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car must be furnished within a specified time or else the railroad company must pay to the party making the requisition demurrage at the rate of $25 per day. This demurrage is reciprocal, and where the shipper or the consignee does not unload such cars within forty-eight hours after same is delivered de murrage at the rate of $25 a day runs against the consignee.
Our court of civil appeals in suits brought by individuals for damages has held that under this law the railroad company can not be compelled to furnish cars for loading where the destination of shipment is beyond the line of the originating road. Acting under this construction of the law the Texas railroads are refusing to furnish cars to be loaded when the destination of the shipment is beyond their line. When shipments are accepted, the cars are held at junction points where the originating line requires loads to be transferred or their connecting line to furnish them with an empty car for every loaded car so tendered at such junction points. The result is that at junction points there are many cars tied up with loads waiting for transfer or exchange of an empty.
The great quantity of commerce going to the port of Galveston from the interior of Texas, as well as from Oklahoma, Kansas, and Nebraska, much of which is originated on railroads that terminate in the interior and have to depend on their connections reaching Galveston to make port delivery, and the originating lines refusing to let their loaded cars go to port destinations, thus forcing the unloading of such cars at interior junction points, first produced a blockade of cars at such points, and so tied up several thousand cars on side tracks in enforced idleness beyond the length of time which it would have required such cars to be transported to destination and returned.
This congestion at junction points soon extended to Galveston, where it was aided greatly by a new policy which the Texas roads had adopted of shipping cotton to the port in mixed consignments, thus necessitating the unloading and sorting of such shipments before delivery could be made.
Manifestly it is of little value to a shipper to be given a car if that car, when loaded, is not moved promptly to destination. Therefore the conclusion is inevitable that reciprocal demurrage alone will not insure better railroad service when the movement is over more than one system of railroad. Such a law or rule must be supplemented by some other rule or law under which the originating carrier may be insured of prompt return of the cars which it delivers to its connections.
The traffic of this country can not be moved in the fashion which obtained in the early days of railroading, when transfers were universal at junction points. When the railroad is penalized for not placing a car at a shipper's warehouse or elevator it will protect itself against the loss of that car by refusal to permit it to pass beyond its control unless it can be given another car in its stead, or unless some system is devised similar to that of the car pool under which its needs for cars may be promptly met.
It will profit those who are seeking to remedy the shortage in car service by means of the imposition of reciprocal demurrage to consider well the decision of the United States Supreme Court in Houston & Texas Central Railroad Company v. Mayes, 200 U. S., 321. This case involved the applicability of the Texas law to interstate cominerce. Mr. Justice Brown, in delivering the opinion of the court, said:
While there is much to be said in favor of laws compelling railroads to furnish adequate facilities for the transportation of both freight and passengers and to regulate the general subject of speed, length, and frequency of stops, for the heating, lighting, and ventilation of passenger cars, the furnishing of food and water to cattle and other live stock, we think an absolute requirement that a railroad shall furnish a certain number of cars at a specified day, regardless of every other consideration except strikes and other public calamities, transcends the police power of the State, and amounts to a burden upon interstate commerce. It makes no exceptions in cases of a sudden congestion of traffic and actual inability to furnish cars by reason of their temporary and una voidable detention in other States, or in other places within the same State. It makes no allowance for interference of traffic occasioned by wreck or other accident upon the same or other roads, involving a detention of traffic, the breaking of bridges, accidental fires, washouts, or other unavoidable consequence of heavy weather.
While railroad companies may be bound to furnish sufficient cars for their usual and ordinary traffic, ca ses will inevitably arise where, by reason of an unexpected turn in the market, a great public gathering, or an unforeseen rush of travel, a pressure upon the road for transportation facilities may arise which good management and a desire to fulfill all its legal requirements can not provide for and against which the statute in question makes no allowance.
Although it may be admitted that the statute is not far from the line of proper police regulation, we think that sufficient allowance is not made for the practical difficulties in the administration of the law and that, as applied to interstate commerce, it transcends the legitimate powers of the legislature. (Mr. Justice White not participating; the Chief Justice, Mr. Justice Harlan, and Mr. Justice McKenna dissented.)
There is nothing in this decision which justifies the conclusion that a reciprocal demurrage bill or rule governing interstate commerce can not be so drawn as to come within the ruling of the court and the principles declared in the opinion of the learned justice. Clearly, however, in justice to the carriers and in conservation of all the industrial interests of the country which use the railroads, whatever plan may be adopted to penalize the railroads for the nonfurnishing of cars must be supplemented by some provision of law or plan of cooperative operation by which the railroads may be secure in permitting cars to pass to the tracks of connecting lines. If this be not done each carrier will live unto itself and will find it to its own interest to confine its cars to its own tracks.
If the Interstate Commerce Commission is to be vested with power to make rules under which railroads shall be required upon penalty to furnish cars to shippers, this Commission should also be empowered to make rules under which free interchange of cars shall be effected or to require railroads engaging in interstate commerce to make such rules for their own protection and provide for their enforcement.
Throughout this inquiry the thought has repeatedly suggested itself that many of the problems presented must rest for their solution in the character and intelligence of the railroad managers—their foresight, initiative, adaptability, and public spirit. If it be true, as railroad men have said, that the railroads have not kept pace with the growth of the country, it must be remembered that it is within the right of a private enterprise to restrict its obligations to its known capacity without becoming subject to the slightest criticism, whereas the measure of a common carrier's obligations is undetermined and without limitation save in the demand of the public for transportation. Whatever of criticism, therefore, is to be expressed should in justice be tempered by a consciousness of the novel and perhaps unparalleled difficulties which the problem of American railroad transportation to-day presents.
This demand, however, the shipping and producing public is certainly justified in making—that every railroad shall do its utmost, not alone in and of itself, but by community of action with other roads, to render the service which is imperatively needed, and shall act in supreme good faith in endeavoring to organize and equip itself for such service. Methods which were sufficient to fully meet the needs of the largely localized traffic of a few years since are at this time properly subject to reexamination. Policies which hitherto have sufficed, if found satisfactory to the most exacting of stockholders, should now be reconsidered with respect to the requirements of new conditions and much broader considerations. The most conservative critic must hold that proper coordination of departments within individual roads and intelligent cooperation between independent roads, within entirely lawful lines, would leave far less foundation for criticism of car service than may at present be justly made. HARLAN, Commissioner:
Little need be added to what is said by Commissioner Lane in his report on the car-shortage investigation. The evidence adduced before us at Minneapolis and Chicago clearly established these facts:
1. The inability of the carriers in the Northwest and in some other parts of the country to move the traffic ready for shipment not only results in financial loss to the particular shipper, but is reflected back in some cases to the business and prosperity of entire communities. In individual cases the loss thus suffered is substantial and often severe and the aggregate must be very large.
2. The railroad companies in order to meet the demands of increased traffic are making huge expenditures of money for additions to their car and locomotive equipment, the enlargement of their terminal facilities, and the extension of their trackage.
3. The evidence seems to amount to a demonstration that there can and ought to be improvement in the car service and in the operation of terminals. It was conceded both by the railroad men and by the shippers who came before us that cars are constantly used by shippers as warehouses, and that the time allowed to shippers for loading and unloading is in excess of real necessity and to some extent is responsible for the congestion at terminals and the consequent car shortage at points on the line. There was evidence offered at Chicago tending to show that the reconsignment privilege granted by the carriers to coal dealers is often abused. It was agreed by the shippers as well as by the railroad men that these privileges should be curtailed.
4. It is reasonably clear that there can be immediate improvement in the switching of cars in and out of terminals. The delay of many days in setting a car at the unloading point and in getting the loaded car out of the switching district and on its way to destination is often not only unexplained, but apparently inexcusable.
Reform in most of these matters lies wholly in the hands of the railroad companies and the shippers themselves. Possibly if more extensive powers were lodged in the Commission in dealing with terminal conditions it might result advantageously.
The efficacy of the proposed reciprocal demurrage legislation was not satisfactorily demonstrated by the witnesses who appeared before us. In my judgment, such a measure ought to have very full consideration before being enacted. It seems not improbable that if the railroads are penalized by Federal legislation for failing to supply cars for interstate commerce, the local commerce of the States in times of stress may be wholly neglected by the carriers in order to avoid such penalties, unless the Federal legislation is promptly followed by State legislation of the same nature. Such legislation without providing also for the compulsory interchange of cars would tend to compel carriers to keep all their cars on their own tracks in order to avoid demurrage penalties, and thus break up the advantages now enjoyed by shippers of through transportation. Some railroad men of prominence appearing before us seemed to think that the more effective regulation of the interchange of cars by carriers would of itself go far toward remedying the present car shortage. There seem to be strong reasons for thinking that the proposed car pool or car clearing house would result in a more effective car service. · If some such adjustment can not be reached by the companies themselves, it may be that legislation will become desirable and necessary.
12 I. C. C. Rep.