able in themselves, and whether rebates were being given; but the carriers were not required to file their schedules of rates so that it could be known how matters stood, and what was being done. Moreover, although the duty to investigate conditions and report thereon was imposed upon the Commission, its powers to call witnesses and elicit testimony were by no means sufficient for the purpose. The Amendments of 1889 and 1891 were, therefore, necessary to clear things up in these two respects, if the Commission was to have any real power to accomplish the objects for which it was created.

73. The Elkins Act of 1903.

In 1903 the so-called Elkins Act was passed to perfect the Act. In the first section carriers in interstate commerce are made criminally responsible for violations of the Act. In the second section provision is made for bringing into any proceeding before the Commission all carriers or other persons interested in the inquiry. In the third section jurisdiction is given to the courts sitting in equity, at the request of the Commission, to inquire into and enjoin any infraction of the provisions of the Act. These suits shall be prosecuted by the District Attorneys under order of the Attorney-General, and shall not preclude suit by private persons. And provision is made for speedy trial by expediting such suits.

§ 74. The long and short haul clause.

It seems to have been undoubtedly the intention of the framers of section 4, the long and short haul clause, to forbid absolutely the practice of charging more for a shorter haul, unless upon application to the Commission express permission so to charge was given. The section, however, was a matter of contention between the two houses of Congress, and as it was finally passed the qualifying phrase "under substantially similar circumstances and conditions" was inserted, without probably any very clear

belief that the meaning of the section was thereby fundamentally altered. At first the railroads acted upon the supposition that express permission of the Commission must be obtained according to the proviso in the section, if a greater charge was to be made for the shorter haul, and this seemed to be the view at first taken by the courts. The philosophy of the Act was that competition would reduce the rates to a fair amount at all competitive points, and that the fourth section would then keep the rates at non-competitive points down to the level of the competitive rates. The courts, however, finally decided, in view of the limitation of the section to cases where the conditions were substantially similar, that competition with other carriers would justify a lower rate for the longer haul, and as practically all cases of the sort before the passage of the Act had been due to the competition of other carriers, this decision in effect nullified the whole section until its force was restored in 1910 by Amendment to the Act.

§ 75. Limited jurisdiction over rates.

From the outset of its history the Commission claimed that under the Act it had the power not merely to forbid an unreasonable rate, but also to indicate to any railroad what it would regard as a reasonable rate for any particular service, and that then the railroad disregarding such recommendation would be subject to the action of the courts. The lower federal courts, however, from the beginning denied this power to the Commission. The question did not reach the Supreme Court of the United States for ten years, but finally in the Cincinnati, New Orleans and Texas Pacific Railway case the issue was fairly presented; and the Supreme Court of the United States decided that the Commission had no power to fix rates. After that time the Commission under certain circumstances advised a railroad that in its opinion a reasonable rate would be no greater than a sum named; but no attempt was made to go further than this in fixing rates,

until in 1906 this power was given it by amendment to the Act.

§ 76. Lack of power over through rates.

The practice of carriers to make through traffic arrangements with some one connecting line, and to throw all business into the hands of that line, notwithstanding the wishes of the shipper and without regard to his interests, caused dissatisfaction from the outset. It is true that in case such an arrangement was made the through rate would be posted; but if the tariff sheet did not state the route the shipper was deprived of a chance to discover and ship by a cheaper route, or one more agreeable to him for any reason. Furthermore, the connecting carriers sometimes refused to recognize the joint rates and collected their entire local charges. The Commission early ordered that published joint tariffs should indicate the route, and that the connecting carriers should file a consent to the rate. But the carriers refused to abide by this order; and upon a suit for enforcing it the Supreme Court finally held that the carrier might publish a through tariff of rates, reserving the right to route as it pleased. All this has been changed by later amendments to the Act, to be discussed subsequently in this chapter.

77. The occasion for radical changes.

The attitude of the courts toward the Interstate Commerce Act caused considerable dissatisfaction, especially in those parts of the country where the great bulk of freight originates, and the desire for further regulation culminated in the passage of the Rate Regulation Act of 1906. This action of Congress had been foreshadowed by a very considerable body of similar legislation in the States just previously. It was characteristic of this legislation that it confers on the railway commissions the power of fixing a maximum rate; and the giving of such power to the Interstate Commerce Commission was in fact the

chief object of those who secured the passage of the Railroad Rate Act. The decisions of the Supreme Court which had given most dissatisfaction were the decision denying the Commission the power to fix rates and that permitting the carrier to charge a less sum for a longer haul. In addition to this, certain omissions in the original Act were found to work badly, in view of the railroad practices. Most of these defects had been remedied by legislation in England. It was believed by a large portion of the shippers that railway rates were in many instances too high, and that favoritism through rebates and other forms of discrimination were indulged in by various methods by the carriers.

Topic D. The Strengthening of the Commission

§ 78. The Hepburn Act of 1906.

The act of 1906, was in the form of an amendment to the original Interstate Commerce Act; and its object was to perfect that Act by an extension of its scope. It increased the number of commissioners from five to seven; and their salaries from $7500 to $10,000. It included in the provisions of the Act express and sleeping-car companies and pipe lines for the transportation of oil or any other commodity except water and natural or artificial gas. It enumerated at great length the persons to whom free passes may be issued (the original Act having named typical classes only), and made it a crime to issue or to use a pass contrary to the provisions of the Act. It made the penalties for a violation of the Act more severe, and provided more carefully for the institution of prosecutions for violation of the Act.

§ 79. Effect of these Amendments.

The legislation of this period fundamentally changed the character of the Commission, so much so that it is spoken of in Washington circles as the New Commission when contrasting it with the Old Commission before 1906.

Under the old law, the Commission was primarily an investigating body, aiding the legislative branch in showing it the way. Its powers were hardly more than administrative, being confined largely to supervision by inquiry into the course the carriers were taking, rather than any regulation of their conduct by order. But from now on the Commission may fairly be said to have combined in its constitution quasi-judicial functions along with its administrative duties. It henceforth not merely declares matters of which complaint has been made so improper that relief should be granted; but it fixes for the future the standard of propriety to be observed. Since this time it has become a regulating commission with the fundamental powers characteristic of such bodies. It remained only to develop those powers still further by subsequent legislation.

§ 80. Occasion for the Act.

The occasion for the new Act was thus stated by the Congressional Committee that reported the bill: "It has been believed by a large portion of the shippers that railway rates were in many instances too high, and that favoritism through rebates and other forms of discrimination were indulged in by various methods by the carriers. The ingenuity of some of the carriers and shippers has resulted in avoiding the provisions of that Act through the use of joint tariffs, involving, in some instances, a railroad and a mere switch owned by a shipper; through arrangements whereby excessive mileage was given to the shipper of products who owned his own cars; through the use of refrigerator cars; through the permission given to independent corporations to render some service incident to the shipment, as the furnishing of ice in the bunkers of the car; by what is known as the 'midnight tariff,' a method involving an arrangement with a shipper to assemble his freights, have them ready for shipment at a particular date, whereupon the carrier would give the necessary three days' notice of a reduction in the rate. Compet