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CHAPTER XXII

THE INTERSTATE COMMERCE ACT OF 1887; EVOLU

TION AND PASSAGE

RESUMÉ OF FEDERAL REGULATION DOWN TO 1874

Looking back over the ground covered in the preceding pages it appears that considerable progress has been made toward the recognition of Congress' power to regulate railways. From a very early time it was realized that the railway was an economically peculiar instrument of transportation, and various propositions for measures of control were put forward. These propositions were not all based upon the same clause of the constitution and varied in their scope with the different economic conditions from which they sprang.

The political relation between the federal government and the territories and the District of Columbia made regulation of railways necessary. The exigencies of the government postal service called attention to railway abuses and brought on discussions of the power of the government to control. In the case of railway bridges the power to regulate interstate commerce has been carried to considerable length. But, above all, the war upheaval of the Sixties and the Granger movement in the Seventies were the forces which led to the longest steps preliminary to a comprehensive interstate commerce law.

In 1862 a bill authorizing the president to take and operate railways for military purposes became a law-a measure based on the power to raise and support an army. In 1865 was passed a law which, in a negative way, regulated interstate commerce by authorizing railways to make connections for interstate shipments with any existing lines in spite of state-backed monopolies. This act was based upon the power to regulate commerce among the states, and, though it shows a great measure of respect for states' rights, it was an important step in the growth of federal power.

In 1873 came the next legislation. Then an act was passed in regulation of interstate commerce in livestock, the significance of which act seems to have been realized by contemporary congressmen.

Between 1865 and 1887 discussions of the power contained in the commerce clause arose with increasing frequency, and after 1874 it may be said that a law regulating interstate commerce by railway was merely a question of time.

EARLY PROPOSALS FOR RATE REGULATION—CHEAP TRANSPORTA

TION

Down to 1868 relatively little was said in Congress concerning the regulation of railway rates. The question was touched upon, or the threat was made; but such control of railways as was most seriously proposed or actually exercised did not lie in the field of rate regulation. As early as 1868, however, clear evidence of the beginning of a movement for such regulation appears.

In that year three different resolutions were introduced in Congress which looked toward the control of rates. Two of these resolutions were brought up in the House, both for inquiring into the constitutionality of such action. The Senate agreed to have its committee on commerce inquire into and report on the expediency of regulating railways so as to get uniform and just rates. In 1870 Mr. Williams (Ind.) introduced a joint resolution to inquire into the constitutional power of Congress to regulate and limit the tariff of rates of railway companies extending through two or more states. The following year the Senate agreed to a similar resolution. And in 1872 a resolution was adopted to the effect that the committee on judiciary inquire and report what powers the United States had over interstate commerce by railway and whether such

1 Cong. Globe, 1867-68, pp. 16:32, 2331. 2 Ibid., p. 343. 3 Ibid., 1869-70, p. 239. Ibid., 1870-71, p. 569.

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power extended to prohibit unequal or oppressive rates. These various resolutions indicate an early period of doubt and inquiry concerning the power of Congress to regulate railway transportation and especially railway rates; in response to the last of the preceding resolutions the Senate committee gave a divided report, the majority refusing to commit themselves on the ground that the subject was novel and required much information which they did not possess; the minority opposing the constitutionality of rate regulation.

The object of rate regulation in this early movement was predominantly cheap transportation, i. e., lower rates rather than more equal rates. There were complaints of discrimination, and some of these resolutions refer to equality of rates, but down to about 1875 these had not reached such proportions and publicity as to demand the center of the stage. This was the time when conditions surrounding the crisis of 1873 called attention to the relatively high level of rates in general. It was the time when the Grangers were agitating for lower rates, and when improvements in waterways and freight railways were sought in order to remedy extortionate charges. This, it will be remembered, was the object of the Windom report–cheap transportation. It was the animus of two of the three resolutions of 1868. It appears in many of the bills introduced; three in 1870 and one introduced by Mr. Marshall (Ill.) in 1871 were bills entitled to promote commerce and cheapen the transportation of mails, etc.;' and Mr. Killinger (Pa.) brought forward another to promote a cheap and uniform system of railway transportation.

THE MCCRARY BILL

The passage of the McCrary bill by the House in 1874 may be termed the climax of this earlier movement. The chief provisions of this bill were as follows: it forbade unreasonable and extortionate charges; the president was to appoint a board of nine railway commissioners, whose duty would be to make thorough investigation and prepare a schedule of reasonable maximum rates, and they were empowered to demand witnesses, books, documents, etc.; the commissioners were to watch for violations of the act and commence suit when such occurred; the penalty for extortion was made $500 to $5,000 for each offense, damages and attorneys' fees to be paid by the guilty party. Where two or more roads joined in an interstate shipment they were declared one line for the purpose of the act. Section 15, almost as an afterthought, prohibited unjust discriminations, with penalties as for extortion.

5 Ibill., 1872-73, p. 131. 6 Sen. Rep., 1872-73, no. 462. ? Ibid., 1871, p. 732.

This bill was referred to as a pioneer measure and Mr. McCrary stated the object to be to keep as near the common law rules as possible, supplementing them by heavier penalties in the shape of punitive damages.

The debate was strikingly similar to later ones on like bills. Individualistic and laisser faire economic ideas played the usual part in opposition. It was argued that to bring about just and reasonable rates by legislative enactment was as impossible as to enact virtue. Granting the constitutionality of regulating commerce, still rate regulation lay outside this field and was not necessary to it. Rate regulation must be uniform, if constitutional, and uniformity was economically unthinkable. To be logical, if rates were to be regulated then the components of rates must be also controlled, e. g., price of labor and materials, and the government must be forced to deal with the bond hold.

Congress could no more delegate power to make railway rates than the power to make tariff duties; it would be an unwarrantable delegation of legislative authority. Then there were the fears that a commission would be corrupted, and that it would be dangerous to entrust any body of men with such powers. Let the states regulate their railways.

In reply to some of these objections Mr. Hoar (Mass.) and others reasoned that state uniformity of action was impossible and state control was hopeless: The position of the gentlemen on the other side is simply that the constitution gives Congress the power to regulate commerce among the states, in order that commerce may forever be not regulated as far as it is commerce among the states. As to uniformity of federal regulation, the regularity would lie in the rule, not in the application. Nor

ers.

were legislative powers to be delegated; but simply, the general rule of the common law being enacted, the commissioners would apply it. As to corrupt commissioners, they could not raise rates and any lowering would benefit the people; and they were to be appointed in such a way as to be above corruption. The courts and the common law as then applied could furnish no adequate remedy; for only the producer who was often not the shipper would be damaged, while some middleman was often the shipper and he would not be interested in getting redress for the producer. The great increase in consolidation through long leases was referred to as an alarming symptom. Even Massachusetts petitioned for the passage of the law and her representative denounced railway "kings” as any western demagogue might have done.

By a vote of 121 to 116 the bill was passed, 53 not voting. It failed, however, to make any progress in the Senate.

The McCrary bill was not the first bill for a federal railway commission. In 1871, Mr. Cook (Ill.) introduced in the House a bill to create a railroad bureau for the United States; which was read a first and second time and referred to the committee on railways and canals. Mr. Hawley (Ill.) in 1873, brought forward a bill to provide for the appointment of commissioners to collect information in regard to the railroads forming lines of commerce between the states.' It provided for a body of three eminent and disinterested men to be appointed by the president to collect information and recommend legislation. In this same year Mr. Negley (Pa.) and Senator Windom (Minn.) both presented bills for commissions and hardly a session passed thereafter without several such bills. The influence of English legislation is clearly seen in these measures.

MOVEMENT AGAINST DISCRIMINATION

As already indicated there was agitation against railway discrimination as early as there was against railway extortion, and the point was merely made that the cheap-rate idea at first

Cong. Globe. 1870-71. p. 325. Ibid., 1872-73. pp. 332, 893.

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