CHAPTER XIII
THE ACT TO REGULATE COMMERCE OF 1887[521]
Its general significance, [441].—Economic causes, [442].—Growth of interstate traffic, [442].—Earlier Federal laws, [443].—Not lower rates, but end of discriminations sought, [443].—Rebates and favoritism, [445].—Monopoly by means of pooling distrusted, [446].—Speculation and fraud, [447].—Local discrimination, [448].—General unsettlement from rapid growth, [449].—Congressional history of the law, [450].—Its constitutionality, [451].—Summary of its provisions, [452].—Its tentative character, [453].—Radical departure as to rebating, [454].
Due appreciation of the significance of the great body of Federal legislation concerning railroads which has accumulated during the last quarter century in the United States, depends upon a clear understanding of the economic events of the period. Great laws are not the figments of men's minds, conjured up in a day. They are a response to the needs of the time. Their true causes are thus immeasurably complex. Nor does a wholesale public demand for legislation arise overnight. From small beginnings the pressure steadily grows, oftentimes for years; until, perhaps through a conjuncture of particularly aggravating events, matters are at last brought suddenly to a head. Yet while this culmination of industrial or social pressure may finally result in legislation under some particularly strong political leadership, to assign such personal influence as even the remote cause of legislation, is to belie all the facts and experience of history. No clearer illustration of the close relationship between economic causes and statutory results could perhaps be found, than in the field of our Federal legislation concerning common carriers. It forms one of the most important chapters in our industrial history.
Several of the economic causes of the Act to Regulate Commerce of 1887, are deep-rooted in the preceding decade. A few even run back to Civil War times. Foremost among these was the rapid expansion of the railway net; and particularly, as outlined in our introductory historical chapter, its phenomenal growth during the eighties. More new mileage was laid down in the year of the Act itself than at any other time in our entire history within a single twelvemonth. Of equal significance, however, was the far more than commensurate development of long distance, that is to say, interstate business. The through carriage of livestock and grain to the seaboard for export attained immense importance; and the settlement of the Middle West called for a corresponding westward movement of manufactured goods. The Windom Committee of 1874 on "Transportation Routes to the Seaboard"[522] bears eloquent testimony to the growing importance of this through traffic as a factor in legislative activity. According to the Cullom Committee Report twelve years later,[523] approximately three-fourths of the railway traffic of the country was already at that time interstate in character. On the trunk lines, excepting the Pennsylvania Railroad which still relied more largely on Pittsburg-Philadelphia tonnage, more nearly nine-tenths of the traffic consisted of through, as distinct from local, business. Obviously, this pointed to the assumption of authority by the Federal government, if any were to be exercised; inasmuch as the separate states, as will shortly appear, were held by the Supreme Court of the United States in 1886 to be powerless to deal with interstate commerce.
The growing disposition of Congress to assume control over interstate business had already been evinced in the passage of two Federal statutes. One in 1872 had dealt with abuses in the carriage of livestock. And another, even earlier, had sought to remove obstacles set up by local jealousy and monopoly to the through carriage of goods. Some railway charters actually prohibited railroads from making connections with other lines; or from allowing cars to leave their own rails. The Erie, for example, was thus hampered; lest the trade of southern New York be diverted to rival seaports. But the military necessity of through transport of troops, and the impediments to speedy and cheap carriage of mails and goods through delays at junction points, impelled Congress to authorize, though not as yet to compel, the formation of through routes and the issue of through bills of lading by the Act of 1866. The immediate response to this permissive legislation was the rise of the private car lines, elsewhere described, in connection with personal discrimination and also in the general historical review.[524]
No widespread demand for a general reduction of railroad rates seems to have existed in 1887. In this regard the situation is strikingly in contrast with that which prevailed during the protracted hard times succeeding the panic of 1873. Acute industrial depression during that period had aroused deep public feeling against the "extortions of soulless railway corporations." It was but natural that all the farmers in the newly settled states should actively participate in the Granger movement. The popular war cry in this agitation was lower freight rates. This demand is voiced in the President's message of 1872, calling for "more certain and cheaper transportation, of the rapidly increasing western and southern products, to the Atlantic seaboard." The proposals of the Senate to attain these objects are contained in the above-mentioned Windom Committee Report of 1874. Competition is to be stimulated by the development of waterways and new trunk lines. A bureau of commerce is proposed. The long and short haul principle in rate making is to be enforced. Stock-watering is to be prohibited; and publicity of rates to be brought about. On the whole, reduced charges are to be secured rather by means of natural competition among carriers than through legislation. But the keynote of the Windom Report of 1874 is cheaper carriage of goods,—a general reduction of rates all along the line.