Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-05-01
ELK|NS' COMMITTEE
Mr.. George R. Peck Again a
Witness
AS TO DIFFERENTIALS
COMMERCE COMMISSION COULD
NOT DEAL WITH QUESTION.
IT Invested With Rate-Making Power
Preference Clause of Constitution
Would Be Violated.

George r. Peck, general counsel for the
Chicago, Milwaukee and St Paul railroad.
who testified last week before the Senate
interstate commerce committee now inves-
ugating the general subject of railroad
rates discrimination and rebates appeared
as witness again this morning and was
questioned at length by the members of the
committee.
In answer to questions by Chairman Ell
kins. Mr.. Peck said that in his opinion the
abolition of the existing relation between
the railroads and the shippers would re-
suit in disastrous confusion. The commits
sion, he said could not deal successfully
with the question of differentials. Differ
entails had grown up through the efforts
or trafflc officials, who had of course been
lnfueQced by public necessity The effort
of the traffic managers to secure business
1or thelr roads had not been entirely philan-
thropic Mr.. Peck said each company tried
10 serve It's own interests and its own
towns in the effort to secure business for
itself.
The Preference Clause.
Mr.. Peck said there was no doubt in his
mind that if the commission were invested
with the rate making power and attempted
TO continue the existing differentials or to
establlsh new ones. that the preference
clause In the Constitution would be vio-
lated. This clause provides that the ports
OF one state shall not be given an advantage
over the ports of another state in matters
OF interstate commerce. purely distance
rate, Mr. Peck said. would constitute the
only means of avoiding violation of the
constitutional prohibition.
The word ports" as used in the Consti
tuition, meant inland ports as well as ports
on naVlgable waters. Mr.. Peck thought
holding that 1t made no difference whether
such ports were so constituted naturally or
had been designated as such By act of Con-
greSS. he thought moreover, that the con-
sttutlonal prohibition in question would
adapt IT. elf to the notifications in question
and that the word in its broader sens
would cover the situation.
The witness said that in his opinion If
would not be possible for the interstate
commerce commission or any other COM
mission to fix rates so that the railroads
might earn a fair percentage on the capital
invested. 1t was so large a subject he said
and the commission would have such an i'm
mense number of rates to fix that there could
be no accurate determination to cover a fair
return upon investment on the basis of
such a necessarily fiuctuating and incon-
slant quantity. And l believe" ne said
that even if there We're no preference
clause in the Constitution it would be far
better for the country and for the railroads
to leave to the judgment of the railroad
traffic managers the question of what rates
should be applied. If the traffic manager
OF one road sought to impose higher rate
l believe he would be brought to time more
quickly by his competitors than by any
body of men sitting in Washington
Mr.. Peck thought disastrous consequences
would result If the power of rate making
were placed in the hands of the interstate
commerce commission. THAT would be the
most dangerous and far-reaching power
ever placed in the hands of seven men," he
declared emphatically. THE commission by
C n trs,1, Il
control the railroad properties as well 6y
giving the commission the right 10 make
rules and regulations they would also have
the power to operate trciins. More than
study is necessary in order to make a trffic
manager. 1t taxes practical experience,
long and constant dealing with the uues-
tions in hand The requisite knowledge
must be gained on the ground
Tendency of Rates Downward.
Chairman Elkins called attention to the
fact that in 1870 the average freight rate
was cents a ton mile, while at the pres
ent time the average about .76 cents a
ton mile He asked the witness whether
in his opinion, the tendency was still down
ward.
Mr.. Peck replied in the affirmative He
thought that the constantly increasing com
petition for business, the constantly increas-
ing development of the country, the growth
natural causes, all made for lower rates
He thought, too, that the fact that rates
had continued to decrease of late years.
despite the fact that everything used by
railroad in its construction and operation
had advanced in price, spoke well for a
continuation of low and equitable rates.
Mr.. Peck thought. moreover, that ex-
horbitant rates could be controlled just as
well, and even better, under the present
laws under any law which has so far
been proposed by the advocates of radical
rate legislation. The power of Injunction
conferred by the Elkins bill. Mr. Peck
thought, was an extremely powerful lever
to use against unjust and discriminatory
rates
Chairman Elkins inquired whether Mr..
Peck was ready to state that out of twenty
merce commission and taken to the United
States Supreme Court, twenty-five had been
reversed. The witness was not familiar
able to answer
Mr.. Peck in answer to questions bv
Chairman Elkins. said he was not ye:y
lines. He thought, however that while
mon carriers. He did not believe more
over, that the interstate commerce laws
could be applied in full to private car lines
as such lines did not make rates, and dij
not charge the rates against the public
He did not, however, see any objection to
subjecting the private car lines 20 The super
vision of the interstate commerce commits
sion.