It was alleged before the committee that this last result would not be very injurious to the carrier, for the reason that it would be receiving the rate which it had fixed as a fair compensation for the service performed prior to the change. The answer to this seems reasonable, which was, that conditions had so changed that it required an advance of the rate to meet those new conditions. Otherwise the advanced rate would have no justification. That traffic officials fully appreciate the fact that, with the watchful eyes of every shipper affected by an advanced rate and the authority of the commission to determine and fix a just and reasonable rate (as a general rule), rates would not be advanced by such officials without a belief upon their part that there were sufficient reasons to sustain them, if protested.
The attention of the committee has been called to the attitude of the commission in its rulings upon the advance of rates, even where the facts have shown that the rates have been lowered with a view of developing a particular industry. In the case of the New Albany Furniture Company against Mobile, Jackson and Kansas City Railroad Company, etc., decided June 2, 1908, the commission held:
"The rates were low before the increase, but having been established, after prolonged negotiations, especially for the purpose of permitting complainant to reach a particular market, and in preference to making a readjustment in some other direction or territory, and complainant having adjusted its business thereto, defendants may not by an arbitrary advance in those rates destroy complainant's business, there being no evidence that the rates advanced were less than the cost of service."
A similar decision was rendered on the 1st of June in the case of Western Oregon Lumber Manufacturers' Association against the Southern Pacific Company.
Knowledge of the views held by the commission by the traffic officials and shippers will serve as the most effective check upon the part of the carrier in advancing rates over those which have been in existence for any considerable period of time, unless they can support the advance by the most satisfactory reasons.
WOULD THE AMENDMENT PROPOSED BE IN CONFLICT WITH THE FIFTH AMENDMENT TO THE CONSTITUTION?
2. An objection urged to the approval of this amendment, even though modified as suggested in committee, was that it conflicted with the fifth amendment in depriving the carrier of its property without due process of law.
The existing law authorizes carriers to make reasonable rates. Congress recognizing the right of control by the carrier has provided reasonable regulations to safeguard the interests of the public in the exercise of that right. It authorizes a protest after the rate had gone into effect; it provides for a full hearing after notice by the commission; it has further extended the time when the rate shall be made effective to thirty days from the filing of the schedule with the commission. These were held to be reasonable regulations, but it is claimed that under the amendment proposed to the sixth section, that if the rate is suspended from going into effect at the end of the thirty days by a protest, there is no limitation in the act fixing the time when the commission shall determine the question of the reasonableness of the advance; that the period is therefore indefinite, depending upon numerous considerations which might extend the time when the rate would be effective, if it was finally held to be reasonable, to six months or a year.
That the act of suspension either by the operation of the statute or by the commission is without notice or hearing to the carrier; that Congress has no greater right to authorize an administrative tribunal to suspend indefinitely the taking effect of a reasonable rate without notice or hearing than it has the right to provide that an administrative tribunal may authorize a rate which would yield less than the cost of the service.