390 



INTERSTATE COMMERCE LAW, THE. 



INTERSTATE COMMERCE LAW, THE. The Fed- 

 eral Government had never undertaken the 

 regulation of railway transportation until the 

 passage of the " act to regulate commerce," 

 which was approved Feh. 4, 1887. Laws had 

 been passed regulating it so far as it was con- 

 fined to the limits of individual States, some 

 of which were very comprehensive, while 

 others laid down rules of limited application 

 only ; and in several of the States there were 

 railroad commissioners or boards of transporta- 

 tion, possessing large powers. But, as the 

 scope of any State law or regulation was neces- 

 sarily limited to such transportation and traf- 

 fic as was wholly within the State, the great 

 bulk of the railroad business of the country 

 was left to such imperfect regulation as was af- 

 forded by the rules of the common law. Those 

 rules were wholly inadequate : they gave reme- 

 dies for such distinct wrongs as were known to 

 the common law, but they could not provide 

 for the conditions that new inventions and new 

 methods of doing business had introduced. To 

 a large extent, therefore, the managers of great 

 interstate lines of railway transportation were 

 a law unto themselves, not only as to the 

 methods in which their business was conducted, 

 but as to the charges for the services rendered. 

 Many abuses resulted; those that most at- 

 tracted public attention being discriminations 

 between persons and places in the facilities fur- 

 nished and in the charges made. Great num- 

 bers of persons were given free transportation ; 

 some of them for business reasons, some be- 

 cause they were supposed to possess political 

 or other influence that might be important to 

 railroad companies, some because they occu- 

 pied public places and claimed free carriage as 

 a perquisite. In the charges for the transpor- 

 tation of property, gross discriminations were 

 made; large customers being given rates that 

 put competition with them on the part of small 

 dealers out of the question, and tended to build 

 up monopolies in particular lines of business. 

 These special rates were often given through 

 the device of secret rebates, and, as both the 

 public and secrdl rates were changed at pleas- 

 ure, it was impossible that business should 

 adapt itself to them so that they should have 

 a proper and 'normal effect upon prices. In 

 many parts of the country, also, the railroad 

 companies made very low charges on long-haul 

 transportation, and very much higher charges 

 in the aggregate for a haul of like property for 

 a distance perhaps not half so great. These 

 were among the abuses that the act to regu- 

 late commerce was intended to remedy. 



The act provided for five Interstate Com- 

 merce Commissioners, and the President ap- 

 pointed Thomas M. Cooley of Michigan, Wil- 

 liam R. Morrison of Illinois, Augustus Schoon- 

 maker of New York, Aldace F. Walker of Ver- 

 mont, and Walter L. Bragg of Alabama. The 

 first-named was elected chairman, and the Com- 

 mission entered upon the performance of its 

 duties April 5, 1887. The passage of the act 



excited among railroad managers and some 

 classes of shippers great distrust and uneasiness. 

 It was supposed to have been conceived in a 

 spirit of bitter hostility to railroads, and some 

 of its provisions were thought to have been in- 

 tended to cripple their business and render it 

 unprofitable. Some classes of business men 

 also shared in this distrust, and they discovered 

 grounds for it in the fact that in some quarters 

 it appeared to be taken for granted that the 

 Commission would treat the railroads as pub- 

 lic enemies and curb and limit them in every 

 way possible. The result was that business 

 for a time was to some extent paralyzed, and 

 a letter from one of the consular agents in 

 Canada to the Secretary of State probably ex- 

 pressed a general truth when it said : " The re- 

 sult of the act has been most damaging, both 

 as regards imports and exports, and is severely 

 felt both by the buyers and sellers to and from 

 the United States." The immediate effect was 

 most severely felt by those roads which, as to 

 some of their traffic, charged less for the longer 

 than for the shorter haul of the like kind of 

 property. This was forbidden by the act, 

 when the hauls were on the same line in the 

 same direction and under like conditions and 

 circumstances; but the Commission was em- 

 powered to make exceptions. The transconti- 

 nental roads claimed that a strict application 

 of the statutory rule would ruin very much of 

 their business and be destructive of Pacific 

 coast interests, and the president of one of them 

 telegraphed to the Commission for an order 

 giving immediate relief. The Commission de- 

 clined to make any order until after a show ing, 

 on oath, of its necessity ; but, when the show- 

 ing was produced, orders were made not only 

 for the transcontinental roads, but for many 

 others, permitting a continuance of existing 

 rates for a limited period. This was done as a 

 provisional and prudential measure, that the 

 business of the country might not suffer more 

 than was absolutely indispensable while ques- 

 tions of construction naturally arising under 

 the statute were being considered, and carriers 

 were adapting themselves to the new condi- 

 tions. On June 15, 1887, the Commission filed 

 an opinion holding that orders of relief were 

 not essential ; that the prohibition to charge 

 more for the shorter than for the longer haul 

 only applied when the two were had under cir- 

 cumstances and conditions that were substan- 

 tially similar; and that every carrier must de- 

 cide for itself when this was the case, subject 

 to responsibility to the law in case of erroneous 

 action. 



Meantime, the railroads of the country had 

 been revising their tariff-sheets in order to 

 bring them more generally into conformity 

 with the "long- and short-haul clause" of the 

 act, and this has now so far been accomplished 

 that, in large sections of the country, no in- 

 stances occur in which more is charged for a 

 shorter than for a longer haul of the like prop- 

 erty over the same line and in the same direc- 



