and efficiency of all legislation upon this subject depend upon the enforcement of general principles of restraint rather than upon the prescription of arbitrary details, and that the most efficient supervision that can be exercised is that where intelligent remonstrance is permitted to precede a resort to actual force. 2. Maximum preferable to specific rates. Our conclusion is partially illustrated by our own law, in so far as that law adopts maximum instead of fixed rates of fare and freight, and refers to the commissioners the propriety of modification within the limits of the law. The whole history of similar legislation demonstrates that this generalized method of restraining extortion and discrimination is more practicable and efficient, and less obnoxious than any other expedient; always presuming, however, that the standard of the law is sufficiently liberal and broad for all probable contingencies. The reason of this conclusion is clear. It is impracticable for the state to assume the actual management of railroads, or to wisely determine the multitude of minor questions of policy constantly arising in this department of the public service. Surely there is no apology for the exercise on the part of the state of any power over corporations which can be safely and as wisely exercised by the corporations themselves. There is no principle of American government so thoroughly or so properly established, as that which limits the province of legislation, in all times and under all circumstances, to enactments for the general good, and which denies to government the right or the duty of unnecessary interference with private or public enterprise. In railway legislation this principle is entitled to as much respect as in case of any other legislation; and the first question to be determined is, the extent to which such legislation is necessary for the protection of the people, without unjust detriment to investments in corporate enterprises, and to individual discretion in their management. 3. It provides for correct information as the basis of future action. The circumstance of an official position, like that of the present commissioners under this law, need not excuse us from all allusion to the great importance of the most careful and deliberate action in matters of so great moment-matters involving complex and extremely difficult questions of a somewhat technical and profes sioal character, as well as the fair name and future prosperity of the commonwealth. It was in full view of these responsibilities of the state that we commenced our labors; and it is but just to ourselves and to the interests we have undertaken to represent, that we express to the legislature in this connection our belief in the impossibility of a judicious final settlement of all those questions in a few months, or in a single year. What the wisest men of many countries have been engaged upon for a whole generation, with but partial success, we can hardly hope to settle at once in Wisconsin. We should be nearer a solution than were any inquirers in the past, for the reason that we have the benefit of all past experience. But, even with this advantage, it is needful that our hope be tempered with much caution, and that we consider the commission as having but entered upon a series of prolonged and difficult labors. (C Probably the ablest opponents of the law would fail to make a case should they attempt to establish the fact of its responsibility for all the misfortunes and financial embarrassments which have overtaken the railroads of the whole country, or even of Wisconsin. For these are mainly due to quite other causes, as any unprejudiced mind may see-to general stagnation of business; to the financial troubles which of late have overtaken commercial enterprises in nearly all parts of the world; to the general unsoundness consequent on the freedom of speculation during recent years; and to the reaction from the mania for building roads, with but little regard to the real necessities of industry, which has come, at lengtlı, and more suddenly than was expected. Still, it cannot be denied that the law is really obnoxious to just criticism, even if the objects aimed at are allowed to be in themselves desirable. · The more notable faults are these: 1. It bears heavily on the new roads. In the consideration of this question, we are not to forget how much the present and future development of the state is dependent upon the construction of new and the extension of old lines of railway. And while we most earnestly urge such judicious legislation as shall protect the public and the owners of railway capital alike from the evils of mismanagement, we cannot appreciate the merits of the existing law, in its enforcement of limitations upon the earnings of the new or incomplete Wisconsin lines. These lines now neither receive nor expect to receive any present return for their expenditure, by whatever standard of honesty or economy that expenditure is measured. The initiation and successful completion of these enterprises are vital to the progress of our commonwealth. Their projectors look to the future alone, for that compensation to which all capital is entitled for legitimate investment, and a wise and magnanimous people will not consciously consent to any violation of their equitable privileges. The present law is peculiarly and unquestionably oppressive and deterimental as to all roads of this kind. Reference to the statistics accompanying this report, will confirm and enforce this conclusion. The restrictions imposed not merely tend to delay the completion of lines already in operation, but without affording relief for any evident wrong, manifestly discourage or absolute by paralyze all efforts for the development of further enterprise of the same character. Such modifications of the existing law should be made as, would relieve these lines of the burdens of which they now complain, without exempting them from such general supervision as would protect the public from the otherwise possible consequences of present or future mismanagement. 2. The law not sufficiently elastic. As said before, we cannot, subscribe to the opinion that it is wise to attempt interference with the details of management. On the contrary, we regard the method of the present law, in the respects stated, as too arbitrary and unyielding. The limits of this report do not permit us to specify many considerations by which this conviction is enforced. One general fact in this place will illustrate many of a similar character. From August 20, 1873, to November 10, of the same year, the receipts of wheat in the Milwaukee market, mostly by rail, were about 12,000,000 bushels. From August 20, 1874, to November 10, of the same year, the receipts of wheat at Milwaukee were about 6,000,000 bushels only. Whether the principle of the present law, in its method of regulating freights, is not obnoxious to the objections intimated, is a question of fact that deserves your serious consideration. Is it necessary, in order to protect the public from the evils of bad management or extortion, that the mutable, intricate and complicated circumstances under which railways are operated, should be wholly ignored, and specific rates, especially of freight, be fixed by law? Obviously, the capital honestly invested in Wisconsin railways is entitled to fair compensation. Obviously, also, it is the duty of the state to protect the people from the payment of unreasonable or extortionate tolls. But does it follow from these premises that the state should prescribe those details of railway management, not necessarily relating immediately to the general object sought to be accomplished? cost of a car-load of and 49 miles. There 24 3. The law takes no account of short distances. As the rates of charges now stand, the freight of any kind is the same for one mile is reason in making charges proportionally larger for very short than for considerable distances, inasmuch as the trouble of taking, switching and cutting off a car is the same in the two cases; still there is a little difference in the cost of hauling five miles and fifty miles, and, on the other hand, the due accommodation of shippers, and proper regard to the apparent as well as real equity in cases of this sort, have always influenced railway companies in fixing their tariffs, and should also be regarded by the state, if rates are to be determined at all. 4. The law fixes maxima for car loads only. This provision is unjust in two ways: first to the shipper of quantities considerable in amount, but just short of a car load; secondly, to the larger shipper, the shipper of several car loads at a time. There seems to us no good reason why the commercial principle of lower prices at wholesale than at retail should not apply to the transportation of freight. During the past season, we have received complaints from parties who were making regular shipments of quantities averaging about a car load, sometimes over, sometimes less, but who, when the quantity fell below a full car-load were always charged by the hundred pounds-the price being a sum considerably greater for less than a car-load than was charged for the full ten tons. In all cases of 'deficient weight of freight ordinarily rated per car-load, the shipper should have his option as to whether he would pay by the car-load by actual weight. It is equally clear that a shipper who loads a whole train, and who, by shipment of hundreds, perhaps thousands, of car-loads annually, is a main support of the company doing the work, should be entitled to somewhat lower rates than he who ships but one, two or three car-loads in several years. 5. The law treats connecting lines as continuous, but is silent as to division of earnings. The difficulty of executing this provision of the law has been made manifest during the past season. A large proportion of the complaints made have related to the unwillingness of the companies to divide earnings upon an equitable basis. The law provides that "in computing the rates for carrying any freights according to the provisions of this act, the distance for carrying such freight shall be computed from where it is received, notwithstanding it may pass from one railroad to another." This makes it necessary that the roads so connecting shall be treated as one line. But the section establishing the rates that may be charged allows for the first and second 25-mile hauls much the larger share of the earnings, leaving the several companies to equalize them in some manner. If the amounts of freight carried both ways over connecting lines were equal, the earnings would of course equalize themselves. But this is rarely or never the case. Should the out freights be great in excess of the in freights, upon a given road, it is apparent that such road would have the advantage in the proportion of first, as compared with second or third hauls. Under ordinary circumstances, all such matters are settled somehow by the companies among themselves; but where the law imposing restrictions as to earnings is felt to press a little, it appears to be natural that the company having the worst of it should protest, and that the company having the best of it should be reluctant to divide equally. In the cases above referred to, some of the companies have insisted that the commissioners should prescribe the rule of division, urging the provisions of section 5 as their authority for so doing. The commissioners have not understood this to be a part of their duties, however, and so these matters are still in dispute. As to the terms proper to be fixed, the rule in common use in European countries, and, so far as we know, which the companies everywhere, being free to act, observe among themselves, is to make a pro rata division according to mileage, after deducting terminal and other charges, should there be other charges, not equal15 borne by the several parties to the joint service. |