2 DUTIES AND POWERS OF INTERSTATE COMMERCE COMMISSION.

commerce with foreign nations and among the several States," but that "no navigation act shall be passed without the assent of twothirds of the members present in each House." This proposition was overruled on August 29. Finally, on September 14, three days before the signing of the Constitution, the following provision was added to section 9 of article 1, which section relates exclusively to limitations of the powers of Congress:

No preference shall be given, by any regulation of commerce or revenue, to the ports of one State over those of another.

This fully satisfied all the States and probably saved the Constitution. Apparently this limitation came rather near to the original proposition to omit from the Constitution any declaration in favor of conferring upon Congress the power to regulate commerce among the States. But it voiced the dominant sentiment of the people in favor of a government which should secure the ends of commercial liberty and meddle as little as possible with the competitive struggles of business. The practical question arises: What does that limitation imply to-day? I shall endeavor to answer that question.

merce.

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Besides the ports of the Atlantic, Gulf, and Pacific coasts, Congress has from time to time created "ports" at interior points on rivers, on the Great Lakes, and on railroads, all of which ports now afford all necessary facilities for the conduct of both internal and foreign comBut this constitutional limitation has a much wider application. The significance of the word "port" in the Constitution was undoubtedly that which it had and still has in Great Britain. The exact meaning of the word "port," according to Lord Esher, M. R., in 15 Q. B. D., 580- a case decided in the year 1885-is "not usually the legal port as defined by acts of Parliament, but any place at which the loading and landing takes place." Accordingly, in the case at bar, it was ruled that "the word 'port' in a charter party is to be understood in its popular, business, or commercial sense, and not the port as defined for revenue or pilotage purposes." This is the meaning given to the word "port" by Lord Chief Justice Hale in "De Portibus Maris," chapter 2, page 46, and it is regarded by Bouvier, an accepted American authority on legal definitions, as defining the meaning of the word "port" in the United States. It applies to all places or markets where goods are shipped or received by rail or by water.

Thus the constitutional limitation that "no preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another," involves stringent restraints upon the power of Congress to regulate commerce among the States. These served at the beginning to avert the danger of disunion, and to-day they stand as a defense of commercial liberty throughout all our borders.

The question arises-did the constitutional limitation referred to

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practically eliminate the power vested in Congress in the eighth section of article one-namely, the power to "regulate commerce among the States?" I answer, No! In many ways not affected by the constitutional limitation the National Government has effectually and beneficially regulated commerce and transportation. There is no business in this country which is more completely the subject of legal restraint. than is that of railroad transportation. The railroads are regulated not only by the National Government, but also by States, by cities, counties, towns, village boards of trustees, school districts, and by almost every other political subdivision of the State. The decisions of the courts involving the law of the common carrier and of public highways embrace volumes of judicial regulation applicable to the conduct of railroad transportation. The act to regulate commerce amplifies, extends, and particularizes the regulative principles of the common law in its application to the railroads. In view of these facts it has been asserted by an eminent lawyer that "the railroad is held to a more rigid responsibility in the courts than any other litigant." The judicial records of the country afford abundant proof of the correctness of that assertion.

But the question arises, What would be the effect of the constitutional limitation, "No preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another" upon an act of Congress which would confer upon the Interstate Commerce Commission the power to determine the relative rates which shall be charged on railroads engaged in interstate commerce? Experience clearly proves that it is unwise for lawyer or layman, or even legislator, to predict the judicial determination of the meaning of an act of Congress vitally affecting the commercial interaction of the people, or the question as to the constitutionality of such an act. I shall not attempt it; it is sufficient here to point to a dilemma which confronts Congress in any attempt to confer the power of rate making upon an administrative board. In case the Supreme Court should hold that an act conferring the rate-making power upon the Interstate Commerce Commission is subject to the constitutional limitation, "No preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another," it appears probable that such a statute would in practice be nugatory for the reason that any regulation of relative rates to or from the ports or markets of any two States by the Commission might be alleged to violate the contitutional inhibition against preference to the ports of one State over those of another. This, of course, would give rise to tedious and interminable litigation.

If, however, the Supreme Court should rule that a rate-making statute would not be subject to the constitutional inhibition mentioned, it seems evident that the multip.icity of cases arising under such a

4 DUTIES AND POWERS OF INTERSTATE COMMERCE COMMISSION.

statute would overwhelm the Commission just as the assumption indulged for a while at the beginning, that the interstate commerce act confers a dispensing power with respect to the long and short haul rule was, upon due consideration, declared by Judge Cooley to be impracticable for the reason that it imposed upon the Commission a task in practice proved to be superhuman.

TWO OTHER CONSTITUTIONAL QUESTIONS.

There are two other constitutional questions which may be briefly noticed in this connection.

1. The power to issue self-executing decrees is essentially a judicial function, and not one to be exercised by an administrative board. This is purely a legal question and one which may profitably engage the attention of an investigation committee of Congress.

2. Conferring the power of rate making upon the Interstate Commerce Commission by Congress would constitute an unconstitutional delegation of its legislative authority. This is an exceedingly important matter. The rule of constitutional law that Congress has no power to delegate its legislative authority is a recognized political axiom. This was clearly stated by Mr. Chief Justice Marshall in Heyman 2. Southard, 10 Wheaton, page 42. Congress has the power to authorize any administrative office to make regulations needful to the execution of particular laws, such regulations being in execution of, supplementary to, and not in conflict with the law, but specifically in effectuation of the law. But this authority must not trench upon law making. Without discussing the question as to the distinction here drawn, it appears unnecessary to say more than to express the opinion that the power of rate making proposed to be vested in the Interstate Commerce Commission, with the unavoidable consequents of that authority, would be a much larger exercise of the power of Congress to regulate commerce among the States than has ever been exercised by Congress, and that it would constitute a clear delegation of the legislative powers of Congress. The subject is evidently one which should be carefully considered by a Congressional investigating committee.

WHAT CONSTITUTES COMMERCIAL LIBERTY?

We must not lose sight of the fact that commercial liberty ever has been and always will be the liberty of competitive struggle, with all the severe results of such struggles, and that governmental regulation conservative of the ends of liberty must not attempt to eliminate that struggle, but only hold it within the restraints of justice and equity. In Great Britain the only governmental restraints upon the freedom of competition recognized under the principles of the common law are restraints upon practices which are recognized as involving conspiracy, dishonesty, intimidation, molestation, or other clearly recognized

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wrongs. The maintenance of commercial liberty has been a problem of the ages solved by the lessons of experience and not by any populistic, socialistic, or academic experiment. It is the animating purpose of the common law to enforce the principles of commercial liberty.

Let it be observed just here that the constitutional limitation already mentioned applies only to the regulation of commerce by Congress, but that the Constitution imposes no limitation upon the regulation of commerce by the courts. During the last four hundred years the English-speaking people have had implicit faith in the principles and provisions of the common law, as developed, and that confidence knows no abatement.

In the light of these facts, it appears to be the duty of Congress to carefully inquire whether the proposition to give practically autocratic power to an administrative board of the Government would or would not operate as an improper barrier to the exercise of the power of the judiciary to defend the commercial liberties of the people.

WHAT THE PROPOSITION OF COMMISSION RATE-MAKING INVOLVES.

In order to avoid any possible misrepresentation as to the attitude assumed by the Interstate Commerce Commission toward the question of governmental rate-making, I quote as follows from its official utterances upon the subject:

In its Seventh Annual Report, dated December 1, 1893, at page 10 the Commission stated its conception of the nature and scope of governmental regulation of the internal commerce of the country as follows:

To give each community the rightful benefit of location, to keep different commodities on an equal footing, so that each shall circulate freely and in natural volume, and to prescribe schedule rates which shall be reasonably just to both shipper and carrier is a task of vast magnitude and importance. In the performance of that task lies the great and permanent work of public regulation.

The Utopian idea of placing the conduct of the commercial and transportation interest of this country under the supervision and control of an administrative bureau of the National Government “ so as to give each community the rightful benefit of location, and to keep different commodities on an equal footing, so that each shall circulate freely and in natural volume" is a conception of distributive justice to which the judicial mind has never yet soared. It savors of what Napoleon scornfully characterized as "the ideology of the laws of nature."

Humanly speaking, it constitutes a striking illustration of what is commonly known as bureaucratic rule, which in all ages has proved to be the antithesis of commercial liberty. This is clearly, and as hereinafter shown, unavoidably involved in any proposition to invest the Commission with the power of rate making.

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In its annual report submitted December 6, 1897, the Commission recommended that Congress should confer upon it the absolute power to prescribe rates; authorize it to issue self-executing administrative orders, and final administrative orders a strictly judicial functionand compel the courts to sanction such orders.

These views of the Commission were subsequently expressed in a bill introduced in the Senate January 22, 1898 (S. 3354, 55th Cong., 2d sess.), which bill provided that the courts shall be required to review the rates, fares, classifications, etc., prescribed by the Commission, and further that "the case as certified from the Commission, together with any additional testimony taken by the courts, shall be the record upon which it shall be heard." The Supreme Court, however, had already declared the power of rate making to be not a judicial function, and one over which the Federal judiciary could not and would not exercise any authority. This absurd bill also proposed to confer upon the Commission absolute power to decide cases involving long and short haul rates, and to prescribe the rates and the conditions under which transportation shall be conducted throughout the United States. It also provided that the Commission shall be authorized to issue administrative orders and final administrative orders. If enacted into law, it would have subjected the commercial, industrial, and transportation interests of this country to the absolute control of a bureau exercising a dispensing power. The bill failed to secure serious attention in either branch of Congress, and apparently produced no other effect upon the legislative mind than of astonishment.

The Commission, however, refused to abandon its purpose to acquire dispensing power. Again in the Fifty-sixth Congress-March 2, 1899, to March, 1901-it approached Congress, but this time with a bill intended to evade the rule of governmental policy announced by the Supreme Court in the Maximum Rate case, and thus to circumvent the judiciary. This bill was introduced December 12, 1899, as Senate bill 1439, Fifty-sixth Congress, first session. It provided that the companies shall first make their rate sheets, which, having been made, the Commission shall, upon complaint made either by itself or any other competent complainant, have power to revise and change the rates which have been made, thus conferring upon the Commission the right to recast every rate sheet in the country. The fallacy involved in this provision consisted in the pretense that it avoided the objection of the courts that rates made in advance of being charged and collected, even if authorized by statute, are not reviewable in the courts as to their reasonableness, from the fact that they are legislative rates. An ingenious argument in favor of just such an arrangement had been made in the Maximum Rate case, but was utterly discarded by the Supreme Court in the following terms: "The vice of this argument is that it is building up indirectly and by implication a power which in