The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-12-27
An Important Question Discussed
by the American Economic
Association To-day.
Interstate Commerce Commissioner
Prouty Believes in Strong
Medicine.
He Says That the Present Advances
in Freight Rates Are Not
49,. Justified.

at the University Of Pennsylvania to-day
was devoted to a discussion Of the itopic
Public Regulation Of Railroads. : The
principal speakers were Charles A.. Prou ty,
interstate commerce commissioner whose
paper was on National Regulation and
Walker. D. Hines, vice president Of the
Louisville & Nashville railroad, who spoke
on Legislative Regula ton ssgs.S5 a.
~ The Advancing Railroad Rates.
G. A. Prouty read a paper on National
Regulation of Railways He said:
rive years ago the crying evil in rail-
way operations was discrimination; MAIN
ly discrimination between idividuals To-
day this is not true. The vast consolida-
lions of the last few years, the use OF in
Junction to prevent departures from the
published rates, the lesson which rail-
road operators themselves have learned,
that competition In rates is always sui
cidal. since it does not Increase business
and does reduce. revenues have largely
eliminated such competition. The dis
elimination disappears, but in It's place
comes the danger attending every mo-
nopoly-extortion in the charge imposed.
the public has been. repeatedly assured
that there was no danger Of any advance
In freight rates. Rates have been adj
vanced and are still advancing. In the
winter Of 1899 the rate on grain from the
Mississippi river to New York fell to IL
cents per 100 pounds; to-day it is 22k
cents. The cost of transporting grain
and grain products from Chicago to the
Atlantic seaboard by rail this past sum-
mer has been from to cents per 100
pounds-from 10 to % per cent greater
than it was the summer preceding. With
In the month all grain rates in every di-
rection from the fields to the seaboard
have been advanced another 2 cents per
100 pounds. Within the last three years
the combination Of anthracite coal roads
has increased the cost of domestic sizes
to the consumer from 81 to 50 per ton.
In sympathy, the common stock of the
Reading road alone advanced in market
value from July, 1885,. to July, 1902, $45,-
| 600, 0Qo-about 800 per cent.
UnJustifiabIe Advances. -
1.-THE practical significance Of those ap-
parently slight advances is not appre-
ciated. The interstate commerce COM
| mission has recently concluded an in
vestigation into a general advance in
rates on hay, and decided that such ad-
vance was unjustifabe.. No attention
has been or will be paid to that decision,
since there Is no way in which 1t can
be enforced but the testimony in tina t
case shows that this advance in rates
costs the consumer and producer. Of hay
| in the territory. to which it applies from
| two to three millions of dollars annually.
There are now. pending before the CONF
| mission for Investigation complaints
which demand reductions probably
amounting in the aggregate to fifteen
| millions Of dollars annually, equivalent
| upon 4 per cent basis, to almost $500
| 100000 In capitalization. The railroad is
| the greatest and the most dangerous OF
all nonopolies. If the anthracite coal
combine advances the price Of that com
modify to the consumed 81 per ton,
1t levies upon the poverty Of this coun-
try, which uses that coal, tax Of $780,
! 100000 annually in favor of the wealth
which engineered and profits by that
combine. - 49,. E. 4
! How shall the public be protected
/ against this kind Of extortion? Public
! ity in the completest form has been tried
in vain. To this the Sherman anti
trust law has been applied in its strong
est form in vain. 1t has been suggested
that the injured 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 re
coups himself by increasing the price
to his customer, and it would be no rem
| edy to permit that consumer to bring
suit and recover from one to- ten dol
lars, manifestly no right to get back any
portion of an unjust rate already paid,
can be of the slightest value, the i'm
position of that rate must in some way
be prohibited. -. =.
Rates Must Be Fixed.
| And the way is perfectly plain. 1t has
been determined by courts without mum.
Der that the railway is public servant
subject to public control, and that the
public, in the exercise Of that control, may
fix the rates. Nearly one-half the states
do at the present time, to a greater OF
less extent, exercise this right with re-
| TO i'm {r, fI,ni,.
ders. The United States attempted tc
do this for Interstate transportation by
passing the act to regulate commerce
The imperfections Of that act were not
corrected when they became manifest. be-
cause railway competition had SO reduced
action was not felt. Now that competi-
ton has passed away and such a measure
does become necessary, let me for a, min.
ute call attention to the means.
Under the decision of the United
States supreme court, the fixing of rate
for the future is Legislative function. III
cannot be delegated to- the courts, but
must be exercised by the Legislature
either directly, which is impracticable, OF
4 indirectly through commission.
1.-THE function of this comm ission should
! be- Ito correct, not make, interstate rates
So long as railways are private property
I they should be allowed to make their ow1
ment interfering only when the rates 81
made are unjust In the discharge Of tina
4 function. such commission is not
) court. 1t should not sit merely. to hear The
complainant and the defendant and decide
4 the issue. s. gE l5
4 THE really difficult question is. How
/ shall the orders of such commission b.
revised and enforced? The railway rat,
! is property. The railway industry is tn,
most important In this country. Unjustly
to reduce the rate or unreasonably ham
per the industry would be both wrong ant
unwise A commission OF the sort indi
Gated would be to degree a partizal
4 body. whose orders ought not to be en-
: forced without opportunity for appeal.
: while the courts cannot be givel
q authority to prescribe a rate for the flu
\ ture, they have authority to determin
whether the rate fixed by a commission
is reasonable, and hence the natural sug
4 gestion is that railways should be allowe
to review the orders Of commission il
the federal courts To this there are man
objections. The questions are not lay
4 questions, to be decided upon precedent
Tor by the way of testimony. They ar
& traffic questions for the most part re
4 curing for. their understanding and de
termination expert knowledge in a hig
4 degree This knowledge the fedora
4 judges Go not usually possess in any. de
Il gree. The time Of the courts is fully oc
cupied with other matters. II for n
q other reason the interminable delays at
i tendant upon that method OF procedur
4 would be valid reason against Its adop
II ton. ~ ssg ~