It so happens that I have been intimately connected with this subject from the time I was serving as Speaker of the Illinois House of Representatives in 1873.
The State of Illinois, like most of the Western States, had a law on the subject of railroad regulation; but it was ineffective, and the commission under it had no practical power. I appointed the committee of the House of Representatives of the Illinois Legislature in 1873, of which John Oberly, of Cairo, Illinois, was a member, and it was that committee that reported to the House the bill which finally became a law, known as the Railroad and Warehouse Law of 1873. It is still the existing law in Illinois, and was for many years regarded as one of the broadest and most far-reaching of State enactments.
After I became Governor of the State, in 1877, I appointed a new Railroad and Warehouse Commission under the new law, and naturally took a deep interest in its work. During my term as Governor a resolution was adopted by the General Assembly really looking to the abolition of the Railroad and Warehouse Commission, but on its face inquiring of me as Governor for information concerning the cost of maintaining the Railroad and Warehouse Commission, and the benefits, if any, of the commission, to the people of the State of Illinois.
To this resolution I promptly responded in a message to the General
Assembly, dated February 17, 1879, which in part I take the liberty
of quoting here, because never afterwards in Illinois, so far as
I know, was there any movement to abolish the Railroad and Warehouse
Commission and repeal the Illinois Railroad and Warehouse Act.
After giving the pay and expenses of the board, I continued:
"To answer this portion of the resolution in a manner satisfactory to myself would include a recital of the many attempts that have been made in this and other countries to control railroad corporations by legislation. In a paper of this kind such a reply can not be made. I must therefore be satisfied with a glance at the advance that resulted in the enactment of the railroad and warehouse laws of this State.
"Since the passage of the laws creating the railroad and warehouse commission, in 1871, Illinois has made very important advances toward the solution of the railroad problem.
"The questions involved in this problem have not only been before the people of this State, but in other States and countries.
"In England, after the railroad had become a fact, it was recognized as a public highway. The right of Parliament to fix rates for the transportation of passengers and freight by railroad corporations was therefore asserted, and schedules of rates were put into their charters. Those familiar with the subject need not be told that the attempt to establish rates in this manner was a failure. Then it was asserted that competition, if encouraged by the Government, would prove a remedy for the abuses with which the railroads were charged. The suggestion was acted upon. The Government encouraged the construction of competing lines. As a result, rates fell. Competition, however, finally began to entail disaster upon the competitors and compel them to become allies to escape destruction. The competitors combined; railroads were consolidated; rival lines were united, and competition was thus destroyed. The danger of great combinations of this kind, not only to the business interests of the country, but also to the State, was at once suggested, and occasioned alarm. This alarm resulted in a public opinion that the Government should own the railroads. But consolidation, to the surprise of the prophets of evil, did not result in higher rates. On the contrary, lower rates and higher dividends resulted.
"Thus by a logical process of attempt and failure to control railroad corporations, the conclusion was reached that wise policy required permission to such corporations to operate their railroads in their own way upon ordinary business principles. But at the same time a board of commissioners was wisely created and authorized to hear and determine complaints against railroad corporations, and to exercise other important powers. This board was created about five years ago; and the most notable feature in its career, says Charles Francis Adams, junior, is the very trifling call that seems to have been made upon it. The cases which come before it are neither numerous nor of great importance. It would, however, be unwholly safe to conclude from this fact that such a tribunal is unnecessary. On the contrary, it may be confidently asserted that no competent board of railroad commissioners clothed with the peculiar power of the English board, will, either there or anywhere else, have many cases to dispose of. The mere fact that a tribunal is there, that a machinery does exist for the prompt and final decision of that class of questions put an end to them. They no longer arise.