questions of law. The courts, however, early in the commission's history" permitted defendants to submit evidence which had not been introduced before the commission and based their decisions in large measure on their own interpretation of facts, thereby assuming the functions of the commission. The manner in which the courts handicapped the commission by denying its right to compel witnesses to give incriminating testimony has also been noted. In both these respects, however, the legislation itself was defective. The courts, however, were responsible for the

-weaken emasculation of two most important features of the act: the pro

vision authorizing the commission to prescribe freight rates and the long-and-short-haul clause.

Almost from the time of its establishment, the commission had interpreted the act of 1887 as conferring upon it not only the power to investigate problems relating to freight rates, but also to prescribe and enforce the remedy for existing evils. The exercise of the rate-making power, however, was confined entirely to the correction of abuses which came before the commission on complaint, while the right to prescribe the rate in the first instance was not claimed.

For nearly ten years no question was raised in regard to the validity of this policy, but in 1896, in the "Social Circle" case," the Supreme Court stated that it was unable to find any provision of the act "that expressly or by necessary implication conferred such a power. Various decisions followed, in both the circuit courts and the Supreme Court, which cast further doubt in respect to this power of the commission. The so-called "Maximum Freight Rate" decision in 1896" finally decided this question, the Supreme Court holding that the commission had no power to "prescribe a rate for the future, although its right to pass upon the reasonableness or unreasonableness of a rate already paid and of which complaint is made is unquestioned."

The result of this decision was to make impossible enforcement of the commission's orders relating to rates. The only remedial

26

Kentucky and Indiana Bridge Co. v. Louisville and Nashville R. R. Co., 37 Fed. Rep., 567 (1889).

27

" C. N. O., and T. P. Railway v. Interstate Commerce Commission, 162 U. S., 184.

28

Interstate Commerce Commission v. C. N. O. and T. P. Railway, 167 U. S., 479.

measure then available to the commission was to declare illegal one rate after another in the hope that the carrier would finally comply. It soon became evident that "the denial of the right, not only to pass upon the reasonableness of a particular rate, but to prescribe what rate should supersede it, meant the abolition of all control whatever."

99 29

A most important factor in placing the act of 1887 on the statute books was the public irritation over the practice of local discrimination by competing railroads in consequence of which higher rates were paid by small non-competitive points than localities served by rival carriers. Section 4 of the act which aimed to eliminate the abuse of place discrimination followed many of the state regulations in regard to the same matter.

It shall be unlawful for any common carrier subject to the provisions of this act to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included in the longer distance.

For several years the carriers made serious attempts to adjust their tariffs in acordance with this principle, namely, "that distance was a sufficiently important factor in the determination of the cost of transportation to require that charges should be graded according to the length of the haul."" In October 1892, the first difficulty arose through a judicial interpretation" the effect of which was to allow a railroad when entering a traffic agreement for through carriage of freight to become legally a separate line from that under which it engaged in transportation of local freight over its own line. Later decisions expanded upon this view until the commission lamented in 1893 that "the very jurisdiction of the law itself is invaded by the extension of the line theory indulged in by the Georgia Federal Court.""

"Report of Industrial Commission, XIX, p. 428.

30 Ibid., p. 438.

81

22

Chicago and N. W. Ry. Co., v. Osborne, 52 Fed. Rep., 912.
Annual Report, 1893, p. 35.

Although the Supreme Court in 1896 remedied the injury thus accomplished by restoring the original meaning of the word "line" as interpreted by the commission, it ruled in another case in the same year that "competition, whether of trade centers or of railroads, must be recognized as a factor in the determination of the similarity of circumstances and conditions under which the fourth section of the clause should be applied.' The result of this decision was to permit carriers to make whatever variation they desired from the practice originally contemplated in adjustment of long-and-short-haul rates.

99 33

By the close of the nineteenth century, the commission's functions, through the causes described, were attenuated practically to those of a mere publicity body. Its field of activity was limited to enforcement of the safety laws, statistical work, and various independent investigations. In its annual report for 1897 the commission declared: The same case is not tried before the court which is tried before the commission. . . . The delay which is attendant upon an attempt to enforce the order of the commission. is unjust to the public is fatal to a measure of regulation

66

. . . deters shippers from the making and prosecution of formal complaints. Our order when made binds nobody. All these defects may be summed up in a single sentence. The proceedings and the order of the commission go for nothing. Such is the theory of the present act as interpreted by the courts."

While thus the principle object contemplated by the act of 1887-equitable and reasonable adjustment of charges for transportation-had not been attained, much had been accomplished. Aside from the social gain through general publicity as to rates, the education of the public in railroad problems through the commission's published reports, the reduction attained in number of freight classifications, and the more equitable adjustment of railroad charges by formal and informal inquiry as between localities, commodities, and shippers, there had been erected a substantial basis of a code for future railroad control through the cumulation of decisions handed down by the commission. Moreover, the experience in administration of the law had revealed the particulars

33

Interstate Commerce Commission v. Alabama Midland Ry. Co. et al, 69 Fed. Rep. 227.

in which new legislation was required for effective work in the future.

In matters relating to safety of employees, a significant beginning had been made. Although the Safety Appliance Act of 1893 was not fully enforceable until after August 1, 1900, as explained above, there was evidence that there had been in the face of increased traffic a marked decrease in the number of deaths and injuries to employees due to the causes against which the law was aimed." An important step in promotion of safety to passengers as well as employees had been taken in the passage of the Accident Reports Act, the beneficial effects of which were not, however, manifest until a later period. In spite of the progress thus made it was obvious from the experience during this period that considerable amendment and extension of the safety laws would be required to give passengers and employees the full degree of protection which was both practical and desirable.

Nothing to this time had come of the law of 1898, aimed at amicable adjustment of disputes between the carriers and their train operatives. The first attempt to utilize the law, made within a year of its enactment, not only resulted in total failure to settle the controversy, but in repudiation of the principle of the law by the chief railroad companies involved." It was not until December, 1906 that a second attempt was made to settle a dispute under the law.

In the compilation of national statistics of railroads and analysis and standardization of accounts much had been accomplished." The act of 1887 required the common carriers subject to the law to file with the commission, copies of all tariffs, contracts and agreements, to make annual reports at such time in such form as

34 See Annual Report, 1901, p. 62, et. seq. Also Dixon, as above, p. 581, who presents a table showing a decline from fifty killed and 1296 injured per 100,000 employees in coupling accidents in 1893 to twenty-eight killed and 518 injured in 1900 and from eighty-two killed and 486 injured per 100,000 in 1893 due to falling from trains and to overhead obstructions to fifty-eight killed and 480 injured.

35

Bureau of Labor, Bulletin 98, p. 29, et seq.

See Cummings, Statistical work of the federal government, in Koren, History of statistics, p. 605 et seq., which gives an historical account of the commission's statistical work.

the commission should direct; and to answer specifically all questions upon which information might be required by the commission." The commission was also authorized to prescribe a uniform system of accounts for the railroads and the manner in which such accounts should be kept.

Immediately after the organization of the commission on March 31, 1887, a public hearing was held and a form for the annual reports was prepared following conference and correspondence with railroad accountants and state commissioners." This form,

* Previous to this date, Congress had enacted legislation respecting reports from land-grant railroads. The act of July 1, 1862 (12 Stat. L., 489), “An act to aid in the Construction of a Railroad and Telegraph Line from the Missouri River to the Pacific Ocean, and to secure to the Government the Use of the Same for Postal, Military, and Other Purposes," assigned various duties to the Secretary of the Interior in connection with surveying and setting off lands for the route of the proposed railroad and filing in the Department of the Interior of notices in regard to consolidation of railroad companies enumerated in the law. The act further required the railroad corporation created by the law and the roads connected therewith to make annual reports to the Secretary of the Treasury of the amount of stock, the lines of road surveyed, amounts received from passengers and freight, expenses, indebtedness, etc. By subsequent amendments similar reports were required of other corporations created for purposes of railroad construction.

By act of June 15, 1868 (15 Stat. L., 79), it was directed that the reports required to be made to the Secretary of the Treasury by the act of July 1, 1862, and its amendments be thereafter made to the Secretary of the Interior, and that the reports in the possession of the Secretary of the Treasury be transferred to the Secretary of the Interior. The act of June 19, 1878 (20 Stat. L., 169), repealed the previous law and established the office of Auditor of Railroad Accounts as a bureau of the Interior Department. It was made the duty of the Auditor to prescribe a system of reports for the railroad companies whose roads were in whole or in part west, north, or south of the Missouri River and to which the United States had granted any loan of credit or subsidy in bonds or lands. He was also directed to examine the companies' books and accounts, to assist the government directors of any of these railroads when requested, to see that the laws relating to these companies were enforced, to make annual report, etc. By an appropriation act of March 3, 1887 (21 Stat. L., 409), the title of the officer was changed to that of Commissioner of Railroads. By an appropriation act of March 3, 1903 (32 Stat. L., 1083, 1119) the office of Commissioner of Railroads was terminated after June 30, 1904, and the duties of the bureau transferred to the Secretary of the Interior. By act of August 24, 1912 (37 Stat. L., 503), the duties of the office were abolished by repeal of the act of June 19, 1878 and its amendments.

38 For origin of the commission's system of accounts see Hooper, The Accounting system prescribed for railroads by the Interstate Commerce Commission, Annals of Amer. Acad. of Pol. and Soc. Science, vol. 63, p. 223 et seq.