The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-06-24
Public Regulation or Private Prop


the last three years The process be-
gan to be accelerated in the oil and to-
bacco trust cases and since then there
has been vast shrlnkage Of the de-
batable area surrounding the two great
statutes, the sherman law and the In
terstate Commerce act, which constitute
the definition OF the political limits Of
the American business field. Further
swift progress was made on Monday
when the Supreme Court handed down
several decisions OF large consequence
to business interests. two of which were
Of peculiar Importance because OF their
declaration OF the extent to which
transportation industries were subject
10 the regulatlve enactments OF Con.
gress rs construed by the Interstate
Commerce Commission.
After the decision in the so-called in.
termountain rate cases it cannot be
pretended that the private owners Of
the railroads do not know where they
stand In relation to governmental SUI
pervsion. The supreme Court in the
Minnesota. the Missouri River and the
Shreveport rate cases had asserted thai
Federal regulation was paramount over
State regulation. In the intermOuntain
cases It Is shown that the Interstate
Commerce Commission has a life and
death power over railroad enterprise
through sweeping control Of rates;
that it is not merely power to review
rates fixed by the railroads, but n pri-
mary power to initiate rates at the
commissions own volltion
The intermountain case originated in
a prayer by Western railroads for re-
lief from the so-called long and short
haul clause Of the act Of 1910 amend
ing the Interstate Commerce act. This
clause was intended to he adverse to
railroad practices which resulted in
much higher charges from the East to
intermediate points than to the Pacific
coast. and for the preservation Of their
rate structure the railroads urged the
necessity OF meeting various kinds Of
competition, particularly water compe-
tition to Pacific coast points.
The decision rendered by the Su.
preme Court on Monday has been spoken
Of as defeat for the railroads be-
cause they lost their appeal from or
ders OF the Interstate Commerce Com.
mission changing the transcontlnental
rate structure In accordance with the
long and short haul clause. But the
orders issued by the commission were
in large part grant Of the relief for
which the railroads had asked, and It
may be suspected that the practical
effect OF the Supreme Courts decision
will not be very harmful to railroad
earnings unless the Interstate Com
merce Commission should order more
drastic rate changes affecting reduc-
tons than have already been decreed.
Indeed. practical test Of the work
ings OF the new rates for period of
several months suggested that they
would cause no serious impairment OF
railroad revenues.
1t Is not, however. in practice that
the chief interest Of the intermountain
decision consists. The decision gives
notice Of the entire subordinatlon Of
the railroad industry to the Interstate
Commerce Commission as Congress
charges It with various duties to per
| form. and the unanimous subscription
| OF the members OF the court to the de-
cision Is a token OF the tendency OF tu-
dicial exposition of governmental rela-
ton to business which may be expected
hereafter.
Yet from any careful study OF the
course OF Supreme Court rulings In the
| last few years II might have been pre-
dicted that the scope Of regulating
power would be thus affirmed, and the
opinion rendered in the Standard Oil
pipe line cases Is only corroborative
Ct circumstance. The Supreme Court
some time ago committed itself to a
most liberal and indulgent view Of the
exercise of authority by Congress under
the Interstate commerce clause OF the
Constitution to reach the regulating
arm Of Government over business en-
deavor, particularly enterprise OF a
public utility nature.
That these and other recent judi
cial announcements have done much
to mako a new world for business Is
obv ious II Is a world OF diminished
economic incentives as they have been
understood. for although the opportun'
ity of profit still beckons II Is an op'
portunty Of profits increasingly cir
cumscribed by law.
It was the unfettered spirit OF eco
nomic adventure which gave tho
United States It's present magnificent
railroad system. and despite the specu-
latlve evils which attended their pro
vision the country gained enormously
by the encouragement which offered
10 capitalistic hardlhood. In the
same way corporate enterprise has
expanded generally, to the immense
benefit Of the people, although greed for
profits Hourished in the expansion.
How much the country's business car
stand In tho way Of enforced submits