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PREFACE.

Congress, in the exercise of its power to regulate interstate commerce, in 1887 passed the first general law on the subject, which was approved February 4th of that year. The act is entitled “An Act to Regulate Commerce.” In 1890 this Commerce Act was supplemented by an act to prohibit contracts in restraint of trade, entitled “An Act to protect trade and commerce against unlawful restraints and monopolies,” approved July 2, 1890. This act is known as the Sherman AntiTrust Law. It is universal in its application, and embraces not only carriers, but manufacturers and producers.

The principal object of the Interstate Commerce Act was to give to every man engaged commercially equality of opportunity, and to place all shippers as to rates and tariffs upon an absolute equality. The principal evil complained of, which complaints finally resulted in the passage of the Commerce Act, was the practice of discrimination by the great carrying and transportation companies, whereby they gave to certain favored shippers an unjust and unreasonable preference and advantage, by carrying their goods and commodities at a less rate than was given to their competitors. This discrimination enabled the favored shippers to undersell their competitors, destroy competition, and drive out of business thousands who had spent their lives in acquiring mercantile training, and had invested their means in mercantile pursuits.

Indeed in some instances it has been shown that the favored shippers directly benefited, were also officers and directors of the carrying companies giving the rebates.

The discrimination complained of was not confined to favoritism to individual shippers. Communities and localities were discriminated against by giving lower freight rates to points at a much greater distance from the point of origin, in the same general direction, thus enabling merchants in a particular locality to make prices which their competitors in less favored localities could not meet. The result was ruin to many business communities. Cities and towns on a line of railway were built up at the expense of other cities and towns. Merchants in one locality were discriminated against in favor of those in another to an extent that practically compelled those discriminated against to relinquish business. Equal opportunity was denied. Trusts and monopolies were the legitimate fruits of such discrimination. The favored shipper also became the favored manufacturer.

The discrimination aimed at included also discrimination among carriers themselves, who in some instances denied to competing connecting lines equal facilities for through transfers and connections.

The beneficial results which had been anticipated by those through whose instrumentality this remedial legislation had been secured were not realized. Prior to 1903, the statutes relied upon to secure the remedy were found to be difficult to enforce, due in a measure to the delay in securing an interpretation of the law by the Supreme Court of the United States. Commercial enterprises and business activity could not survive the

PREFACE.

long delays which necessarily resulted. While the measure of relief was suspended, pending appeals from the Circuit Court to the Circuit Court of Appeals, and thence to the Supreme Court of the United States, not months only, but years elapsed. The delay amounted practically to a denial of justice. The merchant and shipper, who was unable to compete with a rival, favored by secret rebates, was in many instances unable to surmount the discouragements and difficulties, arising from conditions for which there seemed to be practically no redress.

It was plain that in order to secure the beneficial results of the existing body of legislation, additional legislation was necessary. The President of the United States, Hon. THEODORE ROOSEVELT, in his message to Congress in December, 1902, referring to the subject declared: “A fundamental base of civilization is the inviolability of property; but this is in no wise inconsistent with the right of society to regulate the exercise of the artificial powers which it confers upon the owners of property, under the name of corporate franchises, in such a way as to prevent the misuse of such powers.” Supplemental legislation was urged to render the Commerce Act and the Sherman Anti-Trust Law useful and practical. The result was the important legislation of 1903.

This legislation embraced three important statutes, to wit: the act of February 11, 1903, to expedite suits by abolishing appeals to the United States Circuit Court of Appeals in cases in which the United States is complainant, and authorizing appeals in such cases to be taken directly from the United States Circuit Court to the Supreme Court of the United States, and giving to such suits and appeals a right of preference over other pending litigation. A most important step, designed to minimize delay. The act of February 14, 1903, creating the Department of Commerce and Labor and establishing a Bureau of Corporations. This statute conferred upon the Commissioner of Corporations the same power conferred by the Interstate Commerce Act upon the Interstate Commerce Commission. The object of the law was to secure information and data by investigations instituted under the act with respect to corporations, joint-stock companies, and combinations other than carriers engaged in interstate commerce. The act of February 19, 1903, known as the Elkins Act, increasing the powers of the Interstate Commerce Commission and authorizing it to institute proceedings not only against carriers charged with the practice of unjust discrimination, but against all persons who receive rebates, or the benefits conferred by such discrimination, amplifying the powers of the Commission with respect to evidence and the compulsory

production of books and papers, and extending the jur| isdiction of Federal courts in cases brought to enforce

criminal proceedings for violations of the act, by declaring that indictments might be found in any district in which the act was violated, “ or through which the transportation may have been conducted."

The legislation of 1903 has made the commerce legislation available and practicable. The evils sought to be remedied under the law may be grouped as follows: Evils growing out of the combination of independent producing corporations engaged in the manufacture and sale of necessaries of life, to fix and maintain extortionate prices, designed primarily to destroy competi

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tors and drive out of business those not associated with the trust. Evils arising from merger of carrying corporations, designed to put the control of parallel competing lines of railroad in a single corporation and eliminate competition in rates of transportation, seeking thereby to accomplish more effectively the results sought to be accomplished by the pooling of freights among carriers, a practice expressly forbidden by section 5 of the Commerce Act.

The vital importance of this legislation is apparent. It operates upon the industrial world and affects the commerce of the country and the thrift and prosperity of the nation. Shall commerce be absorbed and controlled by particular combinations which exclude all others from participation therein? The controversies which have arisen under the Federal statutes on the subject, clearly demonstrated that such absorption is possible. The faithful enforcement of the acts of Congress seems to suggest the only remedy to secure active, healthy competition and afford to every man equality of opportunity.

Legislation is being sought also by the shippers and commercial bodies throughout the country to confer upon the Interstate Commerce Commission power to fix rates subject to review by the Circuit Courts of the United States. It is claimed that such legislation would be of more importance and practical benefit to shippers than any previous amendments to the act. A list of the bills which have been introduced to secure this remedy, which are now pending in the fifty-eighth Congress, will be found at page 193 of this work.

WILLIAM L. SNYDER. TEMPLE COURT, NEW YORK,

July, 1904.

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