"A stranger to the law might infer, from some public addresses and pamphlets which have assumed to discuss this subject, that the railroad companies were prohibited from carrying the necessities of life over long distances at very low rates, unless their rates on other subjects of transportation for shorter distances were made to correspond. Indeed, instances have been pointed out in which it was said that certain articles of commerce could not now be transported for long distances, because, by reason of this provision, they would not bear the charges that must under compulsion of law be imposed upon them. Among such instances has been mentioned the granite industry of New England, as to which it has been said that valuable manufactories have ceased to be profitable because it has now become impossible for the proprietors to obtain from the railroad companies the nominal rates for the transportation of their products which they formerly enjoyed, since it is now, by the long and short haul clause, made criminal for the companies to give such rates.
"A complaint of this nature is not to be met by argument, because it is baseless in point of fact. The instance mentioned may safely be assumed to be chosen rather from regard to the need of an attack upon the law than from any belief in the justice of its application. The prohibition of the fourth section, so far as concerns this article of commerce, or any other that can be named, will have no application whatever until it is made to appear that elsewhere upon the lines of the road conveying it there is property of the same kind, for transportation by the same carriers in the same direction, upon which the carriers are disposed to making greater charges in the aggregate for the shorter hauls.
"The wheat of the extreme West, it is also said, can no longer have the nominal rates which were formerly made for transportation to the seaboard, but this assertion is also without point or applicability, unless it is shown that the carriers are not only disposed to give such rates, but propose to make up for the consequent losses to themselves by the imposition of greater charges in the aggregate for the carriage of the like grain when offered for carriage by growers in the States nearer the seaboard. Nominal rates impartially made as between shippers of like articles in the same direction and under like circumstances and conditions are as admissible now as they ever were."
The same report contains a rather pointed reply to Judge Brewer's ruling in the Iowa rate cases, viz., that, "where the rates prescribed will not pay some compensation to the owners, then it is the duty of the courts to interfere and protect the companies from such rates," and that compensation implies three things: "Payment of cost of service, interest on bonds and then some dividends." The commission reviews this stupid rule as follows:
"The effort has sometimes been made to indicate a rule which must constitute the minimum of reduction in all cases, and it has been said that rates must not be made so low that the carriers would be left unable to pay interest on their obligations and something by way of dividend to stockholders, after maintaining the road in proper condition and paying all running expenses. This comes nearer to a suggestion of a rule of law for these cases than any other that has come to the knowledge of the commission. But it is so far from being a rule of law, that it is not even a rule of policy, or a practical rule to which any name can be given, and to which the carriers themselves or the public authorities can conform their action. In the first place, when we take into consideration the question of the condition of roads and of equipment, the proper improvements to be made, the new conveniences and appliances to be considered and made use of, if deemed desirable, and the innumerable questions that are involved in the matter of running expenses, it is very obvious that there can be no standard of expenses which the court can act upon and apply, but that the whole field is one of judgment in the exercise of a reasonable discretion by the managing powers or by the public authorities in reviewing their action. It is to be borne in mind that there are many roads in the country that never have been and in all probability never will be able to pay their obligations and to pay dividends, even the slightest, to their stockholders.... If the rule suggested is a correct one, and must be adhered to by the public authorities, then it is entirely impossible that those who operate these roads can prescribe excessive charges, since it is impossible to fix any rates that would bring their revenues up to the point of enabling them to pay any dividends.... But the rule suggested would also be one under which those roads would be entitled to charge the most which, instead of being built with the money of the stockholders themselves, had been constructed with money borrowed; the larger the debt the higher being the rates that would be legal. If a road were out of debt so that it had no bonds to provide for, it must content itself with such rates as would pay some dividend to its stockholders. If the road were in debt, though it perhaps served the same communities, it might be entitled to charge rates 50, or possibly 100 per cent higher.... But over and beyond all this the attempt to apply the rule suggested would be absolutely futile for the reason that the rates prescribed for one road would necessarily affect all others that either directly or indirectly came in competition with it."
It is no exaggeration to say that the annual reports of the commission stand unexcelled as dauntless, clear, concise and instructive public documents. It may also be asserted that whatever success has so far attended the Interstate Commerce Law, that success is in a great measure due to the tact, courage and ability of the men who, in the past, have been the guiding spirits of the commission.
Efforts will be made by railroad managers in the future, as they have been made in the past, to weaken the commission by securing the appointment of men servile to the railroad interest as members of that body.
Mr. Depew says that "all railroad men are politicians, and active ones." This is true as to manipulating managers and will continue to be so just as long as we allow such extraordinary powers to be exercised by them. The saloon men are politicians, and active ones. There is not a city or town in this broad land that is not in danger of falling under their sway unless their offensive efforts are resisted. The old United States Bank managers were politicians, and active ones. They perverted the trust reposed in their hands to such an extent that the indignation of the people was aroused, and under the lead of a stern old patriot the bank was swept out of existence. Shall we restrain corporation management within proper limits and make corporations serve the public welfare, or shall we let the abuses go on until the people, under the lead of another Jackson, demand emphatically the application of some remedy, for better or for worse? Perhaps Government ownership, perhaps something else. Nations, like individuals, should profit by the experience of the past.
The Interstate Commerce Commission, in their sixth annual report, say, concerning the Interstate Commerce Law:
"It was scarcely possible that it should be so complete and comprehensive at the outset as to require no alteration or amendment. Those who are familiar with the practices which obtained prior to the passage of this law, and contrast them with the methods and conditions now existing, will accord to the present statute great influence in the direction of necessary reforms and a high degree of usefulness in promoting the public interest.