[19] Illinois a few years ago passed a statute limiting passenger fares within her boundaries to two cents a mile. To this, the Business Men’s League of St. Louis filed a complaint with the Interstate Commerce Commission, stating that a discrimination had been created against St. Louis. The Federal board had made most of the interstate passenger fares in the central portion of the country average two and one-half cents. This made the fare from Chicago to St. Louis (in Missouri) $7.50, while the fare from Chicago to East St. Louis (directly across the river, but in Illinois) only $5.62. A similar complaint was received from Keokuk, Iowa, also just across the Mississippi from Illinois. After reviewing these complaints the Federal Commission held that two and four-tenths cents was a reasonable rate for interstate fares in this territory and required the railroads to remove the discrimination against St. Louis, Mo., and Keokuk, Iowa. The decision was limited, however, to the points involved in the complaint. The supplemental report covers all points in Illinois.
“‘In our original report in this proceeding,’ Commissioner Daniels says, ‘it was shown how the lower state fares within Illinois furnished a means whereby passengers could and did defeat the lawfully established interstate fares between St. Louis and Illinois points. This was done by using interstate tickets purchased at interstate fares from St. Louis to an east side point in Illinois, and thence continuing the journey to any Illinois destination on a ticket purchased at the lower state fare.
“‘We deem it advisable to point out that the interstate fares between St. Louis and Keokuk on the one hand and interior Illinois points on the other, made on a per mile basis of two and four-tenths cents, would likewise be subject to defeat if the state fares to and from interior Illinois points intermediate to the passengers’ ultimate destination be made upon a basis lower than the fares applying between St. Louis or Keokuk and such Illinois destination. It would be necessary merely for the passenger who desired to defeat the interstate fare to shift the intermediate point at which to purchase his state ticket. The burden and discrimination which a lower basis of fares within the state casts upon the interstate commerce would not be removed merely by an increase in the intra-state fares to and from the east bank points.
“‘And not only this burden, but the direct undue prejudice to St. Louis and Keokuk will also continue if the east side cities while on the face of the published tariff paying fares to and from Illinois points upon the same basis as do St. Louis and Keokuk can in practice defeat such fares by paying lower state fares in the aggregate to and from Illinois destination, by virtue of such an adjustment of fares.’”
As soon, however, as the railroads attempted to put this edict of the Interstate Commerce Commission into effect the state courts of Illinois stepped in and tied their hands. At the present time the matter is still involved in much litigation. And a man may buy a ticket from Chicago to East St. Louis for $5.62, and for ten-cent trolley fare cross the Eads bridge into St. Louis. This is, of course, a great injustice to the railroads—an inequality which must sooner or later be adjusted, and the sooner, the better.
[20] “A curious light was thrown on this condition in connection with the Shreveport rate case. Texas, in order to keep Louisiana merchants from competing in its markets, had fixed a number of rates within the State applying between points of production and jobbing centers and markets in the direction of the Louisiana line. These rates were substantially lower than the interstate rates from Shreveport, Louisiana, to the same Texas points of consumption. The United States Supreme Court sustained the Interstate Commerce Commission in raising the Texas rates so that Louisiana business men could get a square deal.
“Thereafter Senator Shepard, of Texas, introduced a bill in the Senate to abolish the doctrine of the Shreveport case. In a hearing on this bill it developed that while Louisiana was protesting against rate discrimination on the part of Texas, the city of Natchez, in Mississippi, was making a similar protest against the action of Louisiana in fixing rates which excluded the business men of Natchez from the Louisiana markets. Moreover, one of those who appeared in favor of the bill was Judge Prentice, chairman of the Virginia Railroad Commission, which was at that time complaining that the state rate-fixers in North Carolina had discriminated against Virginia cities.
“In short, an appalling condition of interstate warfare was revealed that was hurting business generally and killing railroad development.”—Harold Kellock in The Century Magazine.
[21] When one comes to consider the possibility of the Interstate Commerce Commission being made supreme in these matters of railroad regulation, he must assume that the members of this Commission are to be held immune from interference; save by the actual and necessary processes of the higher courts. The objection by Senator Cummins, of Iowa, recently to the Senate’s affirmation of the reappointment of Commissioner Winthrop M. Daniels, is in this connection, most illuminating and disquieting. Senator Cummins was careful to say that he held no quarrel against Mr. Daniel’s character or personality. He added that he would be glad to vote for a confirmation of appointment to any other government position. Unfortunately, Commissioner Daniels had written several of the commission’s opinions advocating recent raises in railroad rates. For this offense the Senator from Iowa sought to punish him by blocking his reappointment. Fortunately, however, Mr. Cummins carefully conceived revenge failed of execution. The Senate promptly and generously confirmed the President’s appointment. But the episode shows clearly a great potential danger to which the members of this Commission, as well as all other regulatory boards, are subject if their honest opinions, as expressed in decisions, run counter to the whim of popular opinion.
[22] “No one who has traveled about the world will seriously contend that there is any other country where the quality and quantity of rail transportation is so good or so abundant as in the United States. In most European countries rail transportation is furnished by the government at great cost to the public, both directly in the form of heavier taxes and indirectly in the form of high rates. In this country it is furnished by the investment of private capital. This capital is supplied by about 2,000,000 persons. It is absolutely at the mercy not only of the Federal Government, but, within their boundaries, of the legislatures of forty-eight States. How much it may earn depends upon the whim of these masters. How much it may lose has never been determined; for when a certain point is reached the courts step in and administer the bankrupt’s business.