The Committee of 1883 is quoted as finding that “a case has been made out for granting to litigants before the Railway Commission a right of appeal,” and we are told that the Committee were “all agreed that the attempt to prevent appeals from the Commissioners’ decisions had been a complete failure.”
President Hadley further says: “Parliament has abandoned the theory on which the act (of 1873) was based, because the courts did not carry out the law, but insisted on retrying questions in their entirety, instead of acquiescing in the attempt to separate the law from the facts.”
And we are told that “the evil effects of the attempt to give the English Railroad Commission power of fixing rates did not stop here. The attempted performance of this duty took up so much of their time that they failed to perform other duties, which under more favorable circumstances they might have carried out efficiently and usefully. They did not have that influence on the formation of railroad tariffs which their experience and high position would otherwise have secured.”
Now as a matter of fact the English law never attempted to give the Railway Commission power to fix rates, except a very limited power in relation to through rates when the companies cannot agree, nor was it intended that the Commission should have anything to do with the “formation of tariffs.” Rates are fixed, not by the Commission, but by Parliament with the advice of the Board of Trade. When Parliament orders a revision of the maximum rates, the railways and the Board of Trade try to agree on new schedules, and the Board embodies its conclusions in Provisional Orders or rate bills which are passed by Parliament with or without amendment as it sees fit. This was true in 1873 and has been true ever since. The Commission’s duty in this connection was and is to hear complaints of undue preference, and rates alleged to exceed the maxima fixed by Parliament. If a through rate proposed by any company is objected to by any forwarding company, the Commission has power to allow or reject the rate subject to the limitation that it cannot require a company to carry at lower mileage rates than it is legally charging for like business on any other line between the same points. (Sections 11, 12, Railway Act of 1873.) The Commission may also determine the division of through rates if the companies cannot agree. Since the Railway Act of 1894 the Commission has jurisdiction under Section 1 to order a return to former rates charged by the company in case complaint is made of an increase above the rates charged in 1892 (the date of the last Provisional Orders or tariff revision), and the burden of proof is on the company to show that the increase is reasonable. This puts a limitation on the companies’ rate-making power in addition to the limit of the parliamentary maxima, for no matter how much below the maximum a rate in actual use in 1892 might have been, it cannot be increased if the Commission on complaint and hearing forbids it.
Further, it is not the case that Parliament “abandoned the theory of the act of 1873” in the sense the reader might gather from the statements made by President Hadley. On the contrary, the Railway Act of 1888 (which resulted from the investigation of 1882, quoted by Hadley) distinctly provides in section 17 that “no appeal shall lie from the Commissioners upon a question of fact.” Subject to this provision an appeal was given to a superior court of appeal, the change being that under the old law the case went up on a statement by the Commission, which could therefore itself determine what were questions of law and what were questions of fact, while under the new law the case went up on the record and the court above determined what questions of law were involved. But the new law is exactly like the old in making the judgment of the Commission final on all questions of fact.
The truth is that England never attempted anything like the system of regulation embodied in the Hepburn Bill; never delegated to any commission the power to fix reasonable rates or make reasonable regulations in place of rates or regulations found on complaint and hearing to be unjust, but she has done and continues to do the other thing that President Hadley gives us to understand she has tried and abandoned, viz., the intrusting of power to a Railway Commission to render final decision on questions of fact.
In the Transcript of April 1, 1905, President Hadley says he “urged that a single hearing in the railroad court was better than two successive hearings by two different kinds of bodies. Mr. Hepburn’s committee desires to avoid the double hearing, but it undertakes to do it by eliminating the court instead of the Commission. There is reason to fear that this plan will not work.”
That may be true. There is reason to fear that no plan for government control of these giant interests will work so long as the ownership is divorced from the said control. As stated in the text, one of the ablest and most honorable of our railroad presidents, in answer to my question as to what would happen if the Interstate Commission were really given power to fix rates, replied, “The Commission would have to be controlled, that’s all.” And when I quoted this to one of the leading members of the Interstate Commission his comment was, “I always said the railroads would own the Commission as soon as it was worth owning.”
Even without owning the Commission the railroads can block it pretty effectually by secret practices, extensive forgetfulness on the witness stand, persistent persecution of shippers who make complaint, cunning evasions, and interminable litigation. It is quite likely the proposed regulation will not realize what is hoped for from it, but we cannot predict such failure from English experience as President Hadley does when he says, “The history of English railroad regulation shows that a similar measure, passed under closely analogous circumstances, failed to do the good which its advocates expected. The same failure is likely to be repeated in the United States.” The Hepburn Bill in its scope and directness is very different from anything that England has attempted. It is quite likely that England may try some more vigorous measure than she has yet adopted, but in spite of all her efforts at regulation Mr. W. M. Acworth, the classic railway writer of England from the railway standpoint, corresponding to President Hadley in this country, told me a few months ago that dissatisfaction with the railway situation is so great in England that “9 out of 10 would vote for public ownership of the roads if the question were submitted to-morrow.”
The general failure of regulation in England to accomplish what was expected of it, may suggest a broad conclusion as to this country, but a specific conclusion from any parallel to the Hepburn Bill is not possible, because no such parallel has been tried.