The times., 1901-05-23
THE COMMUNITY OF INTEREsTA
j. ". schiG on Hallway Protection
Before the Industrial Commission

NEW YORK. May 22.-Jacob H. Schln.
Of the banking house Of Kuhn, Loeb &
Co, that was concerned intimately with
the recent railroad struggle between the
Hill-Morgan and Hartman interests, was
the first and principal witness today be-
fore the special committee Of the Indus
trial Commission. Col. Albert Clarke. who
is presiding at the session here. said that
1t had been matter OF common knoNl-
edge that there were great movements
going on among some of the large rail-
roads
Can you. Mr.. schif." said Colonel
Clarke, describe to us without giving
away any business secrets. the methods
employed and the objects which I is ex-
pected viii he attained?'
I suppose" said Mr.. Schiff. in anst,er
that you refer to the community OK in
terests movement. Owners of railroads
are forced to take steps to protect them
selves against the Generalization and
consequent depression of value Of prom
erty brought about by anti-pooIing Iegts-
iatton- When one carrier makes a rate OF
transportation the shipper goes to a com
peting railroad to cut under that r,te."
with what resuIt 9r aslro5 -,
Clarke. e'
1T has contained more Of danger to the
weaker interests of the country than any
possible advantage derived from anti
pooling legislation
What is the method of establishing
this community OF INTEREST,""
IF one road Is injuring the others bv
reducing its rate of transportation and
the other road has to meet the cut II
stands to reason that the earnings of both
are less. Now, II the stockholders Of one
road hold stock in the other-not neces-
sarily the controlling Interestingly viii
not vote to take any action to reduce the
values of their holdings. This is COM
munity of interest"
Do you think this community of inter-
est viii be carried so far as TO bring into
harmony all the railroads Of the coun-
try?"
Well" said Mr.. schih. 81 am not a
railroad man, but think even a railroad
man would tell you that this is too big
proposition to be the subject OF proph-
ecy-'
Mr. Farquhar asked Mr. schin If he
could tell what caused the great f1uctua-
tions of Northern Pacific.
Mr.. Schiff said ne supposed people had
been selling what they did not have and
when what they sold was called for they
had to pay heavy prices to get it for de-
Schiff If he thought there was any over
capitalizatiO of railroads
4 doubt if there is, said Mr.. Schin-
''The market or the investor quickly dis
counts any overca pitaliZation.
Are not dividends very frequently de-
cIared which have not been earned2'
asked Mr.. LItchman-
Not in any of the corporations with
which l have been concerned. said Mr..
Schiff, somewhat warmly. Nor do
know, as a fact that any board OF dl-
rectors has declared a dividend which
was not earned.
estimate the amount OF American securt-
ties held in Europe. He said 1t was I'M
possible to tell exactly, but the amount
was extremely small.
That. he continued. lis the greatest
protection TO the welfare and prosperity
of the United States at large
Mr.. Schiff also said he Thought the re-
cent panic III Wan Street was due TO
mad Speculation. As 10 the advisabii-
ty OF having Government ownership OF
and telephone lines, Mr.. Scnln
is adapted TO Capitalization
to that extent"
Senator KYLE asked Mr.. Schiff as he
was about to leave the witness char II
he thought competition would De ehmi-
mated by the recent movements OF the
railroads toward fewer heads OF manage
ment
tinctIy that such a consolidation VIII
ever come 1t will certainly not come in
this generation II the day should come
when all the transcontinental lines are
consolidated that consolidation would ba
the signal for a new parallel transcon-
LinentaI line"
The rest of the day was taken UP in
questioning silk manufacturers, all OF
whom said that to take off the tariff on
foreign silks would be fatal TO the silk
Industry here; that silk made here was as
good as European silk, and that II was
made more cheaply for the consumer al
though the Iaborer in the American silk
mill got more pay than the European silk
mill labOrer.