Extracts from some State statutes belonging to this period are in chapter xxxvi. 8877. Railroad commissions. The regulation of charges by direct legislation was found not to be a convenient or effective method, and the States soon agreed in establishing State commissions, which were given in several States the power to fix maximum rates. The movement for the establishment of railroad commissions has covered the entire country. Almost every State has such a commission, although the powers entrusted to it differ widely in the different States. Some commissions have been granted full power to fix rates; others have power to revise rates, while many are simply established to investigate railroad conditions and report to the legislature. In chapter xl extracts from these State statutes are given. The effectiveness of these commissions has depended to a great extent upon the skill and ability with which they are administered, and the confidence felt in their decisions. Thus one of the most efficient is the Massachusetts Railroad Commission; yet its power over the railroads is merely advisory. Without any power whatever to fix rates, it nevertheless indicates to the railroads what rate in its opinion is reasonable, and in no instance has its recommendation been neglected; because if such a recommendation were reported to the legislature as disregarded by the railroad, a statute would undoubtedly be passed to enforce it. The similarity of this practice with the English law will be noted. 8878. Regulations against discrimination. Meanwhile other difficulties were felt by the people beside that of excessive charges. The discrimination of railroads in favor of certain shippers came to be an industrial evil, and provisions were adopted in State after State forbidding such dis crimination. Among the earliest was that contained in the constitution of Pennsylvania of 1873, in which it was provided that persons and property should be transported without undue or unreasonable discrimination in charges or in facilities. In chapter xxxvii extracts from these various State statutes are given. TOPIC C-FEDERAL LEGISLATION SINCE 1887. 879. The Interstate Commerce Act. The power given to Congress by the constitution over commerce between the States was not taken advantage of until the year 1887, when the Interstate Commerce Act1 was passed. This act was founded to a considerable extent on the English Railway and Canal Traffic Act, although many of its provisions were influenced by prior State legislation. In that Act the Interstate Commerce Commission was created; railroads were forbidden to discriminate between persons, places or varieties of traffic. The Commission was given the power to investigate alleged violations of the Act and to make orders thereon and power was given to the courts to act in support of such orders. One or two particular abuses were directly forbidden. Thus it was forbidden to charge more for a shorter than for a longer haul in the same direction and over the same route under substantially similar conditions, and the practice of giving rebates or free carriage was forbidden. Amendments to the Act were made in 1889 2 and 18913 perfecting the Act, extending the power of the federal courts, and supporting the Commission in its investigations by giving it greater power to summon witnesses and elicit testimony. 1 Act of Feb. 4, 1887; 24 Stat. 379, 3 Comp. Stat. p. 809. 2 Act of March 2, 1889; 25 Stat. 855. 3 Act of February 10, 1891; 26 Stat. 643. § 880. The Elkins Act of 1903. In 1903 the so-called Elkins Act was passed to perfect the Act. In the first section corporation commerce carriers are made criminally responsible for violations of the Act. In the second section provision is made for bringing into any proceeding before the Commission all carriers or other persons interested in the inquiry. In the third section jurisdiction is given to the courts sitting in equity, at the request of the Commission, to inquire into and enjoin any infraction of the provisions of the Act. These suits shall be prosecuted by the District Attorneys under order of the Attorney-General, and shall not preclude suit by private persons. Provision is made for speedy trial. TOPIC D-INTERPRETATION OF THE INTERSTATE COMMERCE ACT. § 881. The long and short haul clause. It was undoubtedly the intention of the framers of section 4, the long and short haul clause, to forbid absolutely the practice of charging more for a shorter haul unless upon application to the Commission express permission so to charge was given. The section, however, was a matter of contention between the two houses of Congress, and as it was finally passed the qualifying phrase "under substantially similar circumstances and conditions was inserted without probably any very clear belief that the meaning of the section was thereby fundamentally altered. At first the railroads acted upon the supposition that express permission of the Commission must be obtained according to the proviso in the section, if a greater charge was to be made for the shorter haul, and this seemed to be the view at first taken by the courts. The philosophy of the Act as expressed by Judge Shiras 4 Act of Feb. 19, 1903; 32 Stat. 847, U. S. Comp. Stat. Supp. of 1903, p. 363. in Van Patten v. Chicago, M. & St. P. Ry.,1 was that competition would reduce the rates to a fair amount at all competitive points, and that the 4th section would then keep the rates at noncompetitive points down to the level of the competitive rates. The courts, however, finally decided in view of the limitation of the section to cases where the conditions were substantially similar that competition with other railroads would justify a lower rate for the longer haul, and as practically all cases of the sort before the passage of the Act had been due to the competition of other railways, this decision in effect qualified the whole section. Since that time few applications have been made to the Commission for express permission to charge the higher rate, since under the decision of the courts any reason which would justify such permission by the Commission would justify the charge at the lower rate by the railroads without obtaining permission. These matters have been discussed in chapter xxv and will be treated in detail in chapter xxx. § 882. The fixing of rates. From the outset of its history the Commission claimed that under the Act it had the power not merely to forbid an unreasonable rate, but also to indicate to any railroad what it would regard as a reasonable rate for any particular service, and that then the railroad disregarding such recommendation would be subject to the action of the courts. The lower federal courts, however, from the beginning denied this power to the Commission. The question did not reach the Supreme Court of the United States for ten years, but finally in the case of Cincinnati, New Orleans and Texas Pacific Railway v. Interstate Commerce Commission, the issue was fairly presented, and the Supreme Court of the United States decided that the Commission had no 2 181 Fed. 545 (1897). 2162 U. S. 184, 40 L. Ed. 935, 16 Sup. Ct. 700, 5 Int. Com. Rep. 391 (1896). power to fix rates. Since that time the Commission has under certain circumstances advised a railroad that in its opinion a reasonable rate would be no greater than a sum named, but no attempt has been made to go further than this in fixing rates. It will have been noticed that the English practice is to fix rates by Act of Parliament upon recommendation of an administrative body. § 883. Through routes. The practice of carriers to make through traffic arrangements with some one connecting line, and to throw all business into the hands of that line, notwithstanding the wishes of the shipper and without regard to his interests, caused dissatisfaction. It is true that in case such an arrangement was made the through rate would be posted; but if the tariff sheet did not state the route the shipper was deprived of a chance to discover and ship by a cheaper route, or one more agreeable to him for any reason. Furthermore, the connecting carriers sometimes refused to recognize the joint rates and collected their entire local charges. The Commission in 1894 ordered that published joint tariffs should indicate the route, and that the connecting carriers should file a consent to the rate.3 But the carriers refused to abide by this order; and upon a suit for enforcing it the Supreme Court finally held that the carrier might publish a through tariff of rates, reserving the right to route as it pleased.* TOPIC E-THE RATE REGULATION ACT OF 1906. $ 884. Occasion for the Act. The attitude of the courts toward the Interstate Commerce Act caused considerable dissatisfaction, especially in those parts of the country where the great bulk of freight originates, 3 In re Form and Contents of Rate Schedules, 6 I. C. C. Rep. 267 (1894). 4 Southern Pacific Co. v. Interstate Commerce Commission, 200 U. S. 536, 26 Sup. Ct. 330 (1906). |