The Railroad Builders: A Chronicle of the Welding of the StatesMoody, John
History
The Railroad Builders: A Chronicle of the Welding of the States
Moody, John
Railroads -- United States -- History
Two facts presently gave great impetus to the movement; in 1886 the
United States Supreme Court, reversing its previous decision, decided
that no State could fix rates for railroad lines outside its own
borders, in other words, that interstate rates were exclusively within
the jurisdiction of the Federal authority *; and a Senate committee,
under the chairmanship of Shelby B. Cullom, conducted an investigation
of railroad conditions which made clear the need of immediate reform.
As a consequence, Congress passed the Interstate Commerce Act, which
received President Cleveland's signature on February 4, 1887. This
measure specifically made illegal rebates, pools, higher charges for
short than for long hauls (when the hauls in question were upon the same
road); it required railroads to file their tariffs, and it established
a commission of five members, who had powers of investigation, including
the right to make the companies produce their books. This commission
received power to establish systems of accounting and the like, but it
had no prerogative to fix rates. Inadequate as this measure seemed to
the radical element, it was generally hailed as marking the beginning
of an era in the Federal control not only of railroads but of other
corporations, and this impression was increased by the high character of
the men whom President Cleveland appointed to the first board.
* Wabash, St. Louis and Pacific Railway Company vs. Illinois, 118
U.S. 557.
The Interstate Commerce Commission lasted essentially in this form
for nearly twenty years. On the whole it was a failure. Such was the
judgment passed by Justice Harlan of the United States Supreme Court
when he remarked in one of his decisions that the commission was "a
useless body for all practical purposes"; and such, indeed, was the
judgment of the commission itself, for in its report of 1898 it declared
that the attempt at Federal regulation had failed. The chief reasons
for this failure, the commission said, were the continued existence of
secret rates and the fact that published tariffs were not observed. *
The managers of the great American railroad systems would not yet
admit that the fixing of railroad rates was the concern of any one but
themselves, and they still regarded railroad management as essentially
a private business. If they could obtain large shipments by granting
special rates, even though they had to do it by such underhanded ways
as granting rebates, they believed that they were entirely justified in
doing so. Thus rebates flourished almost as much as ever, passes were
still liberally bestowed, and pools were still formed, though they
sometimes took the shape of "gentlemen's agreements."
* But it should be added that the effectiveness of the commission
as an administrative and regulating body was diminished by decisions
of the courts, notably the decision of the Supreme Court in the maximum
rate case. See 160 U.S. 479.
Public-domain text, read in full here on John Shaqi.
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