Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-12-27
DISCUSS R. R RATES
Members of American Eco
nomic Association
MEET IN PHILADELPHIA
REGULATION OF CHARGES By
LEGISLATIVE ACTION.
Addresses by Charles A. Pruty and
Walker D. Hines on the
Subject.
MEET IN PHILADELPHIA

The principal speakers were Charles. "A.
Prouty, interstate commerce commissioner,
whose paper was on National Regulation,
and Walker D. Hines, vice president OF the
Louisville and Nashville railroad. who
spoke on Legislative Regulation Of Rail-
road Rates"
Mr.. Proutys address was as follows:
Mr.. Prouty's Remarks.
Five years ago the crying evil in railway
operations was discrimination; mainly dis
elimination between individuals. Today
this is not true. The vast CONCENTRATIONS
of the last few years, the use of 1n1uncuon
to prevent departures from the published
rates, the lesson which railroad operators
themselves have learned that competition
in rates is always suicide since 1t does not
increase business and does reduce revenues
have largely eliminated such competition.
The discrimination disappears, but IN us
place comes the danger attending every
monopoly, extortion in the charge imposed.
AS these combinations have proceeded the
public has been repeatedly assured that
there was no danger Of any advance IN
freight rates. Rates have been advanced
and are still advancing. In the winter of
1899 the rate on grain from the Mississippi
river to New York fell to II cents per lOO
pounds; today it is 22R cents. The cost or
transporting grain and grain products from
Chicago to the Atlantic seaboard by rail
this past summer has been from z to
cents per 100 pounds, from 10 per cent to
% per cent greater than 1t was the summer
preceding Within the month all grain
rates in every direction from the fields to
the seaboard have been advanced another
. cents per 100 pounds. Within the last
three years the combination OF anthracite
coal roads has increased the cost of do
nestle sizes to the consumer from 81 to &
per ton. In sympathy. the common stock
of the Reading road alone advanced IN
market value from July 1898. to July, 1902,
S45 900, 600 about 800 per cent.
The practical significance of those ap-
parentIy slight advances is not appreciated.
The interstate commerce commission mas
recently concluded an investigation into
general advance in rates on hay, ana de-
No attention has been or will be paid to
that decision, since there Is no way In
which 1t can be enforced, but the test1-
mony in that case shows that this advance
in rates costs the consumer and producertof
hay in the territory to which 1t applies
from two to three million dollars annually.
q. ere are now pending before the commits
sion for investigation complaints which de-
mand reductions probably amounting in the
aggregate to $15OO0,O00 annually, equiva-
lent upon a 4 per cent basis to almost
$4OO, 100000 in capitalization. The railroad
is the greatest and the most dangerous OF
all monopolies. If the anthracite coal COM
bine advances the price of that commodity
to the consumer 81 per ton it levies upon
the poverty of this country which uses that
coal a tax of $5O,O00O00 annually in favor
of the wealth which engineered and profits
by that combine.
To Protect the Public.
How shall the public be protected against
this kind Of extortion? Publicity in the
completest form has been tried in vain.
To this the Sherman antitrust law has
been applied in its strongest form in vain.
party might sue in court and recover the
unreasonable charge from the railway, but
the coal dealer, who pays the freight. will
not sue for he recoups himself by increas-
ing the price to his customer and 1t would
be no remedy to permit that consumer to
bring suit and recover from 81 to $40.
ManifeStly no right to get back any Dor
of the slightest value. The imposition of
that rate must In some way be prohibited.
1t has been determined by courts without
number that the railway is public SER
want. subject to public control, and that
the public in the exercise of that control
may fix the rate. Nearly one-half the
states do at the present time, to greater
or less extent, exercise this right with re-
spect to transportation within their borders
The United States attempted to do this for
transportation by passing the
act to regulate commerce. The imperfec-
lions of that act were not corrected when
petition had SO reduced rates as whole that
the need Of such action was not felt. Now
that competition has passed away and such
a measure does become necessary. let me
for minute call attention to the means.
Under the decision of the United States
Supreme Court, the fixing of rate for
the future is a legislative function. 1t can
not be delegated to the courts, but must
be exercised by the legislature, either di-
rectly, which is impracticable, or Indirect
" through a commission.
The function of lhis commission should
be to correct, not make Interstate rates.
So long as railways are private property
they should be allowed to make their own
rates in the first instance: the government
interfering only when the rates SO made
are unjust. In the discharge Of that func-
ton such commission Is not court 1t
should not sit merely to hear the COM
plainant and the defendant and decide the
issue.
The really difficult question is. how shall
the orders Of such a commission be revised
and enforced? The railway rate Is prop
erty. The railway industry Is the most i'm
portant In this country. To unjustly reduce
the rate or unreasonably hamper the in
dustry would be both wrong and unWiSe. A
commission of the sort indicated would be
to a degree a partisan body, whose orders
ought not to be enforced without oppor-
tunity for appeal.
Position of the Courts.
While the courts cannot be given author
ity to prescribe a rate for the future, they
have authority to determine whether the
rate fixed by a commission is reasonable,
and hence the natural suggestion is that
railways should be allo we'd to review the
orders of commission in the federal
courts. To this there are many objections.
The questions are not law questions, to be
decided upon precedent. or by the way OF
testimony. They are traffic questions, for
the most part, requiring for their under
and determination expert knowl-
edge in a high degree. This knowledge the
federal Judges do not usually possess in any
degree. The time of the courts Is fully oc-
cupied with other matters. II for no other
reason the interminable delays attendant
upon that method of procedure would be
valid reason against its adoption.
For these reasons 1t has for some time
to me that we must create a special
tribunal. in the nature OF commerce
court, which should be charged with the
duty of reviewing and enforcing the orders
Of a commission. from which appeal upon
questions Of law. and perhaps those OF fact.
should lie to the Supreme Court OF the
United States. The members Of such tri-
bunal would be appointed for life and
would therefore possess the conservatism Of
a court. They would not come in direct
contact with the parties In the same way
that a commission does, and hence. would