"A. Yes."
Was there ever a clearer case of megalomania, menacing the welfare of a great people?
But it was not alone the dangers incident to monopoly in transportation which excited popular alarm. There was the ever increasing danger of abuse of monopolistic power by the newly created industrial combinations. Most of these had sprung up overnight in the great promotion movement of 1899-1901. The general public had long been aware of the gross favoritism in transportation, which had created the Standard Oil Company. It knew something of the power of the beef packers' monopoly, built up by the use of private car lines. But with the publication of Miss Tarbell's History of the Standard Oil Company in 1903-1904, followed by the reports of the United States Commissioner of Corporations in 1906, its attention was newly directed to the evil.[591] Even the carriers themselves were now roused to protest by the pressure for secret favors by large shippers. The Elkins amendments to the law in 1903, as we shall see, enabled the government to convict many offenders. But even this new law was not enough. The rebating still went on, under new and ingenious forms. If the United States Steel Corporation, the "Sugar Trust," the International Harvester Company, the Colorado Fuel and Iron Company and a host of others were not restrained, monopoly in transportation would soon be followed by monopoly in manufacture. Each new disclosure verified the suspicions of the public as to the magnitude of these abuses. The necessity of a special corrective was first applied to rebating; but this action in turn only served to reënforce the popular conviction that more general legislation was necessary. The Elkins amendments of 1903 surely paved the way for the Hepburn law three years thereafter.
The so-called Elkins amendments to the Act of 1887,—the first changes of importance in its substantive clauses,—were made in 1903, in response to a demand of the carriers. Educated to a sense of the grave losses of revenue incident to rebating and general rate cutting, prominent railroad men united in urging Congress to act. The ease and decorum with which this legislation was passed is, in itself, eloquent testimony to the organized influence of the railroads over Congress, which made itself felt during the next few years in opposition to further changes in the law for the benefit of the public. The entire inadequacy of the original act to prevent rebating had been proven time and again. The Interstate Commerce Commission had done its best. The Department of Justice had attempted to apply the equity processes of injunction without much result. Other Federal laws had been invoked in vain. When the carriers themselves asked for more stringent legislation, it was accorded by Congress with commendable despatch. No opposition whatever appeared. Nor was there much debate. The machinery of legislation moved expeditiously and almost without noise to the desired end.
These Elkins amendments dealt solely with the provisions of law concerning observance of published tariffs. They in no wise affected the determination of what those tariffs should be. That problem of reasonableness was the bone of contention in the great struggle in Congress, hardly as yet under way but soon to follow. The changes in 1903, therefore, had mainly to do with penalties and legal procedure. They were, as elsewhere outlined, five in number. The railroad corporation itself,—and not merely its officers and agents as heretofore,—was made liable to prosecution and penalty. This put an end to the anomalous immunity hitherto enjoyed by the principal and beneficiary of a guilty transaction. Secondly, the penalty of imprisonment for departure from the published tariff,—added to the law in 1889 in the hope of rendering it more effective,—was removed. It had been hoped that the reluctance of witnesses to become parties to such condign punishment of associates might thus be somewhat overcome; especially since the liability to fines now ran to the corporation rather than to the individual. The third change in the law was of great importance, as it had been construed by the courts. Preferential treatment of shippers had been made to depend upon proof; first, that rates lower than as published in the tariff had actually been allowed; and, in the second place, that these full tariff rates, or, at least, higher rates, had been paid by others on like shipments at the same time. Such proof had turned out to be practically impossible in any general rate war; inasmuch as, at such times, rates were cut more or less substantially for all shippers alike. In other words, there might well be departure from the published rates, without preferential treatment. And it was the object of the law to put a stop to both of these abuses. The Elkins law, therefore, explicitly made the published tariff the standard of lawfulness. Any departure from it, proven by itself alone, was declared a misdemeanor. In the fourth place, the new law made shippers or any other interested parties defendants; whereas formerly only the giver of rebates, not the recipient, could be prosecuted. This change rendering the guilty shipper liable, was an eminently proper one. And then, finally, the new law provided for the issuance of injunctions,—viz., peremptory orders punishable by contempt of court,—by any Federal judge whenever the Interstate Commerce Commission had reasonable ground for belief that any common carrier was deviating from the published tariff, "or is committing any discrimination forbidden by law." A summary prohibition from this judicial source, it was hoped, would act as a powerful deterrent.
The enactment of more general remedial legislation than the Elkins amendments was a far more serious matter. That statute has not inaptly been described as "not even a preliminary skirmish. It was a truce of the principals to abolish piracy." The original law of 1887 was avowedly experimental and imperfect. With this in view the statute had specifically directed that there should be transmitted to Congress in its annual reports "such recommendations as to additional legislation ... as the Interstate Commerce Commission may deem necessary." This duty was conscientiously performed year by year. One may find, therefore, in these documents, especially after 1896, the most convincing presentation of the need for amendment of the law. Yet despite its importance, Congress was for some years so intent upon more pressing public business, that no action was taken in the matter. Currency legislation, the Spanish War and the Philippines, the Isthmian Canal, pure food and the trusts quite engrossed public attention. And, oddly enough, when the campaign opened seriously in 1899, activity was for a time confined mainly to the Senate. This was in sharp contrast with the situation both before 1887 and after 1905, when the upper house was the obstructive member.
As early as 1894 the Senate Committee on Interstate Commerce had reported favorably a bill; but nothing came of it. Five years later, both Senators Cullom of Illinois,—sponsor for the original law,—and Chandler of New Hampshire introduced bills. All these measures aimed to confer rate-making power upon the commission and to expedite judicial procedure upon appeal. In the meantime important organizations, especially in the West, such as the National Board of Trade and the Conventions of State Railroad Commissioners, had taken the matter up. Much evidence was heard by the United States Industrial Commission which dealt with it in an elaborate report in 1901.[592] The chances seemed favorable for action. The Senate Committee on Interstate Commerce in that year added several progressively inclined members. The general freight rate increases of 1900 had greatly stirred the people. But at this juncture the powerful new financial influences, concerned with the formation of the great transportation systems, came into play. Effective regulation might interfere with some of these plans. The matter was becoming serious. Railroad opposition began to organize. It became clear that a bitter contest would be needed to secure legislation.
Renewed pressure from the public came in 1902. Senator Chandler had been retired by direct railroad influence in New Hampshire. But Senator Cullom again brought in a bill,[593] which was consolidated with another by Senator Nelson of Minnesota. Public interest was plainly rising; yet these measures all died in committee. And the House of Representatives was too busy with other concerns. But in 1903, for the first time, the lower house devoted some attention to the so-called Cooper-Quarles bill;[594] although no vote was taken. It did, however, with little debate, as we have seen, grant what the railroads asked for the suppression of rebating in the passage of the Elkins amendments. The necessity of general legislation on the subject was not yet strongly felt. The trusts, floundering in the panic of 1903, seemed more threatening to public order than the railroads. Only in a few communities like Wisconsin under the able leadership of Governor La Follette, had public opinion become sufficiently aroused to achieve definite results.