The railways would not accede to such a compromise measure, with all the financial burdens thereby entailed. Unfortunately even this scheme is woefully short of a just solution. The whole matter looms up larger at this point. Enter again the interests of the real consumer! In most cases freight rates to some degree affect the price of commodities. Has the shipper, having paid a freight bill afterward adjudged unreasonably high, any right to sue for recovery of the amount? Has he not, with his fellow merchants, probably shifted the burden upon the public? Evidence shows that carload rates on cattle from Texas to South Dakota have been increased within ten years after 1898, from sixty-five dollars to one hundred dollars. Probably part of this thirty-five dollars increase has been taken from the profits of the cattlemen; but can there be doubt that a part of it has been added to the price of beef?[611] No, tackle it as you will, from whatever point of view, you return to the same proposition: that the damage of an unreasonable freight rate, once paid, is irreparable. Particular shippers may recover what seem to be damages; but which are likely not to have been so to them individually at all.[612] By standards of abstract justice, the real solution should distribute the temporary burdens incident to the delays of legal procedure, as nearly evenly as the laws of chance will permit. A compilation in 1905 showed that, of 316 freight rate cases decided by the Interstate Commerce Commission, fifty-four per cent.—practically one half—turned in favor of the complainant. Inasmuch as these complaints were practically all brought on behalf of shippers against the railroads, this shows how evenly balanced the issues have been. Were the orders of the Commission to become effective at once, the losses incident to errors afterward corrected by the courts, would be distributed in about equal proportions. Under the law even as amended in 1906, all the penalty of a mistake falls upon the shipper and the public; the railway always goes scot free. An impartial commission should be clothed with power to distribute these onerous burdens by prescribing the temporary rate. Quite possibly the limitation of the equity power of Federal judges to protect the railroads in their constitutional rights, might have been overthrown by the Supreme Court; but the advantage in the contrary case would have been well worth the risk.
The only remedy left for the public under the circumstances of compromise above outlined, was to forward the course of judicial procedure in every way. The Expedition Act of 1903 had done much. The new amendments went still further, by providing for appeal directly to the Supreme Court with the privilege of precedence upon its docket. Other details served the same purpose. Formerly it had taken much time for the Commission to prepare its formal orders and its prima facie case for the courts. All the evidence had to be duly set forth.[613] Except for damage suits, all this was now changed. The Commission in its orders need only state its conclusions in the premises, without the delays, labor and expense incident to formal re-examination of witnesses and the preparation of extended records of evidence. This has materially expedited the settlement of contested cases. It has yet another advantage. The Commission was stripped of one of its semi-judicial functions; always an anomaly under our plan of government. And the assignment of the duty of formal prosecution of cases on appeal to the Attorney-General of the United States, was yet another improvement along the same line.
In the matter of personal discrimination, the disheartening persistence of illegal practices, despite the provisions of the Elkins law of 1903, rendered it necessary to specifically extend jurisdiction of the Commission over private car lines; and to confer authority over all incidental services at terminals. Separate publication of storage, icing and other charges was called for; and railroads were held responsible for the provision of special equipment when requested. Industrial railroads, "tap lines," spurs and sidings, so ingeniously employed in discrimination,[614] were expressly included under the Commission's authority. Passes for individuals, a fruitful source of favoritism and political corruption in the past, were even more particularly prohibited. The only exceptions were for employees and their families, the poor or unfortunate, and persons engaged in religious or philanthropic work. In this connection, it may be added that the law of 1910 somewhat modified this rule by enlarging the meaning of "employees" to include caretakers of milk and other commodities. It also dealt with the issuance of franks by express, telegraph and telephone companies in some detail. Superannuated or pensioned employees and the bodies of persons killed in service might also be carried free. Such details are significant as illustrating the extreme nicety of definition required by the drastic character of the prohibitions.
An important change was also made by the law of 1906 in re-imposing the penalty of imprisonment, as well as of fine, for departure from the published tariff. Its removal from the original law of 1887, in the interest of effective enforcement, was recognized as a mistake. With the complete affirmance by the courts of power to compel the production of evidence, recalcitrant witnesses were now under control. It was hoped that vigorous prosecution with this criminal punishment added, might put an end to the abuse.
An entirely new feature was added to the law by the so-called "Commodity Clause." This sought to divorce transportation entirely from all other lines of business. The experience of years had shown that corporations, especially in the coal-fields, by combining both the service of carrier and shipper, might most effectively stifle competition of independent producers. Rank discrimination might be concealed by means of ingeniously framed systems of inter-company accounts. And denial of equal facilities such as cars or sidings might operate to drive competitors out of the business. While the Hepburn law was before Congress, several events drew attention forcibly to the existence of such abuses. The Interstate Commerce Commission in April, acting under the Tillman-Gillespie resolution, uncovered flagrant violations of law on the Pennsylvania system.[615] Equally important was the decision handed down in February by the Supreme Court in the Chesapeake and Ohio Railroad case.[616] This dealt with discriminatory rates on soft coal for the New Haven road, given by means of manipulation of the pro-rating division between the various companies interested. The general public was also greatly concerned over the growth of monopoly in the anthracite fields and the coincident rise in the price of coal. The independent producers in the soft coal regions were at the same time roused over the grievous discriminations practised against them, especially in West Virginia.[617] Senator Elkins of that state,—usually a strong railroad partisan,—introduced the amendment under pressure from his constituents. It was warmly supported by the most radical administration representatives. For it was apparent at once that a withdrawal of railroads from all such correlated businesses was not only proper in itself, but would also greatly promote the enforcement of many other provisions of the law. Yet the radical character of the proposition was perhaps scarcely appreciated. Some railroads, like the Lackawanna, were dependent for nearly three-fourths of their tonnage upon the anthracite coal traffic; much of it from their own mines. The Chesapeake and Ohio in the eastern fields and the 'Frisco in the Middle West, relied upon soft coal for more than half of their tonnage. A great many other carriers were interested to a lesser degree. To compel them all to give up their coal properties was indeed a serious matter.
The "commodity clause" provided that "after May 1, 1908, it shall be unlawful for any railroad company to transport from any state ... to any other state ... any article or commodity other than timber and the manufactured products thereof, manufactured, mined, or produced by it, or under its authority, or which it may own in whole or in part, or in which it may have any interest, direct or indirect, except such articles or commodities as may be necessary and intended for its use in the conduct of its business as a common carrier."
The original proposition was even more drastic. It was to apply to all common carriers, such as the pipe lines in the oil business. But it was soon considerably modified in the course of passage.[618] First, it was limited to railroads. Then the western senators, on behalf of the lumber industry, secured its special exception. And, finally, an attempt to prohibit specifically the control of subsidiary industrial companies through stock ownership was defeated. But, as thus limited, the clause finally passed the Senate,—the stronghold of the railroad interests,—by a vote of 67 to 6. This affords a good indication of the extent of popular feeling on the subject. It was fortunate indeed that the prohibition was not to take effect for two years, in view of the litigation necessary for its precise interpretation. For in any event it was bound to lead to much corporate readjustment. The course of these proceedings will be considered in the next chapter.
There remains for consideration one of the most important provisions of the Hepburn law, namely that dealing with publicity of accounts.[619] Section twenty of the law of 1887 called for the filing by all carriers of annual reports with the Interstate Commerce Commission. These reports were to be standardized; and the Commission was empowered, in addition, to demand specific information whenever it was so desired. But the absence of express authority to enforce these orders, except by means of tedious equity proceedings in the courts, made improvements in accounting almost entirely dependent upon the tact and resourcefulness of the statistician. The Commission was most fortunate in the services of Prof. Henry C. Adams, who succeeded in bringing about cordial coöperation between the accounting officials of the railroads and the government. Great improvements in the line of uniformity resulted; but the need of positive control became increasingly apparent.