The record-union., 1894-05-05
RAILWAY RATE REGULATION.
Complete History of Rate and
Competitive Questions.
Exposure of Fallacies Regarding Regu-
lation-Railrosd Rates in California
and Elsewhere-The Right to Rea-
sonable Rates.

iaIion-hailfossu haDeS In California
and EIsewhere-The Right TO Rea-
sonable Rates.
Not long ago Gerrit L. Lansing. Esq,
of San Francisco read before the Chit
Chat Club of that city a paper on "The
Right Of the Railroad to Reasonable
Rates.
This paper is of such high value as
historical review, is so stored with in
formation and sound argument, and is so
clearly the best review yet made OF the
question Of the constitutional powers of
the Railroad Commission, that we under
take to present review, with copious
extracts.
While this able and exhaustive essay
and historical review is accompanied
by charts and tables illustrative of points
made, and which we cannot now present,
the salient features we hope to be able to
convey TO our readers, whom we assure
of profit and instruction in reading the
article.
HISToRY-THE GRANGER CASES.
The Granger cases of 1876 first brought
the power of Legislatures to fix the rates
of railroad transportation.
An Illinois Act fixed charges for stor-
age of grain in warehouses. In one case
higher rate was charged and the offend
ers were punished by fine, and the Su-
preme Court affirmed the judgement.
The case then went TO the Supreme Court
OF the United States.
1t was claimed that the Act of regula-
tlon was in violation of the fourteenth
amendment, securing life, liberty and
property to all and equality of protection
under the laws.
WHAT THE COURT HELD.
Had the Legislature the power to fix
rates for use of private property? That
was the main question considered by the
court.
lit held that by virtue of the ware
house business being affected with pub
lie use, it became subject to legislative
control of rates as well as to other regula-
ton for the public benefit. That this fol-
lows from the fundamental powers of
government inherent in every soyer-
eighty, TO provide laws requiring each
person SO TO conduct himself, and to use
his own property, as not to infringe the
equal freedom or property rights of others.
When private property is de-
voted to public use it is subject to public
regulation"
WHAT THIS INVOLVES.
This involves The vital question, "What
is the limit of The legislative power of
regulation ?'' ''If this is to be liked by
reasonableness, so that rates will afford
the usual prohts to property devoted to
public use,' and at the same time pro-
tect the public from rates which are un-
Just-from eXtortion or unjust discrimi-
nation; and if the fact of reasonableness
oh in nh he
determined as are other facts affecting
property rights, by due process of law
by the courts Of juStlce-then the regula-
lion may be expected TO further the end
for which 1t was authorized. 1t will pre-
vent the use of such property by its
owners to the injury OF the property rights
OF others. If the legislative regulation as
to rates is without Limitation, it will, as
other regulation under the police power
of the State has in the past repeatedly
done, produce what it was intended TO
prevent-inj INJUSTICE. Public regulation tor
the public use may then deny such prop
erty the equal protection OF The laws, and
under the form of regulation may affect
its confiscation."
THE QUESTION OF REASONABLE COM
PENSATIoN.
Upon this point of reas0nableness of
compensation the court held that the right
10 regulate carries with it the right to
establish the maximum charge as one of
the means of regulation. The court said:
1--WE know this is power which may be-
abused; out that is no argument against
its existence. For protection against
abuse by Legislatures the people must re-
sort to the polls not to the courts" (p.
134.)
DISSENTING VIEWS.
Two Justices dissented, giving the
fourteenth amendment broader con-
10 tn
prevent Legislatures from violating the
great natural rights of life, liberty and
property; that to make the receipts of the
fruits of ones property or industry de-
pendent on the legislative will, is simply
TO give license unrestrained. But the
State may regulate private property so
far as is necessary to protect the rights of
others. and secure to all the equal use
and enjoyment of their own. In this case
the warehouse was private property,
owned by private persons, used to store
grain for price, was not under public
franchise, and not handled for public
uses.
A WEAK PLEA.
1.-THE plea for the regulation of charges
by the State was that the article chiefly
stored was wheat, from which was man
tactured bread, the staff of life. The bus
mess was thus affected with public in
terest. But, as this public interest was
comes subject to the same legislative reg
ulation as TO the price of his loaves.
The use OF the police power to fix by
law the prices of things affected with
public use is a return to the misguided
legislation of the past, when attempts
were made to fix the price of bread and
of other commodities OF common con-
sumption. The application of this rule
10 railroads was not based on the plea
that they were owned by corporations
The creatures Of law, and operating under
authority of q franchise granted by the
State. Railroad rates were declared SUBJ
lect TO unrestricted legislative control
solely because transportation is affected
with public use.
THAT is indeed the true and natural
reason why such regulation as is legal
may be exercised by the State. If the
rates are unjust it is the proper province
Of the State to provide such regulation as
will remedy the injustice: but if, in the
effort to prevent injustice to the shipper.
IL fixes rates which are unjust to the car
rier, it defeats the most important end for
which government is established
THE PRINCIPLES APPLIED TO RAILROADS.
The principles laid down in the elevator
or warehouse cases were applied in sew
eral cases TO railroads, and the same JUS
tices dissented, who held that the doc
trine put railroad companies and their
business at the mercy of the Legislature.
But the decision affirmed the legality OF
rates. just or unjust, fixed by the Granger
legislation Of Illinois, Wisconsin, Iowa
and Minnesota. This legislation was in
disregard of any rights claimed by the
railway carriers for their property.
HIGHER Law.
But the results were found to be con-
trolled by higher law than that recog-
niZed by the courts. They are thus sum-
,,,oriza1 bv ProfaSSor Hodlox1 20 V,la