It is hardly necessary at this time to call special attention to the practical importance to every member of the community of the charges made by the railroads. To the vast majority these charges are an important part of the cost of their food; it is in the power of the great trunk lines, except where the law can restrain them, by an increase of rates to cause a famine as serious as would be caused by a complete failure of the crops. And to a great number of our people,-to the great farmers of the interior, to the ranch men of the plains, to the planters of the South, to the manufacturers of the seaboard, and to the millions of their employees who are dependent upon their prosperity, railroad charges are of greater immediate importance. The railroads, if unrestrained by law, can prosper or can ruin them; they can build up a great and flourishing business, or they can turn an industrious city into a wilderness again. That power such as this should be the subject of legal restraint is inevitable; that the legal qualities and limitations of such restraint should be of the greatest interest to the profession and to the people at large is clear. From the earliest times some restraint has been exercised over such lines of industry as are of vital interest to

* Copyright 1915, by Bruce Wyman, being in large part extracts from the introductory matter to the Second Edition of Railroad Rate Regulation, reprinted here simultaneously with its publication by the kind permission of Baker, Voorhis & Co., New York.

the public. The protection of the weak against the actual physical violence of the strong is the fundamental function of government in the modern sense; but of equal importance and of almost equal antiquity is the protection of the common people against the greed and oppression of the powerful.

II.

At the time of the beginning of the railroads every inducement was held out by the authorities of the State to those who would devote their capital to construction of these highways. In the early charters the legislatures not only often permitted profits which to-day would seem incredible, but gave exclusive franchises to protect the proprietors in getting the returns expected. After some experience with this policy, however, the legislatures began to grow cautious about granting exclusive rights for railroad construction; for it was felt, in accordance with the theory of political economy then in vogue, that competition would protect the public in all contingencies. This policy of laissez faire had hardly been developed when it was discovered that not only did unrestricted railroad building produce wastes costly to all concerned, but that the inevitable end of all such competition was a combination of some sort, which would almost inevitably result in higher rates. There followed a period of legislative control by direct action, rates being drastically reduced by popular clamor; but it turned out that much of this legislation was so ill advised as to practically bring the business of transportation to a standstill. Not until what may be called our own time has it been discovered that although control was necessary it could be better exercised by commissions given jurisdiction to deal with particular problems upon general principles enounced by the legislature. Only recently, therefore, has it generally been appreciated that an administrative body with its elasticity of procedure can do more to protect the public than any judicial tribunal with its inherent limitation to private litigation.

The passing of the Act to Regulate Commerce by the Congress of 1887 marks the beginning of an epoch in the exercise of the power of the federal government over interstate commerce. Before that time the control of the conduct of commerce between the states granted to the nation under the constitution had been by legislation, taking effect directly by force of its provisions upon the matters within its scope. A fundamental change was

wrought by the establishment of a body of experts to effect the administration of a statute by deciding whether its general provisions were so applicable to particular facts as to call for action of the government. The constitution of the Interstate Commerce Commission in 1887 marks the beginning of federal regulation in this intimate way by delegated power of the businesses affected by a public interest subject to the jurisdiction of the national government. It had been worked out into practice in the state governments to a certain extent during the preceding decade; and there had been some experience with railroad commissions with powers over intrastate transportation. But as to interstate transportation it was doubtful on the decisions of the courts whether there was any duty resting upon the railroads to make their charges reasonable and equal to all shippers. At all events, if there were such duties in respect to interstate transportation it had become abundantly clear by 1887 that the cumbrous process of accidental suits by private parties constituted no real check to stop the railroads in extortionate charging, mitigated only by competition at junction points, and outright rebating, practiced openly to get business. Settling beyond question the law against such dereliction in the duties owed by the railroads to the public was requisite, but even more necessary was the establishing of a body specially charged with the enforcement of these rules of law.

In tracing the rise of commission control of railroad operations by the federal government one ought really to go back at least as far as the English Railway and Canal Traffic Acts beginning in 1854, and the railroad commission laws passed in many of the states beginning in 1867. Congress in framing this Act to Regulate Commerce in 1887 laid down in the first four sections certain general rules: first, that charges must be reasonable; second, that there should be no more discriminations between shippers; third, that there should be no undue preferences between localities; and fourth, that no less should be charged for a long haul than for a short haul included within it. The phraseology of these provisions was obviously in the language of some earlier provisions of existing statutes, and consequently the interpretation which the courts of those jurisdictions had already put upon the form of language used has, by a familiar canon of statutory construction, been held to be persuasive in later decisions of the courts interpreting the powers of the Commission under the Act. The limited extent of the scope

of the jurisdiction of the Commission established by the Act originally is to be noted. It extended only to carriers by railroad engaged in interstate and foreign commerce; it did not cover carriers by water unless operated under the control of a railroad; and even now it does not cover port to port business as such. And as to railroad service itself, the Act did not go far toward including services incidental to carriage by rail, which have since been found so necessarily involved with it as to make the supervision over them by the Commission provided in later amendments indispensable.

The original Act went no further than to give the Commission the power to investigate alleged violations of the Act and to make orders thereon; and jurisdiction was given to the courts to act in support of such orders. Generally speaking, there was no idea of giving the Commission anything but supervisory power over the railroads; the Commission was primarily established by the Congress as an investigating body. It did have powers, however, in addition to conducting general investigations, to hear particular complaints; but in respect to such complaints, it had no powers of its own to grant relief. The most that the Commission could do was to make findings on such complaints, and its report thereupon could be used as prima facie evidence in proceedings in the courts based upon the wrongs alleged. However, the railroads in these subsequent proceedings, which were virtually regarded as de novo, put in any evidence they had, and it was more or less of a scandal that the railroads showed very generally a disposition in important cases to withhold much of their evidence from the Commission and produce it before the courts, with the result that the courts would very frequently come to a different conclusion from that which the Commission had announced.

III.

It was found from the very outset, that the Commission had not been given in this legislation of 1887 the equipment to carry out the objects for which it was created, moderate as these were in their purpose. The Commission was particularly charged with seeing whether rates were reasonable in themselves, and whether rebates were being given; but the carriers were not required to file their schedules of rates so that it could be known how matters stood, and what was being done. Moreover, although the duty to investigate conditions and report thereon was imposed upon

the Commission, its powers to call witnesses and elicit testimony were by no means sufficient for the purpose. The Amendments of 1889 and 1891 were, therefore, necessary to clear things up in these two respects, if the Commission was to have any real power to accomplish the objects for which it was created. In 1903 the so-called Elkins Act was passed to perfect the Act. In the first section carriers in interstate commerce are made criminally responsible for violations of the Act. In the second section provision is made for bringing into any proceeding before the Commission all carriers or other persons interested in the inquiry. In the third section jurisdiction is given to the courts sitting in equity, at the request of the Commission, to inquire into and enjoin any infraction of the provisions of the Act. These suits are prosecuted by the District Attorneys under order of the Attorney-General, and do not preclude suit by private persons. And provision has since been made for speedy trial by expediting such suits.

It seems to have been undoubtedly the intention of the framers of section 4, the long and short haul clause, to forbid absolutely the practice of charging more for a shorter haul, unless upon application to the Commission express permission so to charge was given. The section, however, was a matter of contention between the two houses of Congress, and as it was finally passed the qualifying phrase "under substantially similar circumstances and conditions" was inserted, without probably any very clear belief that the meaning of the section was thereby fundamentally altered. At first the railroads acted upon the supposition that express permission of the Commission must be obtained according to the proviso in the section, if a greater charge was to be made for the shorter haul, and this seemed to be the view at first taken by the courts. The philosophy of the Act was that competition would reduce the rates to a fair amount at all competitive points, and that the fourth section would then keep the rates at non-competitive points down to the level of the competitive rates. The courts, however, finally decided, in view of the limitation of the section to cases where the conditions were substantially similar, that competition with other carriers would justify a lower rate for the longer haul; and as practically all cases of the sort before the passage of the Act had been due to the competition of other carriers, this decision in effect nullified the whole section, until, as will be seen later, its force was restored in 1910 by amendment to the Act.