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as it is, where we are just simply choking to death. These things that I am undertaking to tell you are facts. I do not mean to tell you anything that is not so. If I do it is because I make a mistake; I do not aim to. The conditions are simply intolerable as they stand. If you can not do anything we are in a devil of a fix. If you can not do anything to help us out we are in a worse situation. Whatever I am doing is from a sense of duty to the people that I owe. I am a trustee for the creditors. If there is no chance of bettering the conditions I will have to go to something else to make a living for my wife.
Mr. Sims. Of course, you present a very strong case, but there may be many others like yours that we have not heard of. We had not heard of yours until you came here to give us the facts. Now, in so far as any of these short lines were actually injured by taking over their connecting lines, the trunk lines, and so on, beyond their power to prevent, the taking over of the trunk lines being deemed in the public interest in order to help win the war, and damage that accrued to these short lines by reason of that fact ought to be taken care of.
Mr. BRINSON. That is my judgment.
Mr. Sims. If it could be done in no other way, it ought to be taken care of by direct appropriation from Congress.
Mr. BRINSON. That is my judgment.
Mr. Sims. It certainly appeals to any honest man in that way. Decause you could not prevent it and would not have tried to prevent it, because you were willing to make the sacrifice, and if the sacrifice had fallen upon all roads alike
Mr. BRINSON (interposing). I would have just gone on, if it took the last hen off the roost.
Mr. Sims. Now, we might save you personally and individually from loss by a direct appropriation from Congress, which I think is just and right, but I want to give you a little information which I have with reference to the veto of this bill, which we rushed through both the House and Senate, in order to try to get it signed in time. requiring the Government to take over all these roads or to retain those that had already been taken over. Before that was done, upon the recommendation and advice received through the general counsel, seventeen hundred and some odd roads were relinquished. Now, I have information indirect from the counsel that the object and purpose in that relinquishment was more largely to get rid of a lot of mere plant-facility roads than anything else, and that short lines that could be used would still be contracted with, notwithstanding that they were relinquished, but it is a fact that the bill was vetoed. and the roads were relinquished before it was vetoed, as far as that is concerned, and then, after Mr. McAdoo had given notice of his intended resignation and advocated retention of Federal control of railroads until the 15th of January, 1924, I talked with him per sonally, and I said, "Mr. McAdoo, what about these short lines that have not been taken over, and also those that have been taken over!" He said. “As a matter of course, they ought to be treated just like the other roads."
Mr. Brixsox. Ile experienced a change of heart, it appears.
Mr. BRINsOX. Yes, sir.
Mr. Sims. But unless the President exercises the right to return the railroads sooner, under the law the roads may be retained in Federal control for 21 months after the proclamation of peace is published, during which time it seems that the condition of roads such as yours is going to go from bad to worse.
Mr. BRINSON. Absolutely.
Mr. SIMs. But that is not the saddest feature of all this matter. You might fade away and lose all you have, and perhaps the world would not know much about it, but from your statement and from what seems to be the absolute facts, the road could not be operated under present conditions, no matter who owned it, and pay operating charges in the future, and therefore there is an absolute loss, unless somebody, the Government of the United States or the trunk lines or some other financial power able to take them over and operate them without profit, takes them over, the road ought to stay there and be operated forever. Your road runs through a good country. To take it up and destroy it would be a step backward in the progress of your country which would affect indirectly every other State in the United States. Now, that is one of the largest propositions in which the public is interested that I can see in this whole situation, but so far as taking care of you and your short line is concerned, it is nothing but ordinary common justice which nobody can deny that because they were not taken over or being taken over by the authority taking over their connections, they should not be permitted to suffer while their connections are not only not suffering, but are receiving the highest average return that they ever did receive during any three years of their existence. Now, if you can advance something along that line that we can do and have the power to do, so far as I am concerned, I will be glad to see it done.
Mr. STINESS. Ďid I understand, Mr. Brinson, that you made a contract, or your road made a contract, with the administration at any time?
Mr. BRINSON. Yes.
Mr. Brinson. It was what they called their standard form of shortline contract.
Mr. STINESS. What did that obligate you to do or what benefit did you get from it?
Mr. BRINSON. Well, I never did believe there was a great deal in it for the short-line railroads, but it was all I could get and I wanted it. I wanted anything that would look as if it was going to help us a little. For example, they have what they call a per diem reclaim which gives you two days of free use of cars that you heretofore have not had, which amounted to, say, $1.30 on each car that you kept for any length of time. That would amount to, counting the cars we get from other railroads, maybe $200 a month, maybe a little less or maybe a little more, depending on the business you do. That was something. Then there was something that was nebulous and uncertain, and the verbiage was of a nature that I could not understand, but I was just simply hoping that maybe somebody might get something out of it, and if other people did I could, and that was about giving us freight for the freight they took away from us. We never have not a pound. I never expect to get a pound of freight given to us for that which has been diverted from us. That is gone. That is folded and tucked away and I will never get it. It was not clear and I did not believe at the time I would get it, and I do not believe it now. Another thing was that we were to get cars. There is not one of the short lines that I know of that has cars enough. For example, we have probably 110 cars. We were able to get them before the war came on but after we could not get any. They are not one-half or one-third as many as we need.
Mr. STINESS. You mean then that the Government did not live up to its contract ?
Mr. BRINSON. Certainly; that is what I mean. For example, as I said a while ago, you probably did not catch what I intended to convey, the agreement was in this contract, and that was pretty plainly stated, that we were to be treated fairly with reference to the car supply, which I understood to mean that they would share, and share alike, kind of on the wheelage basis, as it were, according to our needs, and if they could not give us what we asked for, they would give us a proportion about like what they took themselves. The facts in the business are that they notify you that they are short so many cars and they can not give them to you. In other words, if they have the cars sitting about, not doing anything, and they are not likely to need them any time soon, maybe you can get them. It was just one thing after another. Of course, I could go on here and talk to you about the pay rolls and the high cost of fuel and the high cost of materials and things of that sort indefinitely.
Mr. STINESS. I just wanted to know whether the Government lived up to its contract with you or not.
Mr. Brixsex. No. I have told you the truth.
Mr. BRINSON. I would not like, as a matter of fact, for Windom to know that I came up here and said he had not done what he was told to do, because he might give me a few less cars.
The CHAIRMAN. If there are no other questions, the committee is obliged to you, Mr. Brinson, for your testimony. Mr. BRINsOx. Thank you, sir.
Savannah, Ga., September 27, 1919. Hon. JOHN J. Esch, J. (.. Chairman ('ommittee on Interstate and Foreign Commerce,
Washington, D. ('. MY DEAR MR. CHAIRMAN: I am by this mail returning typewritten copy of my testimony before your committee on Monday last, with such minor corrections as I could remember.
In reading over the questions and answers at that hearing these additional thoughts have occurred to me, which I should like to submit as an addenda to the testimony already presented.
First. The general railroad bill should carry as a matter of right a clear provision that they, the short-line railroads, should be reimbursed for the losses that they actually sustained during the entire period of railroad control; these losses to be ascertained through their report to the Interstate Commerce Commission or by special auditing of their accounts by accountants duly authorized by the Interstate ('ommerce ('ommission. Thus and by that means the Gov. erument will not pay them a profit, as they did with the big railroads, but will simply make good only the actual losses which the short-line railroads sustained by reason of being unfairly turned out when it was clearly the intention of Congress that the short lines should be taken over on a parity with the trunk lines, or else they would never have passed the bill which was nullified by the action of Mr. McAdoo before the President's signature would have made it a law.
Second. The general bill should also have a clear provision that a period of at least 12 months should be allowed the short-line railroads in which to read. just where possible their finances and working conditions to the new order of things, and to this end receiverships or levies on the property of short-line railroads should be made clearly unlawful for the period as contemplated by the act, except and only by mutual consent of the owners and creditors. In other words, there may by many of the short-line owners and operators who, heing tired of the struggle and seeing no hope of permanent relief, would wish to give up the struggle and allow their property sold for benefit of the creditors. In this connection it is my calm judgment that unless the protecting arm of the Government is for the time being thrown around these short-line railroads at least 75 per cent, possibly more, will be thrown into bankruptcy. This would be bad business from the standpoint of the general public, the owners, and creditors as well.
Third. The act should carry a clear provision that the Interstate Commerce ('ommission should by the act itself be instructed to increase horizontally freight rates 25 per cent over existing rates as now promulgated in order that all the railroads, including the big ones, will have sufficient revenue with which to sustain themselves during the period of transmission from Federal to private control. This increase of rates to stand for two years, and after that to be subject to revision according to the best judgment of the Interstate Commerce ('ommission.
Fourth. The act should carry a provision clear and strong in its wording that the short lines shall be furnished a fair proportion pro rata of the entire available car supply, this being necessary because none of the short lines have cais enough, and have to depend on the large lines for the bulk of their supply. The short lines having neither money or credit with which to buy this equipment, if the trunk lines did not supply them as heretofore, 90 per cent of them would die from inanition ; they would simply shrivel up.
Now, Mr. Chairman, I wish upon receipt of this communication you would cause it to be read before your committee, with the hope on my part that you may see your way clear by these or similar provisions to save and safeguard the short lines of America from total ruin. Yours, truly,
GEORGE M. BRINSON, President. The CHAIRMAN. Mr. Cawcroft and Mr. Carlson, of Jamestown, V. Y., are here and wish to be heard. Which of you desire to testify first?
STATEMENT OF MR. SAMUEL A. CARLSON, MAYOR, CITY OF
JAMESTOWN, N. Y.
The CHAIRMAN. Give your name, address, and whom you represent.
Mr. Carlson. Samuel A Carlson; mayor of the city of Jamestown, N. Y.
Mr. Chairman, the city of Jamestown is confronted with a situation which I want to bring to the attention of your committee, and I assume other cities will be similarly situated shortly.
The city of Jamestown is supplied with natural gas by a Pennsylvania corporation. The source of supply is in the State of Pennsylvania about 60 miles from the city. Jamestown has a population, including suburbs, of 50,000 people. The Pennsylvania Gas Co. began operations in the city about 35 years ago and has continued the supply of natural gas up to the present time.
It has attempted to advance the rates and the matter is before the New York State public service commission. Owing to some legal interference, the public service commission has failed up to the present time to prevent the increase in rates. I am going to call on Mr. Cawcroft, our corporation counsel, to explain the legal features in that difficulty.
Now, the corporation has surrendered its franchise and served notice on the city that on May 1, 1920, it intends to discontinue the supply of gas to the city of Jamestown. If this threat is carried out, it will mean a calamity to that community, because all the householders have equipped for natural-gas fuel and no other.
The point I want to bring to your attention is this: The Pennsylvania corporation, being outside of the State of New York, hoids that the tribunals of the State of New York have no control over its supply or its rates, and we feel that there should be some Federal legislation to remedy this situation; that there should be some Federal agency, either the Interstate Commerce Commission or the Federal Trade Commission, or some other body which may be created by Congress, to deal with a situation whenever and wherever gas is brought in from one State to another and the attempt is made to shut it off, as is now being done in this case.
The Chairman. Of course, you are familiar with section 1 of the interstate commerce act?
Mr. CARLSON. Yes, I understand that. The CHAIRMAN. Which reads as follows: That the provisions of this act shall apply to any corporation or any person or persons engaged in the transportation of oil or other commodity except water and except natural or artificial gas, by pipe line or partly by pipe line and partly by railroad or water, and so on.
The statutes expressly exempts pipe lines for the transmission of gas in interstate commerce, and so, of course, you can not invoke the protection of the interstate commerce act, as the act does not cover the situation you have in hand.
Mr. CARLSON. I fully realize that, Mr. Chairman, and that is why I am here. We want your committee to recommend to Congress an amendment to the interstate commerce law as it is now.
The CHAIRMAN. That is, take out that exception?
Mr. CARLSON (continuing). By which that clause will be entirely eliminated, so there will be no exception, and so that the same control will apply to natural gas that now applies to railroads. We can see no reason why, in a situation of this character, the same powers should not be extended to the matter of the natural-gas supply as there is now in the matter of transportation service.
The ('HAIRMAN. About how many patrons or consumers have you got in Jamestown of the natural-gas supply coming from Pennsylvania?
Mr. CARLSON. About 9,000.
The CHAIRMAN. Are any of your manufacturing industries built around as a fuel for motive power?
Mr. Carlson. Yes; but not entirely, they use gas partly in connection with their industries.
The CHAIRMAX. Is this movement on the part of the Pennsylvania corporation supplying gas due to the fact of a gradual but sure diminuition in the supply?
Mr. Carlson. That is the position the gas company takes, assert ing that the gas supply is diminishing.
The CHAIRMAN. Then, sooner or later, of course, the people of Jamestown will have to yield to the inevitable, law or no law.
Mr. CARLSON. That may be the inevitable consequence, but we hold that as long as there is natural gas and since this company was