Debate of Oct. 24, 1895.Question: "Resolved, That the Interstate Commerce Act be so amended as to permit of Pooling.

Brief for the Affirmative.A. S. INGALLS and S. HECKSOHER.

Best general references: Quar. Jour. of Econ. Jan. '88 p. 184-185; Jan. '89 p. 177 et. seq.; Jan. '90, p. 158-171: Pol. Sci. Quart. Sep. '87, p. 374 et. seq.: Hadley, Ry. Transportation pp. 74-76, 91-97, 143-145; Interstate Commerce Commission Reports I: 307-312; II: 434 et. seq.; III: 394 et. seq.; IV: 351-358: Senate Reports 1st sess. 49th Cong. 1885-86, III part 2, pp. 71-77, 114-117, 119-126, 170-173, 194, 202-203, 1206.

I. Pooling is beneficial to the public.- (a) It tends to the stability and uniformity of rates: Quart. Jour. Econ. IV: 159, Jan. 1890.- (1) All railroad transactions are made public, thus eliminating (a) rebates, (b) rate-cutting, (c) discrimination, (d) underweighing, etc., all of which evils can only be practiced in secret.- (b) It tends to lower rates.- (1) Rates were lower in 1884 under pooling system than ever before, except during rate wars: N. Y. Ry. Commission Report of 1884, I: 77.- (c) It checks consolidation and monopoly.- (1) The powerful companies cannot, by cutting rates, ruin, and then absorb, the smaller roads: Pol. Sci. Quar. '87, p. 388.- (d) It tends to lessen the construction of parallel lines.- (1) New roads, obtaining only a fair share of traffic under pooling system, cannot compete with old established lines.- (2) Parallel lines are usually constructed on wild-cat schemes, with expected profit through rate-cutting, railway wars, etc.- (3) Parallel lines are detrimental to the public. (a) One line between two points can afford to give better service and more uniform rates.- (e) The majority of best known New York shippers endorsed pooling as beneficial to their interests: New York Senate Ry. Committee Report, 1886, p. 93.- (1) Many of those now opposing pooling do so merely from hostility to corporations as such: ibid.

II. Pooling is beneficial to the railroads.- (a) Railroads profit more on a uniform rate than a fluctuating rate of even higher average.- (1) Fluctuating rates cause fluctuating volume of traffic.- (i) Fluctuating volume of traffic incurs greater operating expenses than a uniform volume.- (ii) Uniform traffic causes capital to be constantly employed; no idleness or loss by interest.- (b) Rate wars following prohibition of pooling caused enormous decline of railroad property: Quar. Jour. Econ. Jan. '89, p. 178.- (c) Railroads themselves favor pooling.

Brief for the Negative.L. T. HILDRETH and A. M. KALES.

Best general references: Reports of the Inter-State Com. Comm., I, 308, 1886-87; United States Statutes at Large, Vol. XXIV; Congressional Record, XVIII, pp. 479, 524; Report of Senate Select Comm. on Inter-State Commerce,- Index under "Pooling"; J. F. Hudson, "Railways and the Republic," 194-250; J. Steven Jeans, "Trusts, Pools and Corners," ch. xiv, p. 140; Rorer, "InterState Corporation Law," 289; Redfield, Railroad Pooling in Law of Corporations.

I. Pooling is unnecessary.- (a) Serious tate wars have ceased since the passage of the Inter-State Commerce Law.- (b) The Inter-State Commerce Act affords the advantages which pooling would offer and does away with its evils: Inter-State Commerce Law; United States Statutes at Large.- (c) There are other ways of avoiding excessive competition; Forum, Aug. 1892.

II. Pooling would entail great legal difficulties.- (a) Pooling is contrary to Common, Statute and Corporation Law; Redfield, "Law of Corporations"; Texas and Pac. Ry. Co.; 41 La. Ann. 970; 40 Am. and Eng. R. Cas. 475; Stanton V. Allen, 5 Den, (N. Y.) 434; N. Y. R. R. Com. Rep., 1885, p. 77.- (b) Pooling would lead to law-suits between Railroads: ibid.- (c) Pooling increases freight rates beyond statutory limits; Rorer on Inter-State Corporation Law, 289, etc.

III. Pooling is inexpedient.- (a) Pooling is of no particular advantage to the public.- (1) Pooling does not give uniform rates.- (b) The pool cannot be maintained permanently: Senate Select Comm. Report on Inter-State Commerce, Evidence, p. 403.- (c) If the pool could be absolutely maintained its rates might be uniform but of such a character that they would be a public burden.- (d) Pooling does not reduce rates: Rept. Inter-State Com. Comm. 1889, p. 80,- (x) etc.- (i) Every reduction of rates has been in consequence of the revolt of one railway or another against the rule of the combination: J. F. Hudson, Railways and the Republic, p. 217.- (ii) Every restoration of pools has been accompanied by an advance in rates: ibid.- (e) Pooling does not prevent discrimination.- (i) The power of pools enables them to establish monopolies by discriminating against a whole industry, instance the Standard Oil Co.

IV. Pooling is a positive evil.- (a) Pooling tends to deprive the public of the benefits of improvement in the R. R. service: J. F. Hudson, Railways and the Republic, p. 229.- (i) A road will get from the pool its alloted share of patronage whether it affords the best or the poorest service to the public.- (b) Pooling causes an artificial maintenance of rates, which stimulate the construction of parallel and competing lines: Select Senate Comm. Rept. on Inter-State Commerce, Evidence, pp. 888, 1295, 127.- (c) Pools tend to increase the frequency and violence of Railway wars: Hudson, p. 232.- (i) Weak companies resort to wars to secure the privileges of combination.- (ii) Strong companies resort to war to prevent honest competition.- (d) Legalized pooling would be a special danger.- (i) The anomalous combination of corporations which could be brought together by legalized pooling would have more power over commerce than the Congress of the United States.- (ii) From this unrestrained control of business interests dangerous abuses would spring.- (e) It took a railroad pool to perpetrate the Standard Oil Monopoly.- (f) Why should not permanent pooling combinations maintain in the same way discrimination over any and every important industry.