The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-11-10

chAntS compelled 90 snip rom h@ne1a9I
places. Railways had 20 meet sEpan@ss.
and soon learned 20 make tho shlppAng
points which had No composition pay foT
the cutting Of rates at competitive points.
OF various devices employed by railroads
20 Overcome competition rata agreement was
The most effective. IL IL said 10 have bSsn
tried a. sarly a. lsSs by Shs New YOrh
Central and tho Erie. when those Posds
wers competing for the trade beswsen Lake
Erie and the city Of New York. Having
Witnessed the disastrous sFeOts Of Chicago
New York rate ware. Cornelius Vanderbilt
IsvOted the Iattsr years Of his hfe 20 psE-
footing cooperation among tho FIVE nj
60 ssabaRrd routes for One rahc from h
Lakes to thS Atlantic" bat tho sO-CAllod
"irOncIGd agreement went 20 pieCes 500
after Vanderbilc's death. Tho deVtOo Of
pooling ehe earnings vas tried q early
as 1870 by tho Northwestern, thS Rock
Island and the Burlington Railway OOm-
panies 70 regulate competition In tho freight
service between Chicago n Omaha b
experiment had many a successor, but tho
difficulty which suCh q combination met
with arose from tho fact that thsro was
not sufficient business for Zach road and
solicitors continued 10 cut rates. An o
matter Of fact rates continued 90 decline
throughout tho pooling days. although
people imagined that the consolation gave
the roads greatly increased profits. No
attempt was made 10 enforce the rules Of
the pooling association by law.
Prof. Sparks recalls that the railroad IN
its early days was regarded a public benz
factor. About 1870. however, a change IN
public feeling towsrd the railways, because
Of discrimination In rates. became OBJ.
servable. 1t manifested itself in hostile
Legislation. especially in the Western States
The farmer and rural shipper were indig'
nan because they paid higher rates than
the city shipper. and their wrath wal in
tensiled by the panic OF 1872. Tho so-oalls6
Granger laws passed by Illinois. Iowa, Wis
consin and Minnesota--the grain producing
States % that time-were intended 20 es-
tablish a uniform rate for Transporting n
warehousing grain M other classified
products. and TO require schedules of ratea
to be published each day. together viii the
rates enforced during tho previous year
The agitation was responsible for the In
sertlon Of a provision in the Constitution
Of California in 1879 requiring railroad
rates 20 be fixed by the State through .
CNhulAlAboAuus OuN 1uDlOE HOuD u AAAA "
note that this legislation ignored the fact
that railroad tariffs are most difficult things
70 frame, involving as they do more than
forty elements in the computation. Volume
Of trahic, cost Of construction, climate.
products. land, water. grades and oompe.
tition are a few of the many factors that have
TO be considered. Prof. Sparks recalls
that the Granger laws. like most legislation
Of the kind. went too far. The railroads ip.
sisted that enforcement Of the laws would
mean confederation Of their property. and
they stopped railway extension in every
hostile State until the Objectionable legis-
lation was repealed.
Many Of the cases arising under the
Granger laws found their way into the
Supreme Court of the United States, and
decisions were rendered in 1879 and the
years following. A majority Of the court
held in the case OF Mum vs.. Illinois hat a
State had power 20 regulate charges made
by a common carrier, and that such regu-
lation was not a violation OF the compapy's
charter as a contract; that the public was in
fact a partner in such n public corporation.
but that State regulation must not estsb-
fish rates 40 low hat they would be equiva-
lent 70 oonfscation Of the property Of the
carrier. The United States Supreme Court
also hold that tho right to regulate rates
within a State might legally Affect oom-
merce passing outside the State until thu
Federal Government should have legis-
lated upon interstate oOmmerce.
Prof. Sparks points out that whatever
advantage the public might have gained
from these decisions Of the highest Federal
tribunal was destroyed by the continued
critical condition Of the finances OF the
railways. In 1873 moro than two-hfths or
the total railway mileage OF the United
States was in The hands OF oourt receivers:
and in 1877 the aggregate debts of the rail
way companies were estimated At more
than double the national debt. Between
1875 and 1870 nearly $50 railroads were sold
under foreclosure OF mortgage. Real re-
covery from the railway and industrial
crisis Of 1879 was not felt until about 1881
By hat time the Changers. not having
confined their reforms to one line and hsv-
ing oourted various political parties, had
lost or signally impaired their influence in
the State Legislatures. The States began
to repeal the restrictive laws: new issues
arose TO attract public attention; and the
agitation subsidized for rho time being. ~
revive . few years later In a demand for
Federal regulation ~ railroads., So began
In movement which for the moment haze
eliminated in the passage ~ he Hepburn
law for the Federal regulation OF railways
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