Warren sheaf., 1905-12-07

City ITdulCdla OF Nasty dClIOH. X ne NESL
thing to do is to deal with the great
corporations engaged in the business
OF interstate transportation. AS said
in my message of December last, the
immediate and most pressing need. so
far as legislation is concerned. is the
enactment into law Of some scheme to
secure to the agents of the govern
ment such supervision and regulation
of the rates charged by the railroads
of the country engaged in interstate
traffic as shall summarily and effec-
lively prevent the imposition Of unjust
or unreasonable rates 1t must include
putting a complete stop to rebates in
every shape and form. This power to
regulate rates. like all similar powers
over the business world. should be ex-
ercised with moderation, caution and
self-restraint; but it should exist. so
that it can be effectively exercised
when the need arises.
The first consideration to be kept
in mind is that the power should be
affirmati-c 60 should be given to
some administrative body created by
the congress If given to the present
interstate commerce commission or to
a reorganized interstate commerce
commission. such commission should
be made unequivocally administrative.
l do not believe in the government in
terfering with private business more
than is necessary. / do not believe In
the government undertaking any work
which can with prOpriety be left in
private hands. But neither do be-
lieVe in the government finching from
overseeing any work when it becomes
evident that abuses are sure to OBJ
tain therein unless there is govern
mental supervision. 1t is not my prov
ince to indicate the exact terms of the
law which should be enacted; but !
call the attention of the congress to
certain existing conditions with which
It is desirable to deal. In my judg-
ment the most important provision
which such law should contain is that
conferring upon some competent adj
ministrative body the power to decide.
upon the case being brought before it,
whether a given rate prescribed by a
railroad is reasonable and just, and
if it is found to be unreasonable and
unjust, then. after full investigation
of the complaint, to prescribe the limit
of rate beyond which it shall not be
lawful to gO-the maximum reason
able rate, as it is commonly called
this decision to go into effect within
reasonable time and to obtain from
thence onward. subject to review by
the courts. 1t sometimes happens at
present. not that a rate is too high
but that favored shipper is given too
low a rate. In such case the commits
sion would have the right to fix this
already established minimum rate as
the maximum; and it would need only
one or two such decisions by the COM
mission to cure railroad companies Of
the pra ctice of giving improper mini
mum rates. I call your attention to
the fact that my. proposal is not to
give the commission power to Initiate
or originate rates generally, but to
regulate a rate already fixed or origi-
mated by the roads. upon complaint
and after investigation. heavy,
penalty should be eNacted from any
corporation which fails to respect an
order of the commission. I regard this
power to establish maximum rate
as being essential to any scheme OF
real reform in the matter of railway
reguStion. The first necessity is t"
secure it: and unless it is granted to
the commission there is little use in
touching the subject at all.
Rebates Really Blackmail.
Illegal transactions often occur un-
der the forms of law. 1t has often oc-
Cured that shipper has been told
by traffic officer to buy large
quantity Of some commodity and then
after it has been bought an open re-
ductiOn is made in the rate to take
effect Immediately. the arrangement
resulting to the profit of the one ship
Der and the one railroad and to the
damage Of all their competitors: for
it must not be forgotten that the big
shippers are at least as much to
blame as any railroad in the matter
of rebates: The law should make it
clear so that nobody can fail to UNDER
stand that anv kind OF commission
paid on freight shipments. whether in
this form or in the form of fictitious
damages. or of concession, a free
pass, reduced passenger rate. or pay
ment of brokerage. is illegal. 1t Is
worth while considering whether it
would not be wise to confer on the
the right of civil action
at least twice the value of the rebate:
this would help stop what is really
hlackmail. Elevator allowances should
he stopped. for they have now grown
to such an extent that they are de-
and are used as rebates.
The best possible regulation of rates
would. of course, be that regulation
secured by an honest agreement
the railroads themselves to
carry out the law. Such a general
= o~reement would. for instance, at once
nut n stop to the efforts of any one
zig shipper or big railroad to dis
criminate against or secure advan-
tag over some rival: and such agree
ment would make the railroads them
serves agents 1OT enforcing the law
The power vested in, the government
to nut stop to agreements to the
1ctriment OF the public should. in my
Judgment. he accompa MED by power to
hermit under specified conditions and
careful suDervison, agreements clear
ly in the interest of the public. But.
in my Judgment the necessity for
giving this further power is by no
means as great as the necessity for
giving the commission or administra-
tive body the other powers | have
above; and it may we'll
be inadvisable to attempt to vest this
IA rticular power in the commission or
other administrative body until it al
ready possesses and is exercising what
I regard as by far the most important
of all the powers 7 recommend-as in
deed the vitality important power
that to fix a given maximum rate,
which rate, after the laDSe OF a reason
able time. goes into full effect. subject
to review by the courts.
All private car lines. industrial roads,
refrigerator charges, and the like should
be expressly put under the supervision
of the interstate commerce commission
or some similar body so far as rates and
4 agreements practically affecting rates are
The private car owners and
the owners of industrial railroads are en-
titled to a fair and reasonable cOmpensa-