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GEORGE F. STONE,
ON THE
Interstate Commerce Law,
DELIVERED BEFORE
THE NATIONAL TRANSPORTATION
ASSOCIATION,
Chicago, February 18, 1897.
HE
ov
GEORGE E. STONE,
ON THE
Interstate Commerce Law,
DELIVEKED BEFOKE
THE NATIONAL TRANSPORTATION
ASSOCIATION,
CHIC'A(t(), Eebiu'ARY 18, 1897.
)
ADDRESS«
OF
GEORGE E. STONE
ON THE
Interstate Commerce Law.
Mr. I're.sident:
The act to regulate commerce was passed to secure an
equitable diffusion of the benefits of transportation and to
correct abuses which had almost imperceptibly and very
gradually crept into the administration of the vast powers
conferred upon railroad corporations, not for the corporations
alone, but for the people in the prosecution of their business
enterprises ; it was not framed to impair any interests, but to
conserve and protect. In the words of the commission, "It
had for its object to regulate a vast business according- to the
requirements of justice, and was not passed for a day or a
year ; it had permanent benefits in view and to accomplish
these with the least possible disturbance to the immense
interests involved. "
The leading features of the act are the following :
First. All charges made for services by carriers subject
to the act must be reasonable and just.
Second. The direct or indirect charging, demanding,
collecting or receiving for any service rendered a greater or
less compensation fi-om anj^ one or more persons than from
any other for a like or contemporaneous service is declared
to be unjust discrimination and is prohibited.
Third. The giving of any undue or unreasonable pi'e-
ferences as between persons or localities, or kinds of traffic,
or the subjecting them to undue or unreasonable prejudice or
disadvantage, is declared to be unlawful.
Fourth. Reasonable, proper and equal facilities for the
interchange of traffic between lines, and for the receiving-,
forwarding and delivering of passengers and property be¬
tween connecting lines is required ; and discriminating- in
rates and charges as between connecting lines is forbidden.
Fifth. It is made unlawful to charge or receive any
greater compensation in the aggregate for the transportation
of passengers or the like kind of property under substantially
similar circumstances and conditions for a shorter than for a
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longer distiinee over the snine line in the same direction, the
shortèr being incduded within the longer distance.
Sixth. Contracts, or agreements, or combinations for
the pooling of freights of different and competing railroads,
or for dividing between them the aggregate or net earnings
of such railroads or any portion thereof, are declared to be
unlawful.
Seventh. It is made unlawful for aii}^ carrier to enter
into any combination, contr'act or agreement, expressed or
implied, to prevent by change of time-schedule, carriage in
different cars, or by means or devices, the carriage of freights
from being continuous from the place of shipment to the
place of destination.
By the provisions of the twenty-second section of the act
nothing in its application or operation shall interfere with
the general rules of fairness and equality which have been
laid down in common law or by statute.
The act of which the above are the salient points, was
approved February 4th, 1887, and took effect April 5th, 1887.
By the eleventh section of the act the Interstate Com¬
merce Commission was created and established, and was
organized March 31st, 1887.
The method of transportation previous to 1830, when
steam power began to be applied to the pi^opulsion of vehicles
upon land, brought new conditions and new problems for the
regulation of land commerce, especially with reference to
federal authority. The regmlation of commerce on navigable
waters was clearly understood in the decision of the great
case of Gibbons vs. Ogden in 1824. This decision brought
such commerce within the scope of federal legislation. The
new method of transportation from 1830 was rapidly de¬
veloped, and the common law was in many important respects
inadequate to meet the constantly arising complications inci¬
dent to expanding inland commerce between states and
territories. Until the Interstate Commerce Law was passed
the carriers of the country made their own rules governing
the transportation of persons and property—rules most vitally
related to our marvelous commercial and to our industrial and
social life. That under such conditions inequalities and in¬
justices should, in the process of time, have attended such a
voluntary, and to a large extent, irresponsible system, excites
no wonder. For a few years prior to 1887 the people began
the serious discussion of the subject of transportation, which
had grown to one of vast and immeasurable proportions, and
the analysis of this subject and the realization of its trans¬
cendent importance to the varied industries of the people
culminated in the framing of the Interstate Commerce Law.
That the law did not, in terms, provide for every possible
contingency which could arise in the application of the rights
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of the citizen and the merchant in respect to his proper and
equitable participation in the privileges of transportation of
persons and property, nor define with absolute exactness the
status of transportation corporations, and has not effectuait}^
restrained great traffic lines, flushed with an unhindered
exercise of ai'bitrary power, is not by any means strange or
unreasonable. To dislodge corporate capital grown through
many years into an indifference, to say the least, to the wants
and rights of the people, is an herculean task and cannot he
done by the stroke of a pen or the passage of a single act.
The roots of this dangerous and dictatorial power lie deep
beneath the surface and can be torn up only by persistent
effort (both personal and combined) in Congress, courts of
jurisdiction and in mercantile associations such as this. The
wonder is that, arrayed against such forces, so strongly
intrenched and occupying such vantage ground, the law
stands at all. The position gained must not be abandoned,
and the natural and inherent rights of the people in the
transportation of persons and property must he observed and
secured. When such rights are involved there never has
been and never will be any alternative, as they stand unques¬
tioned. The sooner this is recognized hy those vainly at-
tem])ting to withhold and circumscribe such rights the bettei-
for their prosperity and foi- the safety and welfare of society.
Indeed, in the enjoyment of these rights consists the
preservation and progress of the Repuhlic.
The law is salutary; it is elastic in respect to cari'iers; it
is tentative in its character; and good faith shown in loyal
efforts to conform to its requirements will not involve reason¬
able and fair-minded officials in any danger of damage or fines.
There is no new principle embodied in this law. It is in con¬
sonance with enlightened public policy. Its provisions an¬
nounce the well-settled principles of common lawapplied to
common carriers, and whatever difficulties have been or may
he encountered in its administi'ation, it must and will prevalí.
The Interstate Commerce Commission from its organization
has been composed of exceedingly able and wise men, who
with remarkable fidelity and pains have discharged their
delicate and oftentimes perplexing duties. They have labored
in comparatively a new field of jmdsprudence and have been
beset with unforeseen problems. I know of no commission
charged with grave responsibilities which has more diligently
or with greater ability performed its functions. Their annual
reports exhibit rare fidelitjq keen discrimination in the con¬
sideration and weighing of evidence, a broad statesmanship,
an intimate familiarity with the law as applied to inland com¬
merce and a spirit of fairness which deserve the grateful
i-ecognition of merchants and carriers alike.
POOLING.
The proi)osition tr» Thermit pooling is being advocated
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with a <4'<)0(1 (leal of adi-oitness and deterniinati(_)u, and seeks
to repeal that portion of the act whieh detdares unlawful all
contracts or agreements or combinations foi- tlie poolino- of
freights of different and competing railroads, oi- for dividing
between them the aggregate net earnings of such railroads
or any portion thereof.
The law itself was largely the result of such evils which
grew out of pooling. These pooling ai-rangements, although
ostensibly for the equalization of traffic com])ensation, for the
encouragement of feeble lines and opposed to an unfair and
unjust proportion of remuneration received by great and con¬
trolling trunk lines, degenerated into a reckless and unscru¬
pulous abandonment of the terms of such agreement, creating
confusion, distrust, an unsettling of ii'eight rates, antagonism,
and a genei'al warfare resulting in disaster to many of the
parties to the ])ooling formation, as well as to business inter¬
ests generally. It is now proposed not only not to forbid
])ooling, but actually to install it in the body of the law itself.
This is a high-handed proposition and attacks the very
citadel of the law, contemplating practically its overthrow.
I know that a part of this proposition, and whieh gives it
plausibility, is that the pooling shall be under the control of
the commission. This means but little in view of the history
of the commission, whose mandates have been from neces-
sit}^ either supinely enforced, or altogether evaded; and this
owing to the direct and indirect opposition of those by whose
astonishing magnanimity this very proposition is submitted.
But whatever may be our judgment upon this subject, I
think that we will all agree that railroad representatives
should first of all obey the law and co-operate for its enforce¬
ment. Let these gentlemen cleanse their hands before
they raise them in petition at the bar of this tribunal,
remembering that only those with clean hands can plead in
the temple of justice.
The subject of ti-ansportation has lost none of its import¬
ance with the lapse of time. The intimate relation which it
sustains to the diversified interests and employments of man¬
kind is universally admitted. While the Interstate Com¬
merce Act has in a general way exerted a salutary effect upon
the management of railroads and the distribution of their
privileges, many of the provisions of the act have been abso¬
lutely inoperative by reason of the opposition of railroad
lines—not only opj^osition of a pronounced character, but of
an insidious and skillful kind exercised in a variety of devious
ways and methods.
Still, notwithstanding these unfortunate and discouraging
incidents and experiences connected with the law, the law
has steadily gained in power since its inception and enact¬
ment, mainly through the instimmentality of such organiza¬
tions as this, wherein the combined efforts of the princiiial
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commercial organizatiors of the country have been arrayed
in support of the law and against the schemes and contriv¬
ances of various sorts invented and applied by transportation
lines for its overthrow. As experience has shown the weak¬
ness and the defects in the law and in the enforcement of its
provisions, changes have been made in that enactment suited
to such defects and to the circumstances with which it is
confronted.
As soon as defects have been remedied and the law has
been strengthened in one regard, railroads with character¬
istic ingenuity and alacrit}- have attacked some other portions
of the law, and in many cases have succeeded. It is indeed
fortunate for the business interests of the country that these
attacks have been made, because they have shown the vulner¬
able points in the law, and in that way the law has been
strengthened as it could not have been in any other manner;
hence we are justified in looking forward, under the light of
experience, to a law which will carry out the reforms which
it was originally intended to accomplish.
The principle which governed those who enacted this
measure, and which underlies the law itself, is more than ever
vitally related to industrial and commercial interests, of what¬
ever kind or wherever located, viz: an absolute equality in
the enjoyment of the privileges and franchises which are
conferred upon railroad companies by the public, not for the
good, primarily, of stockholders, but for the benefit of the
public. It is not at this time in the history of railroad trans¬
portation that we inveigh against excessive rates In the
transportation of commodities, but we protest against the
inequality of these charges and privileges. We take the
ground that every railroad corporation is .entitled to a just
remuneration for the services which it performs in carrying
on the business of the communities through which it runs.
We desire no inadequate returns for the capital invested,
for the labor performed, for the services and facilities to pro¬
mote a profitable conduct of commerce within our borders.
We cannot, however, too severely denounce the injuries and
disadvantages proceeding from an unequal distribution of
transportation privileges. We insist that the humble, striv¬
ing shipper and business man, stimulated by the ambition
which belongs to and is a part of American citizenship, should
not be discriminated against in the siig'htest particular with
regard to this great subject, essential to his well-being* and
to the well-being of communities and states. We demand,
without equivocation, that he should unrestrictedly partici¬
pate in these transportation benefits which are enjo3'ed b}*
the most favored capitalist and the most powerful corpora¬
tion. We will not abandon this position, and we shall enter¬
tain complaints and pursue them regardless of whatever por¬
tion of the countiy they may come. If indeed thej* relate to
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terminal facilities and involve a gi-eat principle which is
universally applicable, we will not be misled by any false
statements, that such things, such incidents, such abuses ai'e
merely of a local character. It is enough for us that we have -
to do with a great principle and that principle is one which
bears vitally upon all who transact business, rich and pooi",
high and low, successful and those striving for success. We
will not be deceived or misled by the statement, that because
such complaints occur only in a particular locality and pos¬
sess a local interest and therefore must be hardled and cor¬
rected by those with whom such inequalities are })articularly
and directly related.
We ojjpose the encroachment of transpoi'tation lines upon
business interests; we oppose inequality and injustice by
transportation lines anywhere, and will not be thwarted in
the objects for which this association was organized b}'
any cry that such injustice is of a local character and of a
local origin and therefore does not come within the purview
of this influential body. If we are organized for anything we
are organized to stop the encroachments of transportation
lines, to stop any inequality in the distribution of transporta¬
tion rates or facilities, of whatever kind or character, or in
whatsoever part of the country they may exist.
We shall commend ourselves to our constituent bodies in
proportion as we adopt this platform, in proportion as we
adhere to this resolution and in proportion as we advocate
this pi inciple.
Let us not be deceived and throw away the immense
advantages which we enjoy and which are not enjoyed by any
other commercial body. Let us array ourselves against the
abuses and the machinations and insidious efforts of ti-ans-
portation lines to deprive the business interests of the coun¬
try of a just, equal and impartial participation in the gi-eat
and untold advantages of transpoi'tation, cr-eated by the
people for the people, without unjust discrimination in a
single instance.
Is the government to withdraw from all efforts to protect
the people as against the enci'oachments, assumptions and
devices of transportation lines; or are the piflnciples of the
law to be maintained and the law itself amended from time to
time according to exigencies and experiences as they may
arise in the conduct of our internal commerce?
Let the law be strengthened; let it have the support of
commercial organizations and of the peojile in behalf of the ,
■people^ and be so thoroughly imbedded in the legislation and
jurisprudence of the country that the veiy smallest shipper
shall feel its care, while the largest shall not be exempted
from its power.
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