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the locals of the different roads in the line. They would necessarily be much higher than they are now, and they would be different by different routes, instead of being uniform between the same points of shipment, as they are at present. It would deprive the publlc of the advantages they now enjoy by reason of the through arrangements. Rates from distant points would necessarily be so high that it would stop, in a great measure, the export business, and while the railroads would, perhaps, be fully compensated for this loss by getting higher local rates on domestic business, the people would be great sufferers. If such a state of affairs were to continue long it would bring ruin to this country. This would inevitably be the result if the qualifying clause that different charges may be made for the same service under different circumstances and conditions, had not been inserted; and it also must be clear that the words“ circumstances and conditions” mean not only the cost of the service, but competition and all other conditions legitimately influencing transportation charges, such as I have mentioned in connection with the through business; and it will be seen that these circumstances and conditions are of such great importance that the prosperity of the country may depend upon their having due consideration in the execution of this law.
There should, therefore, be no doubt entertained that under section 2 the railroads can make different charges for the same service performed, if it is performed under different circumstances and conditions legitimately controlling the charges.
Having shown that under section 2 a railroad may make different charges under dissimilar circumstances and conditions for hauling the same kind and quantity of freight over the same portion of its road, the question may be raised as to whether, under section 4, the maximun charge for a short haul on a railroad is to be determined by the local rate charged for a long haul on the same road, or by the lowest compensation such a road may receive as its share of a through rate. It must be observed that the law nowhere deals with the share of a through rate, but only with the rates in the aggregate, and properly so, because the shippers are only concerned with the aggregate charge which they have to pay, and not with a share of a through rate which each of the several railroads forming a through line may receive. The division of a through rate is a matter of private agreement between the railroads, and does not affect the public. If the through rates in the aggregate conform to the law, that is all that the law requires.
This view of the case is further supported by that section 6, provid. ing for the publication of rates makes a distinction between the tariffs of each railroad (a word defined in section 1 as meaning "all the road in use by any corporation operating a railroad, whether owned or operated under a contract, agreement or lease ") and the through tariffs—the tariffs that any common carrier may establish in connection with some other road, or joint tariffs.” It is made compulsory for each railroad company to publish its tariff between all stations on its own road, but it is left optional with the carriers to establish joint tariffs, and if they do the same must be reported to the commission, who will direct whether and to what extent they shall be published. If joint tariffs are established by the carriers, they must be made in conformity to the law. No more
must be charged for a shorter than for a longer haul in the aggregate, over the same line, unless different circumstances and conditions justify it.
Attention is called to the use of the word “line" in the fourth section, which it must be inferred means somethin different from the word
railroad as defined in the first section - it evidently means a route or line formed by a number of railroads between the points of shipment or destination; and the joint tariffs of such line can only refer to the aggregate charges made to the public and published, and not to the subdivision of a through rate between the several roads constituting, the line. Indeed, it might be inferred from the use of the word “line" in section 4, and the omission of the word “railroad” from this section, that the long and short haul rule applied only to joint tariffs and had nothing to do with the tariffs of each railroad, much less with the share of the through rate each railroad may receive. For these reasons it seems clear to me that the compensation a railroad may receive as its share of the through rate is not to influence in any way the adjustment of rates on long and short hauls, and that it is only required to bring the total or aggregate rate over the same line under the provisions of the law.
It is very important that a decision should be reached at once as to the proper interpretation of the second and fourth sections of the law, as, until this is done, it will be impossible for the railroad companies to determine whether any changes are necessary in their present tariffs to make them conform to the law.
There are other sections of the law requiring interpretation, but I have confined this paper to the discussion of the two sections affecting the establishment of tariffs, so that their revision, if necessay, may be begun at once.
MR. ALEXANDER OPPOSES MR. FINK'S VIEWS.
On February 22, 1887, Mr. E. P. Alexander, president of the Central Railroad Company of Georgia, wrote the following criticism of Mr. Fink's position:
SAVANNAH, Ga., February 22, 1887. Mr. Fink very clearly states that the interstate commerce law is to be interpreted, not only by the conflicting explanations given by different members of congress, but by “its language, and, where that is ambigious, by keeping in mind the object for which the law was passed.”
In other words, when we have followed any line of argument, based upon the ambiguous language of this bill, to its conclusion, before accepting this conclusion, we must examine it in the light of the end or object which congress had in view in passing the law. If the conclusion should be plainly one which congress did not have in view, our argument has ended in “a reductio ad absurdum,” and must be faulty in its premises, or illogical in its process.
Applying this test to Mr. Fink's conclusion on section 4, I think we are confronted with just that result. He makes of section 4 an absolute nonentity. In his own language, in drawing his conclusions, "that section might have been omitted altogether.” That conclusion alone seems to me to absolutely refute the argument leading up to it.
The final test of the real meaning of the law can only be had in a court, and before a judge and jury. It seems to me a vain hope that such a tribunal will ever accept a construction of this law which will make of it—nothing—a thing which might have been omitted altogether.”
And going over the argument in detail, it seems to me that the fallacy in the premises is also obvious. It is not stated in so many words, but the entire argument proceeds upon the assumption that the author and supporters of this bill understood the results which must follow from abolishing all lower rates upon longer hauls in the traffic of the country. The violence of such an assumption can hardly be exaggerated.
Mr. Fink reasons “it is obvious that the enforcement of such a rule would result in great injury to the commerce of the country.”. But that it is obvious” only to those who are experts in the business—who know how the lower rates upon longer hauls
are forced upon the railroads by circumstances beyond their control. To the average citizen, voter, and legislator, the injury to result from prohibiting a less charge on the longer haul is not only not "obvious,” but he absolutely refuses to be convinced of it, and he has insisted upon passing this law to put a stop to the practice.
An interpretation which would make of section 4 a legalizing of present practices, as regards long and short hauls, instead of an effort to change them, would exactly reverse its intent.
The protestations of railroad men and experts, and their predictions of the results which must follow, have had no effect beyond inducing the proviso to section 4, which allows the commissioners to suspend the operation of the law in special cases. It would be an utterly superfluous provision if it were intended that the existence of competition, at the more distant point, should itself justify a lower rate. Under this interpretation of the section, it is impossible to imagine an actual case where there would be need for a commission with power to suspend its operation. There probably never was a case of charging less for a longer haul but under constraint of competition, and I can not conceive of any other ground upon which a commission would or should authorize it. If the authority of a commission is not needed to permit it under competition, it is not needed at all. The fact that a commission is provided proves conclusively that this tribunal alone can authorize a less charge for a longer haul under ordinary competition.
The plain English of the situation seems to me beyond doubt or question. The author and supporters of this bill have believed, and do believe, that the railroads can and will reduce their short haul rates rather than abandon their long haul rates.
And they have forced the issue upon the railroads under terrible penalties. It seems to me vain to hope to escape it by putting an interpretation upon the law which would make of it but a jumble of words means nothing. The “intent” of the law is a matter of public notoriety, and when it is accepted section 4 is very clear and emphatic legislation.
It has been suggested that a prompt compliance with its requirements will be held by the country as an effort on the part of the railroads to make the law odious.
I do not see how it can be so regarded. Not to comply with it, except at the end of the law, can more justly be held to be an effort to override and defy it. In this dilemma, and in view of the severe penalties and heavy risks attendant upon any construction which can not be maintained before a judge and jury, there seems to me but one safe course to pursue. Tariffs should be at once prepared conforming to the intent of the law as generally understood. These tariffs should be imme diately submitted to the railroad commission provided for in the law to meet the very emergency which we believe is upon the country. The effect of abolishing lower charges upon longer hauls should be clearly pointed out to the commission, and their authority invoked to relieve from the operation of the act every road which applies. As soon as any one is relieved, the relief of every other one must follow, one after another, as bricks in a row knock each other down. Otherwise the commisson would be guilty of palpable and unfair discrimination between equal competitors. And unless they begin promptly, by relieving the lines in competition with Canadian lines from the operation of the section, the latter lines and the cities of Canada will take off business legitimately belonging to the United States to an extent which must speedily educate both the commission and the people.
To this result—the education of the people—or at least of the law makers—we must come before there can be peace and mutual prosperity. It seems to me that we postpone that day by any effort to evade the issue made by section 4.
We should refuse to run any risks of the penalties of the law, but promptly and frankly accept the situation and place the whole responsibility upon the railroad commission.
E. P. ALEXANDER.
MR. FINK'S REPLY TO PRESIDENT ALEXANDER.
On February 25, 1887, Mr. Albert Fink wrote the following letter to Gen. E. P. Alexander, in reply to his remarks upon Mr. Fink's interpretation of section 4:
NEW YORK, Feb. 25, 1887: GEN. E. P. ALEXANDER,
President Central R. R. & Banking Co. of Georgia, Savannah, Ga.
MY DEAR SIR: I have your favor of 23d inst., and also your remarks upon my interpretation of section 4 of the Interstate Commerce law. I am afraid you have not fully understood me.
I do not say anywhere that section 4 amounts to nothing, but simply that it amounts to no more than sections 1 and 3, which provide that rates shall be reasonable and just, and that no unjust discrimination shall be made against localities; and that by the insertion of the clause, “under substantially similar circumstances and conditions” in section 4, it permits a greater charge being made for a short haul than for a long haul, where it is just and reasonable.
I read the section according to its language and not according to the interpretation given by Mr. Reagan and others, and it seems to me that you contradict yourself when you say, in the first place, that you propose to construe the section by its language, and then construe it by what some of the supporters of the bill intended should be its effect. You say “it is not stated in so many words,” but you interpret the bill by what you think some of its authors meant it to be, and even by what a portion of the public expect it to be, while I interpret it simply by its language.
There is no doubt in my mind that some of the supporters of the bill meant its effect to be what you state; but others give it exactly the same interpretation as I do (Mr. Cullom for example), so that after all you will have to fall back upon the language of the law and not upon what those gentlemen intended it to mean.
Now, this brings us to the only question at issue, viz: What is the meaning of the clause, “under substantially similar circumstances and conditions?” I have endeavored to show that it means the cost of the service and competition. The whole question is simply one of the interpretation of that clause. If it means nothing, then I think the long and short haul rule in section 4 is absolute, and can only be varied by the Commission. If it means cost and competition, then the railroad companies are obliged, in the first place, to put a construction upon it, subject, of course, to the final ruling of the Commission and the courts. Each railroad company, of course, is at liberty to interpret that clause as it chooses, and perhaps the general disposition is to be on the safe side,