The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1897-05-27
Senator Foraker
On Railroad Pools.

From an Interview with Him by Cath"
Published Recently in the New York
Sun.
what is your Pooling bill?"
'The immediate purpose of the bill Is to
authorize pooling, to enable railroads to
maintain reasonable rates. What the
shipper wants to know Is, not only what
he himself must pay, but also that his
competitor in business is paying the same.
If one secretly secures from the railroad
a rebate, he will in that manner acquire
an unjust advantage over his competitor.
The bill is aimed at unjust discrimina-
tions. and in accomplishing this it will rot
only benefit the railroads, but will also
benefit the whole business community"
Are not the railroads prohibited by law
from making Determinations and giving
rebates?'
Such are The provisions of the Inter-
state Commerce act passed in 1887, but
although severe penalties are provided
for the violation of tina law, yet it's viola
tion is constant. Our railroads have
grown from small beginnings. At the
start they were short and small; finally
they were Blended into lines and systems.
These came into sharp compethtion with
each other and there was much improvi-
dent railroad building. In consequence
some roads could not be, under natural
conditions, properly operated; they strug-
gled for business the stronger and more
favored roads would, however, take the
most of the traffic. the weaker lines to
secure the business, having all to gain
and nothing to lose, especially where they
were already insolvent, resorted to the
giving of rebates, cutting of rates, ship
pers' passes, and various other devices to
attract business. The solvent roads, find
ing their business leaving them and as
certaining the cause, resorted to similar
nttn TO hn11 rlat Ia. Il
cover what they had lost These rate
wars were frequent, and always more or
less disastrous. The fluctuations of rates
disturbed all kinds of commercial busi-
ness Lower rates than were profitable
lost money to the roads: some of them
were unable in consequence to make prop
er betterments and at the same time keep
up their equipments; others went into the
hands of receivers, and the result was
prejudicial all around"
could not the railroads help them
selves?"
THE first step taken by the railroad
managers to modify this evil was to in
duce competing lines to enter into traffic
agreements between competitive points.
Certain rates for each road were charged
to all alike, and there was not 10 be any
cutting Of rates, giving Of rebates, or
making of determinations of any sort.
There were not at this time any statutory
provisions on the subject, and such agree
ments were lawful at common law. IF
these agreements had been kept ley
would have accomplished the purpose OF
the managers of the roads and the chief
purpose of the Interstate Commerce act,
but unfortunately they were not kept; the
rivalry Of the roads continued; the weak
est lines strove to take business from the
strongest; the old practices were again
resOrted to. The railroad MANAGERS, tini-
inc hot frat Hf,, a,,,I-
sufficient to break up Determinations,
then resorted to pooling The first pool
ing agreements were entered into about
1877, after the strikes AMI riots of that
year"
Describe pooling"
'In pooling, competing lines between
competitive points, having first agreed
upon their rates, agree that they will put
into common fund or pool all the earn
ings of all the roads entering into the
pool, and then divide that aggregate of
earnings according to an agreed percent
age, which percentage is based upon the
earnings Of the roads; that is to say, If
there be three roads i'm a pool, and 1t be
found upon examination of their previous
business of the three roads, that one road
has been doing 40 per cent of the aggre-
gate, another 35 per cent, and the third
only 2 per cent, their agreement will be
that after given time, one year or two
years, they VIII divide their gross or ag-
gregate earnings according to these per-
centages. Each road was to account to
the pool for every pound Of freight. BY
this means the motive to cut rates was
removed, since the road that would cut
rates or grant rebate would necessarily
have to do SO at its own expense. The
pooling arrangements worked out the
most satisfactory results, were becoming
popular, and were becoming extended,
a IN ma Ar
was passed. Although the pooling ar
rangements were well understood by the
railroads, they were not very well under
stood by other people; the masses seemed
to have a prejudice against word pool /;
they associated 1t with gambling, specu-
lating, ard trusts, and the result was that
when the Interstate Commerce Act was
passed, for the express purpose of secur-
ing uniform rates, 1t expressly prohibit