Rl
Conservative *
bag. It is the first time any intimation
has been given as to how a power to
reduce rates could be used to stop re
bates. And it amounts to this : that
instead of going at the rebate-pay ing
line by the infliction of penalties and by
peremptory mandamus to compel it to
take all business on the same terms , the
promoters of this bill propose to punish
all the honest lines in order to hurt the
one that is guilty !
"The fact is that the prevention of
rebate-paying would be greatly assisted
by the repeal of the fifth or anti-pooling
section of the law. This is a matter of
expert knowledge , upon which there is
no disagreement among experts. As
was well said by President Hadley , 'It
may be stated as a fact of history that
no nation has succeeded in prohibiting
discrimination and pooling at the same
time. ' Section 5 of the law was simply
a "blunder. If your friends want to
know how track buyers of wheat can be
protected , let them study the situation
which exists where railroads contract
with each other for the equitable appor
tionment of traffic.
"In the transportation service the
cheapest is by no means necessarily the
best. The true desiderata are efficiency
in operation together with stability and
equality in price. It is therefore a re-
quirument of law that the rates of com
mon carriers shall be alike to all.
"Whatever tends to effectuate this
requirement is desirable ; whatever tends
to break it down ( as does the fifth sec
tion of the law ) is undesirable. Every
man has a right to know the rate paid
by his neighbor , and to enjoy the same
rate himself ; fluctuations in tariffs are
also harmful to business interests.
"Thus we see why agreements among
railroads to maintain legally established
and reasonable rates differ from combi
nations to support prices in other
industries. The people do not want
fixed prices upon merchandise ; they
believe conditions are best when they
can buy the products of the farm , the
mine , the factory and the packing
house at the lowest price in an absolutely
open market. But in the business 01
common carriers and other public or
quasi public services , the people properly
demand a fixed price , the same to all.
"Whether or not section 8 may now
be called nugatory depends upon entirely
different considerations. We here leave
the domain of mathematics and enter a
region controlled by theoretical priii
oiples of justice , where men will always
disagree in their application to particular
cases. The section in full is as follows
" 'That it shall be unlawful for any
common carrier subject to the provisions
of this act to make or give any undue or
unreasonable preference or advantage to
any particular person , company , firm
corporation , or locality , or any particular
description of traffic , in any respeo
whatsoever , or to subject any partioula
person , company firm , corporation , or
ocality , or any particular description of
iraffio , to any undue or unreasonable
irejudico or disadvantage in any respect
whatsoever. '
"Most of the important rate contro
versies under the law have arisen under
his section. This will be the case for
all time. Every shipper imagines that
his rate situation might bo improved ,
and cudgels his brain to find some basis
'or ' the claim that some other shipper or
ocality or description of traffic is more
favorably treated in thetariffs. . Claims
of this character are constantly arising ,
and will never cease to be presented.
Some of them are well founded. Hun
dreds of such claims have been adjusted
since the enactment of the law through
; he agency of the commission , either
nformally by correspondence or after
learing upon formal complaint. Mean
while thousands of similar cases have
Deen adjusted by the carriers themselves.
This work is constantly going on. The
principle laid down in this section of the
.aw is continually appealed to , and its
justice as well as its authority is con
stantly recognized. Shippers hastily
assert that the section is nugatory when
bheir personal grievances are not
promptly corrected , but its authority
lias been thoroughly established by court
decisions , and every day witnesses its
application and enforcement somewhere
and in some form.
"The variety of cases which section 8
controls is infinite. Let us consider a
few concrete cases as illustrations of
what is involved and what the law can
do. I think that no violation of section
8 exists that can be proved to the satis
faction of a court , which that court can
not and will not promptly correct. In
any case of demonstrated infraction oi
Sec. 8 ( and Sec. 4 as well ) the federal
court can issue its injunction requiring
the undue preference ( or the violation
of the short-haul rule ) to cease abso
lutely and immediately. By this I do
not mean that the court has an unquali
fied power to prescribe the manner in
which the correction shall be made
( though usually it would amount to thai
in practice ) , but it has ample jurisdio
tion to define the undue preference or
the unreasonable disadvantage and to
require that it shall be corrected.
"For example , the commission con
sidered a case where it appeared tha
the rate on railway ties was 25.18 cents
while the rate on other lumber was only
12 cents , and where it was evident that
the rate on ties was intended to be pro
hibitory against the shipment of ties
away from the line of the road in ques
tion. The commission believed this was
unreasonably prejudicial to shippers o
ties and so reported. The railroad a
once reduced its rate on ties. If it had
not done so , the court could have en
joined the continuance of the undue
preference , which the road would then
be obliged to correct either by advancing
iho rate on lumber or by reducing the
ate on ties. As it could not advance its
umber rate to 25.18 without losing a
argo section of its traffic , it would have
o reduce its tie rate.
"So also in the case of relative rates
upon wheat and flour ; the court has
) ewer to make an order enjoining the
continuance of the unreasonable dis
advantage of which American millers
complain , which would compel a parity
of rates if the court so required , or the
establishment of a reasonable differen-
ial , if so adjudged.
"In all cases of this character the
remedy is with the courts , and is close
at hand. It does not take over twenty
days to get a preliminary injunction
order , if a. prima facia case can be made
out. This is the method prescribed in
; ho act for regulating the maladjustment
of relative rates. The jurisdiction of
the courts has never been minimized by
any decisions whatsoever. It is fully
available today and has always been
open to every shipper. How then can it
be charged that Sec. 3 is nugatory ?
"We find , then , that neither sections
1 , 2 or 8 can in any proper sense be
called nugatory at the present time , nor
lias the jurisdiction of the court to
enforce them become in anywise in
operative.
"Section 4 , the famous short-haul
clause , is also far from being nugatory.
This was the most prominent provision
of the law in the early days of its ad
ministration , and rates were changed in
all parts of the country in order to bring
them into conformity with the intent of
the section as expounded by the com
mission in the Louisville & Nashville
case. In the making of tariffs at the
present time this section is kept con
stantly in view and is universally
observed , except in cases where the
carriers believe themselves to be justified
in making exceptions by reason of differ
ing circumstances and conditions.
"The original interpretation of this
section by the commission has been fully
sustained by the supreme court. It is
true that a few years later the commis
sion changed its construction iix a single
particular , which the court afterwards
disapproved ; but it is absurd to say that
this decision made the section nugatory.
"Section 7 also is in full force and is
universally obeyed. The carriage of
freight is continuous and undelayed
throughout the United States from every
place of shipment to every place of desti
nation. No complaint of violation of
this wholesome provision has been
heard.
"We have thus examined every de
claratory section of the law and have
entirely failed to find any justification
for the charge that the statute is nuga
tory. The allegation that it has been
made nugatory by 'certain court decis
ions' therefore wholly falls to the
ground. "
