SPEECH

OF

HON. RICHARD COKE,

OF TEXAS,

IN THE SENATE OF THE UNITED STATES,

Wednesday, January 21, 1885.

The Senate, as in Committee of the Whole, having under consideration the bill (H. R. 5461) to establish a board of commissioners of interstate commerce, and to regulate such commerce

Mr. COKE said:

Mr. PRESIDENT: I have not participated in the debate upon the subject of interstate commerce now before the Senate up to this time for the reason that the House bill, it was known, would after a while become the subject of discussion, and my opinion of the Senate bill is and has been that it is a measure of no practical value, and that any amendment in accord with its theory would fail to give it anything of usefulness or merit.

The House bill is one which I hope will be examined thoroughly by the Senate. It is a conservative measure.. It is thoroughly well considered. It is the product of a debate and discussion in the press, in the two Houses of Congress, and among the people of ten years standing, and it represents in its principles and policy the popular will on this great question.

This bill provides that freight and passenger in interstate railroad transportation rates shall be reasonable. It prohibits all discrimination in freight rates between individuals. As an adjunct to that propoosition it prohibits rebates and drawbacks. It prohibits pooling and thereby promotes competition. It prohibits discrimination in freight rates between localities by forbidding a greater charge for a short haul than for a longer haul. Lastly, it requires the posting up of schedules of the rates of freight charges, and announces a penalty for charging more or less than the posted rates.

These are the great, leading, salient points of the House bill. I appeal to Senators to give the bill a candid examination and a fair hearing. I deem it proper to say this because the votes of the Senate taken within the last two weeks seem to indicate an opposition to the provisions of the House bill. An examination of that bill will show that it is a just and reasonable measure. It will show further that it embodies in its essential points that which is already the common law of the land in all the States. The States have the common law. The

United States have no common law. That is to say, in every State in this Union the common law, as it is understood and adjudicated, prevails, while under the Government of the United States, a government of granted powers and of statutory enactments, the common law is not the general law. I believe I have stated the proposition correctly as it has been adjudicated in the courts, hence the necessity for Congressional legislation.

The Reagan or House bill contains the common law as adjudicated and enforced in the States on the subject of common carriers. I assert that to be a proposition which can not be denied. It prohibits all discriminations in freight rates between individuals. Is it necessary for me to cite authorities upon this proposition? I apprehend it is not with members of the legal profession at least. If it were I could cite any number of decisions of the highest courts in this country.

Mr. MORGAN. Does the Senator refer to the common law or the statute law of the States?

Mr. COKE. I am speaking of the common law. I will refer to two or three cases which I find conveniently grouped in an able argument of Mr. Chittenden, of New York, before the House Committee on Commerce, which fully illustrates the common law on the subject of pooling. Ten or twelve canal-boatmen in the State of New York scraped together a thousand or twelve hundred dollars each and bought each one of them a canal-boat. Upon these canal-boats they lived winter and summer and the year round with their families, and made their living by running them. Ten or twelve of these horny-handed men concluded that they would form a pool; that they would make a combination; that they would put their boats into a joint-stock company and run them under one head and divide the profits. Those men were sued in the courts of New York, and the supreme court of New York decided that the pool, the agreement, the joint-stock company of these canalmen was an illegal enterprise, and the combination was broken up. I have here what the judge delivering the opinion of the court said with reference to the combination. He said:

It is nothing less than the attainment of an exemption of the standard of freights, and the facilities and the accommodations to be rendered to the public, from the wholesome influence of rivalry and competition. To produce that end more completely, each member binds himself not only to run all his present boats according to the agreement and turn their earnings into the common stock, at the rate agreed upon, and at which rate he is to be charged in the final distribution, though he may have received or charged less, but he is also prohibited, under severe penalties, from employing on any other terms boats subsequently acquired. The association being thus secure against internal defection and external encroachments, and the members having thrown their concerns into stock, to derive an income in proportion to the number of shares they hold, and not according to their merited activity in business, and safe against the reduction of compensation that would otherwise follow mean accommodations and want of skill and attention, the public must necessarily suffer grievousloss. Indeed the consequences of such a state of things would be that freighters and passengers would be ill served just in proportion that carriers were well paid.

That was a pool between canal-boatmen whose misfortune it was to be poor and to only have a thousand or twelve hundred dollars apiece with which to purchase ten or twelve canal-boats. Here in the sixty-eighth volume of Pennsylvania State Reports, page 173, is the case of The M. Railroad Company vs. Barclay Coal Company, in which the court

said:

The effects produced upon the public interests lead to the consideration of another feature of great weight in determining the legality of the contract, to

wit, the combination resorted to by these five companies. Singly, each might have suspended deliveries and sales of coal to suit its own interests, and might have raised the price, even though this might have been detrimental to the public interest. There is a certain freedom which must be allowed to every one in the management of his own affairs. When competition is left free, individual error or folly will generally find a correction in the conduct of others. But here is a combination of all the companies operating in the Blossburg and Burday mining regions, and controlling their entire productions.

They have combined together to govern the supply and the price of coal in all the markets from the Hudson to the Mississippi Rivers, and from Pennsylvania to the lakes. This combination has a power in its confederated form which no individual action can supply. The public interest must succumb to it, for it has left no competition free to correct its baleful influence. When the supply of coal is suspended the demand for it becomes important and prices must rise; or, if the price goes forward, the price fixed by the confederates must accompany it. The domestic hearth, the furnaces of the iron-master, and fires of the manufacturer, all feel the restraint, while many dependent hands are paralyzed and hungry mouths are stinted. The influence of a lack of supply or the rise in the price of an article of such supreme necessity can not be measured. It permeates the entire mass of the community and leaves few of its members untouched by its withering blight. Such a combination is more than a contract; it is an offense.

It is

That is the decision of the supreme court of Pennsylvania. leveled against combinations of the character denounced by the Reagan bill, which but voices in its main provisions the best established maxims of the common law. Judge Hallett, in delivering the opinion of the court in another case, which was concurred in by Judge McCrary, commences with the following declaration:

The duty of common carriers to give equal service upon equal terms and upon reasonable compensation to all who may apply to them to carry persons and property is as well established as any rule of the common law.

Mr. MORGAN. Was that a Federal court?

Mr. COKE. Yes, sir; Judge McCrary and Judge Hallett in the circuit court of the United States. Judge Hallett proceeded as follows:

And whatever is inconsistent with it or with the purpose for which it is adopted is against public policy, and can not be upheld. The defendant refuses to carry to and from Denver, except in connection with the Rio Grande road; not absolutely, indeed, but for the price charged in connection with that road. To say to the public that the rate should be less by the Rio Grande road than by any other line is in effect to say that the public shall use that road only. A very little difference in tolls will prohibit traffic over other lines, and clearly enough such was the effect in this case. It is admitted that the defendant refuses to carry, in connection with the complainant, at the same rate of charges as with the Rio Grande Company, and then it charges for such carriage a much higher rate. For all practical purposes this course of proceeding amounts to a refusal to carry, except in connection with the Rio Grande road.

Says Mr. Chittenden:

After considering the excuses urged for the necessity of this action, Judge Hallett declines to speak at length of the contract, lest he "might convey an impression that for some purposes these corporations have the powers which, in this instrument, they have assumed to exercise." He declares that it is enough to say that it is a conspiracy to grasp commerce and to suppress the building of railroads in two great States, and he cites decisions of the courts of New York, Pennsylvania, and other States in which similar provisions have fallen under condemnation.

That is a very instructive case, and a very able note to that case by Mr. Adelbert Hamilton, one of the editors of the Law Reporter, says:

There can be no question that according to American authority a railroad pooling contract is monopolous in its tendency and objectionable as such, for these three reasons, so tersely reported by Lord Coke in Darcy v. Allen (2 Coke's Reports, 84), where, speaking of such monopolies, it is said: "A monopoly hath three incidents mischievous to the public: First, the raising of the price; second, the commodity will not be so good; third, the impoverishing of poor artificers."

I assert as an undeniable proposition: First, that at common law the charges of a common carrier must be reasonable. Second, that a common carrier can not discriminate in freight rates between individuals. Third, that common carriers can not pool and thereby prevent competition. At common law these propositions are indisputable. I will go further and say that the prohibition upon pooling, that the equality as to all persons for whom they carry enjoined upon common carriers at common law, prohibits discrimination between places. I assert further that the highest public policy requires that common carriers who, like railroad corporations, exercise a part of the sovereignty of the state in condemning land under the right of eminent domain, exercise to a certain extent public offices, public trusts, shall be amena ble to public supervision, and that these public offices, these public trusts, the people are entitled to know all about in their administration, and that, therefore, the railroad companies should be required to post up their schedules of rates of freight charges as required by the House bill. All the propositions which I have enumerated are contained in the House bill. There is nothing more nor anything less in the House bill than those propositions except the modes and methods of enforcing them. Mr. MCPHERSON. Would it interfere with the Senator's speech if I should in this connection ask him a question?

Mr. COKE. Not at all, sir.

Mr. MCPHERSON. I ask the question for information entirely. As I understand the Senator's remarks, they reach the point that a railway company having the power to condemn or take private property for a use, it must be a public use and to the public benefit. So far I agree with the Senator fully, and perhaps I might even go further, because I believe that if a railway company, having the power to condemn private property for public use, fails to conserve the public interest, it has then no more right to that land than a custom-house officer has to the custom-house at the end of his term of office.

But the point I wanted to raise was this: Does the Senator go so far as to say that Congress should intervene when the rates are reasonable? I do not suppose anybody would go beyond saying that the rate must be reasonable. Suppose it is reasonable, and still the railway companies decide to pool. In short, how can you reach a railway company for pooling the freight while maintaining reasonable rates? How do you propose to punish them? Let me put the question still broader. What is the justice in attempting to punish a transportation line for pooling its business with other lines when at the same time all the lines in the pool maintain reasonable rates?

Mr. COKE. I understand the Senator's question. I will say to him that in the State of New York, where the pooling contract of ten or twelve canal boatmen was incontinently squelched and sat down upon by the courts, there is a pool of forty-odd railroads which control the commerce of that great city and all its dependencies, which openly defies all the power and authority of the State. The conclusive presumption of law is that damage results from a violation of law. To hold that a party may violate the law on his idea that no damage will result from it would destroy all law. The mere fact of violating the law is an offense or crime without reference to its results.

Mr. MCPHERSON. If I may again interrupt the Senator, I think there is a very wide distinction between the parallel he draws and a railroad company. It is well known to the Senator that the people of the State of New York, owning the Erie Canal which the people of that