President Hadley thinks one hearing is enough, provided it is a hearing before a court, not before the Commission. Like the railroads, President Hadley has no use for the Commission. The reason perhaps is the conscious or subconscious appreciation of the fact that rate-making involves a vigorous administrative element, which the Commission has shown a tendency to use with great effectiveness, while a body constituted as a court, by its very nature and traditions, is loath to exercise administrative power or in any way disturb its exercise by the companies except on the clearest kind of proof of the adequacy of the new rate or condition proposed, which cannot in many cases be obtained at all except by bona fide trial of the new rate or regulation, since a rate that is even below the present operating cost may develop traffic enough to give it ample justification. Courts do not like to trust to future proof. If rates do not seem justified on existing facts as shown by accounts presented by the companies, the courts are apt to turn the new rates down without a trial, as the United States Supreme Court did in the Nebraska case when the law of that State fixing rates on local traffic was declared unconstitutional. The companies made the division between through local costs to suit themselves, and the Court not only accepted their figures, but neglected to take into account the fact that lower rates might easily develop new traffic enough to cover the slight additional margin needed even on the companies’ own showing.

President Hadley says: “What the United States needs is an act under which the Commission will take part in the making of tariffs and give effect to the public interest in the general questions of railroad management, leaving the specific cases of violation to be stopped or punished by the courts.” Very good. But how is the Commission to take part in the making of tariffs? If it is to do any more than to give advice (the efficacy of which is nil when it comes up against the Beef Trust, Standard Oil, or other big private interest), it must have authority, general or particular, to fix rates when the railways do not make them just and reasonable. In England Parliament fixes maximum rates on the basis of Board of Trade studies, and the commission acts as a court. The plan has not prevented either discrimination or extortion, but has taken the life out of the railways to a large extent. In this country it is proposed to try the plan of letting a public board fix individual maximum rates when injustice is shown. As there is an appeal to the Federal courts and as Hadley declares that the courts insist on retrying questions in their entirety, it would seem that the very system President Hadley advocates would really come into being under the Hepburn Bill,—the Commission will have a part in fixing the rates, and violations of law will really be determined by the courts.

INDEX

[References are to pages.]


[1]. See New England Exp. Co. v. Maine Central R. R., 57 Me. 188; Fitchburg R. R. v. Gage, 12 Gray (Mass.), 393; Kenny v. Grand Trunk R. R., 47 N. Y. 525; Messenger v. Penn. R. R., 8 Vroom (N. J.), 531; Chicago, etc., R. R. v. People, 67 Ill. 11; Wheeler v. San Francisco R. R., 31 Cal. 46.

[2]. Pass discrimination alone, it is estimated, amounts to some 200,000 free transits a day, or over 70 millions in a year. And as for freight discriminations, the reader who follows this history through will see that like the leaves of the forest they defy computation. Just a hint may be given here. Every day that one of the 300,000 private cars is carried at the present mileage rates, a discrimination is made in favor of the owner of the private car,—a hundred millions of unjust discriminations, possibly, in this one item.

[3]. The New York Central, Baltimore and Ohio, and some other lines announced the same purpose as the Pennsylvania in respect to passes after January 1, 1906, but with them as with the Pennsylvania it appears to be a case of more careful discrimination in the use of discrimination, and an appreciation of the fact that it is very important to make a good impression on the public mind just now, in view of the widespread demand for drastic legislation in the direction of railroad regulation.

[4]. A number of the States have laws against passes. The Interstate Commerce law forbids them. And they are always against the moral law whether they run beyond the State line or not.