Aside from the practical unworkableness of the injunction process as a protection against unreasonable rate advances, reform might well be demanded on grounds of fairness. No reduction of rates ought to be compelled without opportunity for protest by the carrier. Contrariwise, no new burden should be laid upon the shipper without a hearing. The burden of proof against disturbance of a long-standing adjustment ought properly to rest upon the party responsible for the change. Such delay as was requisite for determination of the reasonableness of the change could not constitute a serious burden; and even if it did, it was but just under the attendant circumstances.
The new law yielded to these arguments by a radical extension of the authority of the Commission. It was authorized to suspend the taking effect of any new rate or regulation for not more than one hundred and twenty days, to afford opportunity for hearing and decision as to its reasonableness. If necessary, a further period of six months' suspension might be had. Moreover, the burden of proof that the change was just and reasonable was laid upon the carrier. Beyond the ten months' period thus allowed, postponement might not extend. Thereafter the rates became effective automatically. This control fell short of the demand of the "insurgents" that downright approval of the Commission for all changes should be required; but it was, nevertheless, a substantial increase of power. It remains to be seen what the practical result of this great extension of government control may be. It was predicted that its greatest benefit would come from those suspensions of rate advances which ultimately brought about their withdrawal.[692] This prophecy was fulfilled, as will be seen in the next chapter, in the first great test to which the law was put, almost immediately after its passage.
Resuscitation of the long and short haul clause of the Act of 1887 was the second important feature of the new legislation. The long and tedious process of judicial interpretation, by means of which this section of the statute was nullified for so many years, has already been set forth.[693] Dissatisfaction with the local discrimination prevalent throughout the southern states and in the Rocky mountain region had been steadily increasing for a long time. Public opinion in these districts urgently demanded the relief which the original law sought to afford. Chairman Knapp fairly described the situation in 1905 before the Elkins Committee as follows:[694]—"No one, I think, can read the Fourth section ... and be in doubt that Congress intended to provide some actual and potential restraint upon that particular form of discrimination. And, I may say, it remains today much as it was then, not the greatest evil, but the most irritating and obnoxious form of discrimination that has been encountered." No distributing business could hope to become established in the West or South without vitalizing this section of the law. The larger cities, and particularly the manufacturing districts in the East, on the other hand, viewed with alarm any encroachment upon the far distant markets which they were able to hold by reason of peculiarly low rates. The railroads' coöperation with eastern representatives in Congress had successfully prevented any change in 1906. But four years later it became apparent early in the debates that something would have to be done for the relief of the West and South.
The long and short haul clause was amended by the influence of the Progressive Republicans in the House.[695] Four changes were made. The first was the total elimination of the clause "under substantially similar circumstances and conditions," which had been responsible for almost all of the trouble in the courts. This change made it necessary in all cases in future for permission to be secured in advance from the Commission for any lesser charge for a long haul than for a shorter one, no matter what the local circumstances might be. Secondly, the prohibition was specifically made to cover "routes" as well as "lines." Although the Osborne case[696] had already virtually made it clear that the clause applied to a series of connecting railways as well as to a single company, this addition placed the matter beyond dispute. The third change, practically legalizing a standing rule of the Commission for many years, prohibited a higher through rate than the sum of the local charges over the same line.[697] An addition covering an entirely new point constituted the fourth modification of the section. It is suggestive as an indication of the determined spirit which animated Congress. This last detail was borrowed from the then recently submitted report of the National Waterways Commission, which in turn had borrowed it from the state constitution of California. It was intended to meet the tactics so often adopted by land carriers in competition with water lines, of drastically reducing rates until the competition by water had been killed, after which the losses were recouped by even higher tariffs than before.[698] Under the new law, no railroad, having once reduced its rates in competition with a water route, was permitted to increase those charges until the Interstate Commerce Commission should have found that such proposed increase rested upon changed conditions other than the elimination of water competition.
Improvement of the procedure on appeal, by the establishment of the Commerce Court, was the third important feature of the new law. It was not only the delay of which complaint was made, but the illogical process of review as well. For this permitted the orders of a technically expert commission of seven men to be set aside by the order of a single judge who, in fact, relied upon subordinates for an examination of the evidence as to economic fact. This may be illustrated by two recent cases. In 1907 the transcontinental railroads substantially increased their rates on lumber. The Commission held that this advance was unreasonable; but permitted one half of it to take place. The carriers appealed to the Federal Circuit Court. All the evidence, involving great money and commercial considerations, was taken for the court by a master. Upon the findings of this single individual, without opportunity for the court to critically examine the evidence, the deliberate judgment of the Interstate Commerce Commission was set aside. The same thing happened in the Texas Cattle Raisers' case in 1910, involving rates on live stock from the southwest to northern ranges. In this instance, to be sure, the Circuit Court declined to enjoin the Commission. That did not, however, alter the fact that the decision was based upon hearings by a master, extending over sixty-three days and rolling up a voluminous record which the court did not have time even to peruse cursorily. To standardize procedure, as well as to eliminate delay, was the purpose of the President in the plan for the Commerce Court.
Many objections were advanced in the course of debate in Congress against the creation of a special tribunal. It was urged that such a court with limited jurisdiction would be open to political influence, as well as exposed to the danger of narrowness. It was said to be foreign to our judicial organization, which heretofore had known only courts of general jurisdiction. It was stated that no necessity for a commerce court existed, so small would be the number of cases which might be brought before it. Objection was also raised to it on the ground of expense. The problem of court review was, of course, complicated rather than made more simple by the Hepburn Act of 1906. Prior to that time no administrative orders took effect other than through enforcement by the courts. But this law provided that rates and regulations of the Commission should take effect proprio vigore within thirty days. The contest over broad v. narrow court review has already been described, with the outcome at the time regarded as a victory for broad review. The situation was entirely changed, however, by the Illinois Central decision in 1910,[699] which appeared to put a restraint upon judicial review, except when the order of the Commission was either beyond its legal powers or else unconstitutional. This decision did not, as might have been expected, put an end to the plan for a new transportation court; but it did bring about a specific restriction of the powers of this tribunal to those possessed by the regular circuit courts.
The Commerce Court, as finally constituted in 1910, was composed of five judges, each to serve for five years, designated and assigned thereto by the Chief Justice of the Supreme Court from among the circuit judges of the United States. No member might serve continuously for more than one term, but might be reappointed after an interval of one year. The court was to sit at Washington, and was to be always open for the transaction of business. From it, direct appeal to the Supreme Court might be taken, with as simple a mode of procedure as possible to eliminate delay. The original record, for example, was to be transmitted; and agents of every carrier must be designated at Washington upon whom process might at any time be served. Whatever may be said of other details of this judicial experiment, it certainly sought in good faith to promote promptness in procedure.
The jurisdiction of this Commerce Court was expressly conferred over four kinds of cases:[700]
First, those for enforcement of any order of the Interstate Commerce Commission, other than the payment of money.