The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-05-20
Interstate Commerce Act
First Important National
III, Step in Evolution.
Cu1lorn in Both Debates
Wins Devotion
\ in Last.
By w. w. Jermane.

w the interest Of the general
public is focused on the rate
bill Just put thru the senate, it will be
pertinent to recall the facts which led
up to the enactment of the original
interstate commerce act. in 1887.
That law was the logical outcome Of
the soealled granger movement, which
started away back in 1868. Six years
after its inception, this movement had
attracted 100000 followers. There was
a great depression in the farming in
terests at the time, which the grangers
insisted was due to exorbitant freight
rates, In the east the farmers com
planned that the freight rates from st.
Louis, Chicago and other grain centers
to the Atlantic were less than the local
charges for 200 miles and brought the
high priced farms of the east in direct
competition with the Cheap, virgin land
of the prairies Out on the prairies the
local rates to Chicago and st. Louis
were so high that for number OF years
the use of corn for fuel was common.
The subject Of interstate commerce.
came UP in congress and the railroad
members and railroad attorneys con
tended that congress had nothing to do
with it. =
First Rate Regulation.
In the. meantime the legislatures of
several. states undertook to regulate
rates. In Illinois the state railroad COM
mission fixed a maximum rate for pas
sengers of 8 cents mile. In Novem-
her. 1875, in the case of The People vs..
the Chicago & Alton Railroad company,
The United States circuit court affirmed
the canstitutionality of the law under
which this was done. In several Of the
granger cases the supreme court
affirmed the right Of the states to reg
ulate railway charges. During the
period of railway agitation three things
caused great public dissatisfaction:
First-Unequal charges for the same
service, accomplished by secret rebates
to favored shippers. -
Second-Unequal charges caused by
higher rates for the part of distance
than for the entire distance.
Third-The destruction of lcompeti
ton by pooling receipts and dividing
them according to a percentage agreed
upon z'5<"
Effect of ohibiting Poolings.
Rv the rebate system the STANDARD
Oil company, as shown by the con
pressional investigation, had driver
most of it's competitors out Of bushes
and had established a virtual monopoi
which has continued down to the pres
emit time. Therefore the interstate CON
MERGE act prohibited pooling. But thi
prohibition did not restore competition
Il It simply stimulated the railroad con
! panies to find some means to eyade tn
law. and this was done by the con
I munitv-of interests plan. This plan
/ for one line to obtain control OF L
! rivals by leasing them or by buying
having it's friends buy a 1a1lge portle
of its stock. - -
The PENNSYLVANIA company has 81
cured virtual control of the Baltlmor
& Ohio by acquiring $40,0Oo,O0O of tn
I 100000 stock Of that compan.
r. The Union racine goI @Poo,ooo,ooo :
southern Pacific stock and was the
enabled to dictate rates over. lii
which was intended as a competitor
Thisagystem is familiar to reader
Of TIL Journal by reason Of Il
operations Of James J4 Hill, who h
obtained virtual stock control Of Il
Northern Pacific and the Burlingtt
roads, in addition to controlling t
Eli Great Northern. The merger of nu,
Der of southern railways by the Sout
ern Railway company is, another ca
IN print. -. =
President Favors Pooling.
The president is now convinced tn
It would be good public policy to ]
store the pooling privilege, in ort
that the carrying companies may t
better protect themselves against I
great shipping combinations, the la
Of protection being one of the ms
excuses offered for these mergers; /