Railway discrimination breaks down the equality of opportunity that is one of the fundamental rights recognized in every country. It tends to separate success from merit and industry, and make it depend on fraud and favoritism. Judge Grosscup touched a vital point when he said to the Boston Economic Club, March 11, 1905: “Any difference in rates permitted by law, even though based on the bulk of the tonnage handled, is a direct and effective blow, by the nation itself, at the principle that every man, whatever his present business size, shall be given equal conditions and equal opportunity.... In this country there is no such thing as size to a business man. The man of little size expects to get big. He has a right to get big. He has a right to have the atmosphere of equal opportunity and equal conditions in which to grow, and excepting, of course, some unit, such as a ton or a car, the charge ought to be the same for the little as for the big shipper.”[[347]]
The railways are public highways, they exercise governmental powers and fulfil governmental functions, and it is an atrocious misuse of social power to employ these so as to give special advantages to a few members of the community. The Interstate Commission says: “The railroad is justly regarded as a public facility which every person may enjoy at pleasure, a common right to which all are admitted and from which none can be excluded. The essence of this right is equality, and its enjoyment can be complete only when it is secured on like conditions by all who desire its benefits. The railroad exists by virtue of authority proceeding from the State, and thus differs in its essential nature from every form of private enterprise. The carrier is invested with extraordinary powers which are delegated by the sovereign, and thereby performs a governmental function. The favoritism, partiality, and exactions which the law was designed to prevent resulted in large measure from a general misapprehension of the nature of transportation, and its vital relation to commercial and industrial progress. So far from being a private possession, it differs from every species of property, and is in no sense a commodity. Its office is peculiar, for it is essentially public. The railroad, therefore, can rightfully do nothing which the State itself might not do if it performed this public service through its own agents, instead of delegating it to corporations which it has created. The large shipper is entitled to no advantage over his smaller rival in respect to rates or accommodations, for the compensation exacted in every case should be measured by the same standard. To allow any exceptions to this fundamental rule is to subvert the principle upon which free institutions depend, and substitute arbitrary caprice for equality of right.”[[348]]
The losses to the railroads cannot be estimated accurately, but we have some interesting hints. Franklin B. Gowan said in 1888: “The gross receipts of the railroads of this country, in round numbers, are eight hundred millions of dollars per annum, and I verily and honestly believe that one hundred millions of dollars annually are taken out of the pockets of the people of this country by unjust railway discrimination, and turned over to this privileged class—and this is equal to a tax of two dollars per head paid by the people for the sake of building up the new aristocracy of wealth that in this free country arrogate to themselves the position of the nobility of the older countries. It is utterly impossible that there can be any success attending a monopoly of natural products without the aid of the unjust discrimination of railroad companies. And only when such discrimination ceases will all people be placed on terms of equality.”
If the losses were more than $100,000,000 a year when the total income of the railroads was $800,000,000 a year, the losses now with an income of about $2,000,000,000 a year are probably, at least, $200,000,000 a year, allowing for all the saving that is claimed to have resulted from the Elkins Act. A railroad officer who says his road has constantly disregarded the Interstate Commerce Law declares that in more than one year the net revenues of his company “would have been increased by more than 15 percent if no rebates had been paid to favored customers.” The hundreds of millions which the transportation systems of this country have, during the period from 1887 to 1905, earned and repaid to the men who controlled the large industrial products of the country—coal, iron, grain, salt, sugar, oil, provisions, and lumber—belonged equitably to employees and stockholders (or to the people). “And the history of this period may be repeated as often as the whim or the interest of a traffic manager or owning director prompts or requires.”[[349]]
The losses through the disturbance of business, interference with the relation between energy and industry on one side and success on the other, depression of localities, and ruin of individuals, are beyond computation.
Most shippers would be glad to do away with discrimination if they could be sure that there would be a square deal all round, fair play, and no concessions to their rivals. And most railroad men would be glad to be protected against the discriminations that are forced upon them by the shippers, and by competition among the roads, if they could be sure that the published rates would really be adhered to by their competitors.
Law after law has been passed to prevent unjust discriminations, and yet in spite of the contrary statements of some witnesses,[[350]] it is perfectly clear that they have not ceased, and that comparatively little has been done in that direction.
Railroad men in high position declare that discriminations always will exist. President Ripley of the Santa Fe says: “The situation is practically remediless. I think it will always be.”[[351]] President J. J. Hill of the Great Northern says: “You may say there shall be no discrimination. But that condition will never exist. If there were no discrimination the people would come down here in great throngs and ask you to authorize discrimination. We have to discriminate.”[[352]] When I asked President Fish of the Illinois Central how discriminations could be stopped he said: “Tell me how to enforce the Ten Commandments and I’ll tell you how to stop discriminations.” Another railroad president, whose name I am not at liberty to give, said in reply to the same question: “Discriminations will never cease so long as there is competition among the railroads, or political favors and protection can be secured thereby, or railways and railway men are interested in other businesses than transportation.” President Hill also recognizes the factor of special self-interest in addition to the influence of competition. He says: “I think that every railway officer in this country should be disqualified from having any interest, directly or indirectly, in any large producer of traffic, whether it is a coal mine or a factory or a mill or anything else, on a line of railway where he is on the pay roll.”
“Senator Clapp. And the reason for that suggestion is what?
“Mr. Hill. That he cannot be fair to the other fellow and punish himself.