718 



PUBLIC DOCUMENTS. 



only right, but the sacred duty of Congress, to inter- 

 fere by prescribing needful rules and regulations for 

 the conduct of this traffic through those States 1 If 

 the power does not reside in Congress, it is nowhere. 

 The aggrieved States could do nothing, and the peo- 

 ple of one-half the Union might starve, while the 

 other half with overflowing granaries would be denied 

 the privilege of feeding them. It is true this is a 

 strong case, but its circumstances would, change no 

 principle of the Constitution ; its hardships and ag- 

 gravations would create no new powers. If the 

 power be in the Constitution, it exists at all times. 

 If it exist for the purpose of relieving the people of 

 the States in the aggravated case supposed, it exists 

 for all purposes connected with interstate commerce. 

 The circumstances do not call it into life, though they 

 may demonstrate the necessity for its existence and 

 the policy of its exercise. 



Assuming, for the present, that the power of Con- 

 gress is ample to regulate rates and fares on railroads 

 engaged in interstate commerce, let us briefly inquire 

 as to the practicability and expediency of its exercise ; 

 the extent to which with our present limited infor- 

 mation on the subject it may be safely exerted, and 

 the results probably attainable thereby. 



In several of our own States, and in nearly all the 

 countries of Europe, legislative regulation of rates 

 and fares has been tried in almost every form, but I 

 have yet to learn that such experiments nave resulted 

 in a material reduction of charges. 



In England, to whose railway system ours corre- 

 sponds more closely than to that of any other nation, 

 tno subject of regulation has been discussed for more 

 than a third of a century, and experimented upon by 

 Parliament in almost every conceivable form. Com- 

 menting on these experiments, the Massachusetts Bail- 

 way Commissioners say : 



Nowhere has tbe system of special legislation been 

 more persistently followed, and nothing, it maybe added, 

 could have been more complete than its failure. As the 

 result of forty years' experience, reviewed in the recent 

 elaborate report of the joint committee on amalgama- 

 tion of railways, it may be said that the English legisla- 

 tion has neither accomplished any thing it sought to 

 bring about, nor prevented any thing which it Bought to 

 hinder. 



In Ohio, where the system of direct regulation has 

 been tried for several "years, the Kailway Commis- 

 sioner, in his report for 1873, says : 



It is unnecessary here to reiterate the experience of 

 Ohio, or the results of the numerous and persistent ef- 

 forts of her Legislature to fix upon some practical and 

 equitable law governing this matter. The report of this 

 office for 1869 gives a list of nine distinct rates authorized 

 by law for the transportation of passengers and freight. 

 The several acts since passed, and labored attempts each 

 session to devise some system by which rates can be just- 

 ly regulated by law, have failed, as in the past, to accom- 

 plish the object desired. 



In his report for 1870 the Commissioner says : 



There is not a railroad in the State, whether operated 

 nnder a special charter or the general law, upon which 

 the laws regulating rates are not in some way violated 

 nearly every time a regular passenger, a freight, or mixed 

 train, passes over it. 



The railway commission of Massachusetts, after a 



thorough investigation of this subject, embracing the 



railway systems of foreign countries, and the various 



attempts at regulation in the United States, pronounce 



legislative regulation of rates and fare impracticable, 



/ and recommend " the control and regulation of tfie 



1 whole, through the ownership and management of a 



. part." 



The parliamentary committee of 1872, after elabo- 

 rately reviewing all the various modes of railway reg- 

 ulation that have been proposed and tried in Great 

 Britain, many of which correspond with those on 

 which reliance seems to be placed in this country, 

 state their conclusions, drawn fronj forty years' ex- 

 perience, as follows : 



" Equal mileage rates " they pronounce " impracti- 

 cable." 



" Rates to be fixed by relation to cost and profit on 

 capital " they dismiss, because " attended with diffi- 

 culties which are practically insuperable." 



" Immediate reduction of rates," they say, " would 

 be merely a temporary remedy, for the reason that a 

 change which will give the company ample profit to- 

 day may, through increased economy, or other cause, 

 be excessive to-morrow." 



" Periodical revision of rates" is declared to be "in- 

 expedient and impracticable." 



*' Absolute limitation of dividends" is pronounced 

 " impossible and undesirable." 



" Divisions of profit "beyond a certain limit between 

 companies and the public " they reject, because at- 

 tended with " insuperable difficulties." 



" Maxima rates," they say, " will effect but little, if 

 any, reduction, because the actual legal maxima are 

 rarely charged in the case of goods; as is evident from 

 the existence of special rates/ and in the case of pas- 

 sengers, the present action of the companies in carry- 

 ing third-class passengers at parliamentary fares by 

 all their trains shows now impossible it is for Parlia- 

 ment, or any other authority, to determine a scale of 

 maximum charges which shall continue to be fair and 

 liberal to the public under changes of time and cir- 

 cumstances." 



Each and all of these modes of regulation have their 

 advocates in this country who confidently rely upon 

 them to reduce the cost of transportation. Let us ex- 

 amine them with reference to the practicability and 

 expediency of their adoption by Congress. I assume 

 that a general law of Congress regulating railway 

 transportation, to be successful in the accomplish- 

 ment of the desired object, must operate fairly and 

 justly upon all, and that, while it protects the public 

 from undue exactions, it must also guard the equitable 

 and just rights of stockholders who have honestly in- 

 vested their money in railroads. Any thing short of 

 this would shock the sense of justice and fair play 

 which distinguishes the American people, and hence 

 would prove a failure. 



1. Equal mileage rates. The reasons upon which 

 this form of regulation is pronounced " impracticable " 

 in England apply with much greater force in the Uni- 

 ted States. 



Our roads are much longer. Their circumstances 

 and condition are less uniform. The difference in 

 cost of construction and expense of working different 

 sections of the same road is greater. There is less 

 uniformity in the amount of business on different 

 roads, and on different sections of the same road. 

 A rate that would ruin one road costing $100,000 per 

 mile would be excessive on another that cost only 

 $25,000 per mile, if the amount of business on each 

 be the same. On the other hand, the more expensive 

 road could, with a sufficiently large amount of busi- 

 ness, make a profit at rates which would be ruinous 

 on the cheaper one with a small amount of business. 

 And, even on the same road, a rate that would be ex- 

 cessive on one section would not pay the running ex- 

 penses on another section. It would be maniiestly 

 unjust to require local freights passing over a given 

 number of miles, costing $1,000,000, to pay the same 

 rate per mile that other local freights pay for car- 

 riage over a like distance, on the same road, which 

 cost $5,000,000. Distance, also, is an important ele- 

 ment in the economy of railway transportation, but 

 it is not the only one, nor is it in fact always the 

 most important element. Extortionate charges _ for 

 short distances, and unjust discriminations _ against 

 certain points, afford good ground for complaint, and 

 doubtless demand a remedy, but that remedy, to be 

 effective, must be based upon sound principles. It is 

 a fact susceptible of the clearest demonstration, that 

 it actually costs more per mile to transport a short 

 distance than a long one ; and this principle has re- 

 ceived universal recognition by railway managers. 

 In Belgium, where, through state management, the 



