New York, April-23,, 1900
Mr. E. P. Bacon,
President of the
League of National Associations,
Milwaukee, Wisconsin.
Dear Sir.—On April 13, 1900, you filed with the Com¬
mittee on Interstate Commerce of the United States Senate
an accumulacion of resolutions adopted by various
National Associations, Local Boards of Trade and Cham¬
bers of Commerce, together with a series of statements of
business firms and newspaper clippings, all favoring the
proposed amendments to the Interstate Commerce Law
known as Senate Bill 1439, which were printed in the
record of the proceedings of the Committee.
A recital in the first of these resolutions, which is re¬
produced in various forms throughout the entire series,
reads as follows :
''Whereas, certain Court decisions have practically
made the Interstate Commerce Law nugatory, and rele¬
gated the Interstate Commerce Commission to a position
where it has no real power."
This recital fairly states the basis upon which many
respectable and honorable people have been induced to
support the proposed bill. Its truth has been assumed
without discussion. A candid and dispassionate examin¬
ation of the facts is certainly well worth while in view of
the important consequences which are claimed to follow
from this assertion. Such an examination I propose to
make, not claiming to be in any sense an authority upon
the questions involved, but having a somewhat intimate
acquaintance with the Interstate Commerce Law and its
administration from its inception to the present day, and
desiring to state the truth of the case as precisely as I can.
2
A.
It is asserted that Court decisions have made the law-
nugatory. This statement assumes that the law is now-
nugatory ; otherwise Court decisions cannot have made
it so. Is the Interstate Commerce Law nugatory " ?
The Interstate Commerce Law is many-sided. It pre¬
sents a vast variety of aspects. Business men naturally
form individual impressions according to the special fact
which confronts the experience of each. If this or that
particular benefit which they think might have been de¬
rived in their own affairs has not been attained, the law
as a whole is charged with failure. Such generalization is
not just. We have to-day a prosperous country. Busi¬
ness enterprises are successful to an unprecedented degree.
The service of transportation is undeniably well performed
in every part of the land. The Interstate Commerce Law
lays down the guiding principles applicable to interstate
railway traffic. Can it be that the law is nugatory ?
If we examine the subject closely, we begin to doubt
whether those who so flippantly assert that the law is uni¬
versally disregarded have any true comprehension of what
the law really is. Until this statute was enacted interstate
commerce was subjected to no general rules. State laws
and State Courts could not affect it. The Federal Courts
derive their jurisdiction from laws passed by Congress
under the provisions of the Constitution. The common
law of England had developed a series of principles ap¬
plicable to common carriers, which were applied in the
several states of our Union locally. The Act to Regulate
Commerce established those principles as component parts
of our federal jurisprudence, and gave to the federal
courts full jurisdiction to hear and determine causes aris¬
ing thereunder. This was a new jurisdiction. It stands
to-day in full effect. Its establishment was the leading
object proposed by the framers of the law. In this re¬
spect certainly the law is not nugatory.
Section 8 of the Act is one of the sections by which this
jurisdiction is conferred. It gives a right of action against
common carriers for the full amount of all damages that
may be sustained in consequence of any violation of the
8
provisions of tlie Act. With this provision in full force
and its integrity absolutely unchallenged, how can any¬
one venture to say that the law is nugatory? - It is true
that this section has been infrequently invoked, but that
is not the fault of the law, which went to the utmost limit
in conferring jurisdiction upon the courts of the United
States.
What is the essence of this jurisdiction? This ques¬
tion must be answered by a scrutiny of the framework of
the law. Briefly stated, there are three sections declaring
principles ; two other sections are rules of evidence under
those principles ; and the rest of the law is principally
machinery devised to compel the observance of these prin¬
ciples. The declaratory sections are Nos. 1, 2 and 3.
Sec. 1. Charges shall be reasonable and just.
Sec. 2. Unjust discrimination between individuals (re¬
bates, drawbacks, etc.) prohibited.
Sec. 3. Undue preferences and advantages to particular
persons, localities or descriptions of traffic prohibited.
Those three sections formulate the broad charter of a
new federal jurisprudence. It will be observed that
neither charges, discriminations nor preferences are pro¬
hibited. The inhibition applies when, and only when,
charges, discriminations or preferences are unreasonable
and unjust.
The sections above referred to as being rules of evidence
are Sec. 4, prohibiting a greater charge for a shorter than
for a longer haul over the same line when the circumstances
and conditions are substantially similar, and Sec. 7, for¬
bidding devices to prevent the carriage of freight being
continuous from tire place of shipment to the place
of destination. In both of these cases, when the forbid¬
den facts exist, an undue preference is prima facie made
out, subject to exculpation by proof of countervailing
conditions.
Under the three declaratory sections (aside from the
two special cases last mentioned) the burden of proof is
upon the complainant to show that the charge, discrimi-
4
nation or preference attacked is actually unreasonable
and unjust. Every such case presents a judicial question,
cognizance of which appertains to the Federal Courts and
not to the President, the Secretary of the Interior or any
other administrative official.
The foregoing is an accurate statement of the scope
of the Interstate Commerce Law, as explained by its
framers in the Report of the Senate Committee which in¬
troduced the bill, and as deduced from an inspection of
the language of the statute. Is it now nugatory? Let us
examine its declaratory features in detail, with reference
to the charge that ''the law as it stands is inoperative."
Section 1 certainly is not inoperative or nugatory.
Charges made by common carriers upon interstate com¬
merce are not often unreasonable or unjust. Such com¬
plaints are very rarely made except by comparing one rate
with another, which removes the ground of complaint from
the first section to the third. Looking at railway rates each
by itself, under the general requirements of Section 1, it re¬
quires a daring spirit to allege them to be unreasonable,
as a whole or in detail. Unreasonably low they often are;
unreasonably high they are not. Possibly a rare case ex¬
ists here and there as to which some reduction may be
thought to be appropriate, but the cases are too few to war¬
rant consuming time in formulating new remedies. A
speaker at the last public hearing of the Committee at¬
tempted to specify three such cases (p. 381), but all of
them were doubtful, and all of them were relative; that is,
the complaint in each was something more than a violation
of Section 1. The phenomenally low transportation
charge of American railways are the world's wonder.
Nevertheless, a great argument for the reconstruction
of the statute is foisted upon this section, where in fact
little if any appreciable complaint exists. We have been
gravely told that if there should be a rate that was un¬
reasonably high, and if an appeal should be made to a
Court to correct it, and if the Court should grant an injunc¬
tion against the maintenance of the rate, the carrier might
evade the injunction by merely reducing the rate a cent or
s
a half-cent, and the wrong in the case might not be cor¬
rected ! And so, in view of this visionary possibility, no
one has ever attempted to enjoin an unreasonable rate.
Such is the actual though remarkable fact. Because it
was conceived that astute railway managers might evade a
Court's decree,no effort has ever been made to procure one.
The process established by the statute never having been
tried because of fear that it might prove futile, the failure
to enforce the law is made a basis for complaint against
» its efficacy.
The expectation that the statute in practice would not
prove effective in this respect is a fancy only. A carrier
whose rate was adjudicated to be unnecessarily high, and
which was enjoined by a Court from maintaining an un¬
reasonable rate, would hasten to conform to such inti¬
mations as the Court might give respecting the basis which,
it would consider not unreasonable. Railroad companies,
like other citizens, do not litigate for fun, nor do they seek
occasion to trifle with the Courts. Section 1 of the law,
requiring rates to be reasonable, is not nugatory : first, be¬
cause rates in fact are almost universally reasonable,
and second, because it could easily be enforced if any
occasion should arise.
Section 2 is the one chiefly talked about when the law
is called nugatory. But even here a little discrimination in
the use of epithets would be wise. Before the law was
passed special rates were the rule. Now they are the ex¬
ception. Look into the evidence given to the Senate Com¬
mittee in 1885 and 1886 and see what a debauch of universal
private deals composed the then effective railway tariffs.
On many roads almost the only tariffs were figures found
in the private memoranda of the freight agents who ar¬
ranged separate contracts with each shipper.
To correct this state of affairs the law did four things :
first, it forbade it (Sec. 2), which was useful, for railroad
officials, like other men, do not like to be law-breakers ;
second, it prescribed publicity of tariffs (Sec. 6), which
established a standard basis of rates known to all shippers,
and which section has been at all times scrupulously ob¬
served by the roads ; third, it provided penalties for viola-
6
lions (Sec. 10), a section which has not worked very well
because the corporations themselves could not be prose¬
cuted, and which undoubtedly should be amended in this
and other respects; fourth, it opened the door for an in¬
junction to restrain carriei'S from charging more to one
shipper than to another, a remedy which no one has ever
attempted to employ, although it was afterwards strength¬
ened by an amendment conferring jurisdiction upon the
courts to issue a writ of peremptory mandamus command¬
ing the carrier to carry traffic for one shipper on the same
terms as for any other.
Those four provisions of the law have done a great
deal in the direction of suppressing unjust discrimination
between shippers. The situation in this respect is in¬
finitely better than it was before the passage of the law.
There are vast sections of the country where discrimina¬
tions of this character are never heard of. No complaints
of secret rate-cutting are now heard in the Southern States ;
few such cases arise in New England, in the Middle States
or west of the Missouri river. There are many important
classes of traffic which move regularly at tariff rates in
every part of the land. It is not true to say that Section
2 of the law is nugatory.
But it must be admitted that in other sections of the
country and as applied to other classes of traffic, rebates,
drawbacks and other devices for favoring special shippers
are still extant. Outbreaks of rate-cutting, more or less
spasmodic, not infrequently occur. These affairs seem to
be temporary in their nature ; the complaints cease
after a time. The accounts of them given in the newspa¬
pers are usually grossly exaggerated. But the actual facts
are bad enough, and the conditions thus from time to time
created are wrong in every way. There are certain parts
of the country where these outbreaks seem to be recurrent,
and certain kinds of business, such as grain and packing¬
house products, are peculiarly susceptible thereto.
Probably more than nine-tenths of the railroad freight
traffic of the country is free from rate-cutting, and some¬
thing should be done to stop it altogether.
The proposals to this end in the pending bill are two
7
only : first, the amendment of the penalty section (10),
which is in the right direction ; second, the appointment
of special agents to examine railroad books (query, why
not shippers' books also?), which might help the detec¬
tive work of the Commission a little, but is of doubtful
expediency. At the last session of the Committee
(page 389), a new theory was broached, the speaker
for the first time claiming that the power to
name maximum rates would be efficacious in the
stopping of rebates. " Mow, if that railway should be
compelled, when it grants a special rate to Mr. A, to
give that same rate to everybody else and to apply that
rate to all its intermediate territory, the consequence of
granting the rebate would be such that it would not be
longer for its interest to allow it." (Very well; the power
to do this by injunction and mandamus has been specially
conferred as above shown, but never attempted to be ex¬
ercised ; the speaker continues:) "You cannot compel
a railway to adhere to its published rates, but you can
compel it to reduce its published rates to a point where a
secret rate is no longer an object. That is the only thing
which has ever stopped the payment of rebates "
(a wild and untrue assertion), " and it is in my judg¬
ment the only thing which ever will effectually stop
it." This statement lets the cat out of the bag. It
is the first time any intimation has been given as to how
a power to reduce rates could be used to stop rebates.
And it amounts to this: that instead of going at the re¬
bate-paying line by the infliction of penalties and by peix
emptory mandamus to compel it to take all business on
the same terms, the promoters of this bill propose to
punish all the honest lines in order to hurt the one that is
guilty !
The fact is that the prevention of rebate-paying would
be greatly assisted by the repeal of the fifth or anti-pool¬
ing section of the law. This is a matter of expert knowl¬
edge, upon which there is no disagreement among experts.
As was well said by President Hadley, "It may be stated
as a fact of history that no nation lias succeeded in pro¬
hibiting discrimination and pooling at the same time."
8
Section 5 of the law was simply a blunder. If your
friends want to know how track buyers of wheat can be
protected, let them study the situation which exists where
railroads contract with each other for the equitable appor¬
tionment of traffic.
In the transportation service the cheapest is by no means
necessarily the best. The true desiderata are efficiency in
operation, together with stability and equality in price. It
is therefore a requirement of law that the rates of common
carriers shall be alike to all. Whatever tends to effectuate
this requirement is desirable; whatever tends to break it
down (as does the fifth section of the law) is undesirable.
Every man has a right to know the rate paid by his neigh¬
bor, and to enjoy the same rate himself; fluctuations in
tariffs are also harmful to business interests.
Thus we see why agreements among railroads to main¬
tain legally established and reasonable rates differ from
combinations to support prices in other industries. The
people do not want fixed prices upon merchandise ; they
believe conditions are best when they can buy the prod¬
ucts of the farm, the mine, the factory, and the packing¬
house at the lowest price in an absolutely open market.
But in the business of common carriers and other public
or quasi public services, the people properly demand a
fixed price, the same to all.
Whether or not Section 3 may now be called nugatory
depends upon entirely different considerations. We here
leave the domain of mathematics and enter a region con¬
trolled by theoretical principles of justice, where men will
always disagree in their application to particular cases.
The section in full is as follows :
'• That it shall be unlawful for any common carrier
subject to the provisions of this act to make or give
any undue or unreasonable preference or advantage
to any particular person, company, firm, corporation,
or locality, or any particular description of traffic, in
any respect whatsoever, or to subject any particular
person company, firm, corporation, or locality, or any
particular description of traffic, to any undue or un¬
reasonable prejudice or disadvantage in any respect
whatsoever."
9
Most of the important rate controversies under the
law have arisen under this section. This will be the
case for all time. Every shipper imagines that his rate
situation might be improved, and cudgels his- brain to
find some basis for the claim that some other shipper or
locality or description of traffic is more favorably treated
in the tariffs. Claims of this character are constantly aris¬
ing, and will never cease to be presented. Some of them
are well founded. Hundreds of such claims have been
adjusted since the enactment of the law through the
agency of the Commission, either informally by corres¬
pondence or after hearing upon formal complaint. Mean¬
while thousands of similar cases have been adjusted by
the carriers themselves. This work is constantly going
on. The principle laid down in this section of the law is
continually appealed to, and its justice, as well as its
authority, is constantly recognized. Shippers hastily
assert that the section is nugatory when their personal
grievances are not promptly corrected, but its authority
has been thoroughly established by court decisions, and
every day witnesses its application and enforcement
somewhere and in some form.
The variety of cases which Section 3 controls is infinite.
Let us consider a few concrete cases as illustrations of
what is involved and what the law can do. I think that
no violation of Section 3 exists that can be proved to the
satisfaction of a court, which that court can not and will
not promptly correct. In any case of demonstrated in¬
fraction of Sec. 3 (and Sec. 4 as well) the federal court can
issue its injunction requiring the undue preference (or the
violation of the short-haul rule) to cease absolutely and
immediately. By this I do not mean that the court has
an unqualified power to prescribe the manner in which
the correction shall be made (though usually it would
amount to that in practice), but it has ample jurisdiction
to define the undue preference or the unreasonable disad¬
vantage and to require that it shall be corrected.
For example, the Commission considered a case where
it appeared that the rate on railway ties was 25.13 cents,
while the rate on other lumber was only 12 cents, and
10
whore it was evident that the rate on ties was intended to
be prohibitory against the shipment of ties away from the
line of the road in qûestion. The Commission believed
this was unreasonably prejudicial to shippers of ties and
so reported. The railroad at once reduced its rate on ties.
If it had not done so, the Court could have enjoined the
continuance of the undue preference, which the road
would then be obliged to correct either by advancing the
rate on lumber or by reducing the rate on ties. As it
could not advance its lumber rate to 25.13 without losing a
large section of its traffic, it would have to reduce its tie
rate.
Again, take the Pearline case, which was a question of
classification. No adequate reason was proved for keep¬
ing Pearline in the fifth class while common soap was in
the sixth class. The Court could have corrected the diffi¬
culty, if the carrier had refused to do so, by an order re¬
straining the carrier from persisting in the undue prefer¬
ence involved in maintaining this difference in the classi-
cation of articles of cognate nature. It would, of course,
be open to the carriers to raise the classification of soap if
they preferred to do so rather than to reduce the classifi¬
cation of Pearline, but, practically, the reduction of Pear¬
line to the sixth class would be accomplished.
And again, in a case under the fourth section, the
court would enjoin the charging of a greater sum for the
shorter than for the longer haul, and the road would then
be obliged to adjust the tariffs in either of the two ways
open, either by advancing the through rate or by reducing
the local rate. This has actually been done in a case d'e-
cided by the Supreme Court.
So also in the case of relative rates upon wheat and
fiour ; the court has power to make an order enjoining the
continuance of the unreasonable disadvantage of which
American millers complain, which would compel a parity
of rates if the court so required, or the establishment of a
reasonable differential, if so adjudged.
In all cases of this character the remedy is with the
courts, and is close at hand. It does not take over twenty
days to get a preliminary injunction order, if a prima facie
11
case can be made out. This is the method prescribed in the
Act for regulating the maladjustment of relativerates. The
jurisdiction of the courts has never been minimized by any
decisions whatsoever. It is fully available to-day and has
always been open to every shipper. How then can it be
charged that Section 3 is nugatory ?
Instead, however, of employing this simple and direct
procedure, shippers have apparently considered that the
remedy given by the Act is only through a complaint to the
Commission. But there is no such requirement in the
statute, which merely says (Sec. 9) that persons shall not
have the right to pursue both remedies, büt must elect
which of the two methods of procedure they will adopt.
And this provision applies only in cases where damages
are sought, leaving unhampered the general jurisdiction
of the courts to enjoin the continuance of violations of
the law whenever a suit for the collection of damages
will not afford adequate relief. In such cases it is ad¬
vantageous to have a report from the Commission, which
of itself presents a prima facie case, and in aid of which
special celerity of procedure is given by the statute.
Whichever method is pursued, the power is in the judici¬
ary. and is ample. Delays are complained of, but scrutiny
will show that the delays have been attributable rather to
the manner in which cases have been presented and hand¬
led than to the action of the courts therein.
We find, then, that neither Sections 1, 2 or 3 can in any
proper sense be called nugatory at the present time, nor
has the jurisdiction of the court to enforce them'become
in anywise inoperative.
Section 4, the famous short-haul clause, is also far from
being nugatory. This was the most prominent provision
of the law in the early days of its administration, and
rates were changed in all parts of the country in order to
bring them into conformity with the intent of the section
as expounded by the Commission in the Louisville &
Nashville case. In the making of tariffs at the present
time this section is kept constantly in view and is univer¬
sally observed, except in cases where the carriers believe
12
themselves to be justified in making exceptions by reason
of differing circumstances and conditions.
The original interpretation of this section by the Com¬
mission has been fully sustained by the Supreme Court.
It is true that a few years later the Commission changed
its construction in a single particular, which the court
afterwards disapproved ; but it is absurd to say that this
decision made the section nugatory.
Section 7 also is in full force and is universally obeyed.
The carriage of freight is continuous and undelayed
throughout the United States from every place of ship¬
ment to every place of destination. No complaint of vio¬
lation of this wholesome provision has been heard.
We have thus examined every declaratory section of
the law and have entirely failed to find any justification
for the charge that the statute is nugatory. The allega¬
tion that it has been made nugatory by "certain Court
decisions" therefore wholly falls to the ground.
B.
Let us then consider whether " certain Court decisions
have * * * relegated the Interstate Commerce
Commission to a position where it has no real power."
My attention has been called to one decision only
which is said to have been in derogation of the power of
the Commission. In that case the Commission had decided
that the first class rate from Cincinnati to Atlanta should
not exceed $1.00 per hundred pounds, also naming maxi¬
mum rates for the other classes in the Southern classifica¬
tion. This, the Court held, the Commission had no power
to do, basing their opinion on the plain language of the
law. If no such power ever existed of course the Com¬
mission was not relegated to an inferior position by that
order of the Court. The Court held that no such power
was intended to be conferred. There was, therefore, no
relegation by that decision.
This charge is sometimes made in other language, as
that the power over rates, which was believed by the public
and by the Commission itself to have been conferred upon
the Commission, had been taken from them by the decision
13
of the Court. But it is not important what was believed
by the public or by the Commission, so long as that belief
turns out to have been erroneous.
The true question is as to what power was in fact con¬
ferred or intended to be conferred by Congress when the
law was made. This question is not to be resolved by
looking at inaccurate beliefs which, for one reason or an¬
other, may have sprung up in subsequent years, but by
examining the proceedings antecedent to the passage of
the law and also the language of the law itself.
I do not here traverse the recital that •' in order to
secure to the public rates inherently reasonable, and to
prevent undue and unjust preferences and discriminations
it is necessary that some tribunal should be given power
over rates," especially if the roads are to be allowed (as,
in the interest of the public, they ought to be) to contract
among themselves in respect to the apportionment of com¬
mon traffic. The Act to Regulate Commerce, however,
intended to confer that power upon the federal courts and
not upon the Commission.
In fact, it may be questioned whether Congressintended
to confer upon the Commission any real "power," properly
so called. It charged them with various duties, but a close
scrutiny of the Act will fail to reveal any important grant
of power.
As suggested, the several sections of the Act not above
described as declaratory contain the machinery erected for
the enforcement of the Act. This machinery had three
phases : first., publicity, reached by requiring the printing,
filing and posting of tariffs (Sec. 6) and the filing and cir¬
culation of annual reports (Sec. 20); second, court jurisdic¬
tion, accomplished by enacting principles to be applied by
the federal judiciary in controversies respecting interstate
commerce; third, administrative supervision, attained
through the establishment of the Interstate Commerce
Commission.
The Senate Committee which originated the bill pre¬
sented at the same time a very elaborate and valuable
report, which deserves the close attention of every stu-
11
dent of the subject. The following headlines introduced
its discussion of the proposed new body :
" A National Commission—Its Establishment Recom¬
mended for the Enforcement of the Legislation
Proposed."
It will be noted that the establishment of a National
Commission was not recommended with the purpose of
conferringuponitany powers, either legislative or judicial,
but its duty was to be " the enforcement of the legislation
proposed."
The report proceeds: "What is everybody's business
is nobody's business, and the conclusion seems irresistible
that specific enactments must inevitably fail to remedy the
evils they are designed to cure unless an executive board
be authorized for the special purpose of securing their
enforcement. * * * It is true that reliance must
ultimately be had upon the courts in any event for the
final remedy, unless the Commission itself be constituted
a court, which the Committee does not consider expedient;
the final determination of all contested proceedings
instituted under any laws that may be passed by Congress
must rest with the courts of the United States."
This ought to be sufficiently clear. The Commission
was not to be a court. It was not called a tribunal. It
was denominated an " executive board."
Again : "It is not proposed to restrict in any manner
the choice of remedies now available, but it is proposed to
provide additional means of obtaining redress. * * *
This can best be accomplished, it is believed, by making
the reports and recommendations of the Commission
prima facie evidence as to the facts found in all cases
which it investigates."
"Reports and recommendations," not decisions and
orders; and these to be prima facie evidence of facts
stated, when presented in cases before the Courts. Where
is there any evidence of intention to confer power to pre¬
scribe a rate, or to prescribe anything whatever?
The situation as understood at that time may be further
illustrated by two typical citations from the Congressional
15
debates attending the passage of the bill. Hon. Benjamin
Harrison, then a member of the Senate, and whose intel¬
ligence and accurate judgment no one can question, used
the following language :
" As to the other objection, that judicial power is
conferred upon the Commission, I do not think it is
well founded. Its powers are simply supervisory.
They are empowered to get information ; they are em¬
powered to administer oaths, just as a committee of
Congress may in the examination of witnesses. It is
not a judicial function. The Commission may make
recommendations as to what ought to be done, but
the bill does not give their conclusion the force of a
judgment."
Hon. Charles F. Crisp, whose authoritative position as
a member of the House of Representatives (afterwards
Speaker) makes his understanding equally valuable, spoke
as follows, calling particular attention to the trivial im¬
portance of the power conferred upon the Commission by
the bill :
"What are the powers of the Commission? In
particular cases, under the Fourth Section of the Bill,
they may relax the rule therein set up. As to other
matters, they may require the railroads to make re¬
turns of their accounts, their stock and bonds, their
running expenses, rates of charge, etc. Where the
complainant invokes their authority they may pass
upon a given case between the individual and the
railroad company. When they so pass upon the case,
their finding upon the facts is prima facie true. They
have no power to give vital force and effect to their
judgment, but it is prima facie true in the Courts of
the country.
"Mr. Speaker, we do not drive the complainant to
the Railroad Commission. If he chooses to go there,
he has the right to go and invoke this power, which is
created by the government for his protection ; hut if
he prefers for any reason to go to the Courts of the
country, they are open to him. The same judge who
passes upon his rights of property, lus rights of life
and liberty, will there pass upon his rights in his
dealings with the railroads."
In 1889 Section 12 was amended by adding a clause
providing that the Commission shall be "authorized and
16
required to enforce the provisions of the Act," and that
District Attorneys should act when applied to by the c»m-
mission the expenses of such proceedings to be paid by
the United States.
It is too clear for debate that the Commission was
originally expected to find facts and express its opinion as
to rate conditions and other matters presented for its in¬
vestigation, and also to represent the public in the manage¬
ment of prosecutions and other proceedings before the
courts of the United States, and was not expected to issue
mandates to the common carriers of the country.
It would serve no useful purpose, although it would be
easy, to show how the subsequent misconception of the
functions of the Commission originated and progressed
until it was assumed to be a tribunal whose powers have
been sacrificed and annihilated by court decisions. It is
enough to say that the decisions referred to simply
restored the original situation and brought the Commission
back to its true status under the law.
The question which you agitate is therefore, not as you
put it, the re establishment and revivification of a nuga
tory law ; nor is it the rehabilitation of a tribunal whose
power has in some way been dissipated. It is the erection
of a new tribunal and the grant of new authority.
I, of course, concede that even this might possibly be
found desirable. But I insist that the subject should be
approached from the proper point of view and should be
intelligently discussed.
If Congress proposes to assume control over railway
rates, it should do so through some competent agency.
The Interstate Commerce Commission, as now constituted,
does not meet the requirements of the case. In the first
place, the complex nature of its duties prevents it from
occupying the judicial atñtude which the situation de¬
mands. A body which is to be the recipient of such enor¬
mous powers should not be at the same time a prosecuting
official charged with the duty of ferreting out crimes and
misdemeanors and of conducting prosecutions in the courts,
nor should it be authorized to investigate on its own motion.
It must be a judicial body in fact as well as in name. In
17
the second place, the Commission as now organized holds
only a brief tenure of office, changing its complexion from
year to year, subject, in the selection of its membership, to
political considerations laid down in the Act itself; and
embracing no recognized expert upon transportation
problems. Moreover, the attitude which the Commission
has assumed in respect to various matters in the past has
not been calculated to inspire confidence in the compete!cy
of such a body to handle future controversies. As a sin¬
gle illustration, out of many that might be employed, ref¬
erence is made to the Milk case, so-called : rates on milk
to New York city were grouped by the railroads serving
the territory west of the Hudson River and a rate of 32
cents per can was charged for all distances ; after long in¬
vestigation the Commission reported in favor of the estab¬
lishment of four groups instead of one, with rates graded
according to distance, 23, 26, 29 and 32 cents per can, re¬
spectively. This was accepted by the roads and made
effective. After two and one-half years the President of
one of the roads reported to the Commission the result,
which was that the farmer had received, if anything, less
money for his milk; in no case had there been an advance ;
meanwhile there had been no decrease to the consumer,
and the road had lost more than $3C,000 per year in its
earnings.
The tribunal which you have in view should be of
life tenure, a court of record, with power to compel at¬
tendance of its own witnesses and issue its own final
process, composed somewhat as the English tribunal of
this character is composed, which has one judge of a
Superior Court, one expert in railway traffic, and one
high-class business man, without initiative, and all abso¬
lutely free from party politics or local prejudices. When
the right kind of a proposition is presented, there will not
be by any means a unanimous opposition on the part, of
railway managers, for there is now among them too much
uncertainty as to the future of railway rates and business
under the existing unfortunate conditions.
But it may well be doubted whether the time has yet
arrived when it is necessary to make this fundamental
18
change. The grievances which you and your associates
present are not without remedy under the present law. If
they have not been remedied it is not because the law is
nugatory, but because it has not been properly utilized.
If the Commission has met with disappointment, it is not
because it has been relegated to an inferior position by
the courts, but because it has not gone to work in the right
way to accomplish its useful mission.
Railroad managers do not oppose the results at which
you aim, but only the methods through which you seek to
reach those results. ( They believe those methods to be ill-
conceived, unnecessary, and full of harmful potents. If
you will unite with them in a full and frank discussion of
the questions, with a willingness to do as well what is for
the mutual advantage of the railroads and the public as
what is simply conceived to be a harnessing down of the
railroad managements, I have no fear but that some way of
extricating all of us from our present embarrassments can
be devised. Instead of trying to procure the passage of
an ill-constructed, one-sided and unintelligent bill, I sug¬
gest that you invite a small number of reputable railroad
experts to meet with a like number of representative busi¬
ness men and endeavor to agree uponsome common ground
for future action.
Truly yours,
ALDACE F. WALKER.