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to the people. An honest investigation of the rights of the railroad companies and the people would forbid them; and in my judgment such practices, and the arguments by which they have been sustained, amount to an absolute assault upon public justice.

I believe in the paramount right of the people. I would not harm the railroads. I would allow them to pursue their legitimate calling, but I would bear in mind always the rights of the people. In my judgment the bill I now commend to you protects and preserves all the rights of the railroads, while at the same time it gives some modicum of relief to a long suffering and oppressed people. (Loud applause.)

BOARD

OF

PROTEST OF THE MINNEAPOLIS

TRADE.

AGAINST THE INTER-STATE COMMERCE BILL-PRESENTED IN THE

U. S. SENATE JANUARY 10, 1887.

To the Senators and Representatives in Congress from Minnesota:

GENTLEMEN: The Minneapolis Board of Trade, at its regular meeting of December 22, 1886, unanimously adopted the following resolutions:

* Resolved, That while this Board of Trade fully approves the general principle of national legislation for the control and regulation of our inter-state carrying trade, and while in the main it concurs in the provisions of the compromise bill now pending before Congress, it thoroughly disapproves and deprecates the provisions of section 4, relating to what is known as the long and short haul, and of section 5, relating to pooling arrangements between parallel or competing railway lines. In the judgment of this board, section 4, if enacted, would give to the proposed national commission powers whose exercise would always be dangerous and might easily become destructive to the interests of the distinctively agricultural sections of the country.

Resolved, That a committee be appointed with instructions to forward the foregoing resolution to our Senators and Representatives to Congress, accompanied with a letter of transmission which shall more fully set forth the views of this board."

In forwarding these resolutions to you, permit the undersigned, as the committee appointed for the purpose, to call your attention to the following brief summary of objections, which, in the judgment of our Board of Trade, lie against sections 4 and 5 of the pending inter-state commerce bill, and respectfully to express the opinion that you can in no way render a more important or timely service to your constituents than by aggressively helping to secure the omission of these sections from the measure before it becomes a law. Allow us also in passing, to remind you of the fact that, of the entire membership of the Minneapolis Board of Trade, representing all leading branches of legitimate business and productive industry, not half a dozen have any pecuniary interests in railroads, direct or indirect, and we do not know of half that number who are so interested. The board speaks for the producers and shippers of the Northwest. Further, it is fully recognized that national supervision of our railroad system is necessary and best, in the interests both of the people and of the railways themselves; that this supervision has already been too long delayed ; that there are wrongs to be righted and corporate abuses to be corrected, and that the pending inter-state commerce bill, when duly amended, will constitute a wise first step in the right direction. It is simply insisted that a measure which is necessarily experimental and which deals with the most complicated and far-reaching commercial problems known to mankind, vitally affecting the interests of every class and of every section, should not go so far, or attempt so much, at the outset, as to cause infinite damage where it might accomplish unmeasured good.

(1.) Section 4, relating to the long and short haul,” is, intentionally or unintentionally, vague and ambiguous in its language. If enacted into law its interpretation by the courts must, therefore, be wholly uncertain, its practical application doubtful, and some of its effects impossible to predict. This is sufficiently shown beforehand by the known fact that scarcely two persons understand the section alike-even zealous advocates of the bill, as it stands, differing widely as to the real meaning and intent of the words employed.

(2.) Assuming that the section means what its lauguage naturally imports, the consequence of enforcing such a law would, we believe, be gravely injurious to many important interests in all parts of the country, but especially would such enforcement prove destructive in its effect upon the great agricultural section, of which our own State forms so important a part.

It would very greatly increase the cost to our people of heavy commodities of all kinds wbich are brought in from Eastern sections, includ. ing coal, without which our prairie farms could not be occupied.

It would ruinously depreciate the value of every bushel of wheat and every pound of beef produced in Minnesota, by compelling the railroads to adopt a freight tariff on through shipments eastward, which, if not prohibitory, would leave to our farmers no reward for their labor and invested means.

It would depress manufacturing industries and deprive many working men of employment.

It would reduce to a minimum the trade of the Northwest by largely destroying the purchasing ability of our producers.

It would drive a large share of the long-distance traffic from American to Canadian lines.

It would cripple, if it did not bankrupt, many railroads, by compelling them to relinquish a large part of either their through or their local traffic—both of which are essential to their solvency.

The very people who ought to derive most benefit from legislation of this general character-the farmers and wage earners of the country, would be the first and greatest sufferers from its injurious effects.

(3) It is not a sufficient answer to say that the bill gives to the proposed commission discretionary power to avert these otherwise inevitable calamities. The ambiguity of language, already mentioned, renders it doubtful whether this power is fully given; and even if it is conferred, its exercise would be a most unnecessary and dangerous prerogative to be vested in any untried commission, however able and disinterested, under an untried statute, in a difficult field, where national legislation is now making its first tentative venture. At best, it gives to five men, about whose competency, experience, and integrity nothing can be known in advance, almost autocratic power over the market value of hundreds of millions of dollars of railway stocks and bonds, over the market value of the agricultural products of half a continent, as well as of the lands upon which these products are grown.

So great a power and so tremendous a temptation to its abuse ought not to be presented unnecessarily to any committee of citizens or be made the foot-ball of politics. Besides, so enormous would be the task undertaken, and so extensive its domain, that no commission, however capable, could successively consider and adjust the inevitable frictions and controversies in time to prevent the predicted evils, if those evils in fact impend.

(4) Section 5, which arbitrarily prohibits the pooling of railway earnings, is not less objectionable than section 4. It proceeds upon the assumption that an amicable apportionment of traffic among substantially parallel railway lines destroys wholesome competition, creates a “monopoly,” results in exorbitant transportation charges, and thus wrongs the general body of producers, shippers, and consumers, who constitute the people. With exceptions so rare as only to prove the rule, this assumption is a fallacy, and legislation based upon it must prove a hurtful blunder. The facts are that such apportionments of traffic are a natural and necessary outgrowth of the development of our national transportation system; that they constitute the only plan of self-preservation for railroads which time and thought and experience have been able to evolve from a most difficult and perplexing situation; that they are the only known and feasible alternative for that system of cut-throat competition which foments chronic “rate-wars,” and which, unless held in check, would end in the bankruptcy, first of the weak lines, and then of the strong ones-for a bankrupt railway, having no responsibility to bondholders or shareholders, is the most reckless and destructive of competitors. These adjustments and divisions of traffic, known as railway pools, do not raise transportation charges above a reasonable level. Almost without exception they have resulted in holding rates steadily at the lowest point at which the business can be done at a living profit. This is notably illustrated just now, as you are aware, in our own section. Never was there a closer pooling arrangement between trunk lines than that which now exists between the six roads leading from Minneapolis to Chicago yet never were freight tariffs so low as at the present time, and never were the people better accommodated.

The well-known fact that, concurrently with the development of the railway pooling system, railway rates have steadily, greatly, and everywhere decreased is a summary refutation of the whole theory on which section 5 is founded.

The pooling or apportionment system, besides preserving railways from insolvency, and railway investments from destruction, directly benefits every business community by giving some degree of uniformity and stability to transportation charges, and thus enabling business men to shape their course with greater certainty and safety. A railway rate war, although it temporarily reduces the market price of transportation below actual cost, is universally and justly regarded as a misfortune to all legitimate lines of trade. Obviously it is of no advantage to the public to enjoy any service at less than its reasonable cost, including a fair return upon the capital invested in rendering that service. The rule of unregulated and unreasoning competition, followed by the "survival of the fittest,” when applied to railroads, means their own ruin, with resulting calamity to every other business interest which is worth preserv ing.

The railway pool, honestly administered, is the natural balance-wheel of interstate commerce. Section 5 of the pending bill does not provide or suggest any substitute for this regulative and conservative agency. On the contrary, it would

seem to render commercial chaos legally obligatory. (5) It is not a sufficient answer to say that if found to be injurious in their working, these provisions may be repealed at the next session of Congress. The mischief that can be accomplished by their operation during a single business season is simply immeasurable, and there is not the slightest necessity for assuming the risk.

The interstate commerce bill has adequate scope for its initial purpose without including the sections to which objection is here made. Omitting these, the bill lays the broad foundation of a system of salutary legislation, which a little time and experience will develop and perfect. It is evolution, and not revolution, that the situation calls for. Such a policy will avoid the risk of serious and disastrous mistakes; at least it will not invite that demoralization of now reviving business, that shock to commercial confidence, that stagnation of enterprise, that aggravation of the labor difficulties, that wholesale depreciation and destruction of values which many competent and disinterested students of the problem foresee in case the bill becomes a law in its present form. The panic of 1873 was precipated and intensified, if it was not largely caused, by injurious State legislation affecting railroads, hastily enacted in response to unreasonable clamor. It would seem to be hardly the part of wisdom or of statemanship to incur even the liability of repeating that experience, and on a larger scale during the present century. With great respect, your obedient servants,

A. B. NETTLETON,
H. A. TOWNE,
EDMUND J. PHELPS,

T. B. WALKER,
MINNEAPOLIS, Minn., January 5, 1887.

Committee.

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