March i6, 1888.] 



SCrKNCE. 



127 



ONE YEAR OF INTERSTATE COMMERCE CONTROL. - 

 WHO IS THE GAINER? 



Just one year ago the government laid the iron hand of a Bis- 

 marck upon the railways of this nation, their procedure, tariffs, and 

 particulars, under guise and pretext of a provision of the Constitu- 

 tion, framed at a time when railways were unconceived of in the 

 brain of man, and when the only possible object of that provision 

 must have been to prevent internecine commercial hostilities or dis- 

 criminations among the States. Who has been benefited ? The 

 best evidence attainable ought to be the statement of the commis- 

 sion appointed to administer the statute taking control of the rail- 

 ways. In this first annual report the commission says (the Italics 

 are ours), " The Act to regulate commerce has now been in opera- 

 tion nearly eight months. ... It has operated directly to increase 

 railroad earnings, especially in the cutting-off of free passes on 

 interstate passenger traffic. . . . Freight traffic has been exception- 

 ally large in volume, . . . no destructive rate wars liave occurred, 

 but increased stability in rates has tended in the direction of stabil- 

 ity in general business." In other words, then, it is the railway 

 companies which have been benefited. 



But this was not the object of the statute. The railways had not 

 complained of ill treatment. They had, indeed, recognized the im- 

 mense complications of competing systems, the damage suffered by 

 the people from the rate wars and unjust recoupments for the ex- 

 penses thereof, and had themselves provided a remedy by the es- 

 tablishment of so-called ' pools ; ' which, however, the Act of Inter- 

 state Commerce promptly and peremptorily abolished. It is 

 something of a commentary on the words we have put in Italics 

 above, that whereas, at the date at which the statute took effect, 

 the situation was tranquil and satisfactory (the ' pools ' having low- 

 ered rates to a minimum never reached before), the passage of the 

 Act sent tariffs upward at a bound ; and before the report above 

 quoted had left the binder's hands, a rate war began in the West 

 whose bitterness has, so far, surpassed in violence any ever known. 

 At this writing the companies engaged have lost, and are daily losing, 

 millions, until several of the roads involved have ceased to solicit 

 freights, because to do no business is cheaper than to move their 

 trains for unprofitable transportation. And it will not fail to add 

 comment to commentary, that while this very Interstate Commis- 

 sion has been sitting calmly at Washington, dismissing trivial com- 

 plaints against great trunk-railway systems, the ironclad statute 

 which creates it forbids these very warring railways from warding 

 off bankruptcy by coming together, pooling their issues, and termi- 

 nating the battle which is sapping their resources. Next July the 

 semi-annual dividends will be found adjusted to this rate war, and 

 so the people of the United States will pay all the bills ; and the 

 railways, relieved of their burdens, can go on again. But such re- 

 lief will clearly only be temporary as to them, with the prospect of 

 more wars and more bills for the people to pay. Meanwhile the 

 statute of interstate commerce continues to centralize without ad- 

 justing, or attempting to adjust, the larger problems, while carefully 

 hearing and writing opinions as to the least of minor and local par- 

 ticulars of which individuals believe themselves warranted to com- 

 plain ; and this, although the statute itself expressly empowers the 

 commission to take jurisdiction of its own motion, and in the ab- 

 sence of any actual complaint whatever (on grounds of public pol- 

 icy, no doubt ; but, upon whatever policy, an opportunity just now 

 very carefully overlooked by this honorable commission). 



By the time this paper appears in print, the warring railroad compa- 

 nies will probably have come together in ' conference,' ' committee,' 

 or ' synod,' and terminated the ruinous battle I have above alluded 

 to. Only (in deference to the statutes of united Germany, and the 

 Bismarck policy whose spirit has materialized among us in the 

 shape of an interstate commerce law), whatever they call it, they 

 will be mighty careful not to call it a ' pool.' 



But why should the interstate commerce statute be operated to 

 favor the railroads ? Such were not the reforms sought. The Inter- 

 state Commerce Act was the concentration of popular forces, which 

 had for years fought railway incorporations in our legislatures and 

 in our courts : the crystallized expression of fifty years of popular 

 discontent with railway management throughout this Republic- 

 The people looked to the first utterance of a commission created to 

 administer it, for arraignment of the wrecked railways for their 



disregard of popular rights, their high-handed indifference to law, 

 and their supercilious contempt for the non-railway element in the 

 community, that should be scathing in its terms, and triumphant 

 in its justification of the government's constitutional right to assume 

 control of a private interest, and to take the first step toward that 

 centralization which Washington deprecated in prospect, which 

 Jackson scotched in its birth, and from the possibility of which a 

 bloody and costly civil war was supposed to have finally relieved. 

 Nor was it mere aimless legislation. The experiment of biennial or 

 even triennial legislatures in some of the States, as tending to de- 

 crease the volume of legislation, has always been found to work well. 

 The volumes of session laws of our States are, as to their bulk, apt 

 to become mostly lumber in a surprisingly short time, the number 

 of statutes whose usefulness will survive the first few years of their 

 passage being found a surprisingly small one. And even of our 

 National Legislature it can be fairly said that the more time it 

 wastes, the greater the nation's gain. But the interstate commerce 

 law was no product of mere zeal, or temptation to legislate on gen- 

 eral principles. It was the offshoot of sentimental prejudice and 

 jealousy, no doubt ; but its fathers and advocates in Congress can- 

 not be suspected of having been actuated by either motive. The 

 vastness of the nation's growth for half a century had rapidly made 

 railroads into systems. The immensity of the plants, the accumu- 

 lation of costly rolling stock, the huge volume of business, could 

 not fail to impress the people with a sense of power not proceeding, 

 like the power of the government, from the consent of the governed — 

 from themselves. The enormous operations carried on daily in the 

 people's eyes suggested enormous profits, and engendered popular 

 discontent. These enormous operations necessitated new channels 

 and feeders ; that is to say, new railways. To save time, the in- 

 genuity of the nineteenth century had devised construction com- 

 panies, which, by subscribing for the capital of these new roads, 

 should obviate the slow and tortuous collection of money by private 

 solicitation ; and these, centralizing profits as well as subscriptions, 

 massed wealth in localities, and attracted the popular envy. The 

 boundlessness of all these brought great bankruptcies for courts to 

 deal with ; and the result of each was the inevitable wrecking of 

 great corporations, and the private accumulation of wealth in the 

 hands of the winners in these legal fights. No sooner was this the 

 situation than a new problem intruded itself upon the already com- 

 plicated maelstrom. The movement known in Europe indifferently 

 as internationalism, socialism, or nihilism (where it grew originally 

 from the discontent of the constantly enlightening and self-educat- 

 ing masses at the support in opulant idleness of privileged classes, 

 useless courts, and — to the people — always absolute monarchies) 

 was utilized to express among us the popular envy, discontent, and 

 prejudice against corporations it felt in Europe only against kings ; 

 and the result was felt in strikes, trade-combinations, and central 

 labor unions, where one trade supported another, and each all, in 

 abandoning work by the thousands and ten thousands at one and 

 the same time. Underlying all this was, of course, the capital fact 

 that the railway industry itself was not at fault ; was not respon- 

 sible for the shrewdness of the Wall Street operator : for intentional 

 defaults in dividends and interest procured for wrecking purposes: 

 for the huge competition and the closeness of margins which put 

 them at the mercy of a single disastrous season. The president of 

 a great railway recently asserted, in answer to a demand from the 

 company's employees for higher wages, that in twelve years his 

 company had not only not netted a dollar, but had actuallv mined 

 and distributed 51,000,000 tons of coal at a cost of $51,000,000, and 

 paid $53,000,000 for the privilege ! The margin of profit had dis- 

 appeared entirely in the giant competition of American railway 

 companies, which yet had given, and was daily giving, support to 

 almost a tenth part of the people of the United States. 



But great economic facts like these, like great investments, lose 

 strength by their very immensity. The laborer working ten hours 

 a day, six days in the week, with a family of ten children clamoring 

 for food, cannot be approached with figures showing, that, out of a 

 hundred millions of income, his employer had not been able to re- 

 serve one ten-thousandth per cent ; that the private fortune amassed 

 by one man in railway wrecking was the crystallization of ruinous 

 losses to thousands of smaller capitalists not of the working-men ; 

 that the plant of the great corporations had been paid for b\- the 



