PROCEEDINGS
before the
Senate Committee on Railroads,
in opposition to the
"HEPBURN BILL,"
entitled
An Act to Regulate the Transportation of
Freight by Railroad Corporations,
May 13th, 1880.
albany, n. y.
The Press Company, Printers,
1880.
OPPOSITION TO THE 'HEPBUHN BILL.'
At a hearing on the "Hepbnru Bill," before the Senate Railroad Committee,
May 13th, 1880, the following named persons, representing about 100 firms,,
employing 85,000 men, with a capital of $85,000,000, appeared in opposition ta
the bill :
Name.
Business.
Location.
RATHBONË, SARD & Co.,
Stoves.
ALBANY.
SHELDON & CO.,
Axels.
AUBURN.
D. M. ORSBORNE & CO.,
Mowing Machines.
AUBURN.
Hon. T. M. POMERO-Y,
Lawyer,
AUBURN
Gen. JOHN N. KNAPP,
Sec. S. C. R. R.,
AUBURN.
JAS. G. KNAPP,
Snpt. S. C. R. R.
AUBURN.
W. S. NEWMAN,
Lawyer.
AVON.
JOHN PIERSON,
Canned Goods.
BATAVIA.
WIARD PLOW CO.,
Plow Mannfact'rer.
BATAVIA.
C. J. EERRIN,
Produce Dealer,
BATAVIA.
A. BEEKMAN,
Sash, Blinds, etc.
BATH.
C. H. YOUNG,
Produce Dea'er.
BATH.
JAS. PAUCETT,
Grain & Produce.
BATH.
DAVIDGE, HORTON & CO.,
Tanners.
BERKSHIRE.
SMITH & LAPHAM,
Dry Goods.
BUFFALO.
A. L. SMITH,
Wholesale Gocor,
BUFFALO.
ARKELL & SMITH,
Manufacturers
CANAJOHARIE.
W. H. BULLOCK,
Hay Dealer.
CAN AJO H ARIE.
J. NORTH & CO.,
Manufacturers.
C.ANAJOHARIE.
A. C. SMITH & CO.,
Manufacturers.
CANAJOHARIE.
JASON DAVIS & SON,
Merchants.
CANAJOHARIE.
J. L. RIED & BRO'S.,
Merchants.
CANAJOHARIE.
ZIELEY & CO.,
Manufacturers.
CANAJOHARIE.
M. L. SMITH,
Lumber Dealer.
CANAJOH.ARIE.
S. ALLISON & CO.,
Boots and Shoes.
CANISTEO.
J. ALLISON,
Saw Mill.
CANISTEO.
A. B. VORHIS,
Planing Mills.
CANISTEO.
TAYLOR, BRO'S.
Chair Factory.
CANISTEO.
H. CARTER & SON,
Agricnltur'i Imp'ts;
CANISTEO.
C. ELOHR,
Grist Mill.
CANISTEO.
WALDO & DAVISON.
Lumber.
CANISTEO.
W. H. COLEMAN,
Lumber.
CANISTEO.
DAVISON & McCRAIG,
General Stores.
CANISTEO.
A. J. CARTER,
Coal Dealer.
CANISTEO.
D. W. LANGLEY,
Merchant.
CANISTEO.
3
L. S. COLEMAN,
McDOUGAL & AVERT,
J. M. ROBINSON & SON,
PLEASANT VALLEY WINE CO.,
WALTER A. WOOD & CO.,
F. G. BABCOCK,
McDOUGAL & CO.,
E. REMINGTON & SONS,
Manufacturer.
Gas Works.
Produce Shipper.
Wine,
Mowing Machines.
Lumber and Oil.
Gas Works.
Sewing Machines.
castile.
dunkirk.
elmira.
hammondsport,
hoosick falls.
hornellsville.
hornellsville.
ilion.
And other Manufacturers and Trades, in Ilion, represented by petition of
seventy-five names against the bill.
g. l. McDonald,
holden & Mcdonald,
davidge, lampfield & co.,
c. a. burt,
r. m. clinton,
w. affleck & co.,
moore & ross,
t. i. chatfield,
c. m. & g. p. pelton,
adriance, platt & co.,
comstock, bros-,
hon. s. s. lowrey,
head & winston,
globe woolen co.,
utica steam cotton mills,
mohawk valley cot'n mills.
j. m. childs,
hon. a. c. miller,
r. m. bingham & co ,
ethridge & co.,
rome merchants iron mills,
b. w. selden,
rome iron works,
rochester brewing co.,
smith, perkins, & co.,
genesee brewing co.,
bârtholmoy brewing co.,
hamilton & m-athews,
the leighton iron works,
craig & crouch.
j. cuningham, son c& co ,
g. g. buell &. co.,
corning & co.,
Manufacturer.
Merchant.
Tanners.
Produce Shipper.
Lumber Dealers.
Hay Dealers.
Wagons & Sleighs.
Grocer.
Carpet Manuf'tr.
Mowing Machines.
Grocers.
Knit Goods.
Grocers.
Manufactory.
Manufactory.
Manufactory.
Axles.
Gas Fixtures,
Manufacturer.
Grocers.
Lumber Dealer.
Grocers.
Hardware Dealers
Lumber Dealers.
Carriages.
Grocers.
Iron AVorks.
livonia.
livonia.
newark.
newark.
newark vall'y.
new york city.
owego.
owego.
poughkeepsie.
poughkeepsie,
utica.
utica.
utica.
utica.
utica.
utica.
utica.
utica.
rome.
rome.
rome.
rome.
rome.
rochester.
rochester.
rochester.
rochester.
rochester.
rochester.
rochester.
rochester.
rochester.
troy.
ARGUMENTS
IS OPPOSITION TO THE " HEPBURN BILI."
The Assembl}'Bill, An Act to Regulate the Transportation of Freight
by Railroad Corporations, was taken up by the Senate Committee on Rail¬
roads, Hon. Webster Wagner, Chairman, and Messrs. Davenport, Eidman,
Hogan, Madden, Pitts, and Rockwell, on May 13th, 1880, when the fol¬
lowing proceedings took place ;
The Chairman—The Committee will come to order.
Tou may commence, Mr. Burt.
Speech of Mr. C. A. BUET, of Newark, N. Y.
Mr. Chairman—I come before you to-day, repre¬
senting the grain and produce dealers of central and
western New York, or more properly speaking, to re¬
present the farmers of that section, whose agents we
are for the marketing of their products, and to protest
against the passage of this bill, believing—yes, know¬
ing—that it will prove most disastrous to the agricul¬
tural interests of our state.
On Tuesday evening last, when the friends of the bill
had a hearing before you, Mr. Wayne claimed to speak
for the 300,000 farmers of the state. I deny that he has
any such authority. As Past Master of the New York
State Grange, he may be authorized to speak for the
14,000 members of that organization; although having
been superseded in oiBce, it is uncertain to what extent
hé is authorized to speak for even that limited number.
The farmers of this state depend upon the produce
men to protect their interests in this subject of trans-
5
portation, and certainly their interests in this are iden¬
tical. But, Mr. Chairman, I think I can show that the
passage of this bill cannot ijrovo otherwise than injuri¬
ous, not only to the 14,000 possibly represented by Mr.
Wayne, but to the remaining 286,000 farmers of our
state.
It is generally believed that the farmers are in favor
of this bill ; those farmers who understand how it will
afféct their interests are most decidedly opposed to it.
It is true that they have been, and still are, to some
extent, in favor of legislation on the subject of trans¬
portation, because they have beën taught, to believe
that the management of railroads has been antagonis¬
tic to them They have been told that the fai*mers of
the west receive lower rates and better facilities for the
marketing of their products. This charge is not true;
it is based upon the extremely low rates from Chicago
and Milwaukee to îiew York which have prevailed dur¬
ing hotly contested wars between the Trunk lines for
the supremacy of their terminal points at the seaboard-
There are no farmers at Chicago or Milwaukee. The
farmers of all those western states who market their
products in those cities pay as much to get them trans¬
ported to those points as our farmers pay to get theirs
transported to New York city and placed in vessels or
warehouses in that harbor. These low rates prevailed
at a time of the year when the farm products were in
second hands, the farmers received no benefit from
them, the benefit, if any, went to those who had ac¬
cumulated them at those points, and held them at an
expense of storage, insurance, etc., of not less than five
cents per 100 lbs. for each and every month they were
6
• It is claimed that our farmers pay the losses incurred
by reason of the extremely low rates from these
western cities ; that as rates from these i)oints to the
seaboard have declined, rates throughout this state
have been advanced. There is not a shipper in the
state but will tell you how utterly false is this charge.
Seven years ago rates from the central and western
parts of the state to New York were 27 to 33 cents per
100 lbs., with a terminal expense of lighterage of four
cents per 100" lbs. added These rates have steadily
declined keeping pace with rates from interior western
points, until they have reached an average for the
year of fift,een cents per 100 lbs., the railroads paying
the lighterage expense in New York of three cents per
100 lbs., making our average rate for the year twelve
cents per 100, for an average distance of 375 miles, a
rate acknowledged to be the lowest given the farmers
of any state in the union or any nation of the world.
One favorite argument used to prove that the pro¬
ducers and shippers of this state pay the losses in¬
curred in these sharp competitions between the Trunk
lines for the Chicago and Milwaukee trade in the early
Spring, has been, that by these low rates prevailing from
a few points of collection, the railroads lost money; and
as the New York Central x)aid regular dividends, hence,
it follows that the local business must have paid those
losses and a profit beside. The truth is, these low
rates were from only a few points, and were almost
entirely confined to grain, which business, though
large, bears but a small proportion to the whole busi¬
ness on which they earned dividends. It had nothing
to do with the rates upon the thousand and one other
7
articles transported, nor with western bound freight,
nor, passenger traffic. Besides, these low rates existed
only two or three months of the year, while during the
balance of the season even the grain trade Avas highly
profitable.
Eyen our dairy farmers are told that the low prices
prevailing for their products are the results of unjust
discriminations, and not the results of over-production
which has; for several years so depressed all the in¬
dustries of our country. Five years ago western butter
was worth, in Eew York, 10 to 23 cents per pound,
and state butter 25 to 40 cents. Last winter the former
wa,s worth 20 to 37 cents, the latter 20 to 33 cents per
pound.. The same Avith cheese, which fell in two years
from 14 to 7 cents per pound. This,state of things was
brought about by enterprising and intelligent farmers
of Eew York state emigrating Avest, engaging exten¬
sively in dairy farming, building creameries and cheese
factories, increasing the quantity and improving the
quality of. the butter and cheese of that section, so as
to depress the priees of our own productions.
Thp' rates on both butter and cheese to the farmers
of this state have not exceeded one-fourth to one-half a
cent per pound. Can anything be more absurd than to
charge this change in the prices of our dairy products
to discrimination on the part of railroads ? These low
rates which have preAmiled in moving our dairy pro¬
ducts, acknowledged to be low, considering the classi¬
fication of those articles, and the risk incurred by the
railroads by reason of their perishable nature, are not
tho result of competitive canal transportation, for
butter and cheese are never so transported ; nor even
8
from railroad competitiou ; but because our railroad^'
bave been anxious to build up this industry. They
have by these low rates, as well as other facilities
afforded our farmers in the interior and at New Tork^
shown a policy so liberal as to entitle them to the com¬
mendation, and not the condemnation, of those who
claim to represent the dairy interest.
Mr. Thurber, who claims to be the farmer's friend,
and who, through the Board of Trade & Transporta¬
tion, is circulating so many documents throughout the
state calculated to discourage our dairy farmers in the
manufacture of butter, is doing more than all other
things combined, to destroy that industry. He is not
only the acknowledged champion, but the largest manu¬
facturer of or dealer in Oleomargarine in the world, be¬
ing interested in a product of over 300,000 pounds per
week, and reaping large profits therefrom, which is just
so much taken from the pockets of our dairy farmers.-
Wheu he has found a substitute for cheese he will un¬
doubtedly call the attention of ourfarmers to the manner
in which our railroads are discriminating against that
branch of our dairy interest, while he wipes out the en¬
tire industry from the state.
Now, Mr. Chairman, of all the demagogism that has
been displayed in this matter, the most disgusting to
the people of the interior, has been that which has
shown itself in the lamentations made over ourfarmers..
Tliey have been represented as on the verge of bank¬
ruptcy. While the truth is, there have been far less
failures among them during the past six years of de¬
pression than any other class of people. In fact they
have financially and morally held their own in the gen-
9
eral cTemoralízatíon of our wñole social system to ait
extent to make them envied by those- who have been
engaged in the uncertainties and harrassing vacillations
of trade. Look ov^er the report of those years, and how
many financial wrecks do you find among our farmers?
Comparatively few ; and a far less percentage among
the farmers of this than of any other state in the Union.
Mr. Hepburn indulges in this species of demagogism
before the committee when he says:
" Gentlemen, when I learned geography, something*
less than twenty years ago, I learned that Hew York
State was noted as being the first wheat growing state
in the Union; first in the production of Indian corn,,
barley and oats, in live stock grazing and in the num¬
ber and value of its horses. It has long since ceased
to produce wheat to any considerable extent, or corn,
or oats, or barley. The competition of the grain fields,
of the west has taken away from our agricultural dis¬
tricts this means of livelihood. * * What are our
farmers going to do? What is there left for the people
of the rural districts to engage in?"
You will notice that he furnishes no statistics in
proof of this statement ; from his bare assertion let us
turn to the facts—to figures not made to serve a pur¬
pose. We find from the reports of the Agricultural
Department as well as from Mr. Walker, statistician of
the Hew York Produce Exchange, both of which are
acknowledged to be reliable, that the production of the;
cereals in the state was reduced Irom 69,600,000 bush¬
els, in 1867, to 63,700,000 bushels in 1872, during which
five years rates from the west were maintained through¬
out the year and no unjust discriminations are claimed
to have existed ; while;, from 1872 to 1877, during which
time it is claimed unjust discriminations did exist, the
productions of the state increased from 63,700,000
10
Tjushels to 93,600,000 bushels,—the latter being the
largest amount ever raised in the state.
I have just received from Mr. Walker the reijort for
the following year, 1878 : During that year we raised
the unprecedented amount of 101,350,000 bushels, and
if Providence continues to smile upon us during the
next three months as during the past two, we will raise
this season not less than 110,000,000 bushels. [Ap¬
plause.]
What evidence had Mr. Hepburn that warranted him
in indulging in such assertions ? Did he suppose that
the mere assertion without proof would be sufficient for
his purpose? Can we be justly accused of a want of
charity, if we consider that either his motive was mali¬
cious or he was guilty of a criminal ignorance, when,
after visiting during the time of growing crops, Eoches-
ter and the country included within a radius of seven¬
ty-five miles—the most beautiful as well as productive,
and yielding a greater variety of products than any
other section of our country—he indulges in assertions
so utterly devoid of truth, and upon those assertions
puts himself forward as the champion of a species of
legislation, that, without doing any class any good;
•would be so injurious to that element in our present
social system which has contributed so much to our
general prosperity, and under which we have been able,
in spite of all opposition, to retain our present proud
position as the Empire State of the Union ?
I wish to call your attention to one more remark
made by Mr. Hepburn before the Assembly Commit¬
tee, and in so doing I will have replied to all the argu¬
ments he has produced to show that our farmers are in
need of suph legislation.
11
He says : " I do think, and certainly am justified in
thinking that the products of a farm in the Mohawk
yalley or St. Lawrence Valley ought to yield more in the
markets of Hew York city than the products of a farm
upon the Mississipjfi river." You will hardly consider
this an argument in favor of the bill, as he does not
even make an assertion much less an illustraltion, or
produce any facts to prove that such a thing was ever
known or even possible. And yet, Mr. Chairman, of
all the arguments that have been brought to bear upon
our farmers to incite in them feelings of hostility to the
railroads, there has been none that has so thoroughly
accomplished its purpose as this one : " Why should
not the products of your farm bring more than one situ¬
ated upon the banks of the Mississippi?" Who has
»ever, denied it ? Would any other than a fool deny it ?
Has there ever been a time when the products of a farm
in the Mohawk Valley of equal fertility did not bring
more than those of a farm on the banks of the Missis-
;8Íppi ? During the past winter the rate on wheat from
the Mohawk Valley, has been nine cents per bushel to
Hew York. How it is six cents by rail and four and a
Laif by water; while the rate from the Mississippi Val¬
ley was thirty cents during the winter, and is now
twenty-seven cents per bushel, and all other produce
at proportionate rates. There has never been a time
'during the past ten years when the rates from the Mo¬
ka wk Valley, Genesee Valley and all other parts of our
«täte, were not as much lower than the rates from the
Mississippi river, as their geographical jjositiou—their
distance from the seabord—would entitle them. Do
we want any better evidence of it thaU the incontro¬
vertible fact that to-day farms in this state, in a good
12
state of cultivation, with fair improvements, are in de¬
mand at $100 per acre, while farms of greater fertility,
with equally as good improvements, on the banks of
the Mississippi that can be cultivated with far less labor
and at far less expense, are a drug at $35 per acre ?
Me. Ohaiemax—Is it at all strange that when such
misrepresentations are made in regard to the agricul¬
tural interests of our state, the produce dealers who are
thoroughly acquainted with the transportation facilities
demanded by our farmers, and who have their interest
at heart, should protest against a bill drawn by men
who have no more knowledge of our farmers' present
necessities than they have of their present condition ?
Our farmers throughout the country have had their
pride wounded by this kind of talk. They want no
crocodile tears shed over their condition ; they are not
paupers, they are not "without a means of livelihood.'*
They are the richest, most prosperou.?, and intelligent
farmers on the face of the earth.
We will now consider the bill and see if we can, how
it will affect our farmers. They, are given to under¬
stand that they will be benefited if no special rates are'
given. Yet not a particle of evidence is adduced te
substantiate such statement. The truth is our farmer»
have enjoyed more than any other class these special
rates. They have enjoyed them in two ways—directly
and indirectly. Indirectly through the produce deal¬
ers. We either ship their products for them on their
account at the lowest rates we can obtain and pay them
the net proceeds, less our commissions, or we will buy
their produce based upon the New York market and
the lowest rates obtainable. There is not a produce
13
shipper in western New York but will verify this state¬
ment. We are all working for the lowest rates we can
obtain, the benefit going to the farmer, our benefit be-
,ing only that we are enabled to handle larger quantities
and so increasing our commissions. It is folly to talk
of our farmers wishing to ship their own products. Not
one farmer in ten thousand would ship his crops,
taking the chances of markets, etc.
We are also told that our produce men should be
treated alike. The produce dealers throughout the
state have asked for no legislation on this subject; they
are opposed to this bill because they know it will be in¬
jurious to all the interests of the interior of the state,.
and particularly to our agricultural interests.
Only one man among a thousand has so far express¬
ed dissatisfaction with our present transportation facili¬
ties, and he ships almost entirely by canal. Conse¬
quently he is opposed to special rates and in favor of
arbitrary rates, which would throw the ¡jroduce of his
locality to the canal ; take from the farmers the facili¬
ties they now enjoy by rail ; wipe out our small deal¬
ers, and give the rich and large warehouse dealers the
same advantages they held twenty years ago to the de¬
triment of 99 out of every 100 producers. He was the
only produce dealer who testified before the Hepburn
committee, and his testimony corroborates my state¬
ment as to who received the benefit of special rates.
He testified, substantially, that he knew others had
special rates as they had heen ahle to pay the farmers
more for their produce than he could.
Let me call your attention to the fourth section of
the bill which says the carload shall be the unit. By
14
this we understand that the bill seeks to déflne the
maximum aiuount that shall determine the rriiTiimiim
rate. This is something never before heard of since thé
formation of our government, that any part of the gov¬
ernmental system should attempt to change our regular
business customs and so disarrange the laws of trade,
acknowledged as just not only by all commercial bodies
throughout the world, but by all courts of law in this
country. In the grain trade the bushel is the unit, büt
we have never heard of a specified quantity that regu¬
lated the price of the commodity, nor in any particular
the cost of its manipulation. We consider a carload an
insignificant amount. Exporters will not buy so small
a quantity. They expect to buy in lots of 20, 40 or 100
cars, and will always pay more for the larger amount.
In fact our present most excellent grading system was
the result of demands made by the exporters that some
system should be devised that should enable them to
move grain in larger quantities. Not only the cost of
the commodity but expenses of sale and general mani¬
pulation depends upon the quantity, and that without
limitations. Before the introduction of the grading
system by the railroads, shippers were compelled to pay
for the lighterage of grain in New York harbor. We
paid cents per bushel for amounts under 1,000 bush¬
els; 2 cents for over 1,000 and under 2,000; li cents
for over 2,000 and under 5,000 ; 1 cent for over 5,000
and under 10,000 bushels, and this scale of prices estab¬
lished by the New York Produce Exchange, and paid
by thousands of shippers in this state and the west
was never considered other than just and equitable.
What would you think if the produce dealers of this
15
state should come here and ask for the passage of a bill
that would compel the New York Produce Exchange,
an organization doing business under a charter obtain¬
ed from the legislature of our state, to make a carload
the unit upon which all prices and charges shall be es¬
tablished ?
To make the carload the amount upon which all rates
shall be fixed, without regard to condition or circum¬
stances, is most unjust to the shipper. The services
rendered by the railroads are not alike in all cases, even
when the distance is the same. For instance, a party
shipping thirty cars of wheat from the elevator at
Eochester, to ÍTew York, occupies but a few hours in
loading; in twenty-four hours they are in îiew York j
four hours from arrival are inspected, unloaded and the
oars ready for loading with west bound freight. Thirty
cars of the same commodity shipped by as many men
at points between Eochester and Syracuse to local
points on the Hudson Eiver division, are on the aver¬
age forty-eight hours in loading. Twelve hours are
consumed and at considerable expense in collecting
them; it will take twenty-four hours to deliver them to
the consignees and they are given twenty-four hours in
which to unload, and then the cars must be taken, to
Hew York to load for the return trip or they must be
taken empty to the west. Will any business man say
that the services rendered by the railroads in these two
cases are alike or equal ? On business principles should
there not be a difference in the charges of not less than
twenty-five per cent in favor of the large shipment ?
and yet by the provisions of this bill the party shipping
the thirty cars must pay the same as each of the thirty
different shippers.
16
The third section of the bill says: "No greater
«harge shal I be made from a local station to a terminns
than is charged from one terminus to another." How
will this benefit our farmers ? It is intended to control
the rates upon our joads during the time that extreme¬
ly low rates prevail from Chicago and Milwaukee, a
time of the year when our farmers can hardly be said
to have any interest in rates, for their j)roduce is mark¬
eted from September 1st to April 1st, and what provi-
>sion of the bill is calculated to meet their requirements
between those dates ! In fact none whatever. On the
contrary if we may judge by the past, it will increase
rather than decrease our rates during that period. Our
rates during the past winter have been on the average
about IGb" cents per 100 lbs., while the rate was forty
•cents per 100 lbs. from Chicago to New York. Accord¬
ing to the provisions of this bill our railroads can
charge the shippers of this state forty-seven per cent,
of the Chicago rate and 1J cents per 100 lbs. for ter¬
minal expenses, which, if the roads live up to the bill,
will make our rate 201 cents per 100 lbs., as against
IG-J the x^ast winter In other words this bill says to
our railroads "you have charged our farmers 1G¡- cents
per 100 lbs. for marketing their x^roducts from Septem¬
ber 1st to April 1st. Now, hereafter, you shall not
-charge them over 20i cents during that period when
they desire to ship their crops, and you shall not charge
them a rate greater than fort3"-seveu per cent of the
Chicago rate plus 1^^ cents per 100 lbs. terminal charge
during the balance of the joar when they^ are at work
and really have no interest in rates. And yet, Mr.
Chairman, the friends of this bill claim it was drawn in
the interest cf the agricultural classes.
17
It seems by the in-ovisioiis of this bill our rates are
to fluctuato with Chicago rates. This must prove most
prejudicial to our interests. IVhat we want is stability
in rates^ that will enable us to work upon small mar¬
gins without danger of loss. lío grain shipper would
be willing to accept from our railroads even a special
rate that was to bo abrogated at their pleasure unless
they would allow the same to run until grain contract¬
ed for had been delivered and shipped. We could not
safely work under it and pay the farmers prices for their
proilucis that tho markets would warrant. Such in¬
stability in rates will bo ruinous to our business, and
tho farmers can no more stand it than we can. For in¬
stance, if I were to buy 50,000 bushels of wheat of the
farmers—not a largo quantityfor one to contract for—
it would take on the average ten days to deliver and
ship it; in tho meantime the Chicago rate has advanced
ten cents per 100 lbs., and our rate five cents, and lam
out $1500 on the transaction. .
Senator Pitts—Do you claim when they raise the
Chicago rate they are obliged to raise the state rate also
under this bill?
Mr. Burt—They are not obliged to do so, but as
they are compelled to lower our. state rates when they
lower the rates from Chicago, is there any reason to
doubt that they will advance them as tho Chicago rates
are advanced ?
Senator Pitts—I understood you they were obliged
to do it. i-
Mr, Burt—This brings into our busiues.s an element
of uncertainty and instability that must prove most
18
disastrous to it. To meet tMs we will be compelled to
demand wider margins which must come out of >thô
grain and so froni the pockets of our farmers.
The third section of the bill says í
3. No railroad corporation shall grant or allow to
any person or association upon the transportation of
freight, either directly or indirectly, any secret ratö,' re¬
bate, drawback, unreasonableallowanceforuseofcarsor
any undue advantage whatever; nor directly or indirect¬
ly charge to or receive from any person or persons, or
association or corporation any greater or less suin, com-.
pensation or reward than is charged to or received from
any other person or persons, association or corporataou
for like and cotemporaneous service in the receiving,
transporting, storing, delivering or handling of freight.
This requires that the rates from each station upou
the lines of our railroads shall be alike to all persons,
under any and all circumstances, whether the freight,
is loaded at such station or received at that station
from a «îonnecting road. As that which refers to re¬
ceipts from a connecting road applies as well to our
state roads as to foreign corporations. Now, how will
this affect our farmers? And right here, Mr. Chairman,,
we come to an illustration of the manner in which our
farmers have received directly from the railroads special
rates. During the jiast winter our rate on grain from
Oanandaigua to New York, has been 17J cents per 100
lbs. The New York Central made with the Northern
Central railroad—a road running from Canandaigua to.
Elmira—a combined rate from all stations upon the:
line of that road, of 17¿ cents per 100 lbs. to New York.
Of this, five cents went to the Northern Central, and
12^ cents to the New York Central. The New York
Central recognized the fact that farmers upon the line
of that lateral road, though situated at no greater
19
distance from Jíew York than farmers north of them liv-
ing directly on the New York Central, but compelled to
ship oyer two i^nads, gave them a special rate from Oaji-
. aridaigua of 12 J cents per 100 lbs. against the regalar
rate of 17^ cents. This special rate they gave without
being asked by either farmers or produce dealers, and
yet by the provisions of this bill they are denied this
r,ight ; are not allowed to continue this liberal policy to
those farmers, but are compelled to charge them the
regular rate of 17i cents per 100 lbs. instead of the
special rate of 12J cents, and so make the combiued
rate 22J cents as against 17J cents, or subject them¬
selves to the penalties imposed by this bill, and yet it
is claimed that this bill was introduced in the interest
of our farmers.
The farmers on the line of the Geneva & Corning
road have had during the past season, a special rate of
12J cents per 100 lbs. from Geneva to New York, and
yet by the provisions of this bill they must pay the
regular rate of 17J cents per 100 lbs. The same applies
to all farmers upon the lines of the Geneva, Ithaca &
Elmira; Lehigh Yalley, Southern Centra], Utica, Ithaca
& Elmira, and state line roads, all of whom have
marketed their products during the past season upon
special rates. The people living on roads north of the
New York Central, will be similarly affected. Farmers
on the line of the Delaware, Lackawanna & AVesteni,
and manufacturers at Oswego, have always had special
rates from the New York Central at Syracuse. The
farmers on that branch of the Lake Ontario Shore road
running from Charlotte to Lewiston—to build which
every town but one on its line was bonded, have en¬
joyed the past season a special rate of 12¿ cents per 100
20
lbs. from Charlotte to ISTew York, as against a regular
rate of 17J cents. Pass this bill and every farmer on the
line of that road will be compelled to draw his produce
south to the New York Central or the Erie canal, and
then our lateral road becomes of no further use to them
Whatever, for the marketing of their products. Under
this "bill Yates county, which markets all its products
by the lateral roads, must pay next season from $50,000
to $'G0,000 more than last for transportation. Schuyler
■ county is similarly situated, also" Cortland, Otsego,
' Tompkins and many others, as no portion of them lies
xipon a Trunk road. While there is not a county in
the state but what is more or less similarly affected.
Will Governor Cornell, the sou of Ezra B. Cornell, who
made such sacrifices for the railroad interests of Tomp¬
kins county, sign a bill that takes from the farmers of
-that county nearly $80,000 extra cost for the transpor-
; tation of its products '? But a small proportion of our
farmers live upon the Trunk roads. To those living
upon the lines of our lateral roads, the Trunk roads—
and more particularly the New York Central—have
pursued a most generous policy Throughout all cen¬
tral and western New York, they have given those
farmers a special rate of 12J cents per 100 lbs., a most
exceedingly low rate, which was five cents under the
regular rate and eight cents per 100 less than this bill
allows them to charge This bill says they shall cease
this liberal policy, and yet the bill is claimed to be in the
interest of our farmers. Under the bill our farmers on
the lateral roads must pay five cents per 100 lbs. more
to market their products or draw them to the Trunk
lines, and throws us back to where we were thirty
21
years ago, which is by no means progression, but retro¬
gression, in this important matter of transportation.
Daring his remarks before you last Tuesday evening,
Mr. Wayne claimed that in the general discussion of
this bill the farmers have beeu ignored. I cannot bufe
agree witli him. The friends of this bill have in the
general discussion ignored the farmers because they
have never been able t o produce a fact, figure or evi¬
dence of any kind or cliaracter to show that our farmers-
have not been justly and liberally treated by our Trunk
roads, nor been able to give a good and sufficient rea¬
son why they need legislation on this subject. There
may be those who would be benefited by this bill, but
we protest against a bill for the benefit of any one that
must prove so injurious to our agricultural classes.
Wq protest against a bill that prevents Ihj railroad.s,
from giring special rates to our farmer.s v.-hen ci.'cr.ui-
staacos demand it; that prevents o;u' farmers trom se¬
curing either directly, or through their agents, the low¬
est rates that can be obtained; that destroys all compe¬
tition between railroads, as well* as individuals, in the
sale and transportation of their products; that makes
rates arbitrary, and which will result so disastrously te
the manufacturing and agricultural interests of cub
state.
22
.The Ohaieman —We will now hear you, Senator
Pomeroy.
Speech op Hon. T. M. POMEKOT, of Attbtjen,
N. Y.:
Mr. Chairman — I feel I have had my day in court
with the privilege I had iu addressing the Assembly
•committee upon this bill a few weeks ago, and iu view
•of, the yery practical suggestions that have been made
by, Mr. Burt and Gen. Knapp, some of which were
•entirely new to me, I prefer to take as little time as
PQ^^sible to-day, and give as much as possible to the
■other .gentlemen who have not been heard on this
question heretofore. I want to say just one thing at
the,commencement. I see it was stated in several
papers, referring to the proceedings of the meeting I
attended a few weeks ago, that I appeared as the
attorney for some railroad or something. I am not an
attorney-at-law in practice at all. I have not taken a
case in twelve years. I am a business man, if any¬
body ever was in the state of Hew York, and for a
dozen years I have been trying to attead to my busi¬
ness, and I came here at my own expense, to represent
my individual interest as a citizen, and the interest of
all others similarly circumstanced. I am not here as
an attorney or counsel for the railroads, or for anybody
else ; but I am here as a citizen, to protest against a
bill which I really believe to be the most dangerous in
its tendencies upon the business of the state of New
York of any which was ever introduced in this Legis¬
lature. (Applause.)
23
líaw, there have been some amendments made to this
hill siûcè I was here, and I want to call the attention
•of thé committee to one, and that is at the very be^fin-
ning. I never saw this amendment until day before
yesterday. At the end of Section 1,1 find this amend¬
ment has been made: "îiothing herein contained,
however, shall be construed to prevent the making of
a special and exclusive contract by a railroad company
with one or more express companies, for the trans¬
portation of express matter upon express or passenger
trains."
"When I was here before I said nothing about express
business, because I waís told by the special committee
who originated this billy and by the committee of the
Assembly having it in charge, that it did not, and was
not, intended to affect the exptess interest in any way
whatever. I represent a majority of the express inte-
Test of the whole state of New York, and am author¬
ized to speak for them, and I say we want no special
privileges, and it is surprising to me that this Assem¬
bly passing what they call an anti-discrimination bill,
should have put in there a clause giving to any rail¬
road company in this state a right to make an exclu¬
sive contract with express companies.
Senator Madden — Oould they not give their entire
business to the express companies f
Mr, Pomekoy — Yes; and prevent anybody else
from doing it at all.
Senator Madden—And charge what they please ?
M^. PoMEROY — Yes. We do not want anything of
that jsipd.
^e ,vant to stand on an equal fqoting. Anybody
máy take a contract on any road in the world oh the
24 _
same terms that we take it. We ask no exclusive
laivilegfes, and, under the f^arb of an aati-discrimi-
natioa biTl, I i)rote3t that we shall not be discriminated
for.
H"ow, I a'.k that that clause may be amended, in fair¬
ness to ourselves, because, we do not ask any such
le;;;islation; that ii shall bo amended so as to read:
"îiothing herein contained, liowover, shall atfect the
transportation of express matter ujion express or pas-
seni^er trains;" leaving us under the law of 1867,
which expressly provides that we, as common carriers,
shall be put on the same basis as the railroads of the
state in regard to their transportation, of which I shall
have something to say in a few minutes.
You will bear in m'nd that, in framing this bill, this
committee have not considered the fact at all that they
were undertaking to deal with an inter-staie question
■^with a question which, under the constitution cf the
United States, is federal the very minute you cross the
lines of this state.
As Mr. Blanchard said here the other day in regard
to the Erie road, you cannot touch it ; you cannot
touch any of the roads terminating in Penusylvania or
New Jersey. The Erie road can start its freight from
Jersey City to Chicago, and from Chicago to Jersey
City, and they are entirely outside of the jurisdiction
of the state of New York, although they go through
the state of New York. There is nothing in this bill
that appears to recognize at all that, in règard to this
inter-state commerce there-are no state lines; that
New York is simply so much territory of a common
nation—the United States—and subject only to the
25
legislation of that common territory. Inow I say, in
view of that fact, that as to inter-state commerce,,
whatever eifect this bill may have as to trunk lines
relates exclusively to the New York Central & Hudson
Eiver Eailroad Co.; while couched in general language,
it is in fact special legislation, and the promoter of this
legislation (Mr. Thurber) intended it to be special,
and operative on a special corporation, directed
against the New York Central & Hudson Eiver Eail¬
road Co. I propose to take this thing just as it is.
It cannot affect any other railroad—the Pennsylvania
Central, the Baltimore & Ohio, the New York, Lake
Erie & Western, or any of the other roads—not a rail¬
road trunk line in the world, excei)t the New York
Central.
Second—That of all the trunk lines of railroad con¬
necting the Atlantic seaboard with the west, this road
is the only one which, by the fact of its present con¬
struction and the necessities of its future existence, is
local to the state of New York and identified exclu¬
sively with the commercial interest of the state and
city of New York. The only one !
Third—That the perfect integrity of the manage¬
ment of this road is unquestioned ; nobody has raised
an intimation that that road has not been honestly
run. There has been no wrecking on that road. It
is honestly run, honestly managed. Its road-bed with
its numerous tracks laid with steel rails, almost with¬
out grades or curves, complete equipment, and present
and prospective terminal facilities, make it alone com¬
petent to protect the commercial supremacy of New
York. The Erie canal was not, a generation ago, as-
26
essential to New York as the New York Central &.
Hudson Elver Eailroad is to-day. I am not afraid to
stand here or anywhere to advocate the New York
Central Eailroad any more than I am the Erie canal or
any other great promoter of the prosperity of the 'state
•of New York, and this thing might as well be con-
isidered just exactly as it is, and this raid be known to
be just exactly what it is.
Fourth—So far as the business of the, road is conr
«cerned (which is local in the state of New Xorj£,. .both
passenger and freight, upon its open and regular tariff )
rates in every department are lower thap ,upon any
•other railway line in the world and are being constantly
reduced with the increase of the volume of its business.
That is a fact that is not controverted anywhere.
Fifth—That the anomaly is presented by this bill of
:an attack upon a transportation cornpany for the cheap«-
ness of its transportation. There has not been an
allegation made, nor have I ever heard-, that from any
point to any point, the New York Central Eailroad
was charging more than a fair and just and reasonable
jate.
A Gektleman—Mr. Pomeroy, isn't there an Brie
Eailroad ?
Mr. pomekot—Yes, sir; but I say it is outside of
the jurisdiction of this state. It starts outside of it,
and all the freight it takes beyond it is outside of the
jurisdiction of this legislature. The New York Central
Eailroad is the only one whose termini is within'thiá
.state; these raiders cannot touch the Erie road.
A Gëktlemaîî—What about their local freiights f
27
Mr. ÍPoméeóy—Their local freights frota point to
point within the state can be affected by legislation,
and that is all ; but it cannot be affected by legislation
like thrá'which seeks to make through and local rates
adjustable; Should this bill become law thé Erie road-
could still make its local fates without regard being
had to its through rates. The Central road would be
controlled, and it alone as to its local, by its through
rates and, therefore, I say it is special legislation. Thé
complaint here is not as to local rates. The complaint
is that through the necessities of competition beyond.
the state lines that freights are taken to the city of
New York at rates less in proportion than the local
rates charged in the state. That is the complaint. It
is the same complaint you read of in Scripture of the
man ,who went into the vineyard at the eleventh hour
and received his penny. You put Mr. Thurber and
Mr. Wayne on the stand and they will swear the lord
of the vineyard did wrong he should have paid him
for his hour's work only, pro rata. It is an injustice
to be liberal. The spirit of this legislation I say is
dirpctly in the spirit of the complaint that was made
against the man who got the penny for doing the
hour's work. There was no injustice done to anybody
there ; there is no injustice done to anybody here. I
say that is the gist of it. Not that excessive rates are
changed, but that they are carrying at Inadequate
rates, at rates less than they ought to carry by reason
ef competition on through freight throughout the state.
Nq case has been presented, nor can there be, where
thei company has charged more for a longer haul than
fora,,shorter,, except under considerations which in¬
volved the acceptance of the lesser rate or the loss of
28
t JO business ; not one where the rate for the shorter
haul was unjust or exorbitant. These are conceded
facts.
\
Siz:li — Th.at no case has been alleged of a rate hav¬
ing been ÜMod for any locality or any individual, from
any foeling of favoritism eft ill-will on the part of the
direction cf any company within the state, or of any
emi)loyeo ; mor has any case been presented from which
any such fee^liug can be inferred.
The individual cases at Eochester and Buffalo, which
arc referred to in tlie speech made by Mr. Hepburn in
advocae y of this bill, as can be shown, were the mere
accidents of business, and utterly beyond the power o"-
the New York Central Ilallroad Gompan;/ to remedy.
Seveni^i—That while New York, both state and city,
is specially dependent upon the New York Central &
Ilr.dson Eiver Eailroad, and no other x'oad within tho-
state, as to its local business, or as a trunk line in con¬
nection with its inter-state business, is so open, tiirongh-
out its entire length, to both domestic and foreign com¬
petition. That was shown in flie remarks made by
Mr. Depew tho other day. As soon as yon reach
Albany, and go through ibo Mohawk valley, it is tapped
at every priuciixal point throughout its entire length.
This fact makes it powerless to constitute itself w
monopoly in any sense of that term. It is utterly
impossible. And I say, further, that its strength and
complete unity of organization, from New York city to-
Buffalo and Suspension Bridge, is not only a necessitj^
to its existence but is a necessity to the state, in the-
protection of its interests. I have no toleration for this;
paltry cry of monopoly, this paltry cry of corporations f
29
not the least. It is a necessity to this state, just as
•much as it is to itself. The state could not be pro¬
tected, business could not be done, except by a unity
of organization throughout its entire length. That is
a necessity to be accepted, not to be quarreled with
■ and growled at. >
Mr. Hepburn says in his speech, as was quoted the
other day before the Assembly committee, " the busi¬
ness of transportation requires the greatest freedom of
management of any business extant." lie saj's again,
" Certainly a railroad, to be successfully managed and
prosperous in the whirlpool of competition, at the
present time, must be run by brains and not by legis¬
lation; and the reforms in railroad management must
come from railroad mauagei-s, by means of a public
pressure brought to bear upon them." He does not
state an opinion there ; he states a fact. That is a fact
more important in its bearing upon the railroads of the
state of Hew York than upon any other transjiortation
interest in the world ; and yet this bill has passed the
Assembly by a vote of 80 to 30, notwithstanding the
very man who trained it says there is no business in
the world that mast bo lett to mere business manage-
ment so entirely as must this business.
How, I want to say a few words in regard to this bill
itself—this amended bill. I assume the argument
Mr. Hepburn mado the other day (certainly an able
argumeni), I assume it is the best that can be made in.
favor of this bill. I have not only read it, but I have
studied it as carefully as I would study the brief of an
opponent. I7hat is the first section of this bill f I
will read it ; it is short. " Every railroad corporation
30
shall give to all persons reasonable and equal
facilities and accoramodations for the transpoiiaSfeion of
any merchandise or other property of evwyjkind>and
description, not dangerous in character, .upon? rail¬
road owned or operated by such corpoiiatio&tand for
terminal handling, the use of the depot or otherJbakld-
ings and grounds of such corporation, and at anyipoint
where its railroad shall connect with any other railyp^,
reasonable and equal terms and facilities of ipjter-
change, and shall promptly forward merchandise, cçn-
signed or directed to be sent over another road eon-
nected with its road, according to the direction
contained thereon or accompanying the same."
The principle of that first section will be admitted
by everybody, but here comes this fifth section providing
that any railroad corporation which knowingly violates
(and it cannot violate it ignorantly) any provisioA of
that first section is liable to a penalty of fifty dpll^rs.
Now, suppose that the law provided that the treasurers
of savings banks in this state should keep their mopeys
safely invested, and then should apply a penalty for
non-compliance, would that be good legislation ?
What does the state do f The state says they may in¬
vest their funds in such and such securities and in no
other. It specifies the thing to be done. Here you
have a mere exercise of discretion on the part of a rail¬
road company. They may act in the most perfect good
faith, they may believe they are doing exact justice,
exact equality in two shipments of freight, and yet a
jury may say that they were unequal, they were
unjust, and then comes the penalty, not for what they
have done, but for a want of proper exercise of judg¬
ment, of discretion. That is what you fix a penalty
31
to. Every such legislation as that is x)erfectly iniqui¬
tous. To show you the effect of it in the original bill
the word " class " was used in designating freight ;;
that they should take the same class of freight on equal
terms. That is a technical word which might be
understood. liow they put in " Jcind,^ the word
" class " is not used in the bill at all. Take the com¬
mencement of the second section : " îio railroad com¬
pany shall charge or receive for the transportation of
freight to any station on its road a greater sum than iS'
charged or received for the contemporaneous trans¬
portation of the like ' Jcmd ' (not class) and quantity of
freight." Take this case : Mr. Wayne, the president of
the Farmers' Alliance, whom we assume to be a farmer
and a manufacturer of butter, applies to a railroad
company to transport a car load of butter from one
point to another, and a rate is given him. Mr. Thur-
ber is the principal dealer of the United States in
oleomargarine, (applause,) and he applies to the same
company at the same time and at the same place to
take a load of oleomargarine for him. Now the rail¬
road company say that is not the same kind and
nature as the other—one is butter and the other is
oleomargarine.
Mr. Thurber says, I will call chemists to prove that
they are exactly alike—that they are made of the same
components, and I demand the same rates. The rail¬
road refuses, and a suit is brought for a penalty for
refusing to carry the samejkind of goods at the same
price. Six of the jurors are members of Mr. Wayne's
Farmers' Alliance ; six of them are from Mr. Thurber's
store ; they make \]p the twelve, and the case is pre¬
sented to them. The farmers say butter is not oleo¬
margarine — it is a different thing ; the other six say it
32
is just exactly the same thing; you have got the testi¬
mony of the chemist it is the same thing. Those
twelve jurors would sit there, six against six, until the
pismires carried them out of the key-hole before they
would ever agree upon a verdict. Yet the railroad
company has or has not violated the law. Have they
or have they not I Is it the same Mnd of freight or is
it not? There is no classilicatiou. The word classi¬
fication is stricken out, because it was found you could
not apply it by classification, because the railroads
would have had to make a thousand classifications.
In our express business with the Central road we have
a contract which was made in 1872, and there are two
classes of freight provided for — oue the through freight
and one the local freight—and one price fixed for one
and one i)rice fixed for the other. That is the contract
to-day ; and yet I have here oue of our weekly settle¬
ment bills, and there are forty-nine classifications that
have been necessitated in the course of seven years ;
forty-nine different classifications that we pay on,
necessitated by the conduct of the business.
There had to be a special rate made here for grapes;
then for butter ; then for fish, etc.
This committee saw that if the railroad company
were going to make their rates by classiQcation they
would have to do the same thing to the general public
that they do to us ; and where we have forty-nine clas¬
sifications, there would be four hundred and ninety-nine
classifications necessary to regulate their general busi¬
ness. That would be utterly impracticable, so the com¬
mittee have stricken that out. There is no longer clas¬
sification, but the railroad companies are to be made
33
liable to a penalty if they refuse to make equal terms
for the same Icind of freight. I put the question, is
Mr. Thurber's oleomargarine to be counted the same as
Mr. "Wayne's butter? Is the honey that Mr. Thür her
makes out of glucose to go at the same rate with the
honey that the bees make for Mr. Wayne on his farm ?
Is the coffee made out of chickory to go at the same
rates as the real article ?
Is the railroad company to be liable to a penalty for
an honest error in judgment as to the quality and
kind of goods they carry ? They do not know whether
freight offered is butter or oleomargarine, coffee or
chickory ; whether the honey is Mr. Thurber's or Mr.
Wayne's. Mr. Thurber's honey is perfumed to smell
just the same and it is adulterated, so it is claimed, to
taste the same. I do not know anything about it. Is
all grain to be classified as one kind, or are wheat,
corn, barley, etc., to be considered separate kind ? You
see at once, gentlemen, that to apply a penalty to a
discretion of that kind is an absurdity that never was
perpetrated in the world before, except once, I believe
once, when I was in the Legislature—we excelled it. I
have been kind ever since to gentlemen who occupy
those seats. It was my first experience in legislation a
great many years ago.
Sbnatob Madden—Twenty-three years.
Mb. Pomeeoy—We voted to take two children away
from the real mother and give them to the putative
father. We passed such a bill. It went through a
great deal stronger than this bill did, but it was
repealed the next day. I think if this bill should
become a law,^ unless the Legislature know enough the
34
next day to repeal it, it will not survive the opening
of another session. I would be very glad if this bill
could pass just as Mr. Thurber and Mr. Wayne want
it if it would only aifect them. If it would not during
the next year injure the industries of the whole state, I
would say let them take it and try it, and the first day
of the next session of this legislature they would be
here asking for its repeal. Most of you gentlemen are
practical business men. What is the fact in regard to
transportation by canals and by railroads ? I have
known for twenty-five years nearly every farmer in my
county. Every locality is just as familiar as my own
home. I do not know of a farmer in that county who
sends to market a single car load of any kind of freight
—^not one. They could not do the business if they tried.
They would not take the risk of the New York com¬
mission men which they would have to do if they sent
their grain themselves to market. They invariably sell
it to the middle men. These middle men make their
contracts with the railroad company for their freights,
and the farmer gets the whole benefit. The farmer
does no shipping. The reduction made to the middle
men is a reduction made to the farmer, and my
experience with the middle men is this, that as a class
they fail in their business because they pay more in
the fluctuations of the market to the farmer for their
grain in the long run than they are able to get for it
in New York. I can count up on the fingers of one
hand all the men in my knowledge that have been
engaged in business as middle men in the purchase of
country produce and have followed it as a business
that are solvent to-day. They fail as a rule because
35
the hazards of the business are greater than the com¬
mission they take on the risks of the business. That
is a fact that every man here knows that has had any
experience at all with the buying of country produce,
that it is a hazardous, risky business, and the farmer
knows it and invariably sells his grain, butter, poultry,
eggs and whatever comes off from his farm at the lake
station, the canal station, the railroad station, and
when he delivers his property he takes his money from
the middle man. That is the rule on which the whole
farming business of this state is done.
Mr. Hepburn, in his argument, justifies the first and
second sections of this bill, because, he says, they are
practically the same as the legislation in Massachusetts
and Pennsylvania, and therefore it must be correct;
and that it is simply following out the line of the statu¬
tory enactments of the state of New York which are in
existence to-day, as to the obligations of railroad
companies to each other, which he cites at length, end¬
ing with the statute of 1867. It is the law of the state
of New York, and it ought to be, and it is, incorporated
in the statutes that are cited by Mr, Hepburn, that in
all their relations to each other there shall be perfect
equality in the interchange of their freight, and that
applies to all common carriers — to railroads, to express
companies, to everybody connected with the business
of transportation as common carriers. Mr. Hcijburn
says: "You will see, by noticing the reading of these
several statutes, that they have extended those pro¬
visions to everybody except individuals ; and now ah
we propose to do, and all we seek to do, and all we
want to do, by'the passage of this bill, is simply to
36
place the citizens of this state on a par with the cor¬
porations of this state in respect to the transportation
of freight."
What Mr. Hepburn utterly ignores, or fails to see in
these statutes, is that they are confined to transportation
companies, to companies doing business as common
carriers. They ought to be placed on a perfect footing
of equality with regard to each other, because they are
engaged in the same kind of business — the handling
and carrying of property. He says, why not apply the
same rule to individuals ? You will bear in mind that
there is no such line drawn in the statute as he makes
between corporations and individuals. It only applies
to transportation companies. He says, why not apply
it to individuals Î By that he means to'manufacturing
companies, corporations—everybody, except trans¬
portation companies. The reason is just this: The
reasons were stated in the argument before the com¬
mittee, the other day, as a perfect answer to the third
section of this bill, and which he ignores entirely.
What a manufacturer, what the buyer of produce,
xvants, is to know in advance what his rate is to be.
That is the element that has got to bo determined for
him. As Mr. Burt says, when he buys fifty thousand
bushels of grain, it takes several days to gather it and
put it in the cars, and he wants to know in advance
what he is to allow for the transportation. How can
that business be done, if that cannot be known, with
safety to him or with safety to the farmer Î How can
Mr. Burt safely carry on that business if he cannot
safely determine that question of freight Î This third
section utterly prohibits the special time contracts.
37
which are essential to the bulk of the business of the
state.
You take the case of the woolen manufacturers of
the state, who are to-day running on goods for next
winter ; their summer goods have all been made and.
sold long ago, or are in the market ; they were all out
of the mills months ago. They must kuow in advance
what they are to ship their goods at — what they are to
get their wool in at. Now, in regard to transportation
companies, they cau make their rate from day to day.
There is no harm in that ; no diflßculty in their making
a perfect equality in rates as between themselves from
day to day. But a manufacturer must kuow in advance.
That was,a question I stated here the other day to the:
committee ; that is a question to which the supporters,
of this bill make no reference at all. How cau the
manufacturers ; how can the produce dealers ; how can
the lumber men ; how can the great body of the people^
two-thirds of them engaged in industries other than
farming—how could they manage their business as it
ought to be managed; and how can the railroads do for
them as it ought to do in their business, if it cannot
give them a rate by which they can determine this
factor in their business in time to do their business
by it?
Mr. Burt said he buys to sell on a given market and,
at a fixed rate for transportation, and he cannot do the
business in any other way. The disastrous effect of
the bill upon lateral roads is shown by Mr. James G.
Knapp, and that is a question that was only presented
to me recently. But Mr. Eutter, Mr. Blanchard,
Mr. Knapp, these raih-oad men will demonstrate
38
to you: that the lateral roads of this state cannot live
at all and comply with the provisions of this bill. Mr.
Knapp has laid before you all the facts in the case of
the Southern Central, and its condition is substan¬
tially that of all lateral roads. How is anybody
injured in their being allowed to do the business
named by him which would be prohibited under this
bill ? Nobody is injured by it. The road is making
no money anyway; never has paid a dividend; it is a
great blessing to the community, but an utter loss to
the stockholders ; the general public are getting all the
benefit. Yet you propose to prohibit it from doing what
business it is doing. The same rule wotild apply to all
the lateral roads. The two things attempted to be
done by this bill are two things that cannot «be done.
First, the attempt by Mr. Thurber and other jobbers in
the city of New York, through legislation, to restore
the jobbing trade, which is by reason of low freights
passing from them to the other cities of this state and
of the west ; and second the attempts of Mr. Wayne
and others to enhance the value of the farm lauds of
this state, and its agricultural products, by enhancing
the costs of the through transportation of the cheaper
products of the west, ignoring the fact that the farmers
of the west are subjected to much higher rates for local
shipments in getting their crops to business centers
like Chicago, than are the farmers of this state in
getting theirs to the city of New York. It is an
attempt to control the local freight of the state of New
York by the through freights of the United States, or
compel the abandonment of the through business. It
Is to make the rate from Chicago, which is claimed to
39
be the base line for transportation in the United States,
to be the unit ; control the rate not only from through
points to New York, but from Buffalo and Eochester
and Utica and Syracuse and every other point in the
state of New York to the city of New York. The rail¬
road company can make its local rates, but when it
crosses the state line it is as much at sea as any
individual in the United States. Mr. Hepburn says
that the western roads do not make the rate to New
York for their connecting lines. In one sense they do
not make it. They have to report it to Mr. Eutter
and Mr. Blanchard, and Mr. Blanchard and Mr. Eutter
are obliged to accept it or reject it. The latter make
the rate in that sense, and that is the only sense.
As I said in my argument before the Assembly com¬
mittee, and I repeat it, Liverpool makes the price
of corn, and not the New York Central Eoad or New
York Lake Erie & Western Eoad, New York or Chi¬
cago. Liverpool makes it, and the railroads must
yield to it ; and both the farmer and the transporter
must take what they can get to compete with Eussia
and the other nations of the world in the Liverpool
market. (Applause.)
We have heard a great deal said about the effect
upon the farmers of the state of New York by the
western competition, as has been repeatedly stated
during this discussion. The same question was pre¬
sented by the Erie canal. The Erie canal presented
the same question fifty years ago to the stafe of New
York that is presented to-day. Are you to legislate
upon a question which is federal in favor of any
locality ? If so, is it to be a belt of counties along the
Atlantic seaboard ? Is it to be a belt of states along
40
the Atlantic seaboard ? Where is the discrimination
to stop ? Where is it to begin ? I am as anxious for
the prosperity of the state of New York as any man
can be, bnt I say to this Legislature that the moment
you begin to legislate — to discriminate — in favor of
the city or state of New York in regard to any of its
industries, agricultural or manufacturing or trans¬
portation, against the centre and the west of the Union,
you go down in that struggle, for the political power
of the United States has long since passed beyond the
western boundaries of our state. You cannot carry on
such legislation ; you cannot maintain that discrimi¬
nation. Congress will interfere the minute you under¬
take to do it, and fhey are the only power that can
legitimately touch it. The real inspiration of this bill
is to do that which cannot be done — to make a through
rate, that is outside of the power of the railroads of
this state to affect ; to make that the basis of the local
rate of freight in the state of New York. If the first
section of the bill is to stand, then the rest of it may
be stricken out ; it is all surplusage. The prohibitions
contained and requirements expressed in the second,,
third and fourth sections of that bill are all virtually
contained in the general expression in the first section.
It is a simple question of construction.
In the argument before the Assembly committee, I
made certain points of objection to this legislation as
applying to the whole bill, not specially to the details
of it. The first objection I made to it was that nobody
connected with this question of transportation asked
for it. I saw by the papers that night before last
petitions were presented by Mr. Wayne and by Mr.
41
Thurber. Mr. Hepburn, "who concluded the argument
before the Assembly committee, said that I asked for
it. He said that I was in the Saratoga convention and
voted for the platform. I was not a delegate in the
convention, and never saw the platform until I saw it
in the public papers after the convention had adjourned.
If I had been there, I think it is going a great ways to
say I was bound by a general declaration contained in
a political platform to a specific piece of legislation
like this.
Now, party platforms are not the places to go for
practical legislation. They spread a sail for every
breeze of popular prejudice, for every breeze of popular
opportunity, the same as for sound political principles,
anything that will catch a vote ; and the man that
built the Saratoga platform was chairman of the Utica
convention, and insisted as vehemently as anybody
there in favor of the unit rule for Gen. Grant ; but,
nevertheless, he has been publishing a Blaine paper in
Philadelphia ever since. Go to the people that are te
be affected by the law. I repeat that the people of the
state of New York that are to be affected by it—the
transportation interests, both the railroads and the
people sending property by them — are a practical unit
in opposition to it.
The only cases cited by Mr. Hepburn in his whole
argument were the case of the Standard Oil Company,
which was a case "without the state, and would not be
affected by this bill at all ; the case of the millers in
Bochestér, which, as I could explain tof you if time
permitted, were entirely beyond the power of the rail¬
road company to affect ; and one mill that was built at
42
îiiagara Falls, where, as an inducement to the building
of the mill, the railroad company agreed to give them
a rate proportionate to the Chicago rate for a term of
years. Those are the only practical cases that I have
known of that have been brought to my attention or the
attention of the committee having the bill in charge.
I stated before the Assembly Committee that it was
not competent for this legislature to affect inter-state
transportation. It is not denied ; it is not claimed that
can be affected. I claimed there that as a general
proposition applicable to legislation upon this question
it was an attempt by the legislature to make laws for
the conduct of individual business. Not only is that
not denied, but Mr. Hepburn states in language
stronger than I can state it, the hazard of making
such an experiment. I point to the industrial interests
of this state as their own defense of the existing laws
regulating transportation. I state again that the
•existing system of special rates, and by that I mean the
existing system of time contracts, special contracts, in
this state has been wisely and justly and equitably
administered by the railroad companies, as is shown
by the unanimous approval of those who have come
within the scope of its operation. These facts are not
disputed ; they all stand admitted and yet this legis¬
lation is insisted upon simply to carry out as they
claim a principle.
Now legislation is politics applied. Why, on
principle no man can argue one moment against com¬
munism. It was the system of the early church that
every man was to do his utmost for society—make a
common pool and each one receive from it exactly
43
according to Ms wants and Ms merits. It would be the
perfection of human society. But how are you going
to apply such principle to society as it exists ? It is
the greatest nonsense in the world. Legislation is
always absurd when you start off on a theory ignoring
existing conditions of fact and of business. I say all
these existing conditions are with the system of trans¬
portation, with the system of rates as they exist in this
state to-day ; the business of the state cannot be done
without it, and as one interested in the business, not
in the interest of the railroads, because I have not a
particle of interest there, I haven't had a share of
stock in any railroad in twenty years and never expect
to have, but as a citizen speaking for those connected
with the business interests of this state, so far as I
know anything about them, I believe they are satis
fled just as they are to-day. (Applause.)
44
The Chairman said he would be glad to hear Mr.
Miller
Speech oe Hex, A, 0. MILLEE, oe Utioa :
Mk. Chairman—In the discussion I shall give to
this bill this evening I shall try to be brief, and not
weary the patience of the committee by long or elabo¬
rate argument. An attempt lias been made by the
friends of this bill to create an issue between the
farmer and small dealer on one side, and the manu¬
facturer and large dealer on the other, and except for
this attempt, I am satisfied this bill would not have
received the vote it has in the Assembly. There is no
issue between these classes of our citizens. Their
several interests are so intimately blended, and their
success so dependent on each other, that it is impos¬
sible to create an issue between them. In truth and in
fact this is a fight between the merchants of the city of
ÏTew York and the county merchants. When stripped
of all the disguises and misrepresentations which have
been thrown about it, it is an eíFort to increase the
commerce and trade of the city of Yew York at the
exi)ense of the trade and manufacturing interests of
the country. The farmers are more interested in cheap
freights than any other class of our citizens, because
they are the greatest consumers. If the merchant and
manufacturer obtain cheap freights, the former is
benefited in so far as he consumes the goods of the
manufacturer or of the merchant. And no one is more
interested in the well being of the farmer than the
manufacturer and the merchant. If the farmer obtains
45
good prices he buys more freely of the
manufacturer and the merchant. If the manufacturer
is,flourishing he gives employment to labor, and labor
eonsumes the produce of the farmer. In whatever
light the subject is -vúewed the interests of all are
identical, and none demand or require legislative
assistance.
The jobbing of many kinds of merchandize has
largely passed from the city of ISTew York to the
country towns. The city of Philadelphia has increased
until she has become the largestmanufacturing city in
this country. Manufacturers of this state have found
that with low freights they can manufacture more
•cheaply and to better advantage along the line of the
Hew York Central and Erie Eailroads, transporting
their goods to Hew York for sale, than they can
manufacture in the city of Hew York itself. The
expenses of handling goods is less, insurance and taxes
are less, building cheaper, more room for less money,
and above aU labor can be better accomodated, and
with smaller rents, can work for less wages. The
tendency of all manufacturing is away from the city oí
Hew York, and the manufacturing of the country has
largely increased, until the hum of machinery can be
heard most of the way from Hew York to Boston by
way of Hew Haven, from Hew York to Baltimore by
way of Philadelphia, and from Hew York to Lake Brie
along the line of the Hew York Central and Erie Eail¬
roads. The keen-witted and sharp-sighted mei^ of
Hew York have seen that something must be done,
and instead of putting their capital and energy at
work in introducing reforms, whereby manufacturing
and business can be more cheaply carried out, they
46
have set to work to see how they can cripple the busi¬
ness and manufactories of the country towns. And
the "Hepburn Committee" and the "Hepburn Eailroad
Bill" is the result. But they knew they could not suc¬
ceed in their efforts without the aid of the country.
They, therefore, institute a deliberate systematic course
of misrepresentation. They have flooded the rural
districts with documents telling the farmer that the
hard times through which he and others have passed,
since the panic of 1873, is all owing to the railroads
of the state. They have selected out isolated cases of
the past, and after magnifying them to the extent of
their ability they represent that all that is needed to
give the farmer an abundant crop and good prices is to
pass the " Hepburn bill," and end up by requesting
the farmer to write to his member urging him to vote
for this bill.
The other day, on Tuesday of this week, the friends
of this bill appeared before you and they presented
various petitions in favor of its passage, every one of
which came from organizations in the city of îlew
York, excepting three, one of which was signed by
Mr. Harris Lewis of Herkimer, one by Mr. Wayne
from the western part of the state, and the other by
Mr. O'Donnell from Long Island, claiming to represent
the farmers of this state, and no one of whom ever
shipped a car load of farm produce at one time from
his own farm.
I see before me Mr. John F. Henry of îiew York,
an extensive wholesale druggist, who has been spend¬
ing the winter in Albany in favor of this bill, and I
call on Mr. Henry to state how or in what possible
way this bill can benefit the farmers of this state.
47
Mr. johît F. Henet—^We closed our argument by a
general agreement. Since my name has been called I
want to make a correction.
Mr. Mlleek—I beg your jjardon. I did not give
way for you to make any corrections, but simply for
you to give a frank answer to my question.
Mr. Heney—I would rise to a question of order.
Speakers here have made a mistatement of fact in
regard to Mr. Thurber's manufacturing oleomargarine.
I want to say he never manufactured a pound. I have
this from himself, my authority is Francis B. Thurber.
The reason I do not answer your question is because
we have closed our argument, and I do not think it
would be fair to the other gentlemen for me to say a
few words here.
Mr. Millee—If you think the farmers of this state
will be satisfied with your answer, then I am satisfied.
Mr. Buet—I made the remark that Mr. Thurber
manufactured oleomargarine at the rate of 300,000
pounds per week. My friend H. K. Miller of Hew
York, a member of your association, told me so day
before yesterday. Is he good authority f
Mr. Heney—Francis B. Thurber told me personally
he never manufactured a pound.
Mr. OoMSToOK—I understand that he furnishes the
money and it is made by other parties, and he has the
exclusive sale of it. (Applause.)
Mr. Millee—I was saying that this bill is a
deception and a fraud so far as its friends pretend or
claim it will benefit the farmer in any way whatever.
The farmers of this state are intelligent. They are
48
sometimes slow to find out the truth, but they get at it
sooner or later; and when they do, and they find that
they have been deceived by these New York gentle¬
men, they will then call to account the Legislature of
this state in a manner which will not be agreeable. In
jny judgment, the real issue is one of locality, and such
an issue cannot fail to be detrimental, not only to the
country but to the city of New York itself. No
locality, no business, no citizen or class of citizens, can
be favored by any legislation unless it be at the expense
of the general good. Should this bill become a law,
and remain on the statute books, I know of no place in
the state of New York so favorable to manufacturing
and business as the city of New York and its vicinity.
No cotton manufacturer in the western or central part
of the state can successfully compete with one located
upon the Hudson river or near to the city of New York,
when tlie latter can get his cotton from the south, and
can transport these goods to New York without the
interference of this ))ill. The United States are bound
to compete with England in the markets of • the world
upon most articles of manufacture, as we have with
Bussia and other grain-growing countries in articles of
food for man and beast. I do not speak for the New
York Central Eailroad Company. I do not own a dol¬
lar of its stock or securities, and never have. I repre¬
sent the manufacturers of Oneida county—the New
York Mills, which give employment to one thousand to
twelve hundred people ; the Utica Steam Cotton Mils,
employing eight hundred hands; the Globe Woollen
Company, employing four to five hundred. I am one
of the trustees of the two last-named corporations, and
49
so I confess to a personal interest, so far as I am inter¬
ested, in those corporations. I have also been asked
by other gentlemen who are here, who are mannfac-
turers and business men, to speak for them.
Now, let us look and see how this law will affect a
few of these enterprises. Take the case of Wheeler &
Co., who are manufacturers of .stoves in Utica. They
formerly employed about fifty men, and sold their
goods about home. They found a sale for their goods
at the west, except that freights were against them.
They went to the railroad and told their story and
asked for a special rate, and they got it. The result is
they are now emi)loying a hundred men, and run their
"works twelve months in the year instead of seven
months, as formerly. Take the case of Mr. Childs of
our city, who has lately commenced the manufacture
of axes in Little Falls. lîe found he could not sell his
production in this state, but coujd at the west, if he
could get low freights, so as to compete with western
dealers. The railroad found it added but little to their
expenses to stop an empty grain car at Little Falls and
allow Mr. Childs to load it with his axes for the west,
and they gave him a special rate. The result is he is
working his factory to its full capacity, instead of
working half time or discharging half of his men.
The Rome Merchant Iron Mill has to compete with
Pittsburgh iron in the city of New York and the east¬
ern states. Pittsburgh can }nake iron as cheap, or
cheaper, than Rome. Pittsburgh has no difficulty in
obtaining a special rate over the Pennsylvania Central
to New York, and if Rome cannot lay her iron down
in New York at the same price as Pittsburgh, she must
retire from the contest.
50
The Globe Mills buy about a million pounds of wool
a year. Whether we buy in western Virginia and
eastern Ohio, or buy foreign wools in New York or
Boston, depends upon circumstances ; and one circum-
s'tance is our freights. We have no difficulty in obtain¬
ing special rates and time contracts on the Pennsylvania
roads. Our buyer may be in western Virginia several
months ; and before we determine where we will buy,
we must know the cost of our freights ; but under this
law no special rates can be granted and no time con¬
tracts made. The Utica steam cotton mills consume
about 5,000 bales of cotton per year, and the New York
mills about 8,000 bales. It formerly cost us $7 to $8
per bale to bring our cotton from Memphis by rail ; it
now costs from $3.00 to $3.50 per bale, and if the
western railroads charged no more than the New
York Central, it would not cost over $1.50 per bale.
Have we under these circumstances any reason to
complain of the present management of the New
York Central f You may look the world over and you
will not find any railroad that gives to its shippers as
much service for the same money as the New York
Central. The best authorities on this subject put the
freight rates in Ohio at 6f cents per mile per ton ; Con¬
necticut at 64 cents ; Pennsylvania at 5 cents ; Maine
and Massachusetts at 44 cents, and New York at 3
cents, while the charges on the New York Central are
less than one cent, and yet Mr. Thurber and Mr. Henry
are not satisfied—but their dissatisfaction is not because
freights are too high, but because they are too low.
They want the freights of the country jobber raised,
hoping that thereby they may get back the business
51
which the inland' towns now get. The small dealer
now buys of the country jobber, for the reason that he
finds it for his interest to do so ; he can get his goods
cheaper ; he can keep a better assortment, and it re¬
quires less capital, and who is it that gets the benefit of
cheap freights ? To a large extent it is the consumer,
and the farmer is the largest consumer, and therefore
gets the greatest benefit of low freights. The statement
made to me by one of the Eochester millers on Tuesday
last who was here favoring this bill forcibly illustrates
my position. He said he had no fault to find with those
who favored this bill, but his business required a change;
that Eochester and Oswego millers could not live under
the present rates ; that the railroad charged 15 cents
per barrel on fiour from Eochester to Troy, which wa.s
quite low enough, and they did not complain that the
charge was too high, but that the railroad carried flour
from East St. Louis to Troy for 15 cents and the west
could undersell them in the eastern market ; that west¬
ern flour should be charged the same price per mile as
they charged Eochester and Oswego, which would make
the freight on a barrel of flour from East St. Louis to
Troy about 90 cents, and then Eochester could continue
to make flour. In other words : The complaint is not
that Eochester is charged too much, but that St. Louis
is charged too little. Therefore, in order that Eochesta*
and Oswego may continue to make flour, the people of
this state must pay 75 cents more for each barrel of
flour which they consume. Such is the argument, ami
such is the result.
{
There is an element in the manufacture of goods to
which no one whom I have heard speak in favor of
52
this bill has referred. It relates to goods manufactured
iu. this state and sold outside of it, where they come iu
competition with goods made iu other states. Such
goods cannot be made iu this state and sold outside of
it under the inflexible provisions of this bill. The
manufacturer must be left free to do his own business
in his own way and as cheaifly as he can, or he cannot
meet his competitors in other states who are not
hampered by legislative interference. When you see
the gentlemen who are here to-day and look into their
faces, you see an anxiety on their part which bespeaks
great fear for the future. The business, mercantile
and manufacturing interests of a great state cry out to
you in thunder tones to stop the passage of this law.
53
T^-RATA-RTTS OF JiVMES G. KNAPP, Aubtjkîî, N. Y.,
Superintendent of the Southern Central Eailroad,
before the Committee on Eaîlroads of the Senate, May
13, 1880 :
Mr. Chairmax and Senators — I am here in the
interest of the Southern Central Eailroad Company, a
road crossing the state of New York from north to south,
from Fair Haven, a port on Lake Ontario, to the Penn¬
sylvania state line, near Sajwe, We cross the Eome,
Watertown & Ogdensburg railroad at Sterling; the
direct road of the New York Central & Hudson Elver
railroad and canal at Weedsport ; the old road of the
New York Central &¡ Hudson Eiver railroad at
Auburn ; the Utica, Ithaca & Eimira road at Freeville,
connecting with the Nev/ York, Lake Erie & Western
railroad at Owego, and the Lehigh Valley railroad at
Sayre, Pa. Our principal business is the transport¬
ation of coal, which we receive of the Lehigh Valley at
Sayre, and the New York, Lake Erie & Western rail¬
road at Owego. We deliver this coal to stations on
the line of our own road ; to the Utica, Ithaca &
Eimira railroad and the Ithaca, Auburn & Western
railroad at Freeville ; to the New York Central & Hud¬
son Eiver railroad both at Auburn and Weedsport ; to
the Eome, Watertown & Ogdensburgh railroad at
Sterling ; and, during the season of navigation, put a
large amount into the canal at Weedsport, and Lake
Ontario at Fair Haven. The coal going on to the
New York Central & Hudson Eiver railroad at Auburn
is in competition with coal carried by the Delaware,
Lackawanna & Western railroad, and by railroad lines
54
and canal to the west of ns. "We have the same lines
to compete with at Weedsport. The Delaware, Lacka¬
wanna & Western railroad, the New York, Lehigh &
Western railroad, and the Geneva, Ithaca & Sayre
railroad own lines into Pennsylvania. Ours is the
short line from the coal fields to the lake. The coal
going into the lake at Fair Haven finds a market in
upi)er and lower Canada, and in the western and north¬
western states.
Mr. Chairman, I did not come here to make an argu¬
ment. You have had abundant argument, and those
who are to follow me are more skilled in that line than
I am. I want to tell you, in the simplest manner pos¬
sible, how this bill, known as the " Hepburn bill," if I
read it correctly, will affect our road if it becomes a
law. I have written in my memorandum that it will
seriously affect us. That is not the word. It will
destroy our business, and I see no other way but we
must stop. I am presuming, Mr. Chairman, that there
can be no disposition on the part of honorable legis¬
lators to do violence to any corporation, industry or
interest, unless it can be clearly shown that such cor¬
poration, industry or interest, in the prosecution of its
business, is in some way destructive or detrimental to
some other interest.
Last Friday our general freight agent made a
contract for the transportation of 10,000 tons of
Anthracite coal, known as the Lehigh coal, a very
hard coal mostly used for smelting iron. This coal
comes from the south side of the Alleghany mountains.
The destination of this coal was Montreal. I do not
know nor never heard that there was a pound of this
coal ever went to this market across this state, but has
55
found a route to New York through the state of New
Jersey, thence by the river and canal through Lake
Champlain. In order to get this business we were
obliged to make a rate that would not cost any more
to the parties in Montreal than by the old route. Our
proportion of this rate was less than we got for other
coal going to Fair Haven going into other parts of
Oanada. Mr. Chairman, what interest do we interfere
with in this state in taking this coal. If this bill
becomes a law we cannot take it. Again, Mr. Chair¬
man, our road is a link in the White Line route from
the west and south west via. the Lake Shore &
Michigan Southern and the New York Central &
Hudson Elver railroad to Philadelphia and points in
Pennsylvania. The business of this line originates
outside of this state and passes through it to another
state. This is a long line, and the rate we are obliged
to make is made in competition with a shorter line
outside of this state. When these cars are emptied
they are returned to the mines and loaded with coal,
which is taken west at a very low rate made in com¬
petition with shorter lines. Who is there in this state
that can reasonably object to our doing this service.
We cannot if this bill becomes the law of this state.
Mr. Chairman, we are carrying upwards of 3,000 tons
of coal per week for the New York Central & Hudson
Elver Eailroad, delivering it to thém at Auburn. This
coal is burned on their locomotives. The rate on this
coal is made in competition with other coal and other
routes. Why should we be deprived of the right to
carry this ! What interest do we conflict with that can
reasonably object f This bill a law and you stop us.
We are delivering a large amount of coal to the New
>1
56
Tork Central & Hudson Elver railroad at Weedsport.
This coal goes to stations east and west on the New
York Central & Hudson Elver ralEoad. Buffalo takes
a large share of it to be sent west by lake. The rate
on this coal is made in competition with a shorter line
via. New York, Lake Brie & Western railroad. What
interest in this state do we do violence to. If we did
not take it another would ; we should loose the small
profit we make in its transportation, and our men
would loose the employment it gives. We are also
putting a great many thousand tons into the canal at
Weedsport. This is in competition with shorter rail
lines to the canal via. Ithaca and Watkins. Do the
l)eople demand legislation to debar us from doing this
business. Two years ago we spent considerable money
at Fair Haven in the erection of an elevator for the
transfer and storage of barley raised in Canada. This
grade of barley cannot be raised, as I am informed, in
this state or in the United States, therefore, does not
compete with barley raised in this state. Since the
completion of this elevator we have carried a great
many thousand bushels of this barley in competition
with a route via Erie, Pennsylvania, mostly for Phila¬
delphia and other points in Pennsylvania. With this
bill a law and we are forced out of the market for this
business ; and why should we be Í
This bill, Mr. Chairman, takes from us fully 50 per
cent, of our business. Can you sir, or any gentleman
present give me one valid reason why we should be
obliged to make such a sacrifice f
Mr. Chairman the air is full of talk of the low rates
of transportation on grain from Chicago to the
57
seaboard or eastern market, placing the grain raise(î
in this state to a great disadvantage. Sir, I have
lived in Chicago and the west all of my active life from
1849 to 1873, and I say to yon gentlemen, and the
facts and figures will bear me out in the assertion, that
this grain from Chicago pays to the transportation
companies west and northwest of Chicago, before it
reaches the elevator, bushel for bushel more than the
grain raised and marketed from this state pays for
transportation to market.
You have been repeatedly told why this low rate
from Chicago to the seaboard, and what would be the
effect upon western produce if not one bushel found its
way to market or the seaboard over any railroad line
in the state of New York.
Mr. Chairman, what could you do to please the
transportation companies of other states better than to
pass a law which would debar the railroads of this
state from the transportation of western produce ? The
railroad interest of this state is not the only interest
that is watching the result of your deliberation on this
bill. Boston, Philadelphia and Baltimore have a very
great interest in this bill.
Mr. Chairman, this is a great state of ours ; unsur¬
passed by any state in the Union in its natural advan¬
tages ; unsurpassed by any state in the Union in its
transportation lines ; and, sir, I do not hesitate to say
that there is not another state, or an equal amount of
territory in the United States, nor in the whole world,
that is served so well, at so ^all a cost, for the trans¬
portation of person and property as the people of this
grand and glorious old state of New York.
58
Speech of General JOHK N. KNAPP, of
Atjbuen" :
Mr. Chairivian—If the committee have abundant
time I would like to speak, not for any interest, but for
about two minutes in behalf of ]}eople. They are the
most important things in the world, I reside in a city
almost exclusively devoted to manufacturing, and'l
desire to present simply one view, having their interest
solely in mind.
Senator Madden—That is the people ?
Mr, Knapp—Tes, the people. The manufacturers
of Auburn as a body, so far as I know, never before
the agitation of this subject, came into the presence of a
legislative committee, I am not going to discuss
before you whether they are right or whether they are
wrong, I simply affirm that they are intelligent busi¬
ness men, and worthy citizens. They know better
than you can know the effect of this bill upon their
interests. They come here as a matter of duty and
necessity to tell you that this bill threatens ruin to
them. The whole prosperity of the people of the city
of Auburn is bound up in their prosperity. They
employ nearly the whole laboring population of our
city, and two-thirds of the families of that city are
dependent upon them.
Now, I put it to this committee and to every
member of the Legislature who may chance to be pre¬
sent here, is it at all probable that such men would
leave their business and their homes and come here to
make their representations to you unless they were
59
true ? I take it to be teue that what they say of their
interests is true of the other manufacturers throughout
this state, and that our particular locality is affected
just as the other manufacturing localities are affected.
Now, pardon me, I wish to say a few plain words
in the presence of all these gentlemen. When the
robber attacks you in the highway, and with drawn
pistol or knife, asks you to stand and deliver, you have
not quite but nearly an equal chance with him if you
happen to have a pistol or knife; but this threatened
community has no equal chance with you. You have
the right, I suppose, under the constitution, to strike
down that city by passing laws that will cause the
grass to grow in its streets. Do you propose to do it ?
If you believe these gentlemen and then pass this bill,
you consent to do just that thing.
I desire to call your attention to one other evil effect
that this bill has upon my city ; perhaps unlike many
others. The Southern Central railroad, which is built
across the state of New York, north and south, passes
through that city. It is owned by the municipalities
through which it passes, and my city owns $500,000 of
its stock, for which it paid $500,000 in money. You
have listened to what the superintendent tells you
about the effect of this bill upon that road. He does
not argue the question elaborately, because it does not
admit of argument. He states a fact which is patent
to anybody who looks at the earnings and expenses of
that road. Its principal business is the transportation
of coal. It delivers it at three principal points. He
states it, and it is true, as I know from the facts and
figures, that if you pass thi^bill you destroy that road.
60
You take from the city of Auburn, if that stock is valu¬
able, one-half a million of dollars. Who gave you the-
right to rob that city ? I said I would talk plain. You
not only strike down the interests upon which its pros¬
perity is based, but you also rob it of a half-a-milliou
of dollars, in stock that it has paid honestly for in an
honest enterprise. What great interest in this state is
benefited by this robbery f Who is harmed if you let
Auburn prosper? Who is harmed if you save that-
little road that traverses this state north and south ?
Nobody ; nobody. Why, then, should this bill pass ?
You have been told, and it is in the air, that the great
agricultural interests of this state were clamoring at
the capital for the passage of this bill. You know by
your own daily experience here whether that is true or-
whether that is false.
You have heard that the Kepublican party has.
pledged itself to this legislation. I know that is false.
I believe that I have been in every, state convention,
that has passed any platform for a good many years..
The "Hepburn bill" was never indorsed by the Repub¬
lican party, it will never be indorsed by any party ;
and the party that would indorse it, be it Democratic or
Republican, Avould die an ignoble death. (Applause.)
It has been whispered around the capitol that Repub¬
licans have gathered here from different parts of the
state to urge on the Republican members of the Legis¬
lature to pass this bill. Let them be named. Where
is the prominent Republican in the state of New York
that has asked you to force this bill through the
Senate ? Let him be named. They are no friends of
the Republican party that urge you to pass this bilL
61
Even in my own city, because I have not been in
Albany all the time to oppose the passage of this bill,
the impression is I am indifferent to it, because I am
known as an active, not a prominent, Eepnblicau. If
they would lie about one so humble as mj'^self what
would they not say about leading and ijromiueut
Eepublicans of the state. I tell you there is a con¬
spiracy here to injure the Eepnblicau party, and I feel
It my duty to denounce it. (Applause.)
I did not intend to be diverted into this line of
thought. I merely desired the comiuittee to hear me
one moment in behalf of my own city. I have stated
to you that its prosperity depended eutirelj' upon its
manufacturing interests. The manufacturers them¬
selves have stated their case to you. I cannot argue
it. I know only this that I have a slight interest in
one of the manufacturing establishments of Auburn,
and the manager of the company tells me if the bill
passes that he shall have to move the factory to some
place without the state. He is an honest man, an able
man, and I believe he tells me the truth. I thank
jou.
62
Eemarks op Mr. A. L. SMITH, op Buppalo, before
the Senate Oommittee on Eailroads, May 13, 1880 :
Mr. Ohairmax—I have just one remark to make.
I came here from Buffalo intending to make some
remarks in opposition to this bill, but you have been
detained so long that I merely wish to say that it is
supposed that Buffalo is in favor of this bill. There
are two classes there; one class in favor and one
against. The merchants and manufacturers are opposed
to this bill to a'man. Eesolutious have been adopted
by the Board of Trade of Buffalo in favor of it. Mr.
Elchinond, in his closing address the other day, took
particular pains to advocate this bill. Now, I want it
understood distinctly that the Board of Trade of the
city of Buffalo does not represent the business men of
Buffalo. Three or four men can go there and pass
resolutions, and have them go out as the sense of the
meeting, and people outside think it is the sense of the
business men of Buffalo. It is not so. I will tell you
why the Board of Trade are in favor of it. They are
canal men. If they can get this law passed so that the
Central railroad shall not draw through trains of cars
from the west at less than the one car rates, the canal
boats will carry the freight in the summer, and in the
winter they will keep it in their elevators and get
storage for it. That is just why they favor the bill.
There are no farmers there that are in favor of it.
Who get the benefit of special rates ? No class of per¬
sons have received greater benefit from special rates
than they. Every car-load of cheese, every barrel of
apples, and nearly all other farm products, have been
63
sb^^ped at special rates. The canning establishments
throughout the state have had special rates, and the
farmers have had the benefit. And here let me state a
fact. About three years ago the Erie County Preserving
company talked of establishing a factory in the town of
Prant, Erie county, and told the farmers if the railroad
would give them special rates, i. e. rates lower than the
regular schedule rates, they would build a factory in
their town. The railroad consented to do so. Now this
would be called discrimination, but it is not so. The
railroad simply publish what they can afford to carry a
hundred pounds for, but circumstances may be such
that they can afford to carry quantities at a less price
than published; hence they make special rates, so
called because different from published rates. Now I
do not suppose the town of Brant had shipped, previous
to that time, a car load of produce at one shipment,
but I am informed that last year the Erie Preserving
company shipped 600 car loads, thus giving the farmer
the benefit of special rates. I know from experience
that every dollar of special rates that the Central or
Erie railroad has given to any man in this state has
gone to the consumer and producer, and I defy any
man to show to the contrary. (Applause.) The best
argument I have seen in opposition to this bill is Mr.
Hepburn's own argument. If you will read it carefully
you will notice that he recommends against this very
legislation. He says : " The railroads must be run by
brains and not by legislation." (Applause.) He also
says that the experience ofwestern states in a ^ro ruto
law should be sufficient warning for us to leave that
ground alone; and yet what did they do? They
Gl
inserted that very clause in the bill and have been
obliged to take it out. Their argument right through
is opposed to this bill, and I do not believe they
intended to present any bill at all when they wrote
their report.
Mr. Hepburn says, iu his argument iu favor of this
bill, that if there was anything in the bill which would
injure the state of ISTew York in any way, they were
innocent of it; they copied it from the laws of other
states, and I accept the apology. (Applause.)
Geíí. JOHjS" F. EATHBOÍÍB, or Albaxy:
Mr. Chairman — I would say there are several gen¬
tlemen here present who would like to be heard by the
committee, but as so much time has been taken, we
will relieve the committee from any further hearing.
;Sbnatob Madden — I move we adjourn.
•Carried.