incentive to appeal was gone-better endure or compromise than to incur the enmity of the carrier to no purpose. Therefore a decline in the business of the Commission ensued, going so far as to leave that body little beyond the conduct of general investigations and the compilation of statistical data. RESULTS OF THE ACT TO REGULATE COMMERCE To dismiss thus the Act to Regulate Commerce and the work of the Commission is, however, to fail to recognize certain definite and positive gains to the public which resulted from this first attempt to control interstate commerce. Publicity of rates had been secured, even though the published tariffs too often served but as the "take-off" for the individual bargain between railway and shipper. Much discrimination had been eliminated, particularly as among places, the ready conformance of Trunk Line carriers to the requests of the Commission in this particular as well as partial response of roads in other sections of the country relieving many points of an onerous burden previously borne. Too, the consolidation and simplification of freight classifications were distinctly furthered by the law and the work of the Commission; the wide diversity which had existed in this particular had been a fruitful source of uncertainty, confusion, and complaint. Moreover, valuable statistical data covering every important phase of railway operations were gathered during the years following 1887 and prior to the effective amendment of the Act. And this service was the more real because, prior to the organization of the Commission, there was no reliable central source of such information and so wide a divergence in methods of compilation existed among the various railways that comparisons were of little worth. Further, the experiment in regulation had encouraged a more careful study of railway matters and thereby assisted in the development of a more comprehensive grasp of the problems in the field. And last but not least, experience under the Act showed, as nothing else could have done, how legislation, intended to regulate effectively carrier-shipper and carrier-government relationships, should not be phrased if it were to be interpreted by the courts as it was intended by Congress. To accomplish the end which Congress had in view when the Act to Regulate Commerce was passed in 1887, certain definite and positive changes were needed. It was essential that the Commission have the right to prescribe rates, the power to deal effectively with discriminations of various types, and the authority to compel immediate obedience to its orders. It was also necessary that the scope of judicial review in the examination of Commission orders be limited. In laws enacted by Congress from 1903 to 1910 such strengthening legislation was to come but, until then, the federal regulation was a matter of form rather than of fact. References: Dos PASSOS, J. R. The Interstate Commerce Act: An Analysis of Its Provisions. G. P. Putnam's Sons, 1887. HANEY, LEWIS H. Congressional History of Railroads in the United States, 1850-1885, University of Wisconsin Studies, No. 342. HENDRICK, F. Railway Control by Commissions, chap. viii. G. P. Putnam's Sons, 1900. INTERSTATE COMMERCE COMMISSION. Annual Reports; Reports; Statistics of Railways. MCPHERSON, LOGAN. Railroad Freight Rates, pp. 235-261. H. Holt & Co., 1909. MERRITT, A. N. Federal Regulation of Railway Rates, chaps. iii-vi. Houghton, Mifflin Co., 1907. MEYER, B. H. Railway Legislation in the United States, Part III: "The Past and Future of the Interstate Commerce Commission." The Macmillan Co., 1903. RIPLEY, W. Z. Railroads: Rates and Regulation, chaps. xiii-xiv. Longmans, Green & Co., 1912. RIPLEY, W. Z. Railway Problems, chaps. x-xviii. Ginn & Co., 1913. -Cullom Report. Report of Senate Select Committee on Interstate Commerce (Senate Report No. 46, 49 Cong. I sess. 2 vols. 1886). -Federal Reporter. -United States Supreme Court Reports. -Windom Report. Report of Select Committee on Transportation Route to Seaboard. (Senate Report No. 307, 43 Cong., I session, III, parts I and II, 1874.) XXXI ESTABLISHMENT OF EFFECTIVE FEDERAL REGULATION Demand for positive control revived. The problem of personal discrimination. Financial importance of rebating. The Elkins Act: provisions and operation. Railway regulation a "paramount issue." The Hepburn Act: scope; powers of the Commission; the Commodities clause; judicial review; miscellaneous provisions. Increased activity of the Commission Uniform system of railway accounting. Commission's decision now final on matters of fact. Commodities clause: early application and later results Demand for further legislation. The Mann-Elkins Act: rate suspension; rehabilitation of Section 4; the Commerce Court. Minor provisions. As the preceding chapter indicates, the decisions of the Supreme Court, particularly those which denied the power of the Interstate Commerce Commission to prescribe rates and to eliminate violations of the long-and-short-haul principle, left that administrative agency little beyond observation and recommendation. Despite the need of the rehabilitation of the Act to Regulate Commerce, the absorption of public interest by other matters such as war, returning business prosperity, and "trusts," coupled with a considerable influence exerted by the railways in Congress, resulted not only in failure to take definite action but even in the almost complete absence of serious consideration of the problem. Beginning about 1897, however, certain definite influences began to operate which were destined within a decade to result in positive and effective action. DEMAND FOR POSITIVE CONTROL REVIVED One of the more important of these factors was the movement toward railway consolidation which had its beginnings in the recovery from the depression following 1893. This movement led, within a brief time, to the grouping of railways throughout the country into a comparatively small number of ownership systems, dominated by powerful individuals or banking groups and centered largely in New York. Furthermore, such close relationships were established among various of these groups as to accomplish a large measure of monopolistic control of transportation facilities in many sections. This movement aroused public protest upon two principal grounds. It was urged that the unification of properties tended to imperil the commercial interests of many centers which were, by such unification, I either reduced from the high rank of terminal points to mere important way stations, or compelled to share the affections of a particular carrier with other points to which access had been gained by consolidation. Then, too, it was contended that the consolidation of properties represented a clear and positive movement in the direction of monopoly. Objection to this tendency was voiced upon two grounds: it was felt that such control would result in the exploitation of the public directly through higher rates and less satisfactory service and it was feared, because of the intimate relationship which seemed to have developed between important railway interests and certain of the great industrial combinations which had recently gained prominence, that the exploitation of the public by these industrial giants would be abetted. A second impelling force which operated during these years in such way as to hasten effective regulation, was the upward movement of freight rates. Prior to the close of the nineteenth century, the movement of charges had been steadily downward and even the railways themselves seemed to feel that that movement was likely to continue. However, with the general change in conditions which characterized the early years of the new century, a reversal of this tendency appeared, to the great concern of the public. One cause of this reversal was the considerable modification of the force of competition which resulted from the consolida tion of properties and the close cooperation of large groups. A more important cause lay in the upward movement of the price level which began in the late nineties and continued, with only certain minor and temporary recessions, for almost a quarter of a century. This movement affected the railways through an increase in the cost of both materials and labor, and was regarded by the carriers as a clear justification for an increase in rates upon traffic as a whole. Then, too, it was not long until certain of the railways operating in sections of heavy traffic found themselves no longer in a position to enjoy the results of the law of increasing return. Instead, they faced its converse, the law of increasing costs: the plant had failed to expand, pari passu, with the rapid growth of business. PROBLEM OF PERSONAL DISCRIMINATION A third factor, and one of great significance in arousing public opinion upon the matter of effective regulation, was the rapidly growing importance—and threat-of personal discrimination. True, personal discrimination was prohibited under the Act of 1887, but the provisions of the statute with respect to this particular problem made impossible the establishment of any effective control of the situation. Indeed, during a period of almost 15 years the total number of convictions had scarcely exceeded that figure. That this section which had proved wholly inadequate in the control of personal discrimination prior to the period of "big business" should fail miserably in the face of demands made for concessions by the great industrial combinations which had so recently come into being, was inevitable. Because of their magnitude these powerful industrial units, when not offered concessions by ambitious traffic representatives seeking to increase tonnage by undercutting rival lines, were able to force from unwilling carriers the enjoyment of lower rates and better service than were accorded to such independent competitors as remained. |