how serious were the obstacles to be overcome in attempting to faithfully carry out its instructions. The field opened up for investigation was so extensive, the social, economic, legal, and other questions involved so complicated, and the agricultural, commercial, industrial, and corporate interests affected so vast and varied as to require for a thorough and satisfactory examination into technical details more time and labor than could be given, with the facilities at command, during the summer recess of the Senate. . . . The conclusion was reached that the committee would best serve the public interest and carry out the purpose of the resolution under which it was appointed by devoting its attention mainly to the consideration of the question whether any legislation to regulate the management of the transportation lines of the country is advisable, and, if so, what the scope and character of that legislation should be. This is the question that awaits the decision of the Congress. . . . The committee recognizes the justice of this demand, and believes that action by Congress looking to the regulation of interstate transportation is necessary and expedient, for the following reasons: Purpose of the investi gation. master of the situa 1. The public interest demands regulation of the business of The carrier, transportation because, in the absence of such regulation, the carrier is practically and actually the sole and final arbiter upon all tion. disputed questions that arise between shipper and carrier as to whether rates are reasonable or unjust discrimination has been practiced. . . . 2. It is the duty of Congress to undertake the regulation of the business of transportation, because of admitted abuses in its management and of acknowledged discriminations between persons and places in its practical operation - evils which it is possible to reach and remedy only through the exercise of the powers granted by the Constitution to Congress, and against which the citizen is entitled to the protection and relief the national authority can alone afford. ... 4. National legislation is also necessary, because the business of transportation is essentially of a nature which requires that unifirm system and method of regulation which the national authority can alone prescribe.... 3. The failure of Congress to act is an excuse for the attempts mude by the railroads to regulate the commerce of the country in their own way and in their own interests by whatever combinations and methods they are able to put into operation. . . . The complaints against the railroad system of the United States expressed to the committee are based upon the following charges: 1. That local rates are unreasonably high, compared with through rates. 2. That both local and through rates are unreasonably high at non-competing points, either from the absence of competition or in consequence of pooling agreements that restrict its operation. 3. That rates are established without apparent regard to the actual cost of the service performed, and are based largely on "what the traffic will bear." 4. That unjustifiable discriminations are constantly made between individuals in the rates charged for like service under similar circumstances. 5. That improper discriminations are made between articles of freight and branches of business of a like character, and between different quantities of the same class of freight. 6. That unreasonable discriminations are made between localities similarly situated. 7. That the effect of the prevailing policy of railroad management is, by an elaborate system of secret special rates, rebates, drawbacks, and concessions, to foster monopoly, to enrich favorite shippers, and to prevent free competition in many lines of trade in which the item of transportation is an important factor. 8. That such favoritism and secrecy introduce an element of uncertainty into legitimate business that greatly retards the development of our industries and commerce. 9. That the secret cutting of rates and the sudden fluctuations that constantly take place are demoralizing to all business except that of a purely speculative character, and frequently occasion great injustice and heavy losses. of respon 10. That, in the absence of national and uniform legislation, the Avoidance railroads are able by various devices to avoid their responsibility sibility. as carriers, especially on shipments over more than one road or from one State to another, and that shippers find great difficulty in recovering damages for the loss of property or injury thereto. 11. That railroads refuse to be bound by their own contracts, and arbitrarily collect large sums in the shape of overcharges in addition to the rates agreed upon at the time of shipment. 12. That railroads often refuse to recognize or be responsible for the acts of dishonest agents acting under their authority. 13. That the common law fails to afford a remedy for such grievances, and that in cases of dispute the shipper is compelled to submit to the decision of the railroad manager or pool commissioner, or run the risk of incurring further losses by greater discriminations. 14. That the differences in the classifications in use in various parts of the country, and sometimes for shipments over the same roads in different directions, are a fruitful source of misunderstandings, and are often made a means of extortion. 15. That a privileged class is created by the granting of passes, Free passes. and that the cost of the passenger service is largely increased by the extent of this abuse. tion. 16. That the capitalization and bonded indebtedness of the Overcapitalizaroads largely exceed the actual cost of their construction or their present value, and that unreasonable rates are charged in the effort to pay dividends on watered stock and interest on bonds improperly issued. 17. That railroad corporations have improperly engaged in lines of business entirely distinct from that of transportation, and that undue advantages have been afforded to business enterprises in which railroad officials were interested. 18. That the management of the railroad business is extravagant and wasteful, and that a needless tax is imposed upon the The nature of the complaint. shipping and traveling public by the unnecessary expenditure of large sums in the maintenance of a costly force of agents engaged in a reckless strife for competitive business. 147. The Interstate Commerce Commission at Work The Interstate Commerce Act of 1887, as amended by later statutes, provides for a commission of seven members, appointed by the President and Senate, and empowered, on complaint and after hearing, to determine and prescribe reasonable rates, regulations, and practices, to order reparation to injured shippers, and to require any carriers to desist from unjust discrimination or undue or unreasonable preferences. The way in which the commission may grant relief to shippers is well illustrated by the report of the action in the following case: W. O. Mitchell v. Atchison, Topeka & Santa Fe Railway Company; Chicago, Rock Island & Pacific Railway Company; St. Louis & San Francisco Railroad Company; and Missouri, Kansas & Texas Railway Company. Submitted June 4, 1907. Decided July 8, 1907. Report and Order of the Commission. PROUTY, COMMISSIONER: The complainant is a resident of Oklahoma City and a shipper of wheat, who complains that the rates charged by the defendants for the transportation of that commodity from Oklahoma City to Gainesville, Tex., and Forth Worth, Tex., are excessive. The Atchison, Topeka and Santa Fe Ry. Co. and its connection, the Gulf, Colorado & Santa Fe Ry. Co., carry this traffic from Oklahoma City to Gainesville, while all the defendants reach Fort Worth. The short-line distances are 140 miles to Gainesville and 202 miles to Fort Worth, and the rate in both cases was at the date of the hearing 283 cents per 100 pounds. . . . The rate on wheat for 200 miles is 15 cents in Texas, 13 cents in Kansas, 18 cents in Nebraska, 10.8 cents in Iowa, 17.5 cents in Minnesota. In our opinion, under all the circumstances, the rate from Oklahoma City to Fort Worth ought not to exceed 22 cents per 100 pounds, and to Gainesville 20 cents per 100 pounds. These rates are extremely high and the difference between Fort Worth and Gainesville rather small considering the distance by which they are separated; but, as already said, consideration must be given to the fact that it is impossible to pass abruptly from the group system. It should be further observed that these rates are intended to apply only to local consumption at Fort Worth and Gainesville. No milling-in-transit or other transit privilege should be allowed. If the grain is shipped beyond these points, either as wheat or flour, it should be upon the local rates out. An order in accordance with the above views will be issued. Order Upon the foregoing report The ordered to It is ordered, That the defendants, Atchison, Topeka & Santa companies Fe Railway Company; Chicago, Rock Island & Pacific Railway desist. Company; St. Louis & San Francisco Railroad Company, and Missouri, Kansas and Texas Railway Company, be, and they are hereby, notified and required to cease and desist, on or before the 1st day of September, 1907, from charging, demanding, collecting or receiving for the transportation of wheat in carloads from Oklahoma City, in the Territory of Oklahoma, to Gainesville in the State of Texas, their present rate of 28 cents per 100 pounds. It is further ordered, That said defendants be, and they are The new hereby, notified and required to establish and put in force on or before said 1st day of September, a rate of not more than 20 cents per 100 pounds and apply that rate to the transportation of wheat in carloads over their respective lines of railway from said Oklahoma City to said Gainesville, during a period of at least two years from and after said 1st day of September. It is further ordered, That said defendants be and they are hereby, notified and required to cease and desist, on or before the 1st day of September, 1907, from charging, demanding, collecting or receiving, for the transportation of wheat, in carloads, from said rate fixed. |