Railroads: Rates and Regulations
CHAPTER XX
THE CONFLICT OF FEDERAL AND STATE AUTHORITY; OPEN QUESTIONS
History of state railroad commissions, 627.--The legislative unrest since 1900, 628.--New commissions and special laws, 629.--The situation critical, 630.--Particular conflicts illustrated, 631.--The clash in 1907, 632.--Missouri experience, 633.--The Minnesota case, 634.--The Governors join issue, 634.--The Shreveport case, 635.
Control of coastwise steamship lines, 638.--Panama Canal legislation, 641.--The probable effect of the canal upon the railroads, especially the transcontinental lines, 643.
Historically, the attempt of the separate American states to control railways began with a law after the English model in New Hampshire establishing a commission in 1844.[798] Three other New England states then followed suit prior to the Civil War.[794] But these early experiments were mainly concerned with matters of safety rather than of rates. The first real step was taken by Massachusetts in 1869. The Railroad Commission created in that year has served ever since as a model of the so-called "weak" or "advisory" type of regulation. Others of this sort were more common in the eastern states. Such commissions, in Massachusetts for example, rely mainly upon public opinion for the enforcement of their decisions. They possess very limited authority over rates, although they are empowered to recommend such changes as may be deemed advisable. Back of this authority, of course, lies the legislative power of the General Court, invoked on special occasions. But, in general, the activities of the Massachusetts type of commission have been mainly confined to supervision, either of construction or of capitalization.[799] New York and several other states conformed in the main to this type, although none of them had any authority over matters of finance. A second variety of the older railroad commissions dates from the period of the Granger Movement in the West. Maximum rate laws were passed by a number of commonwealths in the seventies, notably Illinois, Minnesota, Iowa, and Wisconsin. The outcome of this legislation was the decision of the Supreme Court of the United States, elsewhere discussed,[800] holding that state legislatures had the power to fix rates. The so-called "strong" commissions had their rise in connection with these events. Railway boards of this second type exercised control over rates in two ways; namely, by means of the promulgation of freight classifications and the prescription of maximum distance tariffs. For the purposes of such regulation most of the western states grouped the carriers according to their earning capacity, with a different schedule in each case. In certain of the southern states these older commissions adopted even more drastic policies which brought about prolonged litigation. The peculiar case of Texas, adding financial legislation to the direct prescription of rate schedules, has been discussed by itself.[801]
A new chapter in railroad regulation by the separate states dates from the general public unrest and Congressional activity of the Roosevelt period. An almost frenzied activity after 1900 culminated in 1907 in a legislative wave which swept over the entire country. No less than fifteen new or remodelled commissions were created in the two years 1905-1907, bringing the total number by 1908 to thirty-nine. Practically all of these were of the so-called "strong" type; that is to say, possessing the most extensive powers over all matters of rate operation and in many cases of finance as well. The most notable of these, of course, were the so-called Public Utility Commissions of Wisconsin (1905) and New York (1907). The subjugation of the formerly dominant railway interests in New Jersey and Pennsylvania was also highly significant.[802] The movement even invaded the New England States,--so long a sanctuary of the "weak" or advisory commission. Vermont and New Hampshire set up powerful boards, and Massachusetts, in 1913, amplified the powers of its commission in harmony with the general movement. Several features of this new lot of state commissions contrast markedly with even the old-fashioned "strong" type. Many of them permit the fixing of absolute rates. The majority now provide for appointment rather than election of the commissioners; and also by salary and in other ways enhance the dignity of the office. This operates naturally to lift these boards out of a semi-political atmosphere formerly too characteristic in many cases; and to bring them more to a par with the state courts.
The "Wisconsin Idea," achieving its full flower under the remarkable leadership of Governor La Follette in 1905, ably seconded by a number of prominent University of Wisconsin men, notably Hon. B. H. Meyer, now a member of the Interstate Commerce Commission, most completely realizes the progressive policy of sane state regulation.[803] The principle is laid down "that it was as much the duty of the state to furnish transportation facilities as it ever had been to make roads or build bridges; and that if the function was delegated to any one, it was the duty of the state to regulate it so that the agent should be required to furnish adequate service, reasonable rates, and practise no discrimination." And, it is added, that this procedure should be "so simple that a man can write his complaint on the back of a postal card, and if it is a just one, the state will take it up for him." The three fundamental principles of the Wisconsin programme, now happily incorporated in the Federal law, were full authority over future rates; secured without expense to the complainant; and with the burden of proof laid upon the railroad in cases of appeal. In short, the Wisconsin plan provided for thoroughgoing administrative control, that is to say, with strict limitation of judicial review to the determination of points at law. The issues were in no wise different from those already discussed heretofore in connection with the development of the recent Federal policy; except possibly in respect of the persistency of opposition, which has had to be overcome more gradually in the Senate of the United States,--the natural stronghold of corporate influence.
The creation of powerful state commissions since 1905 has, oddly enough, been accompanied by a great activity of the state governments in the enactment of statutes aiming independently to regulate common carriers. Laws of this class are not new. As far back as 1890 there were twenty-two maximum rate and fare statutes. A period of quiescence, marked by only four such laws in twelve years, was followed by the passage within five years to 1907 of no less than twenty-two maximum fare laws and nine maximum rate schedules.[804] To these may be added a large grist of statutes dealing with almost every detail of operation or service. Demurrage, provision for terminals, train service and connections, distribution of cars, industrial and spur tracks, and hours of labor, may be cited among a host of others.
The activities of state governments in recent years in the creation of powerful railroad commissions, with the added grist of drastic independent statutes, have greatly emphasized the eternal conflict of authority between the state and Federal governments, as well as between the different states. Problems akin to those raised by the diversity of our laws respecting marriage, labor, and bankruptcy have been forced upon the attention of Congress and the Federal courts. Reasonable coöperation might be counted upon to accomplish something; but the course of events since 1905 points to the necessity of a final settlement of this important issue as far as common carriers are concerned, so authoritatively that a greater measure of political and industrial peace may prevail in future. The situation respecting railroads was well described by Justice McKenna of the United States Supreme Court in an opinion annulling the North Carolina law requiring railroads to receive goods for interstate transportation whether they had published rates for the proposed shipment or not;--"if the carrier obeys the state law, he incurs the penalty of the Federal law; if he obeys the Federal law, he insures the penalty of the state law. Manifestly, one authority must be paramount, and when it speaks, the other must be silent." It may be added that in this recent case, following the inevitable trend of events it was the state law upon which the penalty of silence was visited.
The ultimate ramifications of a state law under the complexities of modern railway rate adjustment and operation can never be foreseen. It is not simply a question of avoiding conflict between distance tariffs and classifications.[805] Oftentimes the most modest rules and regulations may lead to results affecting commerce over a wide area. The great increase in large cars throughout the West, by contrast with other parts of the country, as traceable to the establishment by Missouri of minimum carloads,[806] is a case in point. We have also already observed how the revised milk laws of Massachusetts opened up an issue covering all of New England.[807] And then there are the various attempts of the railroad commissions, notably Texas[808] and Minnesota, to set up schemes of rates which shall concentrate the distributive business of the community in local cities as against the competition of jobbers at a distance. The extreme confusion introduced in matters of classification by conflicting authorities has already reached a point where demand for the substitution of a single uniform schedule for the United States has become wellnigh irresistible.[809] There are also conflicts respecting laws regulating service, illustrated by the Supreme Court decision in 1907, holding that the attempt of North Carolina to require through fast mail trains to stop at small way stations, was unconstitutional;[810] and finally, some agreement as to division of accounts between interstate and intrastate business will at once be recognized as an essential to the determination of reasonable rates for through and local service respectively.[811] From every side, in short, the need of a clear separation of state and Federal powers is becoming more and more insistent.
The conflict between general and local authority came to a head in 1907, resulting in a violent clash between the Federal and state courts.[812] The worst complication arose in the South, particularly in North Carolina and Alabama. Certain railroads brought suit in the Federal courts to annul rates fixed by the state legislatures; and temporary Federal injunctions were at once issued suspending the statutes until determination of their constitutionality. Popular feeling was much aroused, and local officials sought vigorously to defend states' rights. Ticket agents collecting more than the state-prescribed fare, were condemned to the chain gang and the president of the railroad company was arrested. Federal judges promptly released all parties by writs of _habeas corpus_. A truce was finally patched up, pending determination of the matter at issue by the Supreme Court of the United States. The final and inevitable outcome, of course, was a decision by this tribunal, upholding the authority of the general government.[813] Technically, the question in these cases concerned the power of the Federal courts to issue temporary injunctions suspending state laws; or, in other words, raising the nice distinction as to whether a suit against a state officer was a suit against the state or not. Various other legal technicalities were involved both in North Carolina and Alabama. The main issue has been dealt with for the future by a special clause of the Mann-Elkins law of 1910. This provides that a petition for an injunction suspending a state law, shall be heard by three Federal judges, one at least of a superior court. Five days' notice is required; and there is a direct appeal to the Supreme Court of the United States. But an injunction, thus issued, is given clear precedence over any statute regarding common carriers emanating from authority of an individual state.
The state of Missouri has had a trying experience. This occurred in connection with a statute of 1907 reducing passenger rates from three to two cents a mile. Federal judges promptly granted injunctions against the enforcement of this statute. The state's Attorney-General in the meantime cited the railroads into the state courts to show cause for failing to obey. The compromise in this case took the form of an agreement to give the new law a trial of several months in order to test the financial effect of the reduction in fares. Then followed an interchange of injunctions, quite characteristic of the old days of the Erie Railroad, save for the integrity of the judges concerned. To this there then succeeded a decision by the Federal Circuit Court that the rates were confiscatory; although for some reason the two-cent fares and other reduced charges remained practically in effect. Controversies similar to this have arisen since 1907 in some seven different states. Oregon and West Virginia took issue as to the validity of two-cent passenger fare laws. In the latter case, the state supreme court held that the statute was not confiscatory. In Oregon the lower Federal court upheld the state law. The contest from Kentucky involved the constitutionality of a state railroad commission act, already held unconstitutional in the United States Circuit Court. The Arkansas appeal had mainly to do with maximum rate laws in relation to physical valuation of property; and in Ohio, the validity of a state rate on coal to Lake Erie was in dispute. The railroad contended that the traffic was interstate commerce, a contention denied by the state authorities.[814] The Minnesota case,--perhaps the most voluminous in its record of all,--had primarily to do with the confiscatory nature of reductions of intrastate rates: and this in turn hinged upon the mode of separating accounts.[815] A distinct affirmation of Federal supremacy has also been had by a Circuit Court opinion in 1911. All these cases are at this writing (1912) before the Supreme Court of the United States for decision. The main issue is pooled by agreement between the governors of the seven commonwealths concerned. The outcome cannot fail to be of the utmost importance,--far-reaching in its effect not only upon the regulation of railways but throughout the entire field of constitutional law. Such decisions as the Supreme Court has already rendered in connection with these matters having been entirely favorable to Federal authority, undoubtedly in this instance induced the joint action of the state executives for mutual protection and support. There can be no doubt that a sweeping decision, upholding Federal authority, will go far to solidify control by the Interstate Commerce Commission. It will also clear the air and greatly simplify the problem of operation by the managements of the railroads, not only in these seven states but all over the United States as well.
The delicate balance between state and Federal authority over commerce is also in a way to be tested in what promises to become an historic case before the Interstate Commerce Commission,--historic in the sense that its final adjudication by the Supreme Court of the United States will add a positive contribution to the body of our fundamental law.[816] It may best be understood by first gaining a clear idea of the nature of the economic grievance. Shreveport, Louisiana, is situated on the Red river, an important tributary of the Mississippi, some 190 miles distant from Dallas and 231 miles from Houston,--both of the latter being important and ambitious provincial distributing points in Texas. Shreveport, enjoying the benefits of water competition,--probably more keen historically than at present,--was granted correspondingly low carload rates by rail on merchandise from the north and east. These favorable rates were not extended to the two Texas cities, inasmuch as water competition was entirely absent. Naturally, therefore, an advantage was given to the Louisiana city in competition for distributive business in all the intermediate territory and even over in the _Hinterland_ in Texas. In pursuance of a long-standing policy of encouraging the growth of provincial jobbing points within its own borders,[817] the Texas Railroad Commission proceeded to overcome this disability by prescribing relatively low rates out of Dallas and Houston as compared with the rates from Shreveport to the same points. It seems even to have gone further and to have interposed positive barriers against the competition of Shreveport jobbers in Texas territory, by somewhat more than compensating for the low water rates at Shreveport. The disparity thus set up may be best illustrated by the following table of charges for approximately equal distances.
_Rates in cents per hundredweight_
CLASS 1 E ------ From Dallas to Big Sandy, Texas 101 miles 44 13 From Shreveport, La., to Crow, Texas. 100 miles 95 18 From Houston to Renova, Texas 103 miles 45 14 From Shreveport, La., to Angeline, Texas 104 miles 68 15
Stated in another way, sixty cents would carry one hundred pounds of first-class traffic some 160 miles out of Dallas into eastern Texas; while an equal rate out of Shreveport into the same Texas territory, west bound, was exacted for a haul of only fifty-five miles,--about one-third the distance.
The Commission decided upon the evidence by a bare majority that these Texas tariffs were unduly preferential; and ordered them to be so readjusted that the charges should be the same for equal distances from all three cities regardless of state lines. Concerning the minor point that it was lawful for a carrier to equalize conditions as between two competing places by imposing high local rates upon one point in order to offset the advantages as to inbound through rates enjoyed by the other, the Commission merely re-affirmed its belief that natural advantages of geographical location could not lawfully thus be nullified.[818]
The opinion rendered in this case is remarkable, less in its economic aspects, concerning which there seems not to have been any great diversity of view, than as regards the divergent views expressed as to the legal authority of the Commission to interfere in the matter at all. Was undue preference and advantage in the eyes of the law,--the decision being rendered under the third section of the act,--created by the set of circumstances above described? At this point the Commission divided, with no fewer than two concurring and two dissenting opinions added to the majority view. According to this last, not only was the power of Congress to legislate in such matters paramount, but it was also held that this supreme power to put an end to all forms of local discrimination,--even those created by the act of state authorities,--had been delegated by Congress to the Interstate Commerce Commission. And in such instances, wherein conflict arose between Federal and state authority, the only rational and possible course, it was held, was for the national government through its administrative agent "to assume its constitutional right to lead."
The three separate dissenting opinions are of interest as expressing the need of a definitive pronouncement upon this great question by the Supreme Court of the United States. Not alone as to whether Congress intended to delegate authority to the Commission to settle such issues, but even the right of Congress itself to pass upon them under the Federal constitution, were called in question by the members of this administrative board. Two dissenters were content to submit the matter to "the august tribunal of the people which is continually sitting" to choose between submitting to such grievances as an alternative for virtually legislating state authority out of existence. The third dissentient view was more thoroughgoing. It not only discovered, legally speaking, no undue discrimination in the circumstances. It pointed out that on reducing the Shreveport local tariff "we fix interstate rates by the Texas yardstick," whereby "the national government therefore _leads_ by _following_." It concluded by affirming that the Commission "should confine itself within the four corners of the law of its creation, usurping neither the legislative function of the Congress nor the judicial power of the courts." From all of which it is clear, first, that the Supreme Court of the United States, having once clearly defined the jurisdiction of the Federal government in such matters, it may, in the second place, well be that further amendment of the Act to Regulate Commerce will be in order.
* * * * *
In conclusion, it is pertinent, apropos of the approaching completion of the Panama Canal and the intensified interest in a more complete utilization of our internal waterways, to discuss briefly the relation between railroads and carriers by boat. The most stupendous canal projects are being brought forward, in the expectation that they will not only provide for a vast amount of low-grade traffic in themselves, but also that through the forces of competition they will bring about a substantial lowering of charges by railway. The most ambitious of these enterprises is the plan for a "Lakes to the Gulf" ship canal, even comprehending the dream of a twenty-four foot channel down the course of the Mississippi. Another and more modest proposition, probably practicable, is the construction of a canal from Lake Erie to the Ohio river. Altogether it has been credibly estimated[819] that the entire scheme for internal improvements of this sort would call for an outlay of not less than $2,000,000,000. Before engaging in any experiments upon such a magnificent scale, it is certainly proper to enquire whether the results will be in any way commensurate with their cost.
The cost of water carriage, like that of transportation by rail, should at the outset be divided into two distinct parts; one of which varies more or less in proportion to the volume of traffic, while the other, concerned with fixed charges on the investment, maintenance and depreciation, is constant. The latter in other words bears little or no relation to the tonnage transported.[820] A careful distinction between these two great groups of expenditures is of fundamental importance in any comparison between rail and water carriage. The failure to so distinguish is responsible for much of the fallacious reasoning upon the subject both in and outside of the halls of Congress. It is indisputable that mere operating expenses are very much less by boat than by rail, especially when the economies of large craft can be had. The phenomenal development of commerce upon the Great Lakes, especially for the carriage of iron ore, coal and lumber, is due to this fact.[821] But, on the other hand, it is equally clear that the second great group of expenditures, particularly the fixed charges due to the enormous first cost of construction, are very much greater by artificial waterways than by rail. The balance between low operating costs and heavy fixed charges, of course, will be struck according to the nature of the particular enterprise. And canals, being entirely artificial, offer the least advantageous opportunity for realization of the economies incident to movement of freight by water.[822]
Improved riverways are economical by comparison with canals just in proportion to their lessened first cost; but, on the other hand, mere movement expenses, maintenance and depreciation are apt to be higher according to the strength of the current. In each instance everything depends upon first cost and the consequent burden of fixed charges. This point is almost totally neglected in popular discussion of the subject. Internal waterways being, without exception, public enterprises, the burden of interest charges is generally put aside as of no consequence. Naturally therefore, these being eliminated, the apparent economy of carriage by water is mirrored forth with great effect.[823]
The experience of Germany, so often adduced in favor of water carriage, when examined in the light of the foregoing economic principles, is peculiarly illuminating. Much traffic, to be sure, moves apparently with greater cheapness than by rail upon both canals and rivers. Considering the tariffs which are based upon movement expenses alone, excluding, that is to say, any adequate return upon the total investment, such methods of transportation seem very economical and highly effective. But when _total_ costs, rather than merely partial ones, are considered, the picture is completely reversed. The Dortmund-Ems canal, for instance, certainly the most important in Germany, represents an investment per mile fifty per cent. greater than the average for German railways.[824] For the single year 1905, the contributions from the states and cities interested, amounted to a subsidy of about $900,000. This financial burden, if distributed over the total tonnage, would make the entire cost of operation nearly one-fourth greater than the average by rail.
Rivers, as we have seen, possess certain advantages over canals, mainly in proportion to the lessened first cost of their improvement. The Rhine is often cited as an example of what the Mississippi should be as a great channel of commerce; but again that fatal objection of the first cost and, in the case of the Mississippi, of maintenance must always be kept in mind. The Rhine like the Hudson river or the St. Lawrence is, indeed, naturally adapted for carriage by water. Its firm banks, gentle gradient and constancy of level, are all elements in its favor. But it is certainly futile to anticipate similar results on the Mississippi or its tributaries,--huge and inconstant leviathans as they are, traversing a great alluvial plain devoid of solid foundations of any sort. The fact that today with a nine foot channel, Pittsburg makes no use of the Ohio river for its shipments of iron and steel, but sends them to the Pacific coast by way of New York, certainly does not augur well for the success of even an enlarged riverway in future, except possibly as to coal. Of course, if the government is to write off all the original investment, shifting the incidence to the general taxpayers of the country, that is a different matter. But unless the state thus chooses to subsidize the enterprise entirely, the total cost of transportation by rail will continue to be in future as it has been in the past, substantially lower than by the older and now antiquated methods of transportation. If the end in view be the attainment of the lowest possible rates, why not subsidize the railroads directly by this same amount? or even buy them up and operate them for cost? The expense to the taxpayers would be no more; and this plan would unquestionably give far better results. Even the electrically-towed canal boat is not to be compared for efficiency in reaching all parts of the country without transhipment, with giant locomotives, low grades, heavy rails and large train loads.
The ownership or control of water carriers by railroads constitutes a troublesome feature of present day conditions. Peculiar prominence, legislatively speaking, was given to it because of the attempt in 1912 to combine legislation dealing with this possible evil with the matter of Panama Canal tolls and regulations. Such control of water lines in competition with railways is matter of public record.[825] Much of the coastwise traffic is thus tied up. The Long Island sound service of the New Haven system, the Old Dominion Company, jointly owned by eastern railroads, and the Morgan Line and Pacific Mail Company, both parts of the Southern Pacific system, are notable instances. The same thing is true upon the Great Lakes, where a practical monopoly of eastbound transportation has been long held by the trunk lines. By refusal to grant through routes and joint rates to the Lake lines at Buffalo, these railroads have practically throttled the independent water service.[826] Even on the lesser rivers this phenomenon of neutralization of water competition occurs. Oftentimes where the bulk of the tonnage, as in transcontinental business, moves by rail, the water lines simply follow the railroads as to rates with a modest differential dependent upon circumstances. But the fact of practical elimination of competition by boat line is well recognized.
The concrete shape in which this matter arose in Congress was in the form of amendments to the Panama Canal law of 1912. In the House a bill providing for free passage of all American coastwise vessels was passed by a vote of 206 to 61, this measure at the same time prohibiting all railroads from owning stock in or otherwise controlling directly or indirectly, any competing steamship lines. The overwhelming non-partisan majority is significant of public sentiment on the question. The Senate took a less radical stand in limiting the prohibition of railroad ownership to vessels making use of the Panama Canal. After prolonged discussion in the conference committee, the more drastic measure was, fortunately, eliminated.
From several points of view absolute prohibition of financial relationship between railway and water carriers seems unwise. A practical objection is that it may seriously handicap American roads in competition with Canadian carriers. The Grand Trunk, for example, reaching tidewater on Long Island sound might lawfully operate a boat line extending its service into New York; whereas the New Haven Railroad would be forced to dispose of its water lines to the same point, because they were in competition with its railroad service. And it is indisputable that similar injustice to American railroads might elsewhere be brought about. Moreover, the undoubted evil of water competition thus neutralized by railroads, might be remedied in other ways. One of these, embodied in recommendations of the Port Directors of Boston in 1912, opposing the more drastic legislation above mentioned, is the prevention of monopoly through public ownership or control of docks and wharfs. For railway ownership or lease of these, as at Philadelphia, San Francisco, Boston and elsewhere, is one of the easiest methods of preventing water competition. The water lines find it physically impossible to secure suitable terminals. And then, finally, there is always the possibility under the now amplified Interstate Commerce law, of enforcing both reasonable rates and facilities for through shipments, part rail and part water, as exemplified in the Flour City case above mentioned. It is not improbable that further amplification of the law, as recommended by the National Waterways Commission in 1912, may be necessary. Probably, in the light of bitter Southern Pacific experience, it was wise to restrict Panama Canal traffic to water lines not under railroad control. But any attempt to go farther and absolutely to divorce rail and water lines without provision, even, for the approval of the Interstate Commerce Commission in exceptional cases, might be productive of great harm both to the railroads and the public.
* * * * *
What will be the probable effect of the opening of the Panama Canal upon the railroads of the United States? One must consider the nature and volume of transcontinental traffic. The most important fact is that nearly nine-tenths of all transcontinental business at the present time moves by rail.[827] The tonnage by vessel west bound either around Cape Horn or by the Isthmian routes has, to be sure, doubled within five years to 1911. But by far the larger proportion of the business moves by railroad direct. Secondly, it is important to note that a large part of transcontinental traffic consists of an exchange of commodities between the Middle West and the Pacific coast. Over one-half of the rail shipments west bound to Pacific terminals comes from west of Chicago. Less than one-quarter of the through traffic of one of the principal transcontinental roads originated at Atlantic coast points. And, inasmuch as water competition is still mainly confined to eastern seaboard territory, the diversion of this middle western business from the rail routes will not be disastrous in amount. In the opposite direction probably an even higher proportion of business is carried by rail, the principal reason being that much of the bulky freight of the Pacific slope,--lumber for example,--is consumed throughout the treeless Mississippi valley. None of this traffic naturally ever moves by water. It is apparent, therefore, that the effect of opening the Panama Canal, although great, will be for the most part localized as to results.
Specifically stated, four distinct changes seem likely to be brought about in the transcontinental situation. The first will probably be a considerable stimulation to the merchants and cities along the Atlantic seaboard throughout a zone extending inland, perhaps, as far as Cleveland and Pittsburg. A substantial drop in steamship rates will be followed, of course, by a corresponding reduction in through rates to the Pacific coast. But, on the other hand, it must be borne in mind that at best this tonnage is even today relatively unimportant to the transcontinental railroads. More than two-thirds of their through traffic, as we have just seen, now comes from the Middle West. These railways will probably prefer to lose a portion of this Atlantic seaboard business rather than to reduce their rates upon perhaps four-fifths of the other traffic, as they would otherwise have to do under the present system of postage stamp rates, from the Atlantic seaboard to the west of the Missouri river.[828] The eastern trunk lines, moreover, may probably be relied upon to extend the low seaboard rates somewhat farther inland than at present, rather than to divide low or even lower through all-rail rates from the Atlantic to the Pacific.
Next to the Atlantic seaboard territory, the so-called Intermountain or Rocky mountain region, may be expected to benefit substantially from the opening of the canal. It will surely get lower direct rates than at present on all its supplies from the East. Atlantic seaboard cities will doubtless also seek to regain some of the business throughout this region, which has been lost to them because of the growth of manufactures in the Middle West. The transcontinental railroads will seek to protect their clients in St. Louis and Chicago as against the merchants in New York and Boston, who gain an entrance to Denver and Spokane through the backdoor, so to say. Not only will lower rates prevail, therefore, but there will also probably be a larger proportion of supplies for these mountain states drawn directly from the eastern seaboard.
The foregoing prognostication, at first glance, seems to indicate that the Middle West is likely to profit less by the opening of this great waterway than other parts of the country. But it should be borne in mind that their hold upon west coast trade is now most firmly established. A part, but certainly only a part, of Pacific terminal business may be lost, but this will be more than offset by the growth of intercourse with the intermountain states. Surely the transcontinental railroads west from St. Paul, Chicago, and St. Louis may be relied upon to protect the direct exchange of goods of their constituents with the intermountain communities. Transcontinental railway rates will, of course, be lowered somewhat. The railways will, however, probably prefer to surrender the lesser portion of their present traffic in order to maintain profitable charges upon the major share of their tonnage. The profit of these railways will doubtless for the moment be lessened; but there can be little question that an enhancement of their prosperity will follow in the long run. The opening of this great new avenue of commerce by sea is bound to stimulate immensely the growth and prosperity of the entire country. And it is beyond question that in any such large development in future, they will all share to a large degree.
FOOTNOTES:
[798] On state commissions and the conflict with the Federal government, consult as follows:
1900. Hendrick, F., Railway Control by Commissions.
1900. McLean, S. J., _Economic Journal_, pp. 22-42.
1903. Meyer, B. H., Railway Legislation in the United States.
1903. Railways in the United States in 1902, part II. United States Interstate Commerce Commission.
1905. Dixon, F. H. _Political Science Quarterly_, XX, pp. 612-624.
1908. Huebner, G. G. _Annals Amer. Acad. Pol Sci._, pp. 138-155.
In a List of References on Railways, published by the Congressional Library, 1907, special articles on experience by states, such as Dixon on Nebraska, Meyer on Wisconsin, Million on Missouri, etc., will be found under the names of states. Even more comprehensive is the collective catalogue prepared by the Bureau of Railway Economics, Chicago, 1912.
[799] Financial regulation will be discussed in vol. II.
[800] P. 452, _supra_. Also chaps. XXIII _et seq._ in our Railway Problems.
[801] Vol II, in connection with capitalization and stock-watering.
[802] On the new Pennsylvania commission consult the _Quarterly Journal of Economics_, August, 1912.
[803] "The Wisconsin Idea," by Charles McCarthy, described by Van Hise in "Concentration and Control," 1912, p. 236.
[804] Huebner, _op. cit._, p. 147 has carefully tabulated all these laws.
[805] The effect of Missouri distance tariffs upon rates over a large part of the Middle West is best instanced in the Missouri-Mississippi rate scheme. _Cf._ p. 128, _supra_, and especially chap. XX in our Railway Problems, rev. ed. _Cf._ also local and through tariffs at p. 394, _supra_; the Wabash decision, p. 451, _supra_; and the two-cent fare laws, p. 429, _supra_.
[806] P. 335, _supra_.
[807] P. 329, _supra_.
[808] _Cf._ p. 394, _supra_, the Texarkana, I. C. C. case, May, 1900; and 11 _Idem_, 180, for Arkansas. Also 13 _Idem_, 48; and 18 _Idem_, 415. For later cases, 22 _Idem_, 110; and 23 _Idem_, 404 and 688.
[809] _Cf._ p. 338, _supra_.
[810] 207 U. S., 328.
[811] P. 586, _supra_.
[812] _Economic Bulletin_, of the Amer. Econ. Ass., I; Annual Rep. I. C. C., 1907, p. 93; and _Idem_, 1908, pp. 71 and 76.
[813] 209 U. S., 123, 205.
[814] The similar controversy in Minnesota regarding iron ore shipments seems to have been settled by voluntary abandonment of the claim to regulate by the state on Nov. 20, 1911. _Cf._ Minn. R. R. Com., Rep.
[815] Decision reprinted in our Railway Problems, rev. ed., chap. XXV. See also volume II.
[816] Railroad Commission of Louisiana, etc.; 23 I.C.C. Rep., 31.
[817] _Cf._ p. 394, _supra_.
[818] _Ibid._, p. 34. A number of other cases are cited and compared by Hammond, Rate Theories, etc., 1911, p. 82 _et seq._
[819] The most careful examination of this subject is in H. G. Moulton's Waterways _Versus_ Railways, 1912.
[820] _Cf._ p. 45, _supra_.
[821] _Cf._ the Final Report of the U. S. Industrial Commission, 1901, vol. XIX.
[822] _Cf._ the data published by the Bureau of Railway Economics, in _Bulletin 21_, 1911, on the relative cost of transportation upon the Erie Canal.
[823] _Cf._ p. 386, _supra_, on competition by river in the South.
[824] _Cf._ Moulton, _op. cit._
[825] _Cf._ pp. 386, 590 and 612, _supra_. Data will be found in the U. S. Industrial Commission Report, 1900-1901, and the Senate (Elkins) Committee, 1905.
[826] The so-called Flour City case, recently decided in 1912 by the I. C. C. (not yet reported), held it to be the duty of these railroads to provide facilities for the handling of flour on through shipments of this sort.
[827] An excellent review of the situation in _Railway Age Gazette_, LIII, pp. 199 and 249.
[828] _Cf._ pp. 397 and 611, _supra_.
APPENDIX I
APPENDIX II
APPENDIX III
The following good references on the subject-matter of chapter I will be found serviceable:
1907. BISHOP, A. L. The State Works of Pennsylvania; Trans., Connecticut Academy of Arts and Sciences, XIII, pp. 1-298; and _Yale Review_, 1907, pp. 391-411.
1904. PAINE, A. E. The Granger Movement in Illinois (Bibliography); Studies, University of Illinois, I, pp. 1-53. With this should be compared, The Effects of the Granger Acts, _Journal of Political Economy_, 1903, pp. 237-256.
INDEX
A
Accounts, 515, 586 (_See also_ PUBLICITY)
Act to Regulate Commerce (_See_ contents of chapters as follows: original law, XIII; emasculation, XIV; Hepburn Amendments, XV and XVI; Mann-Elkins Act, XVII; and subsequent details, XVIII, XIX), congressional history, 450; outline, 452
Acworth, 65, 168
Adams, H. C., 44, 515
Agreements (_See_ POOLS)
Alabama, and Federal laws, 632
Alabama Midland case, 270 (map), 390, 462, 473, 481, 482 (map)
Anthracite coal (_See also_ COAL), tonnage and ton-mile revenue, 1910, 421; Federal case, 549
Arkansas, and Federal laws, 632
Ashburn case, (map), 388
Atchison, rebates, 190
Attorney-General, 570
Average train load (_See_ TRAIN LOAD)
B
Back loading (_See also_ DIRECTION), 287
Baltimore, 404
Baltimore & Ohio, railroad, 7, 18; car supply case, 541
Banana rates, 532
Basing point system (_See also_ contents of chapter XI, South, etc.), compared with transcontinental basing line system, 239; main objections to, 242; citation of cases, 380; economic defence, 384
Basing points, enumerated and defined, 383; distinction between natural and artificial, 383, 387
Beef, exports in 1870, 21; and cattle rates, 139
Beef Trust, 550
Betterments, 83
Bishop, A. L., 648
Bituminous coal (_See also_ COAL), tonnage and ton-mile revenue, 1910, 421
Blanchard, S. R., 257
Blanket rates (_See_ POSTAGE STAMP RATES, FLAT RATES, etc.), 611
Board of Uniform Freight Classification, 338
Bogue differentials, 162
Bond, 510
Bonds, 553, 573
Books and papers (_See_ WITNESSES)
Boston, 404
Boston & Albany Railroad, 11
Brimson case, 459
Brown case, 459
Buffalo, competition with Duluth, 145
Burnham, Hanna, Munger case, 442
By-products, marketing of, 142
C
California, wheat and Kansas flour, 138; raisin culture and rates, 178; fruits, 537; lemon case, 592; coastwise competition, 607
Camden and Amboy, 450
Canadian Pacific Differentials, 262
Canadian railroads, 33, 400
Canals (_See also_ contents of chapter XX), early interest in, 2; early construction of, 3; in the West, 6, supersession in '70s, 24, 638
Capital investment, as affecting operating costs, 65, 257
Capitalization, and rates, 574
Capital stock, 575
Carload rates (_See_ contents of chapter IX), few in South, 311; theoretical basis, 326; mixed, 331, 340; in transcontinental system, 398
Carmack amendment, 572
Cars, larger in '80s, 24; economy of large, 95; capacity and classification, 334; complaints as to supply, 527
Car supply cases, 199, 538
Cartage case, 191, 257, 464
Cattle (_See Texas_, etc.), exports in 1870, 21, 401; and beef rates, 139; legislation as to carriage, 443; eveners, 445; rates, 510, 536
Centralization, 162
Central Pacific, 41
Central Traffic Association, 377
Central Yellow Pine Association case, 489
Chandler, 495
Chanute, 103
Charging what the traffic will bear (_See_ VALUE OF SERVICE)
Chattanooga case, 228 (map), 240, 461, 464, 483
Cheese, 428
Chesapeake and Ohio Canal, 5
Chesapeake & Ohio Railroad case, 513
Chicago Terminal Charge case, 509
China, rates on, 183
Cincinnati Freight Bureau case, (_See also_ MAXIMUM FREIGHT RATE CASE), 248; as a part of southern problem, 392; Supreme Court opinion, 469; Commerce Court revival, 588
Circuitous competition, 604
Cities, relative size in 1850, 12; rivalry between, 127; competition of large, 278; location in trunk-line zones, 368
Citrus fruit, 537
Civil War, effect on transportation, 16; primitive conditions, 17
Classification (_See_ contents of chapter IX), and relativity of rates, 180; and use of commodity, 183; cost _v._ value of service, 183; historical development, 306; according to use, 318; in practice empirical, 319; and tariffs interlock, 347
Classification committees, conflicting rules and territory, 340
Coal (_See also_ COMMODITY CLAUSE), early shipments by river, 14; rates, 469, 513, 585
Coal Car cases, 199
Coastwise traffic, 274, 608
Colorado Fuel and Iron case, 503
Commerce Court (_See_ contents of chapters XVII, XVIII), 566; jurisdiction, 568; docket, 581; congressional history, 582; Intermountain rate decision, 620
Commercial competition (_See_ COMPETITION OF MARKETS), in the oyster case, 234; in trunk-line system, 372
Commission, Federal _v._ state, 627
Commodities, increase in ratings,309
Commodity clause, 513, 552
Commodity rates, 108; and law of joint cost, 266, 322, 324, 606; _v._ class rates in transcontinental traffic, 615
Common point system, 393
Company cars, 539
Competition, as affecting rate sheets, 104; three sorts of, 114; of routes, 114; of facilities, 116; of markets, 118; differences between trade and transportation, 136; Hadley's illustration, 164; no abandonment of field, 165; nature of, in local discrimination, 219; of routes, which line makes the rate? 255; between eastern and western cities, 391; less for passenger fares, 429
Competition of markets, two varieties of, 118; as applied to jobbing business, 124; as distinct from rivalry of routes, 242; in transcontinental rates, 613, 620
Complaints decline in number, 485; under Hepburn Act, 523; nature under Hepburn Act, 526; none too petty, 531
Concentration points, 537
Conducting transportation, in operating costs, 47, 53; declining cost of, as related to capital investment, 65
Conflict (_See_ contents of chapter XX), of state and Federal authority, 631
Congestion of traffic, in 1903-'05 and in 1906-'07, 62, 80, 548
Consolidation, 487
Constitutional questions, as to Act of 1887, 451; in Hepburn Act, 502, 506; as to amended long and short haul clause, 603; as to minimum rates, 625
Constructive mileage, 275
Cooley, T. M., 140, 456
Cordele, Alabama case, 387
Corn, and flour rates, 143
Cost keeping, 517
Cost of carriage, by highway heavy, 3; declining by 1860, 16; as affected by distance 103, 108
Cost of service, and value of service compared, 166-184; objections to, 169; but essential, 170; not mere distance important, 256; in coal cases, 585
Cotton piece goods, rates, 345, 346, 348, 400, 536
Cotton, rate controversy in 1900, 153; rates, 356, 384, 401; tonnage and ton-mile revenue, 1910, 421
Counselman case, 458
Courts, relation to Commission in 1887, 453; original law, 460; unsatisfactory after 1887 as to evidence, 461; record in appeal cases, 463; judicial review in 1905, 503; objections to judicial control, 504; indefinite basis of review, 507; futility of procedure, 562; new mode of procedure on appeal, 570; broad _v._ narrow review again, 593
Coxe Brothers Coal case, 469
Creameries, 537
Credit Mobilier, 450
Cullom Committee, 442, 444, 448, 450
Cullom, S. M., 495
Cumberland Road, 3
D
Dairy products, 537
Damage claims, 524, 534
Danville case, 227, 483
Decade 1840-'50, 11; 1870-'80, 85
Decentralization, 385
Delaware and Hudson, 554
Delaware, Lackawanna and Western Coal Company, 554
Density of traffic, 86
Denver, 242
Des Moines Committee, 344
Detroit, 373
Differentials (_See also_ contents of chapter XI), 22; Bogue, 162, 262, 361; Canadian, 400, 404, 579; in Intermountain rate cases, 617
Direction of traffic, 287, 374
Discriminations (_See_ contents of chapters VI and VII), complaints in 1887, 445
Distance, as a factor in tariff construction, 102; subordinated in United States, 133; disregard of, produces inelasticity, 161; subordinated to cost of service, 256; relative unimportance, 264; excessive transportation, 277; attempt to reform southern system, 391; nullified in transcontinental rates, 396
Distributing business (_See also_ JOBBING BUSINESS), in Texas, 394
Dixon, F. H., 499, 506, 625
Dollar mark, 575
Dortmund-Ems canal, 640
Dressed meats, tonnage and ton-mile revenue, 1910, 421
Duluth, competition with Buffalo, 145
Dumping, 158
Durham, N. C., case, 210
E
Earnings, during panic of 1907, 75; statistics of gross and net since 1890, 79; as affected by level of rates, 82; gross and net compared, 84; comparison with decade 1870-'80, 85; monthly variation, 100
Eaton, J. S., 66
Eau Claire lumber case, 162, 254
Economic wastes, theory and practice, 268
Elkins, S., 501
Elkins Committee, 496
Elkins law (_See_ contents of chapter XV), application to Standard Oil cases, 205; prosecutions under, 208; main provisions, 493
Equipment, supply, 527
Erie Canal, 4, 7, 15; still important in 1865, 18; decline after 1872, 24; plans for enlargement, 31, 358
Erie Railroad, early importance, 16
Esch-Townshend bill, 496
Eveners, 445
Evidence (_See also_ WITNESSES), powers as to, 461; as to rebates, 493; immunity bath, 550
Ex-Lake grain, 145
Expedition Act, in 1903, 511
Expenditures (_See also_ FIXED CHARGES, MAINTENANCE OF WAY, etc.), earliest classification of, 44; primary division into constant and variable, 45, 55; revised grouping in 1906, 46; statistical distribution, 49; as affected by seasons and circumstances, 56-57; according to nature of road, 58; dependent on density of traffic, 60; constant and variable ever changing, 61; under curtailment of traffic, 63; inseparable as between freight and passengers, 68; affected by betterment charges, 83
Expenses, 64; separation of freight and passenger, 68; comparison with tonnage and revenue, 80
Export grain, beginning after Civil War, 18; after 1870, 20; _via_ Gulf ports, 31
Export rates, on wheat and flour, 135, 404-406
Exports (_See_ BEEF, CATTLE, WHEAT, etc.)
F
Facilities, competition of, 116
Federal authority (_See_ contents of chapter XX)
Federal courts (_See_ COURTS)
Fertilizer rates, 535
Fines, 451, 493, 513
Fink, Albert, 357, 367, 446
Fixed charges, 45; _v._ operating expenses, 257
Flat rates, example, 127; evils in, 132, 243-247
Flour, and wheat rates, 135; for export, 135; domestic, 138; and corn, 143
Foraker, J. H., 501
Fort Worth, 394
Fourteenth Amendment, 619
Freight tonnage (_See_ TONNAGE)
Fuel cost, 59
Furniture rates, 621
G
Galveston, 31, 32, 33, 394, 437; cotton meal case, 186
General Expenses, 48, 54
Georgia Railroad Commission cases, 240
Germany, unified operation in, 294, 640
Glass, 351, 528
Goodrich Transit Co., case, 586
Gould-Huntington, agreement, 447
Gould, Jay, in 1866-1869, 17, 28
Grain elevator cases, 211
Grain rates (_See_ CORN, WHEAT, etc.), 402
Grain, tonnage and ton-mile revenue, 1910, 421
Grand Junction, Tennessee, case, 203
Grand Trunk Railway, 33, 432
Granger movement, 443, 628, 648
Great Western Railroad, 434
Green lines, 12, 15
Gross Revenue (_See_ EARNINGS), 79
Gulf Ports, 437
H
Hadley, A. T., 105, 164, 217, 573
Harlan, Justice, 465
Harriman, E. H., 490, 551
Harriman system, 547
Hay, tonnage and ton-mile revenue, 1910, 421
Hearst case, 549
Hepburn Act (_See_ contents of chapters XV and XVI), congressional history, 497; provisions, 499; effects, 522
(Hepburn) Committee, 445, 447
Hides, 320
Highways, early interest in, 2
Hill Lines, 547
Hillsdale ice case, 221 (map)
Hogs, 401
Hoosac Tunnel, 18
Household goods, 350
Houston, 394
Huebner, 627, 630
Hutchinson salt case, 195
I
Illinois Central car supply case, 538, 568
Illinois Central Railroad, construction, 14
Immunity Bath, 550
Import rates, 406, 409, 438, 464
Imprisonment, 451, 493, 513
Improvements, in operation, 93
Increasing returns, law as applied to railroads, 71-75; law of, qualified, 76; as tested practically, 77; law of, obscured since 1906, 84; final conclusion as to, 98
Industrial Combinations, and rebates, 213, 491
Industrial railroads (_See also_ TERMINAL RAILROADS), 195, 212-213, 512
Injunction, 561, 562, 569, 586, 633, 634
Ink, 302
Intermountain rate case (_See also_ TRANSCONTINENTAL RATES and contents of chapter XIX), 610; history, 614; new orders, 616; Commerce Court opinion, 620
Internal waterways (_See also_ contents of chapter XX, CANALS, RIVERS, etc.), 640
International Harvester case, 196
Interstate Commerce Act (_See_ ACT TO REGULATE COMMERCE)
Interstate Commerce Commission (_See also_ chapters XIV, XV, XVI, XVII, XVIII, XIX, COURTS, PROCEDURE, etc.), reduction in tariffs filed, 324; created by law, 453; record on appeal cases, 460; rate-making power demanded, 468; complaints analyzed since 1906, 526; dissenting opinions in Shreveport case, 636
Intrinsic reasonableness, 622
Iowa Development Company, 434
Iron pyrites, 536
Iron rates, 399
J
Jobbing business, market competition in, 124; car load rates, 327-329; in the South, 384; decentralization, 385; in transcontinental rates, 397; and Pacific rates, 616
Joint cost, 67; two limitations upon the law, 265
Joint Rate Committee, 367
Joint rates, 529
Judicial review (_See_ COURTS)
K
Kansas, wheat and California flour, 138; meal and Texas corn, 143
Keeping everyone in business, 119, 149
Kentucky and Indiana Bridge case, 461
Kindel case, 399
L
La Follette, 498, 559, 629
Lake Shore road, 419
Lake traffic, 358
Lakes to the Gulf canal, 638
Land grants, Illinois Central, 14; others, 35
Lemons, rates on, 345, 537; rate case, 592
Lighterage cases, 586
Lime, rates, 336
Lincoln, Nebraska, case, 147
Live stock (_See also_ CATTLE, etc.), tonnage and ton-mile revenue, 1910, 421
Local Discrimination (_See_ contents of chapters VII and XIX and _also_ LONG AND SHORT HAUL CLAUSE), definition, 215; before 1887, 448
Local rates, in the South, 383; in Texas, 394; and revenue per ton mile, 421; reduced after 1887, 456, 591; the Shreveport case, 635
Local traffic, as affecting averages, 91; proportion of, 259; in basing point system, 385
Locomotives, 24; increased power of, 94
Logging in transit, 401
Long and Short haul clause (_See_ LOCAL DISCRIMINATION and _also_ contents of chapter XIX), tariff structure, obviating waste, 295; final text, 452, 565; congressional history, 473; English cases, 473; emasculation by courts, 476; amendment in 1910, 564
Long line, defined, 256; competition, 604
Louisiana rates, 634
Louisville & Nashville, 590
Louisville & Nashville case, 223, 244, 296, 474, 479
Louisville Properties Company, 556
Lumber, competitive rates for, 142; and wood pulp rates, 148, 181; tonnage and ton-mile revenue, 421; stakes, 533
Lumber rates, Pacific coast cases, 150, 535, 543, 581; tap line case, 212; logging in transit, 401; from Georgia, 489
M
MacGraham, 360
Maintenance of Equipment, 47, 52, 64
Maintenance of Way, expenses analyzed, 47, 51, 74
Mann-Elkins Act (_See_ contents of chapter XVII), congressional history, 558; provisions, 562
Manufactures, westward drift in '80s, 30
Market, definition of, 119
Markets, competition of, 118, 605; consuming capacity as affecting carload rules, 336
Massachusetts Railroad Commission, 627, 629
Maximum Freight Rate case (_See also_ CINCINNATI FREIGHT BUREAU CASE), 248, 469-473, 502
Maximum rates, constitutionality of, 623; state laws, 630
Memphis, 403
Meyer, B. H., 495, 629
Meyer, H. R., 385
Middlemen (_See_ JOBBING BUSINESS)
Midnight tariffs, 197
Mileage, statistics since 1890, 79
Milk rate cases, in New York, 243, 255; in New England, 329
Milling in transit, 402
Minimum carload rates (_See_ contents of chapter IX), 332
Minimum rates, 254, 624
Minnesota, and Federal laws, 632
Misquotation of rates, 571
Misrouting, 527
Mississippi river, tonnage on 1845, 13; declining traffic in '80s, 26
Missouri, carload minimum rates, 335; and Federal laws, 632
Missouri-Mississippi rate scheme, 128, 442, 543
Mixed carloads, 331, 340
Monopoly, resulting from rebates, 187; distrust of, in 1887, 446
Montgomery, Alabama, case, 590 (map)
Morawetz, V., 165
Munn case, 452
N
Nashville, 342
Nashville Grain Exchange, 587
Natural market and territory, 158
Net Earnings (_See_ EARNINGS), 79
Nevada, 611
Newcomb, H. T., 73
New England, oil rates, 202; milk rates, 329; common point system, 395
New Orleans, 31, 32, 33, 437
New York Board of Trade case, 306, 325, 407
New York Central railroad, construction, 15; importance in '80s, 30; compared with Pennsylvania Railroad, 58
New York city (_See also_ DIFFERENTIALS, EXPORTS, etc.), importance in export trade, 30; supremacy threatened, 31
Nickel Plate line, 29
North Carolina, and Federal laws, 632
Northern Pacific railroad, 28
O
Official classification committee, 304
Ohio river, tonnage in 1845, 13
Open car system, 330
Operation (_See also_ EXPENDITURES, etc.), improvement in '80s, 23; recent technical improvements in, 93; in 1910, 597
Orange rates, 345, 471, 537
Orange Routing case, 546, 572
Osborne case, 476
Oyster case, 217
P
Pacific coast (_See also_ TRANSCONTINENTAL RATES, etc.), early trade with, 19; rapid development in '80s, 28; lumber cases, 150; routes by sea and rail, 276
Panama Canal, 638, 643
Panic, of 1857, 16; of 1907, 75; of 1893, 433
Par value, 575
Parallelling, 29
Passenger traffic, 429, 609
Passes, 512
Pennsylvania, internal improvements, 8; state works, 648
Pennsylvania Railroad, 8, 11; illustration of theory of rates, 62; coal supply scandals, 199; and steel companies, 556
Performance, of equipment improved, 96
Periodicity of expenditures, 61
Personal Discrimination (_See_ contents of chapter VI), 185; philosophy of, 185; as creating monopoly, 187-189; distinction from general rate cutting, 188
Philadelphia (_See_ DIFFERENTIALS, EXPORTS, etc.), 404
Physical valuation, 518
Pools, before 1887, 23, 446; obviating waste, 293; prohibited, 453, 579; after 1887, 457
Population, westward drift in '80s, 30
Portland Gateway case, 547, 572
Portland, Oregon, 608
"Postage-stamp rates" (_See_ FLAT RATES), 397, 611
Powder Trust, 571
Prices, and rates, 172, 430, 471, 510, 587, 597
Primary commercial competition, 121
Private car lines, 140, 192
Procedure (_See_ COURTS, WITNESSES, etc., and _also_ COMMERCE COURT), under Hepburn Act, 505, 511
Proctor and Gamble case, 584
Produce Exchange case, 405
Pro-rating, 281, 514, 529, 543, 547
Public aid, 35
Publicity, 515, 574
Pueblo, 399
Pulp rates, 148
R
Railroad Construction, early in southern states, 9; sudden expansion in 1848, 13; new north and south lines, 14; decline during Civil War, 16; rapid during the '70s, 18; climax in '80s, 27; since 1890, 34; comparison with Europe, 35
Railroad mileage (_See_ MILEAGE)
Rails, steel introduced, 17, 24, 93
Rate advances, complaints since 1906, 534; suspension in 1910, 561
Rate-making power, 467, 468; under Hepburn law, 500; constitutional aspects, 502, 506; suspension of tariffs, 560
Rates (_See also_ PRICES, etc., and contents of chapter XII), decline in '70s, 21; intricacy of, 134; on raw and finished materials, 134; export wheat and flour, 135; domestic wheat and flour, 138; beef and cattle, 139; as between by-products, 142; cases of substitution, 143; general protective policy, 146; under changing conditions, 147; insurance function, 149; elasticity of, 152; rigidity, 153; as promoting economic unrest, 156; stability desirable, 157; use of classification in advances, 301; growing distinction between C. L. and L. C. L., 310; lime, 336; glass, 351; trunk line system, 354; cotton, 356; high level in the South, 382; no demand for reduction in, 1887, 443; movement since 1870, 411; actual index, 426; and prices, 430, 471, 510, 528; rise of, 488, 534; and capitalization, 574; advances of 1910, 594; absolute _v._ relative, 623; prescribing minimum, 624
Rate wars (_See_ contents of chapter XII), during the '70s, 22; during the '80s, 23; dressed beef, 33; historical survey of, 431
Reagan, Judge, 444, 450
Reasonable rates (_See_ contents of chapter VII), 588; in Intermountain rate case, 622
Rebates (_See_ PERSONAL DISCRIMINATION and _also_ ELKINS AMENDMENTS), 185, 280, 286; Standard Oil cases, 446; novelty of prohibition, 454; first prosecutions after 1887, 457, 512
Red Rock Fuel case, 199
Refrigerator cars, 140
Rentals, 534
Reports (_See_ ACCOUNTS), 519
Restrictive Rate case, 585
Revenue (_See_ EARNINGS), and rates in 1910, 599
Revenue per ton mile (_See_ contents of chapter XII), decline during rate wars, 23; as related to earnings and expenses, 85, 99; Dilution of, 289; how computed, 412; advantages, 414; on different roads, 415; as influenced by nature of traffic, 416; as affected by distance, 421; and volume of traffic, 423
Review by courts (_See_ COURTS)
Rice cases, 446
Rivers (_See_ contents of chapter XX), early improvement of, 3; still important in 1850, 12; tonnage in 1845, 13; declining importance in '70s, 26, 382; competition in the South, 386, 640
Rockefeller, John D., 445
Roosevelt, President, 486, 496
Roundabout routing, 116, 269
Routes, competition of, 114; new law as to, 572
Routing (_See also_ contents of chapter VIII), complaints, 530, 546
Rules, growing complexity in classification, 312
S
St. Cloud case, (map), 235
St. Louis Business Men's League case, 125, 241, 246, 398
St. Louis, rates under three classifications, 348
Salt Lake City, 400, 611
Savannah Fertilizer case, 224
Savannah Naval Stores case, (map), 484
Sax, 168
Scientific Management, 517, 598
Seaboard differentials (_See_ DIFFERENTIALS), 404
Secondary commercial competition, 122
Securities Commission, 573
Sherman Anti-Trust Act, 561, 579
Shoes, 320
Short line, defined, 256
Shreveport, Louisiana, case, 635
"Similar circumstances and conditions" (_See_ LONG AND SHORT HAUL CLAUSE), 475
Smalley, H. S., 499, 507, 625
Social Circle case, 380, 462, 464, 468, 478
South (_See_ contents of chapter XI), system of rates into, 248; high local rates, 260; classification conditions, 311; commodity rates, 323; jobbers in, 327
South Carolina Railroad tariff, 307
Southern Basing Point (_See_ BASING POINT SYSTEM)
Southern Classification (_See_ contents of chapter IX)
Southern Classification Committee, 304
Southern Pacific Railroad, construction, 28; water competition, 1912, 607
Southern Railway & Steamship Association, 23
Special rates (_See also_ COMMODITY RATES), as distinct from class rates, 113; and joint cost, 266, 280
Speculation, rampant in '80s, 29
Spokane, 226, 303, 611
Standard Oil Company, rebates on tank cars, 192; allowances on sale of supplies, 198; later forms of rebates, 198, 200, 200-206, 445, 491
State railroad commissions, 574, 627
Stock, 552, 573
Stock-watering, 444, 448
Stock-watering laws, 576
Storage, 191
Subsidies and public appropriations, 37
Sugar, rate war, 439; rates, 586
Sunday Creek Coal case, 209
Supreme Court (_See also_ COURTS), delay in appeal cases, 461; divided opinions, 464
Surplus, statistics since 1890, 80
Suspension of rates, 561
T
Taft, President, 559
Tank cars, 192
Tap line decision, 212
Tarbell, Miss, 491
Tariffs, construction of, 101; too complex and numerous, 155; concealment of rebates in, 198; as distinct from classification, 301; classification as affecting, 321; reduction in number filed, 324; as interlocked with classification, 347; and rates, 407; new law concerning, 571
Taussig, F. W., 67
Tax, economic waste, 291
Telegraph companies, 572
Telephone companies, 572
Terminal cost, 101
Terminal railways, as means of rebating, 195; complicated phases of, 213, 512
Testimony (_See_ WITNESSES)
Texas Cattle Raisers case, 70, 167, 567
Texas, corn-meal and Kansas corn, 143; rate system, 393, 635
Theory (_See_ contents of chapters II and III), of classification, 314
Through freight lines, 23
Through rates, 359, 442, 529, 587, 588
Tobacco, 384
Tobacco Trust, 210
Ton mileage, statistics since 1890, 78
Ton-mile revenue (_See_ REVENUE PER TON MILE), 364
Tonnage, statistics since 1890, 77; distribution by years, 417; increasing diversification, 418; classified for 1909, 420
Traffic Density (_See_ DENSITY OF TRAFFIC), 86
Traffic Expenses, 48
Traffic (_See_ TONNAGE), trunk line conditions in 1882, 357; nature of, as affecting ton-mile revenue, 416; by Panama canal, 643
Train load, 88; limit to economy of, 92
Train mile, cost and revenue per, 98
Transcontinental classification committee, 304
Transcontinental rates (_See_ contents of chapters XI and XIX), rigidity, 154; compared with basing point system, 239, 245; general high level, 396; demoralization after 1893, 433; commodity _v._ class rates, 615; future traffic, 643
Troy case (_See_ ALABAMA MIDLAND CASE), (map), 270, 390, 462, (map), 481
Trunk Line Rate System (_See_ contents of chapter X), as related to separate line tariffs, 111
Trusts, and rebates, 213; 491, 571
Two-for-one-rule, 343
U
Under classification, 190
Uniform classification (_See_ contents of chapter IX), 338; objections and advantages, 345
Uniform Classification Committee, 339
Union Pacific Railroad, 19, 40
Union Stockyards Company, 587
V
Valuation, 518
Value of service, and cost of service compared, 166-184; objection to, 172; dynamic force in, 177; inadequate alone, 179; in classification, 315; in coal cases, 585
Vanderbilt, Commodore, 450
Volume of traffic (_See_ TONNAGE, etc.), as an element in cost, 261
W
Wabash, St. Louis, & Pacific Railway case, 451
Wages, 518
Wagons, 109, 621
Wars (_See_ RATE WARS)
Waste (_See_ contents of chapter VIII), in transportation, 268; six causes of, 280; five results, 288; remedy for, 292
Water carriage, circuitous routing, 273; cost compared with rail, 638; controlled by railways, 641
Water carriers, failure to regulate, 579
Water competition, by coastwise steamers to Chattanooga, 232, 359, 475; in the South, 382, 385, 387, 392; by sea in Pacific coast traffic, 396; new law covering, 566, 591; and new long and short haul clause, 606; neutralized in Pacific rates, 612; _v._ market competition in Pacific cases, 620
Waterways (_See_ contents of chapter XX and _also_ CANALS, RIVERS, etc.), 638
West, classification conditions, 311
Western & Atlantic road, 12
Western classification committee, 304
West Shore railroad, 29
What the traffic will bear (_See_ VALUE OF SERVICE), illustrated by rate sheets, 107
Wheat, and flour rates, for export, 135; domestic, 138; rates, 467
Wichita cases, 232
Willamette lumber case, 535, 545
Windom Committee, 442, 443, 446, 447
Wisconsin, Two Cent Fare decision, 69; investigation as to rebates, 206; the "Wisconsin idea," 629
Witnesses, 451, 455, 457, 549
Wooden pipe rates, 303
Wool rates, 333, 352, 401
Y
Youngstown case, 223, 244, 296, 480
Z
Zone rates, trunk line territory, (map), 365; transcontinental, (map) 618
Transcriber's Notes:
Simple spelling, grammar, and typographical errors were silently corrected.
Anachronistic and non-standard spellings retained as printed.
Italics markup is enclosed in _underscores_.
Bold markup is enclosed in =equals=.
P. 453 sections 7, 8, 17, 18, & 19 were skipped in original.