of August 25th, 1864, so far as it applies to articles carried through the State, or articles taken up in the State and carried out of it, or articles taken up without the State and brought into it, is unconstitutional and void. The appointment of the committee. The complications of the question. 146. The Condition of Transportation in 1885 Although the federal and state governments lavished aid upon railway corporations in the form of land grants, subsidies, and franchises, it was a long time before any serious attempt was made to protect the public from discriminations and exorbitant charges by common carriers. At last in 1885 an important Senate committee was appointed to investigate conditions of transportation throughout the United States and make recommendations for federal legislation. Largely on the basis of the report of this committee the Interstate Commerce Act was passed in 1887. The specific abuses against which the legislation was directed are thus stated by the Senate committee: The committee was appointed by the President of the Senate March 21, 1885, under authority of a resolution adopted by the Senate of the United States March 17, 1885, and reading as follows: Resolved, That a select committee of five Senators be appointed to investigate and report upon the subject of the regulation of the transportation by railroad and water routes in connection or in competition with said railroads of freight and passengers between the several States, with authority to sit during the recess of Congress, and with power to summon witnesses and to do whatever is necessary for a full examination of the subject, and report to the Senate on or before the second Monday of December next. Said committee shall have power to appoint a clerk and stenographer, and the expenses of such investigation shall be paid from the appropriation for expenses of inquiries and investigations ordered by the Senate. The committee began its work impressed with the importance of the duty with which it had been charged, and with each step taken in prosecuting the inquiry directed has realised more fully ... how serious were the obstacles to be overcome in attempting to The committee recognizes the justice of this demand, and believes that action by Congress looking to the regulation of interstate transportation is necessary and expedient, for the following reasons: Purpose of the investi gation. master of the situa 1. The public interest demands regulation of the business of The carrier, transportation because, in the absence of such regulation, the carrier is practically and actually the sole and final arbiter upon all tion. disputed questions that arise between shipper and carrier as to whether rates are reasonable or unjust discrimination has been practiced. . . . 2. It is the duty of Congress to undertake the regulation of the business of transportation, because of admitted abuses in its management and of acknowledged discriminations between persons and places in its practical operation - evils which it is possible to reach and remedy only through the exercise of the powers granted by the Constitution to Congress, and against which the citizen is entitled to the protection and relief the national authority can alone afford.... 4. National legislation is also necessary, because the business of Transportation is national. The complaints against the railways. High rates. Discriminations. Rebates. transportation is essentially of a nature which requires that uniform system and method of regulation which the national authority can alone prescribe. 5. The failure of Congress to act is an excuse for the attempts made by the railroads to regulate the commerce of the country in their own way and in their own interests by whatever combinations and methods they are able to put into operation. . . The complaints against the railroad system of the United States expressed to the committee are based upon the following charges: 1. That local rates are unreasonably high, compared with through rates. 2. That both local and through rates are unreasonably high at non-competing points, either from the absence of competition or in consequence of pooling agreements that restrict its operation. 3. That rates are established without apparent regard to the actual cost of the service performed, and are based largely on "what the traffic will bear." 4. That unjustifiable discriminations are constantly made between individuals in the rates charged for like service under similar circumstances. 5. That improper discriminations are made between articles of freight and branches of business of a like character, and between different quantities of the same class of freight. 6. That unreasonable discriminations are made between localities similarly situated. 7. That the effect of the prevailing policy of railroad management is, by an elaborate system of secret special rates, rebates, drawbacks, and concessions, to foster monopoly, to enrich favorite shippers, and to prevent free competition in many lines of trade in which the item of transportation is an important factor. 8. That such favoritism and secrecy introduce an element of uncertainty into legitimate business that greatly retards the development of our industries and commerce. 9. That the secret cutting of rates and the sudden fluctuations that constantly take place are demoralizing to all business except that of a purely speculative character, and frequently occasion great injustice and heavy losses. of respon 10. That, in the absence of national and uniform legislation, the Avoidance railroads are able by various devices to avoid their responsibility sibility. as carriers, especially on shipments over more than one road or from one State to another, and that shippers find great difficulty in recovering damages for the loss of property or injury thereto. II. That railroads refuse to be bound by their own contracts, and arbitrarily collect large sums in the shape of overcharges in addition to the rates agreed upon at the time of shipment. 12. That railroads often refuse to recognize or be responsible for the acts of dishonest agents acting under their authority. 13. That the common law fails to afford a remedy for such grievances, and that in cases of dispute the shipper is compelled to submit to the decision of the railroad manager or pool commissioner, or run the risk of incurring further losses by greater discriminations. 14. That the differences in the classifications in use in various parts of the country, and sometimes for shipments over the same roads in different directions, are a fruitful source of misunderstandings, and are often made a means of extortion. 15. That a privileged class is created by the granting of passes, Free passes. and that the cost of the passenger service is largely increased by the extent of this abuse. 16. That the capitalization and bonded indebtedness of the roads largely exceed the actual cost of their construction or their present value, and that unreasonable rates are charged in the effort to pay dividends on watered stock and interest on bonds improperly issued. 17. That railroad corporations have improperly engaged in lines of business entirely distinct from that of transportation, and that undue advantages have been afforded to business enterprises in which railroad officials were interested. 18. That the management of the railroad business is extravagant and wasteful, and that a needless tax is imposed upon the Overcapitalization. The nature of the complaint. shipping and traveling public by the unnecessary expenditure of large sums in the maintenance of a costly force of agents engaged in a reckless strife for competitive business. 147. The Interstate Commerce Commission at Work The Interstate Commerce Act of 1887, as amended by later statutes, provides for a commission of seven members, appointed by the President and Senate, and empowered, on complaint and after hearing, to determine and prescribe reasonable rates, regulations, and practices, to order reparation to injured shippers, and to require any carriers to desist from unjust discrimination or undue or unreasonable preferences. The way in which the commission may grant relief to shippers is well illustrated by the report of the action in the following case: W. O. Mitchell v. Atchison, Topeka & Santa Fe Railway Company; De The complainant is a resident of Oklahoma City and a shipper of wheat, who complains that the rates charged by the defendants for the transportation of that commodity from Oklahoma City to Gainesville, Tex., and Forth Worth, Tex., are excessive. The Atchison, Topeka and Santa Fe Ry. Co. and its connection, the Gulf, Colorado & Santa Fe Ry. Co., carry this traffic from Oklahoma City to Gainesville, while all the defendants reach Fort Worth. The short-line distances are 140 miles to Gainesville and 202 miles to Fort Worth, and the rate in both cases was at the date of the hearing 28 cents per 100 pounds. . . . The rate on wheat for 200 miles is 15 cents in Texas, 13 cents in Kansas, 18 cents in Nebraska, 10.8 cents in Iowa, 17.5 cents in Minnesota. In our opinion, under all the circumstances, the rate from Oklahoma City to Fort Worth ought not to exceed 22 cents per 100 pounds, and to Gainesville 20 cents per 100 pounds. |