“7. That the effect of the prevailing policy of railroad management is, by an elaborate system of special secret rates, rebates, drawbacks, and concessions, to foster monopoly, to enrich favored 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.
“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, and that the cost of the passenger service is largely increased by the extent of this abuse.
“16. That the capitalization and bonded indebtedness of the roads 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.
“18. That the management of the railroad business is extravagant and wasteful, and that a needless tax is imposed upon the shipping and travelling public by the unnecessary expenditure of large sums in the maintenance of a costly force of agents engaged in the reckless strife for competitive business.”
The result of this investigation and report was the passage of the Interstate Commerce Act, in 1887, affirming the common law rule that carriers’ charges must be reasonable and impartial. Common carriers are forbidden to give “any undue or unreasonable preference or advantage to any person, locality, or description of traffic in any respect whatever, or subject any person, locality or description of traffic to any undue or unreasonable disadvantage in any respect whatsoever.” “No common carrier” says Section 2, “shall directly or indirectly, by special rate, rebate, drawback, or other device, charge or receive from any person greater or less compensation for any service in the transportation of passengers or property than it charges or receives from others for a like and contemporaneous service under substantially similar circumstances and conditions.” Section 4 makes it “unlawful to receive more for a shorter than for a longer distance, including the shorter on the same line, in the same direction, under substantially similar circumstances and conditions,” except where the Commission created by the Act shall authorize the carrier to charge less for the longer than for the shorter distance. Rates must be published and filed with the Commission, and 10 days’ notice must be given of advances. Any deviation from the published tariff is unlawful. The Act excepted traffic “wholly within one State,” and provided that property might be handled free or at reduced rates for the United States, State, or municipal governments, or for charitable or exhibition purposes; that preachers might have reduced rates, and that passes might be given to employees of the road or by exchange to employees of other roads. The penalty for breach of the law was made a fine not exceeding $5000 for each offence, and victims of discrimination, etc., could collect damages.