of intention to do so is very often exercised in such a manner as to cause annoyance and loss to individuals and to other carriers, and sometimes so that the effect is equivalent to the giving of a rebate. The Commission believes that notice of intention to reduce any rate which any carrier subject to the act makes or joins in ought to be published not less than three days before the reduction should be given effect, as provided in the amendments now pending.

There are provisions in the act as it now stands which would render the carrier, its officers or agents, punishable if by false billing, false classification, false weighing, or false report of weight, or by any other device or means whatsoever, they shall give undue or unreasonable preferences or advantages. The Commission believes that the penal provisions against wrongs of this nature should embrace also the owner of the property or any party acting for the owner or consignor of property who shall be a party to any such unlawful conduct, and it urges the passage of the provisions on the subject contained in the pending bill.

There are many instances in which important lines, in transporting property from one point in a State to another point in the same State, will pass through another State; as lines from New York to Buffalo pass through New Jersey and Pennsylvania, and lines from northern Louisiana to New Orleans pass into and out of Mississippi. It is sometimes claimed that a carrier engaged in such transportation is not subject to the act, since the property or persons transported are received for carriage from point to point within the same State, and not from one State to another State. The construction suggested is technical, and is not accepted by the Commission as sound, but a certain plausibility is given to it by the fact that the carriers engaged in transportation from point to point in the United States through a foreign country are expressly made subject to the act, while the same words are not applied to carriers engaged in transportation from point to point in a State, but through another State. The Commission suggests that the question thus raised be settled by express provision.

Another question of construction ought also to be settled by legisla tion in order to take away the pretense on which certain through lines are now claimed to be local lines in fact and through lines only in appearance. It is well known that many cases exist in which one corporation, either directly or through a trustee, holds the majority or perhaps all the stock of another, and thus controls the other to all intents and purposes, though keeping up a separate organization for the distribution of income among stockholders. The official board and staff of the two in such a case may not be identical; in may cases they are wholly so.

There are also cases in which a corporation created for the purpose of operating existing roads does so through a control of stock in the companies owning them. The claim is understood to be made in some cases, where separate organizations are maintained and no lease given of the subordinate road, that the road is to be considered and treated precisely as though no such ownership or holding of its stock existed, and that a through line is not formed over it in connection with the one owning or holding its stock except when by contract between the two such a line is expressly created. If the law now sustains this claim, it should, as the Commission thinks, be amended; if a line is in fact a through line by reason of ownership, the corporation controlling it ought not to be at liberty to make through rates or to decline to make them at pleasure.

1

The act to regulate commerce, in its third section, requires every common carrier subject to its provisions, according to their respective powers, to afford all reasonable, proper, and equal facilities for the interchange of traffic between their respective lines, and for the receiving, forwarding and delivering of passengers and property to and from their several lines and those connecting therewith. It is claimed by some carriers, and perhaps the claim represents the prevalent opinion among them on the subject, that while each carrier must afford equal facilities for the interchange of traffic as between competing lines, when it furnishes any, it is at liberty to abstain altogether from entering into joint arrangements with other lines for the exchange of traffic, and that when it shall do so it may remain altogether a local road. Especially is this claim made on behalf of roads whose lines are wholly within the boundaries of a single. State. It is said they are purely State roads, and they can not, except at their own option, be compelled to engage in interstate traffic.

As is said elsewhere in this report, however, there are probably very few of the carriers by rail in the country that are not to some extent engaged in interstate commerce, and whether or not such a carrier enters into joint arrangements with other carriers for the purpose is believed to be immaterial to the power of Congress to regulate such interstate traffic as it actually engages in. Probably the act as it now stands in its specification of the carriers to which it is made to apply would not reach the case of a carrier by railroad entirely within a State that did not enter into joint traffic arrangements for interstate traffic, but the specification falls short of the full power of Congress in this regard, and it is believed that it would be quite within that power to make provisions under which all roads engaged in interstate traffic, whether by contract arrangements with other roads or not, would not only be subject to regulation when they make joint traffic arrangements, but should be required to make such arrangements when the interests of the general public seem to demand it, and that, in case of a failure to agree with other roads upon the terms of arrangement, the Commission should be empowered to prescribe them.

It must also be within the power of Congress when a State road enters into traffic arrangements with another, so as to be, in respect to the traffic covered by it, within the terms of the act, to require it to give, in respect to such traffic, the same reasonable, proper, and equal facilities for the interchange of traffic to other roads that it does to the line with which the arrangement is made. In other words, as the Commission believes, it should not be within the power of what is commonly called a State road, merely because its line does not extend beyond State boundaries, to so limit its participation in interstate commerce as to establish discriminations therein between connecting lines, or between places and persons, as it is now claimed that it may do.

It is the opinion of the Commission that the interest of the public would be subserved by further amending the third section by adding thereto a provision that

The facilities to be so afforded shall include the due and reasonable receiving, forwarding, and delivering by every such common carrier, at the request of any other such common carrier, of through traffic at through rates or fares. If any one of such common carriers shall desire to form a through route for interstate traffic or any class thereof over its own line or any part thereof, in connection with the line, or any part of the line of one or more other common carriers, it shall address a request in writing to the other common carrier or carriers, describing therein the proposed route specifically, and naming proposed through rates or fares and divisions thereof for such traffic, and shall deliver such request to such other carrier or carriers and also transmit a copy.

thereof to the Commission hereinafter named. If the other common carrier or carriers shall not, within ten days after receiving such request, make and serve and file with the Commission written objections either to the proposed route or to the proposed rates, fares, or divisions, the same so far as not objected to shall be deemed agreed to, but if either the route, the rates, or fares, or the divisions, are objected to, the objections shall be stated in writing and transmitted to the Commission, and the Commission shall then have power to determine whether, having regard to all the circumstances, the route proposed is demanded in the public interest and is a reasonable route for the traffic, and if the Commission shall so find, and the rate or divisions are not assented to, the Commission shall have the further power to prescribe the same; but the Commission in any case, in apportioning the through rate, shall take into consideration all the circumstances of the case, including any special expense incurred in respect of the construction, maintenance, or working of the route, or any part thereof, as well as any special charges which any such common carrier may have been entitled to make in respect thereof, and it shall not be lawful for the Commission in any case to compel any company to accept lower mileage rates than the mileage rates which such company may for the time being legally be charging for like traffic carried by a like mode of transit, on any other line of communication between the same points, being the points of departure and arrival of the through route.

The Commission also recommend that the carriers engaged independently in interstate traffic on the rivers, lakes, and other navigable waters of the country be put in respect to the making, publishing, and maintaining rates upon the same footing with interstate carriers by rail. It is believed they will be benefited rather than harmed thereby, and that the excuses now made by carriers by rail for great disparities in rates for corresponding transportations as between points which are and points which are not affected by water competition would thereby to a large extent be taken away.

The Commission also refers to what is said regarding the transportation of immigrants in another part of this report, in which general legislation on that subject is urgently recommended.

For the purpose of convenient and necessary reference in connection with the foregoing suggestions the Commission has caused to be printed and annexed to this report, marked Appendix A, a copy of the act to regulate commerce approved February 4, 1887; and also extracts from legislation in the Dominion of Canada and in Great Britain upon cognate subjects, including a copy of the railway and canal traffic act enacted by the English Parliament August 10, 1888, which is to come into operation January 1, 1889.

All of which is respectfully submitted.
Dated December 1, 1888.

THOMAS M. COOLEY,

WILLIAM R. MORRISON,

AUGUSTUS SCHOONMAKER,

ALDACE F. WALKER,

WALTER L. BRAGG,

Interstate Commerce Commissioners.

APPENDICES.

APPENDIX A.

COPY OF ACT TO REGULATE COMMERCE, AND STATEMENT OF EXISTING LEGISLATION UPON SIMILAR MATTERS IN CANADA AND IN ENGLAND.

(1)

AN ACT to regulate commerce.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the provisions of this act shall apply to any common carrier or carriers engaged in the transportation of passengers or property wholly by railroad, or partly by railroad and partly by water, when both are used, under a common control, management, or arrangement, for a continuous carriage or shipment, from one State or Territory of the United States, or the District of Columbia, to any other State or Territory of the United States, or the District of Columbia, or from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States, and also to the transportation in like manner of property shipped from any place in the United States to a foreign country and carried from such place to a port of transshipment, or shipped from a foreign country to any place in the United States and carried to such place from a port of entry either in the United States or an adjacent foreign country: Provided, however, That the provisions of this act shall not apply to the transportation of passengers or property, or to the receiving, delivering, storage, or handling of property, wholly within one State, and not shipped to or from a foreign country from or to any State or Territory, as aforesaid.

The term "railroad" as used in this act shall include all bridges and ferries used or operated in connection with any railroad, and also all the road in use by any corporation operating a railroad, whether owned or operated under a contract, agreement, or lease; and the term "transportation" shall include all instrumentalities of shipment or carriage.

All charges made for any service rendered or to be rendered in the transportation of passengers or property as aforesaid, or in connection therewith, or for the receiving, delivering, storage, or handling of such property, shall be reasonable and just; and every unjust and unreasonable charge for such service is prohibited and declared

to be unlawful.

SEC. 2. That if any common carrier subject to the provisions of this act shall, directly or indirectly, by any special rate, rebate, drawback, or other device, charge, demand, collect, or receive from any person or persons a greater or less compensation for any service rendered, or to be rendered, in the transportation of passengers or property, subject to the provisions of this act, than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, such common carriers hall be deemed guilty of unjust discrimination, which is hereby prohibited and declared to be unlawful.

SEC. 3. That it shall be unlawful for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular de