Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1923-07-26
Transportation Act Of 1920.

President Finley, in discussing par
ticularly the Transportation Act of
1920, referred to the wonderful serv-
ice rendered society by the railroads.
Recognizing the necessity for and the
benefits of reasonable regulation Of
the carriers, he showed most conclu-
sively the advanced step in legislation
in the enactment Of what is known as
the Esch- Cummins or the Transporta-
ton Act.
In referring to the thirty-three years
of experience in the regulation of the
railroads since the creation of the In
terstate Commerce Commission, he
stated that, ut would seem natural
that during this period the Commits
sion should have established or de-
clared a formula by which the reason
ableness of rates should be measured.
But such an occurrence did not take
place. During this period, processes of
government by commission have had
considerable development, not only as
concerns the railroads of the United
States, but as affecting most of the
so-called public utility industries. The
railroads, bein5 the largest of the in
dustries affected, reflect probably more
fully than any other the full effect OF
this form of government by commits
sion. In general, the procedure before
the Commission is as follows: that
any one who sees an opportunity to
profit by the reduction of rate.
whether it is reasonable or unreason-
able, originates complaint before the
Commission. The Commission hen
hears the testimony of the complain
ant ane that of the carrier in defense,
and the Commission, usually consider
ing q compromise as expedient, gives
a decision somewhere between the
two positions taken by the opposing
parties. The tendency of this proce-
dure is always to reduce rates, but not
to advance them. This process does
not tend to establish justice. The only
way that justice can be established is
by competent authority acting in con
formity with sound economic theory
based upon a full and truthful knoWl-
edge of the facts pertaining thereto,
and apart from prejudice or Interior
influences.
'The Transportation Act of 1920
was necessary in order to clarity the
situation from legal point of view.
In the experience of the Commission.
and in the exercise of its administra-
tive powers, it had come in conflict,
time after time with the Courts The
various State Commissions in their ag-
gressiveness, had, from time to time,
overstepped their authority and COM
PEELED the carriers to take their cases
TO the Supreme Court Of the United
States. It is clear that such regula-
tory processes are unnecessary, and
that the multitudinous questions in
volved in the transportation industry
cannot reasonably be brought, one by
one, before the Supreme Court of the
United States for settlement
'The Transportation Act brings into
concrete form and expresses the prin-
ciples which have been established by
the Supreme Court of the United
States out of the experience of many
years, and from a<legal point of view,
is a masterpiece of legislation, in that
it simplifies and clarifies those aues-
tions which had been in dispute and
settled from time to time piece
meal, through litigation. If there is
anything which will assist materially
in the conduct of this great industry,
it is the clarifying of legislative en-
actments so that they may be fully
understood, and litigation will then be
unnecessary.
.eThe Transportation Act, in an
nouncing a Rule of Matchmaking, did
not enumerate any new principles n
create any new conditions relating to
commerce, but did state in clear and
concise terms those principles which,
by thirty-three years of experience
and controversy, had been established
through decisions of the Supreme
Court of the United States. These
principles had been established
through court decisions resulting from
the struggles OF public utility enFer-
prises against the injustice which
regulatory commissions would other
wise have inflicted upon Them
President Finley referred to the ex-
perience of government control during
the war and the lessons learned from
it, and showed how the Transports
ton Act aided in the re-establishing
Of the financial credit of the depleted
railroads" He stated that the prov1-
sions of this Act clearly intend to la
Introduce economic theory into the
making of rates (b) provide adequate
wages for the employees, and (e) pro-
vide Just and adequate compensation
| to capital actually employed. The
above are, therefore, perfectly natural
expressions of the governments inten-
ton to deal fairly with the railroad in
l3dustry, both as to employees and In
lyestovs, and remove if possible, this
whole question from the field of con-
troversy and litigation. We must also
recognize that the commerce of the
United States is expanding Our ma
anal wealth and productive power Is