difficult to satisfy a court on this point, and so the rates stand and the clause is practically nullified. Forbid departure from the clause absolutely unless the carrier has obtained an order of release, and you put the burden of proof where it should lie, namely, on the party that desires to depart from the rule of equal treatment.

A Drastic Cure for Rebating.

For the cure of discrimination, the Transportation Committee of the New York Board of Trade suggests that Congress enact a law authorizing the Interstate Commission, in case of any rebate or other device for securing low rates, to declare that the net rate so made by the railway or car owners shall be the regular tariff rate, published as such, and open to all shippers; said new rate to take effect immediately, subject to appeal within 60 days upon questions of law.31 The Committee says the proposal is based on the plan suggested by "Albert Fink, the ablest of all American railroad managers," and adopted by the joint executive committee of the associated railroads in 1882.32 "The giving of unlawful rebates by traffic agents would be preventable if the agent felt assured that such acts would be followed by his dismissal, and the officers of the company would find a way to remove an offending agent or to bring him under control if a punishment of suitable severity were certain to be imposed upon the road for the violation of the law against the giving of rebates."

This would indeed be a drastic remedy, and very effective for the prevention of the discovery of discrimination. An

31 Sen. Com. 1905, p. 3482.

82 Ibid., pp. 3485, 3486. The railroad managers decided to notify offending railroads that unless rates were restored, the lowest cut rates that had been made by any line would be adopted by all, to punish the rebaters and stop them from getting business thereby. At a meeting July 26, 1882, 30 railroads being represented, a resolution was unanimously adopted, directing agents at connecting points to examine waybills, and when rates were found to have been cut, to hold the freight at the expense of the initial line until the waybills had been corrected.

association of railroads might ferret out preferences under such a rule, but it would be almost impossible for a public board to do it. It has been for the most part, as we have seen, practically impossible for the Commission to get evidence of specific facts of discrimination, even under the comparatively mild laws they have tried to enforce. And under such a law the difficulty would be increased tenfold. Moreover, if discrimination were discovered and the rule proposed were put in action, discriminations would thereby be crystallized and legalized, and great disturbances produced in the business of railroads and of the community. Suppose it were discovered that a certain shipper of wheat from Chicago east had a 10 cent rate over the Erie, while the published rate on all the lines was 15 cents. Immediately the 10 cent rate would be open to all shippers over the Erie. The Erie might be stricken with a sudden dearth of cars, and be unable to handle the traffic at all. It would pay the other roads to arrange with the Erie to be stricken that way. For if the Erie handled the traffic, the other roads would have to come down to 10 cents and suffer a severe loss, or lose the business and suffer a severe loss that way. Moreover, the difference in rates on wheat and flour and other commodities would constitute serious discrimination, petrified and perpetuated by law. Again, if many cut rates were discovered in various lines of business and various degrees of discount, the whole tariff would be thrown into confusion worse than the normal chaos. Rates not in the discovered list would have to be raised to save the revenues of the roads, the long and short haul rule would go to the winds, and bankruptcy would threaten not only the culprit railroads but individuals and communities not conditioned so as to be favored by the cut-rate lists. On the other hand, if the railroads tried to be good, the pressure of the big shippers for concessions would put many roads to serious inconvenience and threaten them with dangers and losses almost as great

as those accompanying disobedience, and far more immediate and certain. Under such circumstances the temptation to secure secrecy at any cost, and if need be to control the Commission and the courts, would be irresistible.

Most of those who favor further control of railroads advocate milder methods. The favorite remedies are public inspection and the fixing of rates by a commission or court of arbitration or tariff revision. The facts above stated showing the secrecy of many forms of preference and the difficulties of enforcing the law because of the impossibility of getting railroad officers to reveal the facts indicate the necessity of systematic and thorough public inspection, but also suggest a doubt as to its effectiveness. If railroad officers destroy their papers and refuse to state the facts on the witness stand, is it not possible that they will keep any record of discrimination practices from appearing in the books and papers they submit to inspection? Inspection and publicity are excellent aids to reform, but they are insufficient in themselves. We have had already a smallsized ocean of publicity through the investigations of the Interstate Commerce Commission, but the results have been very small.

18

CHAPTER XXXIII.

FIXING RATES BY PUBLIC AUTHORITY.

FOR years the Interstate Commerce Commission has been declaring that when, on complaint and investigation it finds a rate to be unreasonable, it ought to have power to fix a reasonable rate to take the place of the unreasonable one, the order to be binding on the railroad for a moderate period, subject to revision in the courts. For the first ten years after the Interstate Commerce Act was passed no railroad denied the right of the Commission to fix rates, and the Commission says it was supposed that they possess the power. But the Supreme Court finally ejected this impression in 1896, and again in 1897, and the Commission appealed to Congress for the restoration of the authority that was swept away by the interpretation of the majority of the Court. Congress for a long time paid no attention to the Commission's request for further powers, but President Roosevelt took up the matter and pushed it with the splendid vigor that characterizes all he does. In his message of 1904, already referred to, he said: "Above all else, we must strive to keep the highways of commerce open to all on equal terms; and to do this it is necessary to put a complete stop to all rebates. Whether the shipper or the railroad is to blame makes no difference; the rebate must be stopped, the abuses of the private car and private terminal-track and side-track systems must be stopped, and legislation of the Fifty-eighth Congress, which declares it to be unlawful for any person or corporation to offer, grant,

give, solicit, accept, or receive any rebate, concession, or discrimination in respect of the transportation of any property in interstate or foreign commerce whereby such property shall by any device whatever be transported at a less rate than that named in the tariffs published by the carrier, must be enforced. . . . The Government must in increasing degree supervise and regulate the workings of the railways engaged in interstate commerce; and such increased supervision is the only alternative to an increase of the present evils on the one hand or a still more radical policy on the other. In my judgment the most important legislative act now needed as regards the regulation of corporations is this act to confer on the Interstate Commerce Commission the power to revise rates and regulations, the revised rate to at once go into effect, and to stay in effect unless and until the court of review reverses it." The President's message of December, 1905, has already been quoted at sufficient length in Chapter XXXII.

In the last two years the legislatures of 18 States have passed joint resolutions petitioning Congress to enact legislation for the regulation of railroad rates; 12 States took this action last winter, 1905, and asked their representatives and senators to secure the enactment of such a measure. Commercial bodies in various parts of the country have also petitioned for such legislation, while others have protested against it.1

The Esch-Townsend Bill (1905) giving the Commission power to fix rates passed the House, but failed to pass the Senate. As stated in the preceding chapter, the House has passed the Hepburn Bill by a very large majority and it has gone to the Senate, where a determined effort will undoubtedly be made to secure at least a provision for judicial review on their merits of all orders of the Commission.

1 Sen. Com. 1905, p. 1908, and index, "Rate-Making."

2 The Senate is too full of men interested in railroads in one way or another to make it easy to pass any measure that might seriously affect either the power or the profits of the roads.