The first response to the new Federal law by the railroads was entirely favorable.[547] They sought to obey its mandates both in letter and spirit. The Commission reports in 1888 that the railroads "conformed promptly" to their orders; although in the South and West they were "moving more slowly." On the other hand, the new Commission under the leadership of Judge Cooley, an able jurist trusted by all parties concerned, was equally conciliatory in spirit. Many desirable changes were brought about in railway practice. Attempts were made to remodel tariffs all over the country, particularly in the East, to conform to the long and short haul clause.[548]
The immediate effect of acquiescence in Section 4 was to compel, in many parts of the country, a reduction of the local rates in order to reduce them below the rates charged to terminal and competitive points. Thus, for example, throughout trunk line territory, they were almost uniformly adjusted to meet this requirement. Even in the southern states, where in some quarters the most persistent opposition to the law has from the first existed, there was a patent disposition shown to recognize the justice of such legislation. The Southern Railroad modified its tariff all along the line as far as Atlanta, although it claimed inability to make changes beyond that point. For nearly three years, in fact, the carriers conformed in an increasing degree to this requirement of the law.[549] A sincere effort toward uniform classification of freight, with substantial results in the direction of simplification of schedules, extended over several years. Many pools were disbanded; all were reorganized in conformity with the statute. And in the matter of uniformity and publicity of statistical returns, friendly coöperation between the railroads and the Commission, brought about great improvements in accounting practice. No considerable popular interest in the new commercial tribunal, to be sure, is indicated by the volume of its business. After five years experience, only thirty-nine formal complaints were filed in 1892. But this may have been due in part to the natural hesitancy of shippers to antagonizing the roads by coming out into the open with their grievances. Or, perhaps, it was merely because the people at large were as yet quite unfamiliar with the law and with the ease of procedure under it.
The earliest intimation of determined resistance by the carriers came in connection with prosecutions for rebating in 1890. This abuse was still widely prevalent. The Commission complained in that year of the "general disregard" of the law against personal discrimination; and set out to prosecute with vigor. But witnesses called upon to testify before grand juries as to such practices, proved recalcitrant.[550] Corporations could be made amenable to the law only through the instrumentality of persons in their employ. And guilt in such matters could be detected only by the testimony of those who had directly witnessed, or participated in, the unlawful acts themselves. As one writer has put it, "Rebate contracts are not usually negotiated before large audiences nor are rebate payments commonly made upon street corners. An essential element in these practices, quite aside from their legality, is the secrecy with which they are conducted." It soon became apparent that unless this mantle of secrecy could be stripped off in preliminary proceedings, not even indictments could be had,—to say nothing of the proof needed for subsequent conviction.
The first ground for contesting the right of the government to extort testimony from unwilling witnesses arose, oddly enough, from an amendment of the law intended to increase its effectiveness. Originally punishable only by heavy fine, on recommendation of the Commission, Congress added in 1889 an amendment whereby departure from the published rate was made punishable also by imprisonment. By this change criminal, as well as civil, procedure was thus brought into play. The amendment, moreover, extended the punishment to shippers; the railroad official who gave rebates having alone been liable hitherto. An unexpected result speedily followed. In 1890 one Counselman, a shipper, questioned concerning his enjoyment of less than the open rate upon grain, declined to answer, taking refuge under the Fifth Amendment to the Constitution of the United States. This declared that "no person ... shall be compelled in any criminal case to be a witness against himself." The witness persisted in his refusal to testify even before a district judge: and the case went on appeal through the Circuit Court which decided in favor of the Commission, up to the Supreme Court of the United States. This tribunal in 1892 held that the Revised Statutes of the United States which for twenty-five years had been held to protect the constitutional rights of witnesses when called upon to give testimony, against criminal proceedings based upon such evidence, did not in fact adequately afford such protection. Counselman was ordered discharged from the custody of the United States Marshal. It was held, furthermore, "that a statutory enactment to be valid, must afford absolute immunity for the offence to which the question relates."[551] Congress promptly passed a law to this effect in the following year. The matter did not, however, rest here. The validity of this later statute had now to be upheld. And, with discouraging defeat in 1894 in an Illinois Circuit Court, the issue had to be raised again a year later elsewhere, to be then carried on appeal a second time to the Supreme Court. This took place in the so-called Brown case.[552] The final outcome in 1896 was a complete denial of the right of witnesses to withhold material testimony. But it required six years of litigation to bring about the desired result.
During the pendency of the proceedings above described, a second line of resistance to the government developed. Not the merely negative personal right of witnesses to withhold testimony, but the positive legal authority of the Commission to exact it, was called in question. This struck at the very roots of all procedure. For it challenged the validity of the Act itself. In how far might an administrative body, independently, have power, hitherto resident alone in the courts and Congress, to compel the attendance and testimony of witnesses as well as the production of papers? Section 12 of the Act was evidently intended to confer such powers as were possessed and might be delegated by the Congress. But then there was the Constitution again to be considered! Certain witnesses declined to produce books and answer questions in 1892. One Brimson was selected for a test case. The first decision by the Circuit Court held these sections of the statute to be unconstitutional on the ground that "Congress cannot make the judicial department the mere adjunct or instrument of the other departments." But the Supreme Court of the United States in 1894 reversed this judgment; and, unreservedly, although by a bare majority opinion, affirmed the constitutionality of the procedure under the Act.[553] This Brimson opinion, together with the Brown decision two years later, were confidently believed to have so strengthened the arm of the government that rebating might at last be eliminated. But, as will shortly appear, an entirely new law was yet needed to eradicate the evil. For the moment, however, the right of Congress to legislate and of the Commission to act, had been upheld.
The relation of the Interstate Commerce Commission as an administrative body to the Federal courts under the provisions of the Act of 1887, proved unsatisfactory from the first. In order to understand the situation, it may be well to review the ordinary procedure. Formal complaint having been filed, the Commission heard the case and promulgated its decision in the form of an order to the carriers. If they chose to comply with it, well and good. Otherwise, the Commission must apply to a Federal court for the issuance of a judicial writ to compel obedience to the order. Thereupon the court proceeded to review the case; and upon the findings to issue an order of its own. From this order, however, appeal might be taken even up to the Supreme Court. Then, and then only, did the original mandate of the Commission have the force of law. Practically, two results followed, as shown by the experience of the succeeding years. There was intolerable delay in the redress of grievances; and, in the second place, all definitive proceedings were postponed until the case had gone on appeal to the courts. In other words the Commission instead of being a coördinate body with the courts, was reduced to an entirely subordinate position. Its function became merely to institute proceedings, and thereafter to appear as a complainant before other tribunals competent alone to decide the case. Intolerable delay in procedure was the constant complaint of shippers. Years elapsed before final judgments were rendered. The average duration of cases appealed was not less than four years. Sometimes they extended over twice that period. Often, as in the Charleston, S. C., case in 1898, several years elapsed before the Commission itself rendered a decision. Knotty cases were sidetracked.
But the main source of delay was in the carriage of cases on appeal up to the Supreme Court of the United States. They had to await their turn in regular order, being given no priority on the crowded dockets. The Social Circle and Import Rate cases, soon to be discussed, consumed five years in litigation, even after the Commission had rendered its opinion. The Florida Fruit Exchange case involving rates on oranges, originally decided by the Commission in 1891, was for six years thereafter before the Federal Courts. The Georgia Railroad Commission cases were not settled for nine years. Nor did the tedious process end here. After the judicial review, which usually covered the law points, the entire question had to be remanded to the Commission for a new order in conformity with the findings of the court. After nine years of litigation in the Chattanooga case, back it went to the Commission to be re-tried after consideration of other commercial factors. First decided in 1892, it was reopened in 1904.[554] Is it any wonder that the number of formal proceedings instituted on complaint of shippers steadily dwindled year by year? In 1901 only nineteen petitions were filed. Business of this sort was almost at a standstill.
A second unsatisfactory feature of the relations of the Commission to the courts, lay in the refusal of the latter to accept the evidence taken before the Commission in the original proceedings as final. Trouble began in 1888 on the first appeal, known as the Kentucky and Indiana Bridge case.[555] The court treated it as an original proceeding, even as to questions of fact; and proceeded to consider it de novo. This of course involved a duplication of all expenses; which, in causes sufficiently important to appeal, were very heavy. Ten volumes of typewritten testimony, each as large as the Congressional Record, were taken, for instance, in the San Bernardino case.[556] Both shipper and railroad, therefore, commonly came to regard the proceedings before the Commission as merely a necessary formality to be observed prior to the conclusive adjudication of the matter by the courts. This placed the Commission in a most awkward predicament. It was compelled by law to render a decision upon an entirely imperfect presentation of facts. And this decision was thereafter liable to be reviewed upon the basis of entirely new testimony. Thus in the leading Alabama Midland case, involving the reasonableness of rates to Troy, Alabama, as compared with adjacent towns, much depended upon the existence of effective competition with the railroads from boat lines on the rivers at other places.[557] Before the Commission the evidence adduced by the carriers dwelt upon the navigability of the Chattahoochee river as compelling lower rates at Columbus and Eufaula than at Troy, an inland town. Yet, when the case was really opened up in appeal proceedings, it appeared that this magnificent waterway was really dry about half the year; that the channel was never deeper than three feet; and that boats were at all times of the year "embarrassed by the overhanging trees." How could the Commission be expected to pass upon vital questions wisely under such circumstances? Whether wilfully done or not,—and evidence is not lacking of a deliberate policy adopted in some cases,—the inevitable effect was to bring the Commission and the law itself into discredit. So accentuated did this evil become, that in the Social Circle case the Supreme Court distinctly discountenanced the practice, declaring it to be the intention of the law that all material facts should be disclosed in the original proceedings.[558] But it was not until 1906 that the mode of procedure on appeal was by statute clearly defined. In the meantime public interest in the work of the Commission was bound to wane.
In this connection it may not be out of place to refer to the persistent use made of the record of the Commission in court proceedings under these adverse circumstances, as a plausible argument by the railroads in later years against any augmentation of its powers. One brief, for example, recites that "since 1887, forty-three suits have been instituted to enforce final orders of the Commission as to rates. The net result of the action of the courts shows two affirmances and thirty reversals." It continues later, "as over ninety per cent. of the Commission's orders as to rates which have gone before the courts have been overruled, it is impossible to foretell what havoc would follow from the exercise of such powers." This statement is entirely true, but it is not the entire truth. We may profitably consider the cases of sufficient importance to have been passed upon by the Supreme Court of the United States. Between 1887 and 1905, sixteen such decisions were rendered on cases appealed for enforcement by the Interstate Commerce Commission. Fifteen of these were decided in favor of the carriers, while only one sustained in part the contention of the Commission. At first sight, this record certainly appears to warrant the condemnation of the Commission. A body so persistently on the wrong side of great questions as this record indicates, would surely invite distrust. There were two answers to this contention, however, which merit consideration before a final judgment can be rendered. One of these was the irregularity of procedure, above described. The other was that these court cases had nearly all involved, not so much the administrative application of the law to economic abuses, as the purely judicial interpretation of the law itself.