Omaha daily bee., 1907-04-27
EVOLUTION OF RATES
X. E. INGALLS, Of Big Four Addresses
Trsfi, Club Of Pitsburz
HISTORY OF RAILROAD TARIFFS REVIEWED
Wall sts,t Era o. Control Follows Dis1olu-
tion Of Trafil associations,
WORD Of WARNING IS NOT HEtDED
Speaker Tells Of suggest.on' Wade to Rail-
read Lines Eighteen Years Ago,
RAILROADS MUST sUEMIT TO THE LAW
Their Securities should Not be Used as
Counters in Speculation and In
vestors Are Entitled TO
Legitimate Dividends.
RAILROADS MUST sUEHlT TO THE Law

PITTsBURG. April 9s.-The personnel of
the Interstate Commerce commission was
criticised by W. A. Terry general Weighing
agent OF the Pittsburg Lake Erie rail-
road, IN an address at dinner Of the
Trafio club Of Pittsburg. Mr. Terry thought
It queer that a body should assume 10
regulate the relations Of railroad and ship
per and yet not have in its membership
a single representative OF either interest
in any event the commission should, he
said, have associated with them in an ad-
visory capacity men who could supply the
necessary knowledge.
Another address was given by NJ. p In
gals chairman Of the board of directors
Of the Big -Four system.
introducing his remarks by referring to
the development Of the railway as a means
Of communication and the conditions which
gave rise to the granger legislation which
resulted in the railroads being declared
public institutions Mr Ingalls, said in part:
Until the passage Of the Interstate COM
merce law in 1855 II was the custom among
Rll the railways to make secret contracts,
selling their transportation to wholesale
bidders at the best prices possible, trying
thereby 10 build up the industries OF the
country, and secure returns for their stock
holders. 1t was not considered wrong, but
proper way Of conducting business.
The speaker then referred to the era OF
pooling and its suppression, and continued;
Agreement to Maintain Rates.
In 1876 the situation had become so acute
that a few of thought something must
be done or the end would be bankruptcy,
so we called meeting of all OF the lines
north of the Ohio river and east Of the
Mississippi TO discuss the situation and see
what could be done. ~
George b. Roberts, one Of the great rail-
way men Of the world, then president OF
the Pennsylvania railroad, at this meeting
making an address and saying something
like this;
'Gentiemen as l look around this meet
ing at the faces Of those assembled here'
! would trust any of you with my pocket
book or take your word In any ordinary
transaction. but l would not for five min
utes trust anyone, not even myself, with
an agreement to maintain rates.
We made our agreement we put our ma
months we had rates better maintained
than they had been for years before
we were aware OF II. the supreme court
had decided a case somewhat similar called
sthe "rransmissouri Agreement" that II
: illegal. We asked for rehearing, but in
the spring Of 1891 the decision was reaf-
the highest court IN the land that there
was no authority or power on the part OF
the railways to make an agreement Tor
the maintenance of rates.
This fell on us like bombshel The
question was: What to do My own advice
az EfaL Liflot IN which 4 $1,000 alIlbhN dlOuSs
was that we should meet the case squarely
--eay TO the government that the railways
could not be conducted without some right
20 make en- agreement and that this deci-
rlon had produced anarchy; that every as
eocia ton should be dissolved and each man
Eh2s D9ssSs 6s sd rawS%y % bs ~ ine 6e
with congress to secure Just and proper
LEGISLATION that would enable us to conduct
our business according TO law.
The answer to that was that II was dan
Eerous-thRt different rates would be made
md penie would be produced .eIl a9S mt there ere
ceivershna. II is a pity that We did not
have them and then be done with them.
wall street Gets Control.
In the meatime. owing to the taxation OF
the securities OF the railways had drifted
20 Wall street and were controlled by
ciques. who used them, perhaps not for
great game OF speculation that they were
playing. In 1899 some six or seven or these
men. in the hope OF saving the railways
ard the business OF this country, CON
ceived the idea. which was dubbed "the
community Of interests" that they would
buy the controlling interest in practically
thereby Nroduce a joint ownership, and
through I a maintenance OF rates.
II this had been conducted with modera-
tion and the profits from II used to de-
velop the railway lines, II might have
stood somewhat longer but after It had
been going short time the chief mer
got Into a struggle among themselves foi
the control of certain lines and the skele.
tons IN their closets were laid bare. 20 that
the public understood what was being done
The decision Of the courts was against
this combination, but instead OF accepting
the situation as ought to have been done
ana asking for legislation TO enable then
20 go and manage their properties legally
they continued 20 temporise with various
deals and subterfuges TO avoid the eftec
The people. in the meantime, had beer
busy trying TO obtain greater authority
f0r the Interstate Commerce commission
and the railways, az a whole. had beer
busy opposing THE.
principal lines the question came up o
giving the Interstate Commerce commission
more power. and then and there l endeayy
ored 10 have the railways give up thei
opposition and Join in what the people an
get bill which, while Il gave the Inter
state Commerce commission more power
should also give the rail 'ays some rights
received no support WI 'tever. The rail
ways had not then learne that the Peopl
were supreme and that tney had bette
bow % the inevitable.
Again, when in 1905 II was determine
20 make further EFFORT 10 oppose legisla
ton, tried with what powers OF persuasion
had among railway officials IN control. {
induce them 70 give up their opposition
and Join In with the people and obtain leg
islation giving certain powers 10 the Inter
state Commerce commission, and also civ
ing certain rights 70 the railways. IN
were beaten Drastic legislation In tavo
OF the people was passed-nothing in favo
a or the AulAWase
Passes and Rebates Cease.
Unfortunately. just as this legislation wa
PASSED, the spirit Of reform seized upo
certain railway owners and managers an
they decided that the custom OF giyin
free transportation ana passes 20 certai
ofhcials and certain people had been Wron
and should be changed, and that no NOR
passes should be issued. The result wa
that many public officials, many member
OF congress, OF LEGISLATURES, felt for IN
nrst time (hat they had been aceeptin
unwittlngy hrlbes Ia the past Ia the shap
OF the customary pass. and they weT
angry.
The railway chlcials made up their mind
that rebates must cease-that the publ
had decided that they were illegal an
criminal What was the RESULT Nan
of the shippers. who Tor years had bee
getting fat upon rebates and who felt tina
they had an Inherent right TO receive thel
forever, found they could not get then
Rnd they were angry.-not with the law
but with the railways.
Il has been long nght-it has been
dconttnusd an Fifth Faral