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Among railway experts this history of the reduction of rates is, perhaps erroneously, charged to the constantly decreasing rato wars and the gradual adoption of pooling systems. But let us assign it to their yielding to the laws of supply and demand. It still follows, however, that (since, unless there is a difference of value in commodities at different points, freights cannot be moved at all) if the element of mere distance only is to be considered, the inferior merchandise at a certain point can control the market to the entire exclusion of a better quality further off. Here again was a problem for the railway experts to meet, and they met it by a system of freight classification. But freight classification is “ discrimination ” which the Interstate Commerce Law, if rigidly applied-puts an end to. In other words the Interstate Commerce Law is a bull in a china shop, rushing in rough-shod among all sorts of delicate complications and elaborate calculations and upsetting them all by a single “fiat” born of the highest sense of the public safety, no doubt—but none the less utterly ruinous if actually applied to the interests, not of the railways but of the people—the very people who have enacted the law ! and who are the beneficiaries of those reserved powers of the States of which they are respectively citizens without interference with which the interstate law cannot be enforced. Not to men. tion certain penal jurisdiction conferred upon the commission by the act—which it would be impossible to find in the powers of the general government itself unless actually granted to it by the States themselves. Here again, it is the rights of the citizen no less than of the railroad company (admitting a distinction between a citizen and a company) which are invaded. For a crime implies a criminal and admits of an accessory, and if in any case a railway is a criminal by reason of disobedience of the Interstate Commerce Act, then any aider and abettor of the company committing the act—that is to say, any shipper who accepts the transportation is a criminal equally with the company. But, says the advocate of the law-all these objections are finical and visionary. The “long and short haul” clause has a definite meaning, settled long ago. It is taken from the second section of
the British “Railways and Canal Traffic Act.” A sufficient answer to this, however, we have seen would be that if the clause has a defined and settled meaning, it was impolitic to upset and unsettle that meaning by addition of the qualification “under substantially similar circumstances and conditions." (And an equally pertinent answer might be that Great Britain and the United States have different political systems, and do not regard political legislation with the same sentiments.) But the practical and sufficient answer is, that British railway management does not present the same problems as ours to be over
There are no extreme linear distances to be overcome; no transcontinental systems no great climatic differences of tropics and temperate zones whose commodities are to be interchanged ; and, above all, no paralleling lines. By the large system obtaining in the United States. by which any and every railroad company is an agent for any and every other, ticketing passengers and billing freight over any other line, it is rather difficult to conceive of a railroad which is or may not be an interstate railroad and subject to jurisdiction of the Interstate Commission. It must not be forgotten then that the single element of distance is, and constantly must be, a very unwise element in this discussion. The sliding scales adopted by the railroads were for the benefit of shippers, not for the benefit of the companies. Everybody acquainted with the matter knows that to charge by the element of distance alone would save the companies from fifty to sixty per cent of the cost of its bookkeeping and auditing departments, besides enabling them to dispense with certain other departments(such as, for example, its freight contracting departments) altogether. But to adopt that rigid rule would ruin more interests than it conserved, and those the interests of shippers, not of the railroad companies. The“ drawback” and the "rebate" are conveniences merely-whereby inequalities of haul and handling can be equated without disturbance of general schedules for particular and single cases. It costs more to handle small parcels going short distances than large parcels going long distances—and no amount of legislation can make it otherwise, and the making of freight schedules is one in which every department is and must be consulted, and in which hundreds of circumstances and conditions (rarely even “substantially similar”) must be taken into the account. We have seen what the railways themselves, of their own motion, have done to meet and ameliorate, if not solve, these difficult and delicate problems. Now let us step aside and see the Interstate Commerce Commission dispose of them! Senator Cullom's statement about trade-centres is so remarkable that it deserves a chapter by itself.
RAILWAYS AND TRADE CENTRES.
IF, therefore, a century or so from now, a student of the political history of the United States shall ask, How happened it that its Congress was once moved to establish a court of star-chamber aimed at an industry not ordinarily operated except by charter ; a court which was to be not only an oyer and terminer, but an inquisitor of its own motion; which should dispense with due process of law or with any process at all; which should supply penalties, civil, criminal, and as for contempt with plentiful liberality; but never assume, nay, never so much as hint or suggest a probable or even possible protection or premium upon any probable or even possible good or useful thing to be by any accident done or subserved by that industry-if, we say, the political student should ask that question, in view of the fact that no public interest seemed to have required such a statute, and that its immediate effect was to raise freight rates to the people passing the law-the lawyer of that date might suggest possibly that an application of this rule of interpretation, providing that the intention of the framers of a statute may be looked into (under certain restrictions), would be most likely to furnish some sort of a clew; and in turning to Senator Cullom's speech, just given, possibly might select the following most remarkable passage, as possibly,
the real ro'ison for the passage of this most extraordinary act: “The requirements of the law that all charges shall be reasonable, and that there shall be no unjust discrimination or unreasonable advantage or preference in favor of any person or place, had been shown by the character of the complaints against the enforcement of the act to be absolutely demanded.' In reference to the long and short haul clause, he said: 'For many years the railroads of the country have so absolutely controlled our interstate commerce that we have no means of knowing what are the natural channels of trade, or what would be the effect of the natural laws of trade upon many, at least, of the present commercial centers. What the critics of the law call natural centers of trade are centers created by railroad favoritism which has diverted trade from its natural channels into artificial ones at the expense of less favored localities.'” [The italics here are ours.]
In reading the above, the student of political history aforesaid might be led to remark that to centralize and to submit to the espionage of a single paternal commission of this Government, not only the entire railway interests of the United States (being its operation of 139,986 miles of railway, with a funded debt of $3,669,005.722, upon which interest is to be earned), but the minutest daily detail of such operation, were a rather costly method of gratifying a single Senator's or even a whole Congress's laud. able curiosity as to "what are the natural channels of traffic, or what would be the effect of the natural laws of trade upon many, at least, of the present commercial centers”; and that it appears to be a rather cool proposition to charge the cost of gratifying the aforesaid curiosity upon the only party who had betrayed no curiosity in the premises whatever, but kept on its even tenor, operating at its own cost the franchises the people had given it, and endeavoring to pay one and one third per cent on the capital it employed.
But, to drop the student of political history, it is important, it seems to me, for the present generation to know, at last, just why the Interstate Commerce law was passed, and for just what sins of the railways they have been put under pedagogical surveillance.
It is because these wicked railways have been creating trade-centres ! The revelation is a particularly startling one, because among the railways themselves the maxim had always been to try and accommodate themselves to such trade-centres of the country as already existed at any possible expense and at all hazard. No terror of injunctions out of chancery were too terrible; no right of way was too costly; no rivers too broad; no mountains too solid; but the railway must supermount and penetrate, at whatever expense, to reach the trade-centre which Nature had already provided. This, I say, has always been the maxim of the railway company: “Do the business of your territory, count first cost of construction as absolutely nothing. A railway is a means of supply to a trade-centre, or a connection between two or more trade-centres. The product of the country must have its best markets, but those best markets are at its trade-centres; at all odds we must get to them. No matter where the president of the company lives, or where the capital is subscribed. Construct our line to the best market!” Such, practically, have been the directors' and the promoters' instructions. And, indeed, it has always seemed to be supposed, even outside of the magic circle of the railway companies, that the capital to build railroads was subscribed on the understanding that they were to do the public business, and not operate against it and in its teeth, and that it would be unnecessary demonstration of corporate idiocy to attempt to procure capital upon any other. But now comes Senator Cullom with his proposition, and we are advised that we have all been wrong; that, instead, these naughty railways have been at work not connecting but CREATING trade-centres !
Had anybody but one of the fathers of the Interstate Commerce Commission made this statement, not much attention might have been paid to it. Every railroad man-certainly every shipper over a railway-knows that the establishment of a trade-centre is a matter entirely out of the power and beyond the control of railway companies not only, but of any known human power; a matter regulated by the unwritten laws of trade, laws not only unwritten but, except in their operation, entirely unknown; a result and not