suasion in interviews and conferences, but upon the, then, somewhat doubtful powers of the Federal courts of equity. Injunctions against rate-cutting by many important carriers were sought and obtained, although the power to grant them, prior to the enactment of the Elkins law, was more than questionable, and they probably could not have been secured were it not that, as reported by the Commission,1 "railroad managers, as a rule, welcomed these injunctions as applied to the mainten." Their effect was such that the Commis

ance of rates,

sion was also able to state that :

"It is asserted, and the Commission believes, that these railways have obeyed the injunctions, in the main if not altogether; that published rates have been exacted upon their lines, and very generally by other lines in competition with them. It can hardly be doubted that a very much better condition has existed for the last nine months in this respect than for any corresponding period in the last twelve years at least."-Sixteenth Annual (1902) Report, p. 9.

The next report was issued after the Elkins law had been in force for a period of ten months. The injunctions which had been of doubtful legality prior to this change in the law were fully authorized by the new statute and the Commission was empowered to proceed to secure additional injunctions of similar character whenever it had "reasonable ground for belief" that rebates were being allowed. It reported that :—

It

"Without further reference to the changes effected by this amendatory legislation the Commission feels warranted in saying that its beneficial bearing became evident from the time of its passage. It has proved a wise and salutary enactment. has corrected serious defects in the original law and greatly aided the attainment of some of the purposes for which that law was enacted. No one familiar with railway conditions can expect that rate-cutting and other secret devices will immediately and wholly disappear, but there is basis for confident belief that such offenses are no longer characteristic of railway operations. That they have greatly diminished is beyond doubt, and their recurrence to the extent formerly known is altogether unlikely. Indeed, it is believed that never before in the railroad history of 1 Sixteenth Annual (1902) Report, p. 10.

this country have tariff rates been so well or so generally observed as they are at the present time.1-Seventeenth Annual (1903) Report, p. 10.

Confidence that the Elkins law was operating so successfully as to secure "the invariable application of tariff rates" was also expressed in the next report of the Commission. Even as late as May, 1905, the Chairman of the Commission, testifying before the Committee on Interstate Commerce of the Senate, said:

"Now, if I may add one word about the Elkins bill. A more effective and complete measure for its purpose has not come within my observation. It is invaluable."3

At the same time Mr. Knapp said, concerning rebating, that when the Elkins bill passed, "the thing stopped over-night." But this condition of complete satisfaction did not long persist. The Nineteenth Annual Report bears date as of December 14. 1905, and contains the following:

"In our annual report for 1903 we endeavored to explain the changes in the regulating statute effected by the Elkins law, socalled, which was approved in the previous February, and made some favorable comments upon its operation. A similar opinion was expressed in the report made a year ago. Further experience, however, compels us to modify in some degree the hopeful expectations then entertained. Not only have various devices for evading the law been brought into use, but the actual payment of rebates as such has been here and there resumed.'

The foregoing quotation is from the last report under the law as it stood prior to August 28, 1906. The Twentieth Annual Report was issued on December 19, 1906, and, owing to the radical reorganization of the system of statutory regulation just going into operation, was, very properly, confined almost wholly

1 President Roosevelt was so impressed with the efficacy of the Elkins law that in his Annual Message to Congress, transmitted on December 7, 1903, he said: "The Congress . . . has secured equal treatment to all producers in the transportation of their goods, .. ."

* Eighteenth Annual (1904) Report, p. 6.

3 Hearings before Committee on Interstate Commerce, United States Senate, pursuant to Senate Resolution No. 288, Fifty-eighth Congress, Third Session, Vol. IV, p. 3306.

4 Page 13.

to a statement of the interpretation of and rulings under the new law. It contains no record of the year's experience as to maintenance of tariff rates, but such outside evidence as is available warrants the belief that the tariff rates were observed with comparatively rare exceptions. As has been seen, each statutory "new broom" has swept satisfactorily and there is no reason to believe that the present one is an exception in that respect. It is to be hoped that it will prove to have exceptional wearing qualities.

Reporting to Congress on December 1, 1906, Honorable William H. Moody, then Attorney-General of the United States, characterized the efforts to enforce the penalties for violations of the Act to regulate commerce of February 4, 1887, and its amendments (not including the Elkins law, which is not in terms an amendatory statute) as "not conspicuously successful." This statement is certainly a moderate one, for during the period of but a few months less than twenty years that it was in force there were, altogether, but seventeen convictions, no sentences of imprisonment were executed1 and the total fines imposed aggregated but $16,376, while the government failed in sixtytwo indictments out of seventy-nine.2 The Elkins law, declares the Attorney-General,

"very much strengthened the hands of the government in dealing with discriminatory practices of railroads."—Annual Report for 1906, p. II.

There were, however, no prosecutions for rebating instituted under this law during the first two years after its enactment, the first indictment being secured on July 1, 1905. Two more indictments were obtained in the following October, one in November, a large number in December and many more during the

1 On July 21, 1892, two persons were convicted of false weighing and sentenced to pay fines of $2,000 each and 18 months imprisonment, but both were pardoned before execution of the sentences. See pamphlet issued by Department of Justice, under date of March 7, 1907, entitled "Civil and Criminal Cases Instituted by the United States under the Sherman Anti-Trust Law of July 2, 1890, and the Act to Regulate Commerce, approved February 4, 1887, as amended, including the Elkins Act," p. 15.

* Annual Report of the Attorney-General for 1906, p. 11.

year 1906.1 The Attorney-General states that from October, 1905, "when the situation was first fully realized," to the end of November, 1906, there were seventy-seven indictments, of which, at the date of his report, fifty-three were still pending, and twenty-four had been disposed of. The result of the twentyfour completed cases had been eighteen convictions, three discontinuances, two verdicts of not guilty and one indictment held bad upon demurrer. Thirteen corporations and seventeen individuals were found guilty and, excluding one case in which sentence had not been passed, the individuals had been fined from $1,000 to $10,000 each and the corporations from $15,000 to $108,000 each, the fines aggregating $416,125. The imprisonment penalty prescribed under the amended Elkins law had not become practically operative at the date of the report, but on one indictment, under Section 54402 of the Revised Statutes, the anti-conspiracy law, two defendants were fined and also sentenced to three and six months' imprisonment, respectively. After the date of the report and to March 7, 1907, four corporations, among them the American Sugar Refining Company, were fined, in the aggregate, $158,000 and four individuals were fined $12,000. Thus, fines under the Elkins act now aggregate $586,125. There have been no further sentences of imprisonment. This record of prosecutions, in connection with the facts as to the prevalence of rebating hereinbefore presented, plainly discloses the fact that for eighteen years there was no vigorous and intelligent effort to detect and punish deviations from the published rate-schedules. For when, more than four years after he became President, the present Chief Executive concluded that:

3

"It seemed, therefore, desirable that an earnest effort should be made to enforce the law rigorously,"-Report of Attorney-General for 1906, p. 12.

it was not under a new law but under the old laws that successful prosecutions were found to be practicable. No law has yet been

1 Pamphlet of Department of Justice previously cited, pp. 21, et seq.

2 Ante, p. 134, foot-note.

3 Annual Report of the Attorney-General for 1906, p. 12.

4 Pamphlet of Department of Justice previously cited, pp. 21, et seq.

invoked to secure indictments or to obtain evidence or otherwise in aid of detection or prosecution which was not in force as long ago as February 19, 1903, and the only sentences to imprisonment that have ever been executed have been under laws which have been in force since April 5, 1887. The Attorney-General naively ascribes this lack of enforcement to "the insufficiency of the law or other reasons."1 The facts completely eliminate the first of these alternatives.

This rather tedious record clearly discloses, then, two principal phenomena of great significance. These are (first) the notorious and almost open violation of the law against rebates and (second) the reluctance of the authorities to punish the offenders. The present period of general observance of the schedules and more energetic enforcement has not yet persisted long enough to be pronounced exceptional; it will prove to be such only if it outlasts the next period during which rival railways are forced to struggle over the division of a traffic movement too scanty in the aggregate to afford revenues adequate to the needs of all of the competitors. In no way anticipating the results of such a test, it may be observed, that when a period of two successive decades is characterized almost continuously by such incidents as are herein presented, the inquiry whether the law itself is not at fault becomes not only legitimate but necessary.

A rebate may be the means of affording to a particular shipper, commodity or locality an undue and, therefore, unjust preference or advantage over other shippers, commodities or localities. But it may, just as easily, be the means by which a particular shipper, commodity or locality is put on an equal footing, as to the rate itself, with every other shipper, commodity and locality. If the published rates are justly related among themselves every deviation from them is an unjust discrimination, but, on the other hand, if the published rates are unjustly related to each other, a not inconceivable condition, justice as to the rates may be restored by rebating to those unjustly prejudiced the amount of the improper advantage that would accrue to their 1 Annual Report for 1906, p. II.