amend the act to regulate commerce, and I have before me a copy of the bill as introduced in the Senate, S. 1256. There are two provisions in this bill which vitally affects the future of the independent inland water lines of the country, and based on the number of years' experience in this business, would say that these two provisions which I will refer to below if enacted into law, will seriously handicap the water lines and tend toward destroying them instead of helping them. The first provision which I have in mind is that which requires the local port-to-port rates to be filed with the Interstate Commerce Commission and which also prevents these rates from being changed except in the same manner and through the same procedure that the railroad rates are now regulated. You will be interested in knowing that increases in the expenses of operating navigation companies change much more rapidly than they do in the case of the rail carriers and as furthermore, a majority of the water lines operate for only a part of the year, there is an absolute necessity that these increases be reflected in the charges for conducting business at once. As the interstate commerce act now reads, it is necessary for certain schedules of water lines to be filed with the commission where the water lines participate in through traffic under a through bill of lading, and almost any water line will tell you that it takes anywhere from two months to a year to get the Interstate Commerce Commission to permit changes in these proportional rates and that permission to increase the rates is reluctantly given and only after compelling water lines to submit a great mass of data, exhibits, etc. It so happens that only a small portion of the total business handled by the water lines moves under these proportional rates, otherwise a great many of the companies would have to suspend operations if all of their rates had to be similarly handled. I think that your committee should listen very carefully to water lines before this feature is passed upon. Another provision of the above-mentioned bill requires that the permission of the Interstate Commerce Commission be secured before securities and other evidences of indebtedness can be issued and for almost the same reasons mentioned above the water lines should not be made subject to this provision of the bill. As I understand it, these changes are contemplated with the idea of further development of our inland waterways and therefore no further handicaps should be added to the burden under which they are now struggling. It is my belief that if the interstate commerce act was amended so as to compel the rail lines to give the water lines fair divisions of through rates in which they join; and if, furthermore, the Interstate Commerce Commission was directed by law to entertain complaints of the unfair division of existing through rates and prescribe fair divisions, this will be the help the water lines will need. I will be very glad if you can find it possible to advise me what decision your committee comes to on these matters. Yours, truly, R. A. HISCANO, General Manager. DEAR SIR: We are informed that some question has been raised in regard to the portions of bill (H. R. 4378) which has been introduced in Congress, and which would put under the jurisdiction of the Interstate Commerce Commission traffic carried by boat lines operating upon the Great Lakes and inland waterways. Milwaukee is very much interested in this bill and particularly in this feature of it. We wish to urge the importance of the jurisdiction of the Interstate Commerce Commission over the package freight boats operating from port to port on the Great Lakes, over regular routes, which are not now under the jurisdiction of the commission. We believe there has never been adequate control over the boat lines handling package freight on the Great Lakes. Take, for instance, the Goodrich Transportation Line operating between Chicago and Milwaukee. In past years this company provided excellent service, with rates considerably under the all-rail basis, and with joint rates with rail carriers beyond Chicago and Milwaukee. To-day, because they are not under any adequate regulation, their port to port rates are 30 per cent higher than all-rail. By declaring an embargo, which has lasted over a year, they have declined to transport freight in connec tion with rail carriers, although they concur in tariffs on file which should obligate them to do this. They are operating entirely without regard to public service of convenience, and there is no regulating body that can and will even bring any pressure to bear on them. This situation is characteristic of other lines on the Great Lakes handling package freight from port to port over regular routes. If the regulation of these boats may be put under the jurisdiction of the Interstate Commerce Commission, there will be some adequate means of dealing with them. We believe that such opposition as may come from shippers to this feature of the bill, is due to their apprehension that the commission's jurisdiction and requirements for filing rates, tariffs, etc., would be impressed upon the so-called " tramp" steamers, and steamers oper ating under special charters, handling exclusively bulk freight, such as coal, ore, and wheat. We believe that these "tramp" boats should be exempt from the jurisdiction of the commission, except in so far as the commission may have authority over the dock facilities that they may use at the various ports. We shall very much appreciate your consideration to this matter. Yours, truly, FRANK BARRY. MILWAUKFE ASSOCIATION OF COMMERCE, Hon. J. J. Escн, M. C., Washington, D. C. DEAR SIR: At a meeting of the transportation committee of the Milwaukee Association of Commerce, held on September 25. the subject of legislation which will permit railroads to own and operate steamships on the Great Lakes, subject to the authority and consent of the Interstate Commerce Commission, was discussed at some length. I was instructed to write to you and say that the views expressed by Mr. William P. Libby, of the Associated Industries of Massachusetts, in his testimony before the House Committee on Interstate and Foreign Commerce, September 13, are fully concurred in by this association. We respectfully urge that you give this matter consideration and, if it is possible, to permit legislation in connection with the EschPomerene bill as set forth by Mr. Libby, that you seek to secure the same. Yours, very respectfully, FRANK BARRY, Traffic Secretary. LETTER SUBMITTED BY MR. A. H. SMITH. NEW YORK CENTRAL LINES, MY DEAR CONGRESSMAN: When I resigned as regional director of the United States Railroad Administration, certain newspapers asked for a statement of my impressions of Government operation of the railroads and my views of the railroad problem generally. I have refrained from issuing such a statement, believing that it would be best to convey any ideas that I have on the subject to you and the other gentlemen who are working on the problem. Therefore, if your mind is still open with reference to the solution of the railroad situation, perhaps what I have to say may be acceptable to you. The human element in American railroads represents 90 per cent of its effectiveness. The other small percentage of the whole would be useless without individual vision, effort, and experience. Fixed responsibility really has seemed to be impossible under Government management. It leads into such a maze of interests and interferences that the employees do not get into that state of mind that they do in private operation, and the state of mind is one of the most important parts of railroad operation. Destroy it and the effect is manifest all through the rank and file and every part of the great machine. I know that you realize fully that it is a business that must have the individual concern of the employee-the engineer at the throttle; the fireman beside him; the conductor; the flagman: the signalman; the section foreman; and on up to the officers of the company-they all must have a fixed responsibility. Most of the work is done beyond the eye of the officers, because it spreads over a vast territory. The man at midnight and in the storm must do his duty absolutely and fully with no one to see him and no one to direct him. He must have an incentive-not one of mere salary, but one of pride and hope that he may some time be more than he is. It has been stated, and, so far as I know, never disputed, that before the war the American railroads for each dollar paid them rendered considerably greater and substantially better service than the railways of England, France, or Germany. The European railways, however, do not, in any degree, compare with the American railways in extent. They are short railways for the most part with dense populations, while the American railways are spread over a vast, and in some cases, sparsely settled territory. If we are to become what we are destined to become, if we make no mistake a great commercial country from a foreign as well as a domestic standpoint-we must have sufficient and efficient transportation. Those that produce it by providing the capital and labor should be properly rewarded. The manufacturers and the merchants and the public as a whole owe that to them. Ours is a country of great distances, and with that handicap we will not be able to compete successfully with those countries with shorter distances unless our transportation system is adequate and efficient. The American railways require capital properly and liberally expended to furnish more facilities and modern equipment to offset the labor and other charges which have been placed upon them. To my mind it is important, therefore, that a fair return be allowed, so that capital will enter and provide those facilities that will give what the country must have. Looking backward, it is a little over a year ago when the congestion was so acute that the people were willing to pay almost anything for transportation if they could have it, and such conditions should be avoided. These railroads have stood still in their expansion and development, broadly speaking, for a long time. Economy is going to come in their expansion and refinement, and economy in rates will result, not from radically cutting wage costs, but by giving the railroads and employees a better machine to work with, more facilities, more yards and shops, and other essentials that go to make up a successful transportation instrumentality. Previous to the war we had approximately $450,000,000 of equipment standing idle. Since the signing of the armistice we have seen substantially the same condition repeated. This is a situation that is inevitable, and the compensation to the railroad companies must provide for the lean years which produce such a condition, for the reason that it is impossible to provide the facilities as fast as the business demands in periods of abnormal traffic. In the matter of the return of the railroads to the corporation: My opinion is that they should be restored at an early date. It will eliminate uncertainty in the state of mind referred to previously. and the morale will improve. The Government said when the roads were taken over that they would be returned in as good condition as when they were taken. That means not only physically, but as nearly as possible mentally, and the Government can not afford to do other than to keep its promise. Perhaps a law can be written that will cover all the involved questions that exist and permit settlement with the restoration. But the situation is very complicated. and it may be that the Government will find it advisable to appoint a commission or board to make the settlement after the return. in the meantime giving the benefit of private operation to the people-the present system of compensation being continued as a guarantee pending settlement-a limited time to be allowed after the return to effect the settlement and avoid protracted delays. This commission might well be made a permanent feature of our system of railroad regulation, and should be composed of at least three commissioners and be charged with the responsibility of keeping informed with respect to the transportation necessities of the country generally, and to make representations to the Interstate Commerce Commission with respect to the revenues required to provide the necessary facilities and service, and insure proper development of the transportation system. The cases of the weak and the strong roads, so to speak, should be weighed out by this commission. If the road is so weak that it can not stand, it should have special treatment. If it is absolutely necessary to the needs and comfort of the people that should have some extra allowance, locally or otherwise. The entire rate structure should not be thrown out of proper position because of some exceptional case, any more than any other business undertaking in our country should be gauged by the exceptions. The question of rates, in which the public are most deeply concerned, because it affects the cost of living and the amount of business we may do, is a matter for study by experts. Much has already been accomplished in this direction by the Interstate Commerce Commission and those drafted into Government service, and they have shaped. up a great amount of valuable information which is available to any authority that the Government might designate. Rates established as a war measure and to meet the changed conditions should be continued as presumptively reasonable. Prewar rates should not be the basis of future rate regulation. I believe that it is generally admitted that the interstate commerce law sought to regulate the railways on a basis of reasonableness and justice. The operation of that act, however, has put the burden of proof in all instances on the railroads, and that, it seems to me, is a fundamental violation of justice. As I see it, what is needed is to bring order out of the confusion of unrestrained or biased regulation, and out of the confusion of conflict of regulation between the various authorities. Briefly, the foregoing suggestions contemplate the prompt return of the railroads; the continuance of the present rates until changed and adjusted to meet the largely increased charges; the continuance of the guaranteed standard return until this is accomplished; the creation of a board or commission which will act as an administrative board, charged with the responsibility to represent the public interest in respect to the adequacy of facilities and service, and, ir addition, to exercise the functions and powers of the present Interstate Commerce Commission, except as to accounting, valuation, rates, etc. It is estimated that 12 per cent of the Nation's wealth is invested in the country's transportation systems. It is safe to say that 100 per cent of the public interest is involved therein. It is one of the great problems that we have before us. It is of prime importance that it be solved properly. Politics or theories have no place in its consideration; it is a business of manufacturing transportation. Good machinery should be used together with good brains and full effort, to the end that the country and the people will continue to |