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faith, shrinking from no investigation of their management, and listening attentively to all honest and sincere criticism.
"While this company unequivocally denies the obligation of this statute as a valid law, and will do nothing which might operate to preclude it from asserting its invalidity hereafter, it has no desire to disregard that which seems to be the will of the people, even though expressed in void enactments, and it will do so only when that will demands the surrender of rights secured to owners of all property by the fundamental laws of the land,— rights, the maintenance of which is essential to the proper and profitable use of all property whether owned by individuals or corporations."
The four years during which the granger rates were in effect are said to have been very prosperous ones for the railroads. There were no rate wars and but little occasion for wars, as at that time the territory of the different lines was more exclusive than now. North and south feed branches had not reached out and made competitive territory.
The Chicago & Northwestern had a branch from Stanwood to Tipton, ten miles, was also connected with the Sioux City & Pacific from Missouri Valley. The Chicago, Rock Island & Pacific had a branch to Winterset and Indianola, fifty miles, also a southwestern line from Wilton to Muscatine, Washington and Missouri State line. The Chicago, Burlington & Quincy had a branch from Creston to Hopkins, from Chariton to Leon, and from Burlington to Keokuk. The Chicago, Milwaukee & St. Paul had a line from McGregor to Algona, with a branch from Calmar to the State line of Minne sota, Mason City to the State line, Conover to Decorah.
At the first session of the legislature after the decision of the United States supreme court, the Illinois Central railroad applied for an abrogation of all penalties for a failure to comply with the law which was granted, and to the other lines also. At this session of the legislature, an unsuccessful effort was made to repeal the law creating maximum rates. At the following session, however, that of 1878, the law was repealed and the commissioner law enacted by a vote of fifty-five to forty-three in the house, and twenty-nine to twenty-one in the senate. In this contest, the Chicago, Burlington & Quincy, and several other lines, were very active for the repeal of the law, while the Chicago, Rock Island & Pacific was passive, and was thought to be really in favor of the continuance of the granger schedule.
The commissioner law provided for three commissioners, to be appointed by the Governor and confirmed by the executive council. The commissioners, under this law, were given "general supervision of all railroads in the State operated by steam," etc. Roads were prohibited from discriminating in rates and from charging unreasonable rates, with penalties for disobedience of the same. Section three of the law, among other matters provided that the commissioners, when in their judgment necessary, should inform any railroad company of any change of its rates of fare for transporting freight or passengers, or any change in the mode of operating its road, and conducting its business, they regarded as expedient in order to promote the security, convenience and accommodation of the public. They are further empowered to examine the books and accounts of any railroad company, to examine under oath any officer thereof; to investigate any serious accident upon any railroad, resulting in personal injury or loss of life, and to hear all complaints preferred by the lawful authorities of any
city, incorporated town or township, respecting charges for passengers or freights.
It was under this section that Governor Larrabee in 1886 filed with the Commissioners a complaint that the rates charged by the Chicago, Burlington & Quincy Railroad Company on soft coal to the Institute for the Feeble Minded, located at Glenwood, Iowa, were higher than the rates charged by the same company on the same commodity through Glenwood to the Institute for the Deaf and Dumb at Council Bluffs, a greater distance. In their report for 1885, the Iowa Commissioners said: "We feel that the time is near at hand when a rule should be established which will give equal and exact justice to all, and believe no rule would so effectually prevent ruinous competition as one prohibiting a greater charge for a short than a long haul," and after a full hearing of the above cause, the Board, in its decision, advised the Chicago, Burlington & Quincy Railroad Company "to revise its coal tariff in Iowa to conform to this principle." The case attracted wide attention. It was the chief executive pleading in behalf of the State for equality of treatment to two State institutions located on the same line of road. On the other hand, it was the first declaration of the Board that under the then existing law, ample authority was given the Commissioners to make reasonable rates. The spirit of the decision was that the company should lower its Glenwood rate, but instead the Council Bluffs, or long haul rate, was raised, a step afterward acknowledged by a high official of that road to have been a very grave error, and it may fairly be said that the difference of sentiment later existing between the Iowa carriers and their patrons was given much initial impetus by that action. At a rehearing of this case a tariff was formulated by the Commissioners, which was observed by most of the lines..
In the first annual report of the Commissioners they said: "The rapidly increasing commerce of Iowa demands every practicable agency for transportation and exchanges, and any attempt by discrimination to unjustly or oppressively interfere with or prevent the products of the State from seeking any market desired, or in any improper way to divert, limit or repress the business of exchanges, will arouse the indignation of the people and will command the prompt action of the Commissioners."
A growing dissatisfaction at the increased rates put in by the Iowa lines across the State, in place of the "Granger rates" resulted in a conference between the Commissioners and the freight agents of the leading lines which resulted in the adoption of a new uniform tariff with certain reductions in rates.
The rates complained of were:
Five miles-15, 13, 11, 9.
Fifty miles-31, 25, 20, 14.
One hundred miles-41, 35, 25, 19.
Two hundred miles-51, 45, 35, 26.
Three hundred miles-61, 55, 40, 30.
These rates were changed by this agreement to
Five miles-13, 12, 10, 8.
One hundred miles-41, 34, 25, 19.
These rates continued with some modification up to the taking effect of the "act to regulate commerce,” when the rate agitation again commenced in Iowa.
Governor Larrabee, in his message to the Twenty-second General Assembly, recommended the entire abolition of the pass system, fixing of passenger rates by law, that the salaries of the Railroad Commissioners be paid by the State, and not by the railroad companies, that the companies be required to adopt safety appliances, and to pay more regard to the Sabbath in the running of trains. He also informed the General Assembly that if it decided to make the Railroad Commissioners elective by the people, or nominated by the executive and confirmed by the senate, such legislation would meet with no opposition at his hands. He expressed the opinion that railroad companies being public corporations, their officers should be required to take an oath to obey the constitution and laws of the State and the United States; that the right of the State to control railroad companies had been confirmed by the highest judicial authority. Stringent measures should be applied to strong corporations, while weak ones should be protected; combination should be prevented, and competion secured, and penalties provided to compel obedience to the law. In his inaugural address, delivered two days later, Governor Larrabee enlarged upon the transportation question, supporting the positions taken in his message, by statistics and arguments. He placed the value of donations received from various sources by the Iowa roads at over fifty millions of dollars, and stated that the tracts of land granted them at various times by the State and nation, by counties, by municipalities and private individuals, aggregated an area equal to more than one eighth of the total area of the State, and that the total amount of money actually invested in Iowa roads by stockholders and bondholders would not average to exceed $15,000 per mile; that railroads had practiced extortions and usurped powers dangerous to the public welfare; that while charges should be reasonable, they should be equitable and certain; that it is not uncommon to find in the same train two cars loaded with the same article, and one hauled at one half the rate charged for the other; that the industries of the State were languishing through excessive freight rates and unjust discriminations, and the nullification of the principles of equity which for centuries have been enunciated by the courts.
Stimulated and encouraged by the message and inaugural of the Governor, the legislature which convened in 1888 entered at once upon the consideration and discussion of bills to regulate carriers. A bill was passed making the Railroad Commission elective, and a bill known as House File 373, passed by a vote of 61 to 22 in the house, with seventeen absent or not voting, and in the senate by a vote of 44, with no votes against the bill, six absent or not voting. The bill went to a conference committee, and the report of the committee was adopted in the house by a vote of 74 ayes and no nays, and in the senate by a vote of 41 ayes and no nays. A maximum tariff bill, fixing rates somewhat similar to those afterwards fixed by the Commissioners, passed the house by a vote of 87 to 12, one absent or not voting, but
failed in the senate to be set down as a special order, and thus died on the regular calendar order. The two cent per mile passenger rate bill also failed of passage. A bill passed, however, making the Railroad Commissioners elective by the people, and providing for the payment of their salaries in the same manner as other State officers are paid. A bill also passed requiring railroad companies to construct viaducts across their tracks in cities of the first class, at streets to be approved by the Railroad Commissioners. House File 373, which became a law, was made up of sections of the act to regulate commerce, the Illinois law, the Mississippi law, and those of several other States. The law being eclectic in its character, and made up from so many different statutes, is quite difficult of construction. It provides that all charges must be reasonable, prohibits discriminations, provides for equal facilities, forbids pooling, and a greater charge for a short than a long haul, requires the posting of rate schedules and a ten day's notice for advancing rates; makes the carrier liable for violations to the person injured three times the amount of the damage sustained; fixes the maximum penalty for violations of the act at $5,000 for each offense; increases the authority of the Commissioners; requires the Commissioners to make a schedule of reasonable maximum rates, which shall be prima facie evidence; provides for fixing rates by Commissioners on complaint; provides that the Commissioners, their secretary and assistants shall be carried free, and that reduced rates may be given to ministers of religion and free carriage may be given to their own officers and employes, and families. The law became effective on May 10, 1888, and on that day the Iowa lines withdrew all joint tariffs, special rates and terminal tariffs, and put in a distance tariff under the new law, making rates for the first five classes as follows. For:
Five miles-15, 12.8, 10, 7.5, 6.
Fifty miles-28, 23.8, 18.7, 14, 11.2.
One hundred miles-38, 32.3, 25.3, 19, 15.2.
By comparison it will be seen that these rates up to 100 miles were higher than the "Granger rates" of 1874, and higher than the commissioner-agreed rates of April 21, 1879.
Acting under the new law the commissioners gave the necessary notices, and on the 14th of June adopted a schedule of rates to be governed by the classification adopted by the Illinois commissioners. These rates at five miles, were on first, second, third, fourth and fifth classes, respectively: 14, 11.9, 9.34, 7, 4.9.
At 50 miles-20, 17, 13.34, 10, 7.
At 100 miles-24, 20.4, 16, 12, 8.4.
At 200 miles-40, 30.2, 23, 18.6, 14.2.
A corresponding reduction was made in the latter classes, and in the commodity classes of wheat, corn, lumber, live stock, and coal. The Chicago, Rock Island & Pacific Railroad Company took its Iowa tonnage, exclusive
of coal, for the year 1887, and applied the commissioners' rates to the actual business, and in the Davenport case, showed by the testimony of George H. Crosby, freight auditor, that "on the purely local business of Iowa, our earnings for 1887 were $960,340.37, and if the commissioners' rate and classification had been applied we would have received $752,700.38, 21.66-100 per cent of reduction. The reduction on Iowa business proper would have been in round numbers, $208,000. Deducting this amount from the total earnings of the company, and it would still have been able to pay its regular dividends. These computations show the purely local Iowa business to be about 11 per cent of the total Iowa business."
The commissioners' rates applied only to shipments originating and terminating within the State, which comprises but 4 per cent of the total business of the Chicago, Burlington & Quincy, and 11 per cent of the total business of the Chicago, Rock Island & Pacific. The commissioners, in their annual report for 1888, in commenting upon their schedule, say: They brought to the consideration of the subject mainly the rates that the railway companies themselves had charged in the past. Some of them had been special, others had been made under the influence of strong competition, others were made by an agreement with all the roads in the State, and were supposed to represent all the traffic would bear. The commissioners' rates were, as they thought, a fair and just average from comparisons instituted, as the law required, between the rates of this and adjoining States, not always the rates in schedules, but those under which the business had been done. The rates made were intended, as far as practicable, to afford relief to the business interests of the State, and at the same time give a reasonable compensation for services rendered. * The rates fixed were certainly higher than the roads had voluntarily, for a considerable period, fixed themselves for a large portion of their traffic. The various industrial interests of the State appeared before the Board, showed the rates that they had been receiving, voluntarily given, and asked the Board to arrange a schedule so that they might be fairly placed in a position to meet on equal terms their competitors outside the State. They asked that in the distribution of commodities, their jobbing houses should not be closed and their manufacturing establishments driven out of the markets of the State. The representatives of the railroads appeared before the Board and charged all the evils complained of upon the law, which they claimed was harsh, unyielding, and entirely unfitted to meet the conditions or wants of the people. They claimed that manufacturing and jobbing interests could only flourish in a State situated as Iowa is, by special rates, but to make all rates as low as their special rates had been made for this purpose would take away their revenue."
Notice of the taking effect of the commissioners' schedule was ordered published, and the first publication was made June 14, in which it was set out that the rates would be effective on June 28, 1888. On June 22 the notice was changed by order of the chairman, making the rates effective July 5. On June 28, a restraining order from Judge Brewer was served on the commissioners on complaint of the Chicago & Northwestern, Chicago, Burlington & Quincy, and Chicago, Milwaukee & St. Paul roads, ordering the discontinance of the publication of the notice, and the enforcement of the rates pending the hearing for an injunction. On the 29th of June a temporary