Most of those who favor further control of railroads advocate milder methods. The favorite remedies are public inspection and the fixing of rates by a commission or court of arbitration or tariff revision. The facts above stated showing the secrecy of many forms of preference and the difficulties of enforcing the law because of the impossibility of getting railroad officers to reveal the facts indicate the necessity of systematic and thorough public inspection, but also suggest a doubt as to its effectiveness. If railroad officers destroy their papers and refuse to state the facts on the witness stand, is it not possible that they will keep any record of discrimination practices from appearing in the books and papers they submit to inspection? Inspection and publicity are excellent aids to reform, but they are insufficient in themselves. We have had already a small-sized ocean of publicity through the investigations of the Interstate Commerce Commission, but the results have been very small.
CHAPTER XXXIII.
FIXING RATES BY PUBLIC AUTHORITY.
For years the Interstate Commerce Commission has been declaring that when, on complaint and investigation it finds a rate to be unreasonable, it ought to have power to fix a reasonable rate to take the place of the unreasonable one, the order to be binding on the railroad for a moderate period, subject to revision in the courts. For the first ten years after the Interstate Commerce Act was passed no railroad denied the right of the Commission to fix rates, and the Commission says it was supposed that they possess the power. But the Supreme Court finally ejected this impression in 1896, and again in 1897, and the Commission appealed to Congress for the restoration of the authority that was swept away by the interpretation of the majority of the Court. Congress for a long time paid no attention to the Commission’s request for further powers, but President Roosevelt took up the matter and pushed it with the splendid vigor that characterizes all he does. In his message of 1904, already referred to, he said: “Above all else, we must strive to keep the highways of commerce open to all on equal terms; and to do this it is necessary to put a complete stop to all rebates. Whether the shipper or the railroad is to blame makes no difference; the rebate must be stopped, the abuses of the private car and private terminal-track and side-track systems must be stopped, and legislation of the Fifty-eighth Congress, which declares it to be unlawful for any person or corporation to offer, grant, give, solicit, accept, or receive any rebate, concession, or discrimination in respect of the transportation of any property in interstate or foreign commerce whereby such property shall by any device whatever be transported at a less rate than that named in the tariffs published by the carrier, must be enforced.... The Government must in increasing degree supervise and regulate the workings of the railways engaged in interstate commerce; and such increased supervision is the only alternative to an increase of the present evils on the one hand or a still more radical policy on the other. In my judgment the most important legislative act now needed as regards the regulation of corporations is this act to confer on the Interstate Commerce Commission the power to revise rates and regulations, the revised rate to at once go into effect, and to stay in effect unless and until the court of review reverses it.” The President’s message of December, 1905, has already been quoted at sufficient length in Chapter XXXII.
In the last two years the legislatures of 18 States have passed joint resolutions petitioning Congress to enact legislation for the regulation of railroad rates; 12 States took this action last winter, 1905, and asked their representatives and senators to secure the enactment of such a measure. Commercial bodies in various parts of the country have also petitioned for such legislation, while others have protested against it.[[397]]
The Esch-Townsend Bill (1905) giving the Commission power to fix rates passed the House, but failed to pass the Senate.[[398]] As stated in the preceding chapter, the House has passed the Hepburn Bill by a very large majority and it has gone to the Senate, where a determined effort will undoubtedly be made to secure at least a provision for judicial review on their merits of all orders of the Commission.
Objections of Railroad Men.
Railroad men object to further regulation till the effectiveness of the present laws has been thoroughly tested. In answer to the question what he would do to stop discrimination, President Tuttle of the Boston and Maine Railroad said to me this morning: “Enforce existing laws. The Interstate Commission can investigate the railroads. It need not wait for complaints. It can act on its own initiative. It can have experts examine the railroad books. It can publish the facts, and publicity is a powerful corrective. It can put the facts it secures in the hands of the Attorney-General, and if the Department of Justice will prosecute promptly discrimination can be stopped. There were no prosecutions even after the Hutchinson salt investigation. The law is ample. The trouble is that no adequate effort has been made to enforce it.”
The Commission says that as a rule it cannot get the facts. In some cases it has succeeded, but usually it is thwarted in respect to personal discriminations (to which President Tuttle’s argument chiefly applies) because they are secret, and neither railroad men nor the favored shippers will ordinarily tell the truth about them, and railroad books do not commonly contain any record of them.[[399]] Where the Commission has obtained evidence of unlawful discrimination it has turned the facts over to the Department of Justice, which has not prosecuted promptly, in many cases not at all, and has sometimes prevented prosecutions which United States district attorneys were ready to begin.
There seems to be good reason to believe it is true that existing laws have not been fully enforced; that in addition to the difficulty, perhaps impossibility, of getting at the facts in many cases, wrongdoers have escaped punishment even where the facts were fully known; and that a commission to investigate the Department of Justice, and try the effect of publicity there, may be as essential as a commission to investigate the railroads. Some criticism seems to attach also to the Interstate Commission, as it does not appear that they have asked the Department of Justice to prosecute senators and congressmen, legislators, judges, etc., well known to be riding on passes, nor to punish the railroads for giving them.
As long as express companies and water carriers are not within the Interstate Act, and doubt exists as to private cars and terminal railroads, there is room for further legislation. And in respect to excessive rates and tariff discriminations between places and commodities, though the facts can be easily ascertained, the remedy is regarded by the Commission as wholly inadequate under existing laws, because of the emasculation of the long and short haul clause by the interpretation given it by the Supreme Court, and because the railroads are able, whenever they choose, to delay the enforcement of an order for years by litigation, conceding at last perhaps only a small part of what they should concede and so requiring further years of contest to approach another step toward justice. So the Commission asks for power to fix a reasonable rate in place of one found unreasonable, and to put the new rate into effect at once subject to subsequent revision on appeal by the carrier.