Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-03-13
RIGHT TO FIX RATES
Senator Simmons Discusses
the Powers of Congress.
DEBATING RAILWAY BILL
Claims Existence of Ruinous Dis
ordinations.
UNDERHAND METHODS ALLEGED
Thousands of Articles, he Says, Have
Been Reclassified, Raised From q
Lower to a Higher-Priced Class.
UNDERHAND METHODS ALLEGED
Thousands of Articles, He Says, Hav

upon the interstate commerce commission
the power to fix rates, contending that such
a right exists beyond question. He as
serted. contrary to the contentious of Mr.
Lodge, Mr.. Foraker and other opponents
of the pending bill, that existing trans
portation rates are in many instances, I'M
just and unreasonably high, and that IN
fair and ruinous determinations are prac-
ticed against individuals and localities"
He said that this was true, notwithstand-
ing the declaration of the railroads that
there have been very slight changes in
recent years in the rates charged under
the six great classes Into which freights
are subdivided THAT fact. If it be fact,
would show, he said that the freights
actually paid by producers and shippers
have not been increased. What ii would
show, and all that 1t would show. is that
II rates have been increased they have
not been increased by the open and above
board process of raising these class charges.
As matter of fact, shown by railroad
statistics themselves as well as by the re-
ports of the interstate commerce commits
sion. railroad rates have been increased,
and largely increased, during the last six
years, not by the process OF raising the
specific rate of schedule or commodities.
but by the more insiduous method of COM
modify reclassifications.'
Becoming more spCIlic in his charge, he
said:
Redistribution of Articles.
beginning with the year 1900, hundreds
and even thousands of articles have been
reclassffed by raising them from lower
to a higher-priced class in the Various or
6ers promulgated by the railroads In the
several divisions into which they have di
vided. for this purpose. the whole country.
In one classification, known as order No.
20. issued early IN that year and applying
TO northern and eastern traffic. there were
nearly six hundred reca Ssifications. of
which 572 We're increases and only reduc-
lions. BY another Redistribution order.
made in the same year and known order
No. 30, and applying % the western bust
ness, PSI reclassificatiOnS Were made of
which 240 were increases and only II re
ductions while by or L. No. %, applying
to southern traffic. male in the same yeS,r,
cut OF 636 leClassificatioi.s, So were Iu-
creases.
considering all reclassfications made
during these years, ii may be that the num-
Der of articles actually raised did not great
ly exceed the number nominally reduced.
but the relative number of articles raised
or reduced is comparatively unimportant.
The significant fact is the commercial i'm
portance of the articles so raised or reduced
and the resultant increase or decrease in the
cost of their transportation. Examination
conclusively shows that the commodities
reduced compared with those increased in
these years are not only relatively of little
commercial Importance, but that the per-
centage of the reduction in rates on arti-
eieS reduced Is far below the percentage
of increase In rates on articles increased"
He reached the conclusion that 'if the
high grade commodities, on which high rates
are charged are mixed indiscriminately with
lew-grade commodities, upon which lower
rates are charged the average cost per ton
mile will be Influenced to far greater
extent by the amount of tonnage handed
than by the rate charged.
1T is a fact of common knowledge shown
by statistics and verified by the reports of
the interstate commerce commission" he
asserted. that during the period OF our
great prosperity and business activity there
has been increase in the volume OF low
grade freights altogether out Of proportion
to the increase In volume of high-grade
freights, and that this fact has held down
the increase in the average rate per ton
mile" He declared that the result was
decidedly large increase III the average rate
per ton.
Profits on Investments.
Mr.. Simmons also controverted the con-
tention that the profits on railroad invest
ments are small. LAS matter of fact"
he said. Legitimate railroad profits have
greatly increased in recent years. OF course
the average percentage Of profits could not
be expected to be large upon a capitalize
ton including millions and even billions of
dollars, based not upon cost of physical
properties or upon tangible values at ALL
but based mainly upon estimated earning
capacity. By this process of capitalization
which, a few years ago under the initiative
of a great financier, became a fad I'm cir
cles of frenZied finance, a large part OF
our 215.0Oo miles of railroad and over 500
independent lines have been reorganized
and recapitalized."
After giving illustrations and asserting
that the 800 independent railway lines OF
the country had been reorganized into six
or eight groups he said:
Notwithstanding this false and fictitious
capitalization, on account of the enormous
earning capacity of our railroads the per
centage of railroad stocks paying dividends
and the earning capacity OF railroads has
materially increased in recent years and is
still increasing" He said that while In
1887 the railroads earned S6,362 per mile
the figures In 1904 had been increased to
S9.306. In the latter year the balance left
after deducting the interest and fixed
charges from the earnings of the roads OF
the country was 1927 100000 against STA
900 600 in 1890
Mr. Simmons said that notwithstanding
these figures he did not believe that the
present tendency OF rates Is upward. His
especial complaint was of the favoritism
shown to the big shippers. He hoped that
the rapacity of both the railroads and the
big shippers would be restrained.
Government Supervision.
He did not believe. he said. that the super
vision Of rates by the government would re-
suit I'm injury to the roads. and In support
of this contention cited the fact that dur
ing the ten years from 1887 to 1897. IN which
the interstate commerce commission actu-
ally exercised the power of fixing rates,
forty-1ve thousand miles of railway We're
constructed in this country. He also re-
ferred to the experience OF many of the
states In regulating the roads, saying that
in all cases where there were commissions
the growth of the railroad systems had been
commensurate with that of the other indus
tries of the state.
He defended the interstate commerce COM
mission against the charge of incompetency,
and, coming abruptly to the question OF the
power that should be given the courts, said:
I'VE had as we'll look the fact in the face
The plain truth in this contest between
these corporations and the people is that
the railroads want the laws affecting them
administered by tribunals composed of men
appointed for life and whose amenabiiity
TO the people Is therefore remote They
are not opposed to trusting the powers con-
ferred by this legislation In the commerce
commission because they do not believe
competent and impartial men will at all
times compose that commission but be-
cause they fear that the power OF the peo-
pie to quickly cali them to account for any
forgetfulness of their interest will lead them
TO put the public veal above that OF special
privilege" He announced, however that
he had mo objection To strch right ~ "a.