SPEECH

HON. JOHN

OF

SHERMAN.

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. SHERMAN said:

Mr. PRESIDENT: I have had more difficulty in dealing with this question than any of the important questions presented at the present session of Congress. The people of Ohio are very largely interested in railroad transportation. We have 7,200 miles of railways, probably as large a number of miles in proportion to the extent of our territory as any State in the Union. Our people are largely interested as owners and managers of railways, the capital and debts of such corporations amounting to over $500,000,000. Therefore it is that the people of Ohio take the deepest interest in the proposed legislation by Congress. I can safely say that without division of party, the people of Ohio are in favor of strong, just, and liberal legislation upon the question of transportation, and the management and control by Congress of inter state commerce.

There is no doubt expressed anywhere but that Congress alone has the power to deal with this question. The interstate commerce extends to the great body of the commerce of this country. The local commerce within the limits even of a State so large as Ohio is comparatively small. Nearly all the surplus productions of Ohio are shipped to States beyond our limits, and nearly all that is consumed not the products of Ohio has been the subject of interstate commerce. So that I may say that the body of the commerce of the State is interstate. It so happens, too. that nearly all the great leading lines of railway in the United States cross that State; certainly all the four great trunk lines running from east to west, and some of those running from north to south. So our people are deeply interested in this question, and I have no doubt but that both my colleague and myself would agree that the people of Ohio are more intensely interested in the subjects embraced in the bill than in any other bill pending before Congress.

In respect to the power of Congress over the subject, as I have said, it is undisputable. We find it plainly written in the Constitution: The Congress shall have power * ** to regulate commerce with foreign nations, and among the several States.

It is a broad and exclusive power that has not yet been fully exer

cised as it was expected to be by the framers of the Constitution. It is only asserting a trite fact when I say that but for the necessity of regulating commerce with foreign nations and among the States the Constitution probably would not have been formed at the time it was. In the very first movements to form the National Government the importance of regulating commerce among the States was declared to be the leading motive for the formation of the National Government.

It must be remembered that at that time commerce among the States was but a very small item compared to what it is now. All the States were located along the line of the Atlantic Ocean. Our commerce with foreign nations then was immensely greater than our commerce among the States, but the enormous development of this country has changed the whole order of things. Now our foreign commerce, exports and imports together, embraces about $1,500,000,000, and our internal commerce is estimated at $15,000,000,000, or ten to one. It is pretty difficult indeed to estimate what is the extent of our interstate commerce. It is so vast that figures seem to fail to express the immense extent of it.

It is affirmed that the navigation along the Ohio River and the Mis-sissippi River is greater than our whole external commerce. It is said that the navigation of the lakes far exceeds our commerce with all foreign countries. So the question we are dealing with is not only with greater amounts than any other problem before us, but affects every class of our people in the broad extent of our country.

Under these circumstances, I have felt it my duty, without heretofore taking any share in this debate, not being a member of the committee which framed the bill, to examine it with all the care and attention I could give to it, and I shall express my opinions in as few words as possible as to the choice to be made between the two bills.

We have two propositions before us, one called the Reagan bill, which has been debated and passed by the House of Representatives, and another called the Cullom or Senate bill, framed by one of our committees, and which has beeen debated here in antagonism to the Reagan bill. We are called upon to choose between them. I would vote for either if the other was away. It is, therefore, a mere choice between the two measures; and I propose now to give the reasons why I think on the whole the Senate bill is the most conservative in its character, the most wide-reaching in its effect, the most beneficial to the people of all the States interested, the most beneficial even to the people of Texas and to the regions where the Reagan bill seems to have the greatest strength.

If I can convince any Senator, as I have convinced myself, that this will be the effect of the Senate bill as against the Reagan bill, then I shall have at least justified the vote that I shall give in favor of the Senate bill, and I shall have justified my conduct to my constituents. who are writing to me in great number to act upon this question promptly. That general public opinion has been in favor of the Reagan bill solely because it proposed legislation controlling railways, but, as a matter of course, the people have not yet studied or examined the details or provisions of the Senate bill, so they have not been able to give any opinion on one as against the other.

Mr. MAXEY. Will the Senator from Ohio allow me to ask him a question?

Mr. SHERMAN. Certainly.

Mr. MAXEY. The Senator states, and I was very glad to hear him say so, that he would vote for either bill if the other was out of the way. Now, I ask him as a practical legislator with a great many years' experience, if there is not a far greater probability that if the Senate votes for the Reagan bill it will become a law rather than if the Senator should vote for the Senate bill it can become a law? As a question of practical legislation, would it not be better for the Senator to support the Reagan bill in order to procure a law on the subject?

Mr. SHERMAN. If I shall be able to show that the Senate bill is better than the Reagan bill the Senator ought to join with me in passing the Senate bill, and the House, I have no doubt, would agree to it. I know the feeling in the House, because I have conversed with members of the House of both political parties who voted for the Reagan bill, and they are not entirely satisfied with its provisions, but with the expectation and hope that the Senate would make such changes as would make it more wide-reaching, comprehensive, and effective than the Reagan bill, they gave it their support.

The reason why Congress has not heretofore acted upon this question is very palpable. Our whole commerce is changed, not only in its extent but in the mode of transportation. Within my period of manhood every railroad in the United States has been built. When, as a young man, I crossed the Alleghany Mountains and struck a railroad at Cumberland, Md., I thought it was the greatest wonder in the world. Up to that time I had never seen a railroad. Indeed all the railroads in the United States have been built since the period of manhood of the majority of Senators. Even that great motive-power, the steamboat, has been invented, devised, and brought into being since the framers of the Constitution finished their handiwork.

So we are dealing now not with a power that is doubtful, not upon a question on which we should have any difference of opinion, but we are dealing with new agencies of commerce devised in our generation or in the preceding one, and we should bring to the subject the lights of modern experience as well as the ideas and objects that prevailed when the Constitution was formed. Steamboats and railroads are now the chief agencies of commerce. They have revolutionized commerce. No longer does any one depend upon the slow-moving sailing craft or upon the prairie "schooner" or on the old Conestoga wagon over the mountains of Pennsylvania. Our modes of communication are entirely different, and therefore we must look upon this question as practical men, and conform our measures to the wonderful development that has been made in our productions, the revolution in our means of transportation, and the almost fabulous sums invested in these new agencies of commerce.

Nearly every question which affects the problem we are now meeting has arisen within the last twenty years, because it must be remembered that until 1866 nearly every railroad in the United States was merely local in its character. There was no interstate commerce until in the last twenty or thirty years. For instance, the Erie Road ended and terminated at Dunkirk, and the State of Pennsylvania refused to allow that road and other roads to cross the State of Pennsylvania at the little panhandle up on the Lake Shore. The roads of Ohio began and terminated in Ohio. The great New York Central, which now stretches out with its mighty arm across the continent, had its terminus at Buffalo, and that road itself was divided into seven distinct corporations, and it

required years upon years to combine it into a single line from New York to Buffalo.

Take the great Pennsylvania Railroad, the tonnage of which is so enormous-more than 22,000,000 tons a year. That road itself was a local road. Within my recollection, yes, within twenty years, its terminus was in Pittsburgh, Pa. Going from Philadelphia to Pittsburgh it there terminated, and there it joined another road chartered by Pennsylvania to reach the Ohio State line, and there the line was taken up across the State of Ohio by another road, and across Indiana by another road, and into Chicago, Ill., by another road. All these roads have been consolidated within thirty years.

All the elements of this problem have changed, and now we have connecting lines of railroad, which Congress required to be made. The act of 1866 was one of the wisest laws passed by Congress. Up to that time there was no continuous and continuing lines of railroad going from State to State and doing the commerce of a continent. They were mere local roads or local lines, subject only to local regulations. Now they are transcontinental; they are more than national-they are international. These lines have been formed by their connecting links, one after another.

I ought to have said that when the Baltimore and Ohio road was started it was purely a local road, and when it approached the borders of the State of Pennsylvania that State refused to allow the Baltimore and Ohio road to cross its borders, and for years that was a matter of contention. The Baltimore and Ohio was compelled to deflect this line to Bellaire instead of the natural route to Pittsburgh. It was purely a local road, and could only go through, as it did, with the assent of the State of Virginia. When it came to the Ohio line, Ohio, by another railroad, took up the Baltimore and Ohio line and extended it. Until within twenty or twenty five years these were merely local roads without the slightest power to contract outside of the limits of the State, but gradually from a community of interests these connecting lines formed their links by pooling, you may say, or a species of pooling, by connecting their separate corporations, binding them in connecting links by contract, until Congress in 1866 declared, as the first regulation of interstate railway commerce of an effective character in this country, that where railroads connected they should be run as continuous lines. That is the law which was referred to by my honorable friend from Iowa [Mr. WILSON]. He says that he was part and parcel of the law and helped to make it. That was the first law passed by Congress to make interstate commerce possible in this country, and that has been done within twenty years.

We thus by our law connected these lines of railroad so that instead of being local corporations they are great national corporations. The Pennsylvania line extends in one unbroken management from New York to Chicago, with interlacing lines stretching every way like a great

tree.

Mr. SAULSBURY. I should like to ask the Senator from Ohio, by his permission, whether the railroads enjoy that privilege under the authority conferred by Congress, or whether the privilege which they have of uniting and consolidating is not derived by State legislation from the State charters of the companies that are thus consolidated?

Mr. SHERMAN. I think the whole of that grew out of the fact that the corporations were authorized to contract and to be contracted with,

and connecting lines by mutual agreements made arrangements with each other. I do not know how the State of Delaware could give any railroad in Delaware the right to go into Pennsylvania. The National Government can give that right as a regulation of interstate commerce, or by mutual agreement between adjoining States the power to connect may be given to corporations created by such States.

Mr. SAULSBURY. Does not the Senator see that a State Legislature may charter a company and give that company the power to consolidate with any other company chartered by another State on such terms and conditions as the two companies may agree upon? That is frequently done. But the Senator was referring to an act of Congress, and I wanted to ascertain whether there was any authority conferred by Congress under which any railroad companies were to-day operating conjointly.

Mr. SHERMAN. The States incorporating two separate companies may authorize them to contract with each other and to make these arrangements, but Congress made it the duty of the roads to do so. It was not a mere permission to contract and extend and connect their lines of communication, but Congress made it imperative, and two railroads that merely touch each other by contact are compelled by the terms of that law to make through rates the whole extent of their lines. There is no doubt whatever but what that is within the power of Congress, because the power of Congress to regulate commerce includes also the power to regulate corporations created by States as well as natural individuals.

Mr. SAULSBURY. If the Senator will not think me impertinent for asking the question-for it is information I want

Mr. SHERMAN. Certainly; I yield to the Senator.

Mr. SAULSBURY. I have had some difficulty in arriving at a conclusion in my own mind as to what was the proper thing to do in reference to these bills. I wish to ask the Senator whether under the power to regulate commerce he thinks Congress has any authority whatever to deal with the question of freights and fares charged by railroads? I should like to hear his views on that subject.

Mr. SHERMAN. I have no doubt of it. I do not want to go into these collateral questions, because it will prolong my remarks. I did not intend to speak long, but wished merely to give the reasons why I prefer one bill rather than another.

I do not think Congress has the right to impair the obligation of contracts. I do not know by what authority Congress can change the contract made between the State and the individual, as is proposed in the Reagan bill, by providing that no railroad in the United States shall charge more than 3 cents a mile, although its construction may have cost a million dollars a mile, and although the State may have authorized the railroad to charge 5 cents a mile. Congress can not change the contract between the State and an individual or corporation.

I have been looking for gentlemen on the other side of the Chamber to correct this flaw in the Reagan bill. I should like to know, and to have them answer at their leisure, where is the authority in Congress to change a contract between a corporation and a State. Here is a question where the doctrine of States' rights may come in. It seems to me that wherever States' rights should be asserted to do justice to a corporation they are not asserted, but where they may be used to rob or plunder a corporation they are asserted and enforced.