assessed $5 per car per day for detention of cars beyond a 24-hour freetime period granted for loading and unloading. Other carriers from time to time made individual efforts to enforce payment of demurrage. Demurrage rules and charges were not always published in tariff form but were published in freight classifications, car-service rules, rate schedules, special circulars, so-called billing instructions, or bills of lading forms.

Because of keen competition between carriers, the lack of uniformity in rules and charges, and the practice of rebating (see American Warehousemen's Assn. v. Illinois Central R. Co., 7 I. C. C. 556, at p. 562), the situation became chaotic. In an attempt to remedy that situation numerous "car service associations" were organized, the first appearing in Omaha in 1887, each, however, having its own code of rules. In some of the early cases the question was whether the railways could use these associations as agents, or ratify their determinations. The courts sustained their use. Prior to 1887 it was the practice of many shippers, particuarly at important terminals, to hold cars as long as suited their convenience. Such use of cars as warehouses tended to cause congestion of terminals, deprived a carrier of equipment needed to meet the constant demands of other shippers, and increased its cost of operation. Primarily to stimulate the prompt release of cars, which would facilitate traffic in general and be a practicable solution of the evil, demurrage was assessed. In 1887, when the Commission was created, such demurrage rules as existed were confined largely to the important terminals.

To date the Interstate Commerce Commission has issued 566 reports which dealt with some aspect of railway-car demurrage. The first of these, Riddle, Dean & Co. v. Pittsburgh & Lake Erie R. R. Co. (1 I. C. C. 374, 391-2), was heard in December 1887, and was decided on January 14, 1888.

It there appeared that the Pittsburgh & Lake Erie during a period of car shortage had

done all in its power to enforce the prompt unloading of these cars (i. e., loads of ore, limestone, and iron, also coal and coke) by making a rule that 24 hours of daylight, and no more, should be allowed for the unloading of its cars, and when more than this was taken, unless good excuse was shown for it on the part of the consignee, demurrage was charged.

In addition to using all means it could to have its cars unloaded promptly:

It frequently went to the extent of shutting off mines and mills because they did not load and unload its cars promptly.

These efforts were held to be sufficient excuse for a preference or prejudice in favor of such shippers, as against the complainants-owners of coal mines-who were not obtaining cars to meet their orders for placement.

The Railroad Commissioners of Iowa, a few months before, December 5, 1887, had decided that the rule of the Chicago & North Western Railroad Co. imposing a charge of $3 per day after 24 hours was reasonable. The commissioners were confronted with an extreme situation: Shippers were facing financial dishonor because the company was unable to furnish them cars, and this "affected businessmen, farmers, and all classes seriously. Hundreds of complaints were being pressed based on this situation. The sole question was stated

as being a matter of judgment: How long a consignee should be allowed the use of a car without payment. The demand was considered an element in determination. The case, it was stated, was probably extreme. Under conditions as stated, the board believed that 24 hours after placement in an accessible position, and the consignee notified, was a reasonable time for unloading (D. Rothschild & Co. v. Chicago & N. W. Ry. Co., 1887 Ann. Rep. Railroad Commrs. of Iowa, p. 783).

The early cases, both court and commission, are reviewed in Miller & Co. v. Georgia Railroad & Banking Co. (88 Ga. 563, 18 L. R. A. 323), decided December 7, 1891, and in Norfolk & Western R. Co. v. Adams, Clement & Co. (90 Va. 393, 22 L. R. A. 530), and note collating additional authorities.

The fact is that demurrage does not seem to have become a matter of much moment, save in isolated cases, until close to the beginning of the last decade of the 19th century. When the question of the legality of the practice got into the courts, the initial tendency was to refuse to sustain demurrage charges, in the absence of a contract between the carrier and the shipper. This was in analogy to the British theory of admiralty law, which denied a lien for ship demurrage in the absence of a special contract. However, the American courts departed from the British precedent, and imposed such a lien for ship detention.

After some sporadic refusals by certain State courts to enforce a lien for demurrage for detention of railway cars (Chicago & N. W. Ry. Co. v. Jenkins, 103 Ills. 588, May 12, 1882; Burlington & M. R. Co. v. Chicago Lumber Co., 15 Neb. 391) the tendency was reversed, and the courts began what has since proven to be an unbroken line of cases, in which the imposition of a reasonable charge for detention after a reasonable period for loading or unloading had been afforded. The courts undertook to pass upon both the reasonableness of the period and the reasonableness of the rate of charge. In passing it is noticeable that the controversies chiefly related to demurrage after placement for unloading, not for loading. The authorities are reviewed in the Georgia and Virginia cases referred to.

Let me interpolate that it is somewhat interesting that none of the text writers, such as Charles Francis Adams and others, seems to have discussed the question of demurrage at all. Apparently it was not a live enough subject in those days for them to give consideration to it, and you will not find among textbooks on carriers as of that time any discussion of demurrage.

Following the Riddle, Dean Co. case until the enactment of the Hepburn Act, but seven cases were decided by the Interstate Commerce Commission which referred to the subject of car demurrage. I mention that to contrast it with the hundreds which have come since. In Macloon v. Chicago & N. W. Ry. Co. (5 I. C. C. 84), decided January 12, 1892, the Commission held to be unreasonable a refusal of the carrier, after payment of freight and customary switching charges, to switch for delivery to a consignee unless he promised in advance to pay any demurrage charges that might be made, regardless of whether they were just or legally enforceable. The consignee had disputed and refused to pay demurrage claimed on certain cars pre

viously delivered to him. In this case the language of the bill-oflading condition is interesting:

All carload freight shall be subject to a minimum charge for trackage and rental of $1 per car for each 24 hours detention or fractional part thereof after the expiration of 48 hours from its arrival at destination.

The reasonableness of this clause was not questioned before the Commission, and expressly was not decided.

In American Warehousemen's Assn. v. Illinois Central R. Co., (7 I. C. C. 556, 561), the Commission summarized the rules for loading as providing a period of―

24 hours or other short specified time, under penalty of a demurrage charge for detaining the cars, which is in most cases $1 for each additional day or fraction thereof; and a similar regulation is applied to the unloading of cars by consignees on train tracks or private sidings.

The Commission pointed out the disturbing effect of the "waiver" of the rules and nonenforcement, and it appeared that on some roads no waiver was refused when applied for. In this case the Commission held "storage" schedules were required to be filed under section 6 of the act to regulate commerce, and this was followed by a general order, February 8, 1898, requiring publication and filing as schedules.

In Pennsylvania Millers' State Assn. v. Philadelphia & R. Ry. Co. (8 I. C. C. 531, Oct. 8, 1900), the Commission asserted its jurisdiction to inquire into the legality of the practice of charging demurrage, and, if necessary, to forbid a continuance thereof. The Commission by its findings undertook to secure 48 hours net for unloading grain in the Philadelphia area, after placement and due notice, and condemned a circular, not mentioned in the tariffs, which gave additional time to that allowed in the rate schedules filed.

In Glade Coal Co. v. Baltimore & O. R. Co. (10 I. C. C. 226, 238), after reciting that the demurrage on coal cars involved was at the rate of $1 per day or portion thereof after free time allowed, which "varies according to the character of the traffic loaded, but is never less than 24 hours," the Commission said:

When a carrier has more cars than it needs this charge is more than sufficient, but when it has not as many as the business of its patrons requires the charge is ́less than sufficient, to compensate the carrier for the use of the cars so detained. The reasonableness of the period and of the charge were not determined.

In St. Louis Hay & Grain Co. v. Chicago, B. & Q. R. Co. (11 I. C. C. 82, 89), the reasonableness of demurrage charges was not passed upon, although in issue. The first case in which the legality of the demurrage charge was squarely presented was T. M. Kehoe & Co. v. Charleston & W. C. R. Co. (11 I. C. C. 166), decided August 15, 1905. The report was by Commissioner Prouty. In the southeastern territory all of the carriers had in force car service rules which allowed 48 hours free time, and a demurrage charge of $1 per day thereafter. Between themselves the carriers had an interchange charge of 20 cents per day. The Commission said:

A railroad company is a common carrier. Its duty is to transport freight to destination and to deliver it to the consignee. It is the duty of the consignee to receive his freight within a reasonable time and if he neglects to do so the liability of the railroad company as a common carrier ceases and it becomes simply a warehouseman. It is under no legal liability to continue to discharge the duty of a warehouseman but may insist that the consignee shall receive and remove its

freight. The consequences to the railway of neglect to do this are not merely in case of carload freight the loss of the use of a car. The uncertainty arising from the fact that cars are sometimes unloaded promptly and sometimes not is embarrassing. The congestion of its terminals is often and perhaps usually a more serious matter than the loss of its cars. It would be not only much more expensive but often impossible for the railways of this country to handle their traffic at many points unless they required the prompt removal of the freight from the car. To permit one person to use the cars of a railroad company for a storehouse and to deny that privilege to another creates a discrimination between shippers which is often serious.

For these reasons and others it is not only proper but highly essential that railroad companies should make and enforce uniformly such reasonable demurrage requirements as will insure the prompt receipt by the consignee of his freight. The demurrage charge which is imposed for that purpose is not, however, based upon the fair rental value of a car; it is rather in the nature of a penalty. While it should not be sufficient in amount to work an undue hardship upon the shipper who must occasionally pay it, it should be sufficient in amount to accomplish the purpose for which it is intended.

Senator REED. Mr. Commissioner, you may mention it later but there is a party in interest you have not mentioned so far, and that is the fellow who wants to use a freight car for transportation but is unable to get a car because some other shipper is using it for storage. I am really more concerned about that party in interest than either about the fellow who has bis freight and is not unloading it promptly, or the railroad that is deprived of the earning power of the car because of its detention. Out of long experience in Kansas in various capacities I have come to have more sympathy for the fellow who wants a car and cannot get it than I have for the other parties.

Mr. AITCHISON. I think that will develop as being an important and perhaps the controlling element, but I might say this, which is not in my prepared statement, that from the beginning certain State courts, way back as far as the nineties, had considered there was a public interest in the amount of demurrage and its imposition as a means of making cars available for all. And that threat has run through the mass of decisions from start to finish, I think in language as well as in thought. Perhaps I will cover that in just a moment. Senator REED. I am sorry if I interrupted you.

Mr. AITCHISON. No. I think it would be very well for you to call. attention to what I might overlook with respect to the tendency of the courts.

Senator REED. You may proceed with your statement.

Mr. AITCHISON. This was the last decision prior to the enactment of the Hepburn Act, which clearly authorized the Commission to fix for the future just and reasonable charges, including in the generality of description charges for car detention.

The development of industry in the far West, from 1900 on, threw a severe strain on the rail transportation system. Car shortages began to develop as the transcontinental lines found themselves unable to meet demands for cars for the long hauls which were developing. These shortages grew in intensity until they came to be recognized as amounting to a national menace.

In such circumstances, demurrage charges assumed great importance as a means of alleviating the shortage of cars to meet the demand.. Three characteristics of the situation were soon recognized:

(1) The uncertainty then existing in the minds of many people as to whether jurisdiction over demurrage matters lay with the States or the Federal Government.

I might interpolate at this point that after extremely long and patient hearings Commissioner Lane and his associates, 48 State commissioners, prepared and recommended a code of uniform demurrage rules and charges. That code was adopted after a very long discussion. It was endorsed in principle by the Interstate Commerce Commission, and was published in the tariffs of practically all railroads in the country in their applications.

Senator TUNNELL. Adopted by whom?

Mr. AITCHISON. First, the Association of Railroad Commissioners adopted the report. That had no legal effect, of course, but subsequently the Commission endorsed it in a formal report and recommended it to the carriers for adoption. The carriers had the right to initiate their rates and charges and practices; and they did follow the Commission's suggestion and created a central organization, headed by Mr. Arthur Hale, and the general code of demurrage rules was published in such form that virtually all carriers in the country in all States could take advantage of it. It was in a single document, and appears that way now as I show you by this document.

Senator REED. Let me say for the benefit of Senator Tunnell, who is not quite as familiar as you and I are with this thing, demurrage rules would have to have the approval of the Interstate Commerce Commission. Also State commissions have for many years maintained the National Association of State Commissioners. Chairman Aitchison was for a long time a part of that organization. You were with the National Association of State Commissioners for some years as their general solicitor, were you not?

Mr. AITCHISON. Yes.

Senator TUNNELL. I was interested in the Commissioner's statement that it was first endorsed and then adopted.

Mr. AITCHISON. Have I cleared that up?

Senator TUNNELL. Yes.

Mr. AITCHISON. I will now resume a discussion of the three characteristics of the situation which were soon recognized:

(2) The great disparities in the practices as between different sections of the country, and as between particular commodities, especially as related to the computation of free time.

(3) The attempted interweaving by the legislation of many of the States of the principle of "reciprocal demurrage" with demurrage, to the end that the carrier which failed to supply cars within a reasonable time would be held to a fixed payment of "reciprocal demurrage."

Commissioner Lane, of California, came upon the Commission after the decision in the Kehoe case, and in the midst of the intense period of car shortage mentioned. He became chairman of a committee of the National Association of Railway Commissioners, made up of the State regulatory commissioners and the members of the Interstate Commerce Commission. His committee in its report, October 6, 1908, stressed the lack of, and the necessity for, uniformity in demurrage rules and charges. The report reads in part as follows:

It is to the interest of shippers that many concessions made by the railroads in the way of free time for cars should be withdrawn. The individual shipper who succeeds in using a coal car as a warehouse for 10 or 15 days free of charge may profit thereby, but he does so at the expense of other shippers who are entitled to have the use of the car for transportation of their coal. The pressure

of the individual shipper to secure additional free time is really directed against