The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-05-03


case tho railway rate was annul'ed by
tho Supreme Court because II was
confiscating rate.
Tho fate of Wisconsin. q quarter OF n
century ago. under the so-called Potter
law, may not have been quite fresh In the
Presidents mind when, last year, he
yielded TO Wisconsin clamor against the
Northern Securities combination. The
agricultural politicians Of that State had
in 1874 faith In enforced railway COM
petition. but the result was that Wis
consin railways could not pay dividends
or even fixed charges. Only four paid
interest on bonded debt. railway con-
struction ceased. capital would not go
into the State, the Potter law had to be
repealed.
Other railway difficulties leaped to
light q dozen years later, growing out
of State statutes to prevent the short and
long-haul discrimination and to regulate
rates not only in the State, but when.
under one contract, the service was
through or into other States. A test case
was decided In October Of that year by
the Supreme Court, In which, against
serious protest by minority consisting
OF the Chief Justice and Justices BRAD
LEY and GRAY, the court, modifying
previous decisions, declared that a
statute OF State. intended to regulate
or to tax or 10 impose any other restric-
ton upon the Transmission Of persons or
property or Geographic messages from
one State to another, is not within that
class Of legislation which the States may
enact IN the absence Of legislation bp Con-
gress, and such statute is void, even to
that part OF such transmission which
may be ,eithin the Stale
That decision cleared the ground. It
excluded State law, even as to interstate
service, when the railway had emitted
interstate bills of lading. 1t put all in
the hands OF Congress, which, ever since
1873, had been making futile attempts
to legislate. The two houses had dis
agreed over personal determinations
among shippers: publicity Of rates;
short-haul clause: prohibition Of pools;
possession Of administrative, or only
advisory. powers by commission. and
whether or not it shall determine what
is reasonable rate. After the de-
cision in the Wabash case, Congress
quickly enacted the Interstate Com
merce law, which took Jurisdiction Of tho
whole interstate problem. and crepted
a commission whose power were sup
plemented by the Elkins Law Of the last
session.
1t did not occur TO Senators HoAR and
EpMUNDs q few months later when
framing the Anti Trust law Of 1900 that
it should cover railways. in regard to
which Congress had 90 recently ex-
hausted itself. +.
During the last quarter OF the last
century railway mergers. federations
and consultations, although forbidden
by the statute law, had a phenomenal
growth in obedience to higher law that
railway managers we're unable to resist.
Owners Of rival lines could not by statute
law be prevented from agreeing not to
compete. Steadiness OF rates was bet
ter for shippers than wild fluctuations.
Frauds attendant on hustling for bust
ness by railway local traffic agents Of
lines competing in the same field could
not he longer endured. Prohibiting
pooling in 1887 did not arrest combina-
ton. The Senate Select Committee
which, in the previous year, opposed the
prohibition Of pools, was in the right If
sfvr,o1 f,,c tr
land. New York, along the Atlantic and
everywhere, was to be resisted. 4 ma
jority OF the members OF that committee
surrendered to ignorant clamor.
Perhaps it was obligatory upon the
court to decide that the phrase every
contract or combination in that law
OF 1890 includes one between two rail-
way owners, but it is, nevertheless, re-
grettable that the court had to interpret
the law of 1890 in way to attempt re-
straint Of natural economic forces which
are now we'll nigh as powerful as any of
the laws OF nature.
The little word every in the first
section Of the Antitrust law permitted
or constrained the Supreme Court to
apply to railway transportation Ricar-
dian theory Of competition which eco
nomic experts in Europe and America
seem now to concur in believing should
not be applied, and cannot he benef-
Gently applied, to industries like railway
transportation which-because it re-
quires large permanent capital that,
when once expended. must be used
therein or be complete loss, and can
not be transferred thercf.om--is in an
important sense what the bookmen de-
scribe as an economic monopoly
wherein compulsory competition is an
absurdity. The result OF its economic
law, based on statute, will for the United
States be a. sound ~. and no sounder
than, the hypothesis on which II rests.
There is little probability that the
Northern Securities decree a. subse-
ausntly modified will be changed by
tho Supreme Court. The problem is now,
for the ballot boxes. ..
The opinion written by Justice MILLER
in the Wabash case Of 1885 deserves care
full attention now by our President, who
l.