merce, all express business, by whomsoever carried on, should be excluded. Justice to the public, as well as to that business, demands that it be governed throughout the country by rules of general application, and which shall not be dependent on mere forms, or on the will of those who happen to be in the control of the railroads, and therefore have the power to determine by what agencies this important portion of the business of the roads shall be conducted.

What is said of the express business is applicable also to the business of furnishing extra accommodations to passengers in sleeping and parlor cars. These accommodations are furnished in some cases by the railroad companies, and in others by outside corporations, which are not supposed to be embraced by the terms of the law. Outside companies are also to some extent engaged in the transportation of live stock in cars owned by themselves, but transported over the railroads under special agreements with the railroad companies which supply the motive power. As these last-named companies furnish better accommodations for live stock, and transport them with less liability to injury and with less shrinkage than is done in the ordinary stock car, it is not improbable that they, like the companies which furnish special accommodations for passengers, may in time build up a large business in respect to which they will not be controlled by any existing legislation.

It is well known also that the transportation of mineral oil is already to a very large extent in tank cars owned by parties who are not carriers subject to regulation under the act to regulate commerce. A willingness to disregard the rules of equality and justice as between shippers, when it can be made for the interest of the carriers to do so, is as likely to make its appearance in the action of the managers of any one of these outside organizations as in that of the managers of the railroads, for the temptations will be the same, and the same class of persons will be bidding for special privileges and advantages which before the act was passed prospered so unfairly upon railroad favors. The act has not changed the nature or the grasping disposition of individuals; it has only interposed certain restraints which it is reasonable to assume will be evaded if the opportunity shall be presented.

These facts are noted for the purpose of placing the whole subject distinctly before the national legislature. If it is the will of Congress that all transportation of persons and property by rail should come under the same rules of general right and equity, some further designation of the agencies in transportation which shall be controlled by such rules would seem to be indispensable.

II. THE LONG AND SHORT HAUL CLAUSE OF THE ACT.

Another question presenting itself immediately on the organization of the Commission was that respecting the proper construction of the fourth section of the act, which, after providing

That it shall be unlawful for any common carrier subject to the provisions of this act to charge or receive any greater compensation in the aggregate for the transportation of passengers or of 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 within the longer distance, proceeds to say

That, upon application to the Commission appointed under the provisions of this act, such common carrier may, in special cases, after investigation by the Commission, be authorized to charge less for longer than for shorter distances for the transportation of passengers or property, and the Commission may from time to time prescribe the extent to which such designated common carrier may be relieved from the operation of this section of this act.

The provision against charging more for the shorter than for the longer haul under the like circumstances and conditions over the same line and in the same direction, the shorter being included within the longer distance, is one of obvious justice and propriety. Indeed, unless one is familiar with the conditions of railroad traffic in sections of the country where the enactment of this provision is found to have its principal importance, he might not readily understand how it could be claimed that circumstances and conditions could be such as to justify the making of any exceptions to the general rule.

It is a part of the history of the act that one house of Congress was disposed to make the rule of the fourth section imperative and absolute, and it is likely that in some sections of the country many railroad managers would very willingly have conformed to it, because for the most part they could have done so without loss, and with very little disturbance to general business. But in some other parts of the country the immediate enforcement of an iron-clad rule would have worked changes so radical that many localities in their general interests, many great industries, as well as many railroads, would have found it impossible to conform without suffering very serious injury. In some cases probably the injury would have been overbalanced by a greater good; in others it would have been irremediable. To enforce it strictly would have been, in some of its consequences in particular cases, almost like estab lishing, as to vested interests, a new rule of property.

A study of the conditions under which railroad traffic in certain sections of the country has sprung up is necessary to an understanding of the difficulties which surround the subject. The territory bounded by the Ohio and the Potomac on the north and by the Mississippi on the west presented to the Commission an opportunity, and also an occasion, for such a study. The railroad business of that section has grown to be what it is in sharp competition with water carriers, who not only have had the ocean at their service, but by means of navigable streams were able to penetrate the interior in all directions. The carriers by water were first in the field, and were having a very thriving business while railroads were coming into existence; but when the roads were built the competition between them and the water-craft soon became sharp and close, and at the chief competing points the question speedily came to be, not what the service in transportation was worth, or even what it would cost to the party performing it, but at what charge for its service the one carrier or the other might obtain the business. In this competition the boat owners had great advantages: the capital invested in their business was much smaller; they were not restricted closely to one line, but could change from one to another as the exigencies of business might require; the cost of operation was less. But the railroads had an advantage in greater speed, which at some times, and in respect to some freight, was controlling.

In this 'competition of boat and railroad the rates of transportation which were directly controlled by it soon reached a point to which the railroads could not possibly have reduced all their tariffs and still maintain a profitable existence. They did not attempt such a reduction, but on the contrary, while reducing their rates at the points of water competition to any figures that should be necessary to enable them to obtain the freights, they kept them up at all other points to such figures as they deemed the service to be worth, or as they could obtain. It often happened, therefore, that the rates for transporting property over the whole length of a road to a terminus on a water highway would not exceed those for the transportation for half the distance only, to a way

station not similarly favored with competition. The seeming injustice was excused on the plea of necessity. The rates to the terminus, it was said, were fixed by the competition and could not be advanced without abandoning the business to the boats. The greater rates to the local points were no more than was reasonable, and they were not by reason of the low rates to the competitive point made greater than they otherwise would have been. On the contrary, if the rates on the railroad were established on a mileage basis throughout, with no regard to special competitive forces at particular points, the effect in diminishing the volume of business would be so serious that local rates at non-competitive points would necessarily be advanced beyond what they are made when the competitive business can be taken also, even though the competitive business be taken at rates which leave little margin above the actual cost of movement. Such is the common argument advanced in support of the short-haul rates.

But the lower rates on the longer hauls have not been due altogether to water competition; railroad competition has been allowed to have a similar effect in reducing them. But as the railroad tariffs are commonly agreed upon between the parties making them, the necessity which controlled the water competition was not so apparent here, and to some extent the lower rates have been conceded to important towns in order to equalize advantages as between them and other towns which were their rivals, and to which low rates had been given under a pressure of necessity. But they were given also in many cases as a means of building up a long-haul traffic that could not possibly bear the local rates, and which consequently would not exist at all if rates were established on a mileage basis, or on any basis which, as between the long and short haul traffic, undertook to preserve anything like relative equality.

It would be foreign to the purposes of this report to discuss at this time the question whether in this system of rate-making the evils or the advantages were most numerous and important. Some of the evils are obvious; not the least of which is the impossibility of making it apparent to those who have not considered the subject in all its bearings, that the greater charge for the shorter haul can in any case be just. The first impression necessarily is that it must be extortionate; and until that is removed it stands as an impeachment of the fairness and relative equity of railroad rates. But, on the other hand, it must be conceded that this method of making rates represents the best judgment of experts who have spent many years in solving the problems of railroad transportation; and its sudden termination without allowing opportunity for business to adapt itself to the change would, to some extent, check the prosperity of many important places, render unprofitable many thriving enterprises, and probably put an end to some long-haul traffic now usefully carried on between distant parts of the country. It is also quite clear that the more powerful corporations of the country, controlling the largest traffic and operating on the chief lines of trade through the most thickly settled districts, can conform to the statutory rule with much more ease and much less apparent danger of loss of income than can the weaker lines, whose business is comparatively light and perhaps admits of no dividends, and the pressure of whose fixed charges imposes a constant struggle to avoid bankruptcy.

If Congress intended this immediate change of system, it was not for the Commission to inquire whether the evils of making it at once would or would not exceed the benefits. The law must stand as the conclusive evidence of its own wisdom, and the authorities charged with en

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forcing it were not to question but to obey it. With the Commission. therefore, the first question was one of interpretation; and when it was clearly perceived what Congress intended, the line of duty was plain. The intent should be given effect, not only because it was enacted, but because in the enactment it was determined by the proper authority that the public good required it.

In coming to a consideration of the fourth section of the act it was immediately perceived that many different views were taken of it, some of which were settled convictions which were the result of thought and reflection, while others were mere off hand impressions and deserving of little attention. By some persons it was assumed that the Commission had by the act been given a general authority to suspend altogether the operation of the fourth section, and upon this utterly baseless and unreasonable assumption the Commission was plied with arguments in support of a general suspension. Other views went to the opposite extreme, and while holding that the general rule must be enforced in all cases until the Commission had sanctioned exceptions, would restrict the power to make exceptions to individual shipments made under circumstances and conditions which were special and peculiar. Such a restriction would obviously render the authority to make exceptions of no practical utility.

But among those who had given the subject thought and attention, and whose views for that reason were deserving of consideration, a most important difference of opinion was found to exist regarding the stage at which the intervention of the Commission under the fourth section was to be invoked. By some persons it was believed that a rule was laid down by that section which could not lawfully be departed from until the Commission on investigation had determined that the circumstances and conditions of the longer and of the shorter transportation were so dissimilar as to justify making the greater charge for that which was the shorter, and had prescribed the extent of the permissible exception.

By others the fact was emphasized that the charging or receiving "any greater compensation in the aggregate for the transportation of passengers or of the like kind of property" "for a shorter than for a longer distance over the same line in the same direction, the shorter being included in the longer distance," was only declared by the section to be unlawful when both were "under substantially similar circumstances and conditions;" and they confidently affirmed that the carrier could require no order of relief from the Commission when the circumstances and conditions were in fact dissimilar, since the greater charge was not then unlawful and not forbidden. This view would leave the carrier at liberty to act on its own judgment of the conditions and circumstances in any case, subject to responsibility to the law if the greater charge were made for the shorter transportation when the circumstances and conditions were not in fact dissimilar, unless authorized to make such greater charge by the relieving order of the Commission.

When the Commission was called upon in the performance of its duty to give an interpretation to this section it was found on comparison of views that the interpretation last above mentioned seemed to all its members to be the one best warranted by the phraseology of the statute. Moreover, when it was considered how vast was the railroad mileage of the country, how numerous were the cases in different sections in which, for divers reasons, the general rule prescribed by the fourth section was then departed from, this interpretation seemed the only one which, in administering the law, would be found practical or

workable. Possibly the Commission might therefore have been justified in making immediate announcement of this opinion.

It was not, however, believed to be wise to make such announcement at that time. The construction of a new statute having great remedial purposes in view ought not to be hastily made by the tribunal called upon to act under it. When a question of construction comes before the courts parties interested in taking different views are heard by counsel, and if the case is important the court is likely to have all the considerations which support the several views presented, and will thus be fully informed when it comes to make decision.

The Commission had not had the benefit of discussion by counsel of this most important provision. To delay, before taking any action whatever, until in the ordinary course of affairs a case should arise where the proper construction of the section should be the point in controversy, might be exceedingly injurious to many interests. Under these circumstances it seemed to the Commission that the prudent course, and the course most consistent with the general purposes the act was intended to accomplish, was to take such action as for the time being would disturb as little as possible the general business of the country, and at the same time give ample opportunity for full discussion and consideration of this most important question.

The act to regulate commerce was not passed to injure any interests, but to conserve and protect. It had for its object to regulate a vast business according to the requirements of justice. Its intervention was supposed to be called for by the existence of numerous evils, and the Commission was created to aid in bringing about great and salutary measures of improvement. The business is one that concerns the citizen intimately in all the relations of life, and sudden changes in it, though in the direction of improvement, might in their immediate consequences be more harmful than beneficial. It was much more important to move safely and steadily in the direction of reform than to move hastily, regardless of consequences, and perhaps be compelled to retrace important steps after great and possibly irremediable mischief had been done. The act was not passed for a day or for a year; it had permanent benefits in view, and to accomplish these with the least possible disturbance to the immense interests involved seemed an obvious dictate of duty.

Acting upon these views, and in order to give opportunity for full discussion, the Commission, after having made sufficient investigation into the facts of each case to satisfy itself that a prima facie case for its intervention existed, made orders for relief under the fourth section, where such relief was believed to be most imperative. These orders were temporary in their terms, and in making them it was announced that sessions would be held in the section of the country to which a majority of these orders related, at which all parties interested in the questions they presented were at liberty to appear and present their views. Whatever view should ultimately be taken of the proper interpretation of the fourth section, this course could result in no serious injury. If the first impression of the Commission should be held to be correct, the orders would only sanction what might have been done without them, but if the opposite view should be taken they would only postpone for a time the strict enforcement of the fourth section, and give opportunity during that period for the business of the country to adapt itself as far as possible to the new requirement.

The considerations which were influential in determining when these temporary orders should be granted were not more the relief of the car