CHAPTER II

LEADING PRINCIPLES OF THE DECISIONS OF THE COMMISSION 1

THE decisions of the Interstate Commerce Commission, handed down since its organization in 1887, now number 293, some of which cover two or more cases decided at the same time. The facts presented in this long series of cases are kaleidoscopic. A single fact may appear a hundred times, but it always comes again in different company. Never, perhaps, does exactly the same group of facts reappear in exactly the same combination or relationship. Hence each group of facts embraced in a case and each decision based upon the same has an individuality of its own. Generally speaking, no two cases are alike in every respect, and no rule of thumb can be devised by which a decision can be rendered. Yet, though each decision has its peculiar characteristics, an analysis and comparison of many cases and decisions reveals certain common elements or underlying principles and views. To point out these common elements, views, and principles in the decisions of the Inter

1 This and the two following chapters were published in the Political Science Quarterly, September, 1902.

state Commerce Commission is the chief aim of this discussion.

The problems involved in the decisions are primarily economic, although political and social considerations are not wanting. As a compilation of economic facts alone, tested and certified, the decisions constitute a valuable contribution to industrial history. To know the world as it actually exists should be a leading task of every man. The Interstate Commerce Commission has placed at the disposal of the public the most varied, the most widely distributed, the most concrete, and the best authenticated collection of facts relating to railways in the United States that is available at the present time; and by means of these facts we may learn something of the difficulties involved in railway transportation in this country. By far the greatest number of facts relate to the problems of competition, which in turn involve questions of similarity and dissimilarity of conditions, long and short hauls, coöperation, reasonableness of rates, and discriminations. Closely allied to these questions are those relating to classifications and commodity rates. Standing somewhat by themselves, and yet not disconnected, are decisions relating to through shipments, foreign trade, routing of freight, etc. Questions relating to the enforcement of the Act to Regulate Commerce and to the giving of testimony make their appearance. The interpretation of the act is frequently drawn into consideration, but this feature of the decisions of the commission

can best be associated with the court decisions called forth by the same.1 All of these topics have numerous subdivisions and ramifications which cross and recross one another in the complex network of relationships which the railway as an institution represents, and which is the ultimate cause of the kaleidoscopic nature of the cases brought before the commission.

Competition and the long and short haul. - The Act to Regulate Commerce assumes that railway transportation is a competitive industry and that competition among carriers should be preserved. The Interstate Commerce Commission has repeatedly asserted this in its annual reports and deci sions.2 A score of decisions relate primarily to water competition in its bearing upon the long and short haul clause. The commission has held that the act permits railways to meet but not to extinguish the competition of water carriers.3 cheapening and regulating functions of water competition have been generally recognized; but in the case of very low rates on steel products to San Francisco from the Atlantic and Mississippi valley

The

1 It should constantly be borne in mind that in this chapter only the decisions of the commission are considered, irrespective of the decisions of the courts.

2 For instance, Annual Report (1887), pp. 37, 40; Annual Report (1898), p. 20; Decisions, I, I. C. C. 319; 2. 52; 4. 131.

3 7, 224. Hereafter, for the sake of brevity, the decisions will

be cited by volume and page numbers only.

4 Cullom Committee Report (1886); Johnson, Inland Waterways, 61; Hadley, Railroad Transportation, 93-98 and elsewhere.

points, compared with the rates on the same products from Pueblo, the commission held that water competition is altogether inadequate to account for the general relatively low rating of lumber, grain, and other staple or heavy goods to or between inland points.1

The existence of water competition and of competition among railways has been the ground upon which railways have commonly petitioned the commission for relief under section iv of the act. As is generally known, this is the long and short haul section, which makes it unlawful for a railway company "to charge or receive any greater compensation in the aggregate for the transportation of passengers or of the like kind of property under substantially similar circumstances and conditions for a shorter than for a longer distance over the same line in the same direction, the shorter being included in the longer distance." Obviously the decisions on long and short haul questions turn upon the similarity or dissimilarity of the condi tions under which the hauls are made. The commission has uniformly held, from the first, that carriers must judge in the first instance as to the similarity or dissimilarity of the conditions; and that such judgment of the carriers is not final, but is subject to the authority of the commission and of the courts to decide whether an error has been committed, the burden of proof resting upon the carrier. In the leading case, In re Louisville and

1 6. 488.

Nashville R. R. Co.,1 the commission accepted the existence of actual competition, which is of controlling force in respect to traffic important in amount, as an adequate cause of dissimilarity in circumstances and conditions. That this competition must be actual, of controlling force and relating to traffic important in amount has repeatedly been emphasized by the commission. "That competition with each other of the railroads which are subject to the federal law can seldom, as we think, make out a case of dissimilar circumstances and conditions within the meaning of the statute, because it must be seldom that it would be reasonable for their competition at points of contact to be pressed to an extent that would create the disparity of rates on their lines which the statute seeks to prevent.2 The position taken by the commission in this quotation has been consistently maintained and strongly reaffirmed in a recent decision, except in so far as the Supreme Court decisions in the Alabama Midland (168 U. S. 164), Behlmer and other cases have made modifications necessary.3

Competition among railways, as such, is not sufficient to make out dissimilar conditions. Such competition must exist under peculiar circumstances, and even this competition can be accepted as only one of the circumstances and conditions

11. 31. The same principles are restated entirely or in part in I. 236; 3.534; 4. 1; 4. 104; 4. 228; 5. 324 and other decisions. 2 1. 81; 5. 324. 8 8. 346.