the apportionment of traffic between competing roads are easily distinguishable from the class of cases to which I have just referred.

I must not omit a dictum of Judge Deady in the circuit court in Oregon upon this very point, for although a dictum it is significant. The case is stated and his opinion quoted in full in the report of the Committee on Interstate Commerce, pages 121, 122.

The State of Oregon passed a law conforming as nearly as the circumstances of the case would admit-that is, as State jurisdiction would admit to what is known as the Regan bill in Congress. It was called in Oregon the "Hoult law." A receiver who was to manage a road in Oregon went to Judge Deady, of the circuit court, to know what he was to do in view of that law.

The Senators from Oregon will recollect the case undoubtedly. Judge Deady was the judge who held the court to which the receiver applied. He said that, as regarded this matter of not making any pooling arrangements, he did not think that the law was applicable, because the roads which the receiver was managing were not "different and competing roads," the language being the same which is used in this conference report bill, but that one was a supporting road to the other, and therefore he did not think that the receiver need trouble himself as to what the construction of that clause of the statute should be, but he said morehe went out of the way to say it, showing what Judge Deady would decide when such a contract was brought before him:

Pooling freights or dividing earnings is resorted to by rival and competing lines of railway as a means of avoiding the cut ing of rates, which, if persisted in, must result in corporate suicide. It is not apparent how a division of the earnings of two such roads can concern or affect the public so long as the rate of transportation on them is reasonable.

Sound common sense, if not sound law. I apprehend that it will be found to be sound law.

But I want to refer to the report of this very Committee on Interstate Commerce on the subject of pooling. It is not very long since this report was made. What did the Committee on Interstate Commerce think on this subject as to whether pooling should be prohibited under criminal penalties? When they reported the bill originally to the Senate, on page 200 of the report, they said:

In view, however, of the active competition which exists at the great commercial centers, the successful enforcement of legislation requiring the operation of the entire transportation system upon a basis of fixed rates would seem to depend upon upon a general predetermination of the rates to be established by the carriers interested. It seems necessary, therefore

"Necessary," the committee said then

to leave a way open by which such agreements can be made, in order to avoid the constant friction that would otherwise be occasioned.

They said it in view of this very bill and of its provisions, which it is now claimed may do away perhaps with the necessity of pooling.

If competition is to have full sway, as it does now, the constant changes it would necessitate would render it impossible to maintain fixed rates, just as it is now. It should be understood, therefore, that a statute requiring the posting of rates and prohibiting changes without notice must of necessity operate in restraint of competition if enforced.

The reasons of the witnesses who wish to have pooling prohibited may be divided in this way, and about equally divided:

First, pooling prevents competition.

Second, it encourages the building of new railroads.

Third, it produces unjust discrimination.

The latter may be dismissed; for surely we can not strike at pools because unjust discriminations have been the result of not observing the pooling contract. What we propose to do in the future, if investigation shall develop that to be the wisest thing, is to legalize and to regulate pools. That will compel their observance, and I undertake to say that there was never discrimination in this country by parties to a pooling contract when the contract was observed. It is only when the contract is broken that the discrimination comes. We lay aside, then, that objection; it is not a valid objection; the fact is that the non-observance of the practice results in discrimination.

Then these two reasons, one that they prevent competition, and one that they encourage the building of new railroads, do not agree very well, because the building of new railroads is competition, the fiercest kind of competition, the worst kind of competition, competition which the Government, if it had the power, ought to put its hand upon; and everybody who will think a moment about it will agree with me in this.

Take this instance: Here are two railroads, we will say-I do not know whether there are, if not there soon will be-between here and New York. We will say, for illustration, that each one of them cost $10,000,000 to build. What is the result? There is so much business between Washington and New York. That business must pay if the railroad is to be fairly remunerative-and I apprehend it is for the welfare of this whole country that railroads should be fairly remunerative-that business must pay enough to pay operating expenses, all fixed charges on both roads and reasonable dividends upon the stock capital of each road. Say it is $20,000,000, each road costing $10,000,000, and all represented in capital stock, so that after the operating expenses and fixed charges are paid it takes $800,000 to pay an 8 per cent. dividend on the stock of each. Then you have got to have out of that business, net, $1,600,000.

Now, suppose another ten million dollar road is built between here and New York, what then? That is competition. Competition must not be restrained, no matter in what form it comes. What is the result? There is another ten million dollar capital on which $800,000 more must be paid, in dividends, in addition to paying the operating expenses, and fixed charges out of a business which could just as well have been done by the two roads. There is no more ruinous kind of competition in the world, none more against the public welfare than the building of competing railroads where none are needed. It is that evil which has led to the necessity of these contracts for the apportionment of competitive business.

But about a third of these, fifty men out of the two hundred who said prohibit pooling, put it on the ground that it was against public policy to restrain competition, and the pooling contracts were in restraint of competition, and therefore they were against public policy and should be declared criminal.

As I have suggested, there is a class of people in this country who hold that any competition between railroads is for the public interest. It comes from men usually who want this whole railroad question to re

volve around their farm, or their store, their mine, their manufactory, or their bank. There are men who would be glad to have their wheat and their cattle and their coal carried for nothing. There are shippers who would rejoice to get secret rates, or pass-rates, if I may use the word, for their freight, and they welcome all competition which puts down prices to unremunerative points. Such individuals gain by such competition, but it is to the injury of every other citizen of the United States; it is to the demoralization of all business; it is the breaking down of all business honesty and lawful trade. There is a competition which is worse than the combination and co-operation of railroads.

I said I assumed in discussing these pooling contracts that the rates were always reasonable, and I challenge proof or fact to show that a competitive rate in this country is unreasonable unless it be relatively so. I agree that there are some cities which say they do not get so low rates as others do in proportion, but that would be a matter for a commision to fix. However, on a question of what is reasonable in any man's estimation, I challenge denial when I say that the competitive rates, the rates for competitive business in this country, are not unreasonably high. Indeed, all rates have gone down under pooling arrangements, both competitive rates and local rates. It is not true, as the petition presented this morning stated, that pooling makes excessive rates, any more than it is true that it makes unjust discrimination.

There is a world of figures which might be introduced for the purpose of proving the fact that under pooling arrangements all kinds of freight have steadily on the average_diminished in this country. I remember in the testimony before the Interstate Commerce Committee that question came up as to the Union Pacific. It was admitted that the through rate, the competitive rate, was as low perhaps as could be asked. It was shown that it had been going down steadily year by year, until the managers of the road said they did not know what they were going to do. But it was urged that the local rate had not been reduced as the competitive rate had been reduced. The superintendent of that road, by figures, showed that about the same ratio of reduction had taken place in local freight as in competitive freight.

I take a single table, which I propose to put into my remarks, and only one, and to get it, I confess that I called upon the terrible trunkline commission in New York. I asked them to answer one question, and they did. I say that because it is headed "Trunk Line Commission, New York, December 29, 1886."

TRUNK LINE COMMISSION, New York, December 29, 1886. Statement showing the average earnings per ton per mile by the following roads during the years 1876 and 1885; also showing decrease in earnings per ton per mile during 1885 as compared with 1876.

It is not competitive business alone, mind you, that this table refers to. It is all the business of these roads, competitive and non-competitive, through and local, the New York Central and Hudson River, the New York, Lake Erie and Western, the Pennsylvania, the Pittsburg, Fort Wayne and Chicago, the Lake Shore and Michigan Southern, and the Michigan Central. I take those roads because they are roads most directly interested in the movement of freight between New York and Chicago. There are other roads in what is called the trunk-line commission, but these are the ones which I think fairly illustrates the influence of pooling management upon the price of freight.

From this table it will be seen that the average earnings per ton per mile, or what is the same, the average charges per ton per mile of these roads in 1876 was 91⁄2 mills, almost 1 cent per ton per mile; while in 1885, the time during which this trunk-line commission has been in operation, the average had been reduced to 6 mills per ton per mile upon all the business of these roads, competitive, non-competitive, through and local, and the reduction is equal to 33 per cent.

MR. PLUMB. Can the Senator supplement that statement by saying how evenly that reduced rate was distributed among the transporters on the various lines of railroads?

MR. PLATT. Of course I can not. I am not saying that there are not abuses in railway management, but I say that you will not reach | them by declaring these pooling contracts criminal. I say pooling contracts are in aid of remedying the abuses of which you complain, and I shall show it before I get through, if I have not already shown it.

I might turn the attention of Senators to the statement of Mr. Edward Atkinson in the Century for the present month, where he gives in a table the charge per ton per mile for moving merchandise over the New York Central and Hudson River Railroad in each year from 1855 to 1885.

In 1855 it was 31 cents per ton per mile in gold. In 1885 it was 61 mills per ton per mile. This of course includes non competitive as well as competitive business.

I do not deny that discriminations exist. It is one of the reasons why this bill should be passed. Discriminations exist in spite of pools by the breaking of pooling contracts, not by the observance of them.

Do not, in the name of common sense, declare that criminal which has for its end the purpose which you avow is one of the main purposes of the bill.

I want to look this bugbear of so-called free competition, which it is claimed must not be limited, in the eyes for a few minutes. I have heard the maxim that "competition is the life of trade." I have heard much talk of the so-called law of nature and social life and economic life, "the law of competition and the survival of the fittest." In the sense in which they are invoked, I deny and repudiate them both. There is a competition which is not lawful, which is not legal, which is not honest.

There is a competition which degenerates from true competition, and becomes simply war and strife-war carried on and conducted upon the old maxim that "all is fair in love and war." If by "competition and the survival of the fittest" is meant competition and destruction of the weakest, I say it is anti-Christian; it is anti-republican. I say that that kind of competition which results in the destruction of the weakest, the survival of the fittest, if permitted, would lapse us into barbarism. It would be the old pagan idea-the old despotic idea—that might makes right; that men are ruled by the strong hand, and not by regard for the moral law. It is expressed in that common phrase, the devil take the hindmost." Talk about such competition being demanded on the grounds of public policy. The sooner governments put an end to such competition the sooner humanity will be free to advance along that upward pathway by which it is to reach its final glorious elevation, the sooner governments will come to that beneficent standard designed by the Creator for the happiness of mankind.

I shall show pretty soon that you can not stop competition. Pooling arrangements do not tend to stop it. Their only province is to regulate it. The regulation of competition is not only not against public policy, but is really in furtherance of the public welfare. But I wish to verify what I have been saying by reference to the opinions of some other men. As I said, I am not going to quote railroad men, except in one instance, on this subject. I want to quote on the subject of what competition is, this free competition which it is said must not be prevented by pooling contracts on the subject of what it is and what it accomplishes I wish to quote some men who I think will be listened to in the Senate, even if I am not. I quote from the report of Messrs. Thurman, Washburne and Cooley, constituting an advisory commission on differential rates by railroads between the west and the seaboard. I think no man will accuse Mr. Thurman of being a subsidized railroad attorney, or Mr. Washburne, or Mr. Cooley, and I think what they have to say on this subject of competition will have some weight.

MR. EDMUNDS. What is the date of that?

MR. PLATT. The date of this is 1882. They say:

We have found, however, in the course of our investigations, that a species of competition has prevailed from time to time which has brought satisfaction to few persons, if any, and which has resulted in inequalities and disorders greatly detrimental to trade. Such competition exists when the railroad companies, or those who are permitted to solicit business and to make contracts on their behalf, set out with determination to withdraw freights from their rivals and secure them for themselves at all hazards and regardless of gain or loss; and when acting upon this determination they throw to the winds all settled