joy that much of the unreasonable part of the Reagan bill had been knocked out of it. On the whole it would seem that the House or Reagan bill was the more radically amended at the hands of the conferees, though it should not be forgotten that the original Cullom or Senate bill had been already considerably modified in the direction of the House bill. It is not surprising that, having such a composite origin, the Interstate Commerce Act pleased no one entirely. As Mr. Johnson (N. Y.) remarked, "It has been said : that this is a bill that, practically no one wants and yet everybody will vote for; that, practically no one is satisfied with and yet they are all ready to accept it; a bill that no one knows what it means and yet all propose to try the remedy provided therein.' The passage of federal regulation had become evidently imperative. The press, chambers of commerce, and the people in general loudly and insistently demanded action. State regulation of interstate commerce had proved futile and had been declared unconstitutional. It had become necessary for congressmen to settle longstanding differences of opinion, and a compromise was the inevitable result. Never did Congress face a problem which involved more weighty issues, and never was a knowledge of the economic factors concerned more needed. Yet it was often stated that the Senate rarely showed greater hesitancy and ignorance on any subject than on railway regulation. "The modesty and meekness and confession of ignorance is amazing," said one speaker;" and, after all allowance has been made for the coy hypocrisy of railway congressmen, it is still largely true. There can be no doubt but that the realization of this was the factor which turned the scale in favor of a commission. Not a few of the speeches, however, show careful thought, and the few books on transportation which existed at the time,-Adams, Railroads, Their Origin and Problems (1878); Hadley, Railroad Transportation (1885); Hudson, The Railways and the Republic,— were often quoted in debate. Especially should the importance • Ibid., p. 844. Ibid., 1884-85, p. 752. of Charles Francis Adams, Jr., and his work be observed. His writings were quoted at length and not a few followed him in upholding the good of pooling and decrying railway competition. It will now be well to consider separately the congressional logic in passing some of the more important provisions of the act. Pooling. Almost without exception those congressmen who were interested in railways in a practical way or who were versed in railway economics were inclined to favor pooling; while the majority of the remainder thought it should be prohibited. Judge Reagan stated the objections to allowing pooling as follows:8 1. It destroys competition in freight rates. 2. It makes one great monopoly out of several smaller ones. 3. It secures to the pooling roads the power to levy such exactions on commerce as their cupidity may demand. 4. It enables them to make their roads a means of oppression and ruin to the people. 5. Such power never has been and never can be safely surrendered by a free people to a few men who deny their responsibility to the public. And the question was frequently raised, "granting railways can maintain rates if pooling is allowed, what is to prevent their using the same means to raise them?" In reply it was argued that rates had steadily declined in the presence of pools. The object of pooling was not to raise rates, but to prevent rate wars and cut-throat competition by removing the incentive. Mr. Sewell (N. J.) was among those who defended it. He held it to be the one remedy for discrimination, and maintained that water competition would keep rates down. A few like Senator Brown (Ga.) predicted an increase in consolidation as a result of prohibiting pooling, the soundness of which prediction has been abundantly proved. Those who upheld pooling sometimes argued that the anti-pooling provision 6 Ibid., 1884-85, p. 289. Ibid., pp. 441-2. was unnecessary in connection with the strict provisions against discrimination in any form-a purely negative argument. On the other hand it would be maintained that other provisions of the bill would make pooling by the railways unnecessary, because publicity of rates and a long-and-short-haul clause would make fluctuations and rate wars impossible, which is, again, but a negative argument for retaining an anti-pooling clause. on the The Senate committee of investigation in the so-called Cullom report of 1886 did not commit itself very strongly on the subject. Stating that publicity of rates would restrain reckless competition, it concluded that it did not seem prudent to recommend an anti-pooling section on the one hand, nor, other, the legalization of pooling.10 The prohibition of pooling was being asked, to remove the evils of the system as it had been conducted and to avert the dangers feared from greater aggregation of corporate power. But the evils attributable to pooling were not the most pressing. The majority preferred to leave the subject for investigation by the commission. A majority of the witnesses heard by the committee on this subject testified to the benefits of pooling, many railway officials suggesting that such agreements be made legally binding. After all has been said, there were the two underlying questions: (1) was it logical to foster competition and prohibit pooling while seeking stability and equalty of rates; (2) was it safe to allow pooling, in which there was a possibility of evil monopoly and secret extortion? We can see, as few then saw, that, though a pooling agreement does not primarily concern rates, under private ownership the rate is the center of the problem; if pooling is to be allowed, then rates should be regulated to safeguard public interests, unless all reasonable possibility of abuse be in some way removed; if pooling is to be prohibited rates should also be regulated in order to protect the railways, unless some other means of restraining competition be in force. It was not proposed to regulate rates in 1887, and the various provisions which might prevent the abuse of pooling or restrain 10 Rep. of Sen. Select Committee on Interstate Commerce, 1886 (No. 46), p. 201. 304 undue competition were untried and doubtful; therefore those whose one end was immediate public welfare, it see too dangerous to allow pooling agreements; and, on the o hand, to those whose interests were in the railways, to pro pooling seemed a great and harmful step backward. The taken by the Cullom report was the expression of the wi of the time. As is well known, the anti-pooling provision was insert the Interstate Commerce Act at the last moment throug insistence of one man, Judge Reagan. Long-and-Short-Haul Clause. There was certainly mor fusion and perhaps more difference of opinion with reg the prohibition of charging more for a less than for a distance under similar conditions than existed with reg any other phase of railway regulation. There was no o did not admit that there were some cases of injustice. might be prevented by a long-and-short-haul clause; but the that there were all shades of opinion, ranging from th that most cases of charging less for a longer distance we fiable to the opposite view. A long-and-short-haul clause was not a at rate new meas arme some form or other it was in force in at least the states tem fa sas, Missouri, California, Pennsylvania, and Massachus-short addition to the natural feeling of injustice at seeing, marke kind of freight go by on the same railroad in the sa tion at a lower rate than was charged to one's own tow examp cumstance which would, at first glance, fill anyone with throu there was the widespread belief that population wastes, tha rapidly centralized in great cities. As Senator Georg seeme put it, "The practice of high local freights and differe to recog as against the small shipper has prevented all com retailtraffic between the producer and consumer and made ot for the concentration of these products in large cities,ter. Of become the subject of speculation in futures and ga corners estern From some observation of these mattained t P. 355 justified in saying that high local rates and dise HANEY-A CONGRESSIONAL HISTORY OF RAILWAYS 305 11 It was believed that than those products are sold in Europe. it was the policy of railways to build up large centers and the jobbing business of those centers by low through rates, rates. ich discriminated against small places and businesses. It was charged that the railways indulged in cut-throat rate. s in their through traffic which profited competitive points the expense of the non-competitive, and there is no doubt at in some cases the railways did carry competitive traffic at e low rates as to make it necessary to recoup themselves high local rates. To the extent that this was the case there s force in the argument that an effective long-and-short-haul would largely prevent rate wars by making them impos e chief argument against a long-and-short-haul clause of description lay in the necessity for low rates on long hauls. Brown (Ga.) assumed the case of a farmer twenty miles t from Atlanta and having ten tons of corn to market.12 $5, or 2.5 cents per ton per mile, would not be an unreaBut at that rate to ship corn from Kansas City e rate. lanta would cost a farmer $250 a carload, or 71 cents a a few westerners opposed the clause for the same reason. rates 1884-85, p. 355. |