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one whose benefits are unequally distributed, | tion in the city, have gradually exter and these are likely to be more than counter-area from which they would receive a balanced by the incidental unsettling of prices port it at the lowest rates, until they and interference with safe business calcula- found carrying the article at the sam tions. The public authorities at the same time for 100 miles as for 20. The low rat find that the task of regulation has been made long distance has extended the area of more troublesome and difficult through the ef- tion and benefited the city; and it is fect of war rates upon the public mind. These to conceive of cases in which the are consequences which result so inevitably course, of taking distance into the ac from this species of warfare that it would nat- all rate making, would have kept pr urally be expected they would be kept con- so far restricted in territory that p stantly in mind by railroad managers. It is near the city could never have been inevitable that the probability that any pre- low rates as they receive now, when scribed rates will be accepted by the public as charged the same as their more dist just shall to some extent be affected by the petitors. Where such a case appears, fact that at some previous time they have been ure to measure the charges from rega lower; perhaps considerably lower. tance could not dogmatically be pro unjust, if it appeared that the railro one side and the public on the other fited by the course actually adopted increase the rates to the nearer prod even to keep them at a point which fair in the first place, has in the events become unreasonably high, in be able to put those at a distance on footing in the market with such n ducers, would be manifestly unjust. on grounds of general public advant understand that this would be jus public benefits, when they are to be cost of individual citizens, cannot nor we suppose lawfully, be assess class of the people exclusively.

The disproportion between the rate charged and the distance the property is carried is also important in its effect upon the minds of those who have not the time or perhaps the oppor tunity to study the subject and understand the reasons. There are grounds on which short haul traffic may be charged more in proportion to the distance of transportation than long haul traffic, some of which anyone would readily understand and appreciate. Thus, it is seen that a considerable proportion of the carrier's service is the same whether the transportation is for the short or for the long distance: there must be the same loading and unloading, the same number of papers and entries on books, and so on. It is also seen that short haul traffic is more often taken up and laid down in small quantities, and that for this reason the proportionate train service is much greater. But when all these considerations are taken into account it will still appear that the long haul traffic is given an advantage in rates which must be accounted for on grounds which are not so readily apparent. When the reasons are seen it may perhaps appear that there is in fact no wrong either to the shippers who are apparently discriminated against, or to the general public.

The great disparity in the charge ent roads for the transportation of kind of property is a prolific caus plaint, sometimes justly founded times not. It is apparent sometin complaints which are made to the Co that the parties complaining hold th or at least have an impression, that transporting a particular species of substantially the same on all roads consequently the charges made b may prove with tolerable certain higher charges made by another r just. If the circumstances and com der which the traffic is carried by th are substantially the same, the would be legitimate and the argum of very great force. But when an parison is made, there are some ci having an important bearing upon cannot be left out of view. Amon be specified:

It is not uncommon that in railroad freight service the rates for the transportation of a particular kind of property, instead of being regularly progressive, shall be found arranged on a system of grouping, whereby the charges to all points within a defined territory shall be the same, though the distances will vary. Thus, at the present time the rates which are made from New York to Chicago are also made from New York to all points within a territory about Chicago, which includes some important towns in western Indiana and western Michigan. A question might be made by such towns whether grouping them with Chicago and making them pay the same rates is just; but the grouping system in general departs so little from the distance proportions that it is seldom the ground of complaint. There are cases, however, in which the distance proportions are purposely disregarded; and the doing so is justified by the managers on the negative ground that no one is wronged be done relatively more cheaply th by it, and on the affirmative ground that the small.

The quantity hauled.-A train can be transported more cheaply i to quantity than a single car load load more cheaply than a hundred if the business is large, though it portation of many kinds of pro

public is benefited. Cases of the sort may Return freights.-If lumber or perhaps be found about all our large cities in ty in quantity is to be delivered at which the railroads, as to some particular agri- there will be return loads for th cultural production needed for daily consump- the delivery can be made much m

The length of haul.-A thousand t can be loaded, transported a thou and delivered, much more cheapl tion to distance than the same qua loaded, transported one hundred livered.

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than at points where return freights could not | cago. Any arrangement by consolidation or
be expected.
otherwise that should undertake to eliminate
this influence would, if made on a large scale,
be futile, because it would antagonize laws of
trade and communication which would be too
powerful for it; and on a small scale, affecting
particular towns or small districts, it might be
illegal from its manifest inequality or injustice.

Cost of moving trains.-This is very much less
on some roads than on others by reason of
lighter grades, cheaper fuel, less liability to ob-
struction from storms, and other causes which
may disturb the track or delay trains.

These are among the causes which have an important bearing on relative rates. Beyond these the relative cost of roads must be allowed force also, if the owners are to be permitted to charge such rates as will make their investments remunerative. A complaint that rates are unreasonable may, therefore, require for its proper adjudication a careful inquiry not only into the circumstances and conditions of the road which makes them and of the traffic upon it, but also into those of other roads whose lower rates are supposed by comparison to show the injustice of the rates complained of. But there are reasons which make it necessary, in adjudicating a case of alleged excessive rates, to consider rates on other lines or at other points, even when the complaining party makes no argument or draws no conclusion from them. Questions of rates on one line or at one point cannot be considered by themselves exclusively; a change in them may affect the rates in a considerable part of the country. Rates from the interior to New York necessarily have close relation to rates from the same points to Philadelphia, Boston, and Baltimore; rates from the seaboard to Toledo must have a similar relation to those from the seaboard to Detroit and other towns whose business men compete with those of Toledo in a common territory. Just rates are always relative; the Act itself provides for its being so when it forbids unjust discrimination as between localities. This prohibition may some times give to competition an effect upon rates beyond what it would have if the competitive forces alone were considered.

Competition.-A study of the Act to Regulate Commerce has satisfied the members of the Commission that it was intended in its passage to preserve for the people the benefits of competition as between the several transportation lines of the country. If that shall be done, the towns which have great natural advantages, or advantages acquired by large expenditures of money in establishing new thoroughfares of commerce, will have cheaper rates than can ordinarily be obtained by towns less favorably situated. New York with its noble harbor, its central location, the Hudson River, and the Erie Canal for interior water ways, can not be deprived of the benefits which spring from these great natural and acquired advantages without altogether eliminating competition as a force in transportation charges, and by an exercise of sovereign legislative power establishing arbitrary rates over the whole country.

It might possibly be within the competency of legislative power to prescribe for the several interstate railroads equal milage rates for the whole country; but this, if enforced, would put an end to competition as a factor in making rates, and to a very large extent deprive the great business centers of the country of their several natural advantages, and also of the benefit of expenditures made by them in creating for themselves new channels of trade. It would, in fact, work a revolution in the business of the country, which, though it might be greatly beneficial in some directions, would be fearfully destructive in others. Congress has not by the existing legislation underThe Commission has had occasion, where a taken to inaugurate such a revolution; nothing railroad company operated lines which run in the Act to Regulate Commerce looks in that parallel to each other, to hold that if the com- direction, unless it be the prohibition to charge pany yielded to competitive forces so far as to more for a shorter than for a longer haul on give the towns on one line very low rates, the the same line in the same direction, the shorter effect of such low rates upon the business of being included in the longer distance. But rival towns on the other line could not be ig- that prohibition is not absolute; and if it were, nored when their rates came under considera- a strict enforcement would necessarily be at tion. The natural influence of just competi-the expense of the competitive centers which tive forces ought to be allowed as it would be have heretofore had the exceptionally low as between two lines owned by different com- rates. The rates have made them centers for panies; and if the rates on one line were made a valuable wholesale trade which they cannot very low because of competition, keeping the expect to retain permanently in its entirety if others high because the absence of competition they are deprived even in part of the advanenabled it to be done might amount, within tages which they have hitherto had from the the meaning of the Law, to unjust discrimina competition of rival carriers. The benefit tion. Consolidation of rival lines, or the bring- which non-competitive points receive must be ing them under the same management, cannot largely at the expense of the competitive. This justify ignoring on one line the effect of com- is one of the inevitable consequences of perpetitive forces on the other; those forces al- fecting the reform in the direction of basing ways, when not unnaturally restrained, have rates upon distance more than has been the an influence which reaches beyond the points case hitherto. It is an incidental disadvantage whose business is controlled by it, and by sec- to some which is supposed to be more than ondary effect modifies prices to more distant made up by the more equal apportionment of points. This is well understood in the trans- transportation benefits. portation business; the modifying effect of rates by lake and canal is perceived in the charges on all lines from the Mississippi to the seaboard; the rates to and from Duluth affect all charges in the Northwest to and from Chi

The competition by water is the most importent factor in forcing rates to a low level at the points where the lines of land and water transportation intersect. Where there are good channels of water transportation, the cost of

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the States, it has operated directly to railroad earnings, especially in the cu of free passes on interstate passenge and in putting an end to rebates, dra and special rates upon freight busine results of the Law in these respects

moving traffic upon it is so very greatly below the cost of rail transportation that the railroads would scarcely be able to compete at all if rapidity of transit were not in most cases a matter of such importance that it enables the railroads to demand and obtain higher rates than are made by boat. But even when compensat-eminently satisfactory to the genera ed for the extra speed, the rates which the certainly to all who had not been roads can obtain in competition with the natu- profit by special or personal advanta ral water ways must be extremely low and in connection with the abolition of the some cases leave little if any margin for profit. tem, there has been some reduction i The experience of the country has demonstrat- ger fares, especially in the charge ed that the artificial water ways cannot be milage tickets in the Northwest, the successful competitors with the railroads on the country where they are perhaps equal terms. If the effort is to make the busi- ployed. ness upon them pay the cost of their maintenance and a fair return upon the capital invested in them, its futility must soon appear. The railroads long since deprived the great canals of Ohio, Indiana and Illinois of nearly all their importance, and the Erie Canal is only maintained as a great channel of trade by the liberality of the State of New York in making its use free; in this way taking upon itself a large share of the cost of transportation which would be assessed upon the property carried if the canal were owned and held for the profit of operation as the railroads are.

Freight traffic for the year has be tionally large in volume, and is b have been in no small degree stimul growing confidence that the days and special rates were ended, and rates on an equal basis were now off comers. The reflex action of this ment of confidence among business been highly favorable to the roads.

In some localities the passage of th made the occasion on the part of and short sighted railroad manager exactions, through a direct raising o In their competitive struggles with each change in classification and other other towns can not ignore the effect which manifestation of the spirit which ind the existence of natural water ways must have action is now but seldom observe upon railroad tariffs; the railroad companies wrongs resulting from it have in ge cannot ignore it, nor can the Commission ig- corrected. The effect of the opera nore it if competition is still to exist and be al- fourth section has been specially lowed its force according to natural laws. above, and the Commission repe Neither can the great free Erie Canal be ig-place its opinion that, however se nored; it influences the rates to New York have been the results in some case more than any other one cause, and indirectly, eral effect has been beneficial. T through its influence upon the rates to New in classification made since the Act York, it influences those to all other seaboard have been in the direction of greate cities, and indeed to all that section of the ity, and have also in general, it i country. been concessions to business interes

The tendency of rates has been and they have seldom been perma vanced except when excessive comp reduced them to points at which not well be maintained. No dest wars have occurred, but increased rates has tended in the direction of general business. There is still great mischief resulting from frequ in freight rates on the part of some changes that in some cases it is diff gest excuse for.

The general results of the Law h important ways favorable to both and the public; while the compar complaints that have been heard o are either made with imperfect k the facts, or spring from the reme practices which, the Law was framed to put an end to.

XII. GENERAL OBSERVATIONS.

The Act to Regulate Commerce has now been in operation nearly eight months. One immediate effect was to cause inconvenience in XIII. AMENDMENTS OF THE many quarters, and even yet the business of The Commission has not seen some parts of the country is not fully adjusted recommending any very consider to it. Some carriers also are not as yet in in the Act under which its work i their operations conforming in all respects to its It has seemed to its members that spirit and purpose. Nevertheless the Commis the regulation of interstate comm sion feels justified in saying that the operation be permitted to have a growth of the Act has in general been beneficial. In would most surely as well as most some particulars, as we understand has also a high degree of efficiency and been the case with similar statutes in some of that way. The general feature

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Dess in

are grounded in principles that will stand the | J.
test of time and experience, and only time and
experience can determine whether all the pro-
visions made for their enforcement are safe,
sound, and workable. When they prove not
to be, experience will be a safe guide in legis-
lation to protect them.

Other matters, and particularly whether
transportation by water shall be made subject
to the Act, are submitted to the wisdom of
Congress without recommendation.
All which is respectfully submitted.
Dated December 1, 1887.

Incidentally in this report some need of
amendment has been pointed out. Especially
ought the Law, as we think, to indicate in
plain terms whether the express business and
all other transportation by the carriers named
in the Act shall be governed by its provisions.
The provision against the sudden raising of
rates ought to be clearly made applicable to
joint rates as well as to others. The Commis
sion ought also to have the authority and the
means to bring about something like uniform-ant.
ity in the method of publishing rates, which
is now in great confusion, and to carefully ex-
amine, collect, and supervise the schedules,
contracts, etc., required by the Law to be filed,
as well as properly to handle the mass of sta
tistical information called for by the twentieth
section. For all these purposes, as well as for
others imperfectly provided for, a considera-
ble addition to the force employed with the
Commission will be indispensable.

THOMAS M. COOLEY,
WILLIAM R. MORRISON,
AUGUSTUS SCHOONMAKER,
ALDACE F. WALKER,

WALTER L. BRAGG,

Interstate Commerce Commissioners.

INTER S.

W. SLAPPEY and G. R. Slappey, composing firm of "Cider & Vinegar Co.," Marshallville, Ga.,

V.

CENTRAL R. R. CO. OF GEORGIA; Bruns-
wick & Western R. R. of Georgia; Sa-
vannah, Florida & Western R. R. Co., and
South Florida R. R. Co.
(No. 104.)

ABSTRACT of complaint filed December

unjust discrimination. Petitioners ship from Marshallville, Georgia, to Tampa, Florida, 527 miles, and are charged $1 per 100 pounds by the Central R. R. Co. of Georgia, which connects with the other roads. Rates are made with the first named defendThe rate of defendants from Macon, Georgia, to Tampa, a distance of 564 miles, is only fifty-two cents. This constitutes unjust discrimination against complainants.

R. T. KNOWLES

v.

OHIO & MISSISSIPPI R. R. CO. (No. 105.)

ABSTRACT of complaint filed December charges.

Complainant is a manufacturer of cooperage at Dillsboro, Indiana, and ships by defendant's line to Cincinnati, thirty-three miles.

Prior to the passage of the Law defendant charged $10 per car. After May 26, 1887, defendant charged complainant $16.80 per car. Afterwards defendant charged $15 per car, which they now charge.

These charges are unjust and onerous, and contrary to the Interstate Commerce Law. Prays for investigation and reparation

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