agement of railroads had not attained as high a standard as it has at this time. Subsequently, we believe in 1867, the Commission was abolished on their own recommendation. The Commission had no power to establish fares and rates. The Acts of incorporation prescribed, for the New York railroads, three cents a mile for passengers, except on the New York Central, which is limited to two cents, and two and one half cents on the Hudson River Railroad in Winter, and two cents in Summer. No statutory limitations are imposed as to freight charges. In practice, the limitations on passengers do not act as any restraint upon the companies, as the average does not equal the legal rates.

In Connecticut a Board of three Commissioners exercise but little control over the railroad companies, except to report as to their safety and public convenience. No power to establish rates is conferred upon the Board, nor has the Legislature established any schedule of rates for the roads. Returns are made to the Commissioners by the railroad companies, annually, showing their operations and management.

In Massachusetts a Board of Railroad Commissioners was created. in the year 1869. The duty of the Board is to examine into the management and operation of the railroads of the State; see to the enforcement of the existing laws, and report their investigations and recommendations to the Legislature. The reports of the Massachusetts Board have done more, perhaps, than all others to educate, not only shippers and travelers, but the carriers, as to the rights of the former and the duties of the latter. With that good-natured persistency characteristic of New Englanders, the Board has convinced the managers of the railroads of that State, that there should be no acts done by a railroad company that would not bear the light of publicity; and while the managers at first thought they had some secrets in their transactions, yet when they were made to see a crooked transaction in the light thrown on it by a public inspector, it became offensive even to themselves. The Commissioners of that State have succeeded in procuring accurate returns from the companies as to their financial condition, whereby stockholders are enabled to know whether their interests are properly guarded or not. Railroad securities in the Eastern States being favorite investments for savings and trust funds, the publicity obtained through the returns to the Commissioners enable investors to act intelligently. Uniformity in keeping their accounts is also secured.

It will be observed that in neither of the States above named has been established inflexible rates, so as to affect their actual rates charged, and the credit of the companies was in no way affected by the powers exercised by the Commissions.

In the State of Minnesota, as the railroads extended from the centers of population toward the interior and sparsely settled districts, complaints of inequality in rates began to be made, and for several years the question was debated with little regard to the conditions which were involved. The dissatisfaction culminated in 1871, when a law was passed establishing a tariff of rates, "also creating the office of Railroad Commissioner." This was superseded in 1874 by an Act which provided for the appointment, by the Governor, of a Board of three Commissioners for two years, with power to acquaint themselves with the circumstances of the various roads and to insti

tute suits to compel obedience to the laws. They were also empowered to establish fares and rates, and the rules of evidence was so changed as to throw the burden of proof upon the companies in case of violations of the rules and tariffs. The general rules adopted with respect to rates were as follows:

(a) In all cases a less charge for a shorter than a longer distance by the same train and in the same direction.

(b) No greater charge for handling freight at one station than at another.

(c) No greater charge for given distance on one part of the road, than for an equal distance in the same direction on another part of the road.

(d) No greater charge for handling freight belonging to one person than to another person

at the same station.

(e) No greater charge for transporting freight for one person than for another, from the same point, in the same direction and the same distance.

(f) No greater charge for hauling railroad cars for one person for a less distance than at the same time charged for such transportation for another person over a greater distance in the same direction.

(g) No greater charge for hauling railroad cars from the same point in the same direction and equal distance for one person than for another. The only exceptions to these rules were in the cases of commutation and excursion tickets.

The railroad companies adopted the schedules prescribed by the Commissioners. Complaints were soon heard, however, of unjust discrimination in various parts of the State; that the very uniformity of the plan worked unjustly against certain parts of the same roads and the weaker roads. The increase in the rates over the thickly settled portion of the roads, where the natural advantages of location entitled them to lower rates, caused the most widespread dissatisfaction.

It seems that in Minnesota, the enforcement of a statute which contravened the principle which economic science lays down, was the short road to an adjustment of the railroad problem in that State. The law, which had worked only injury thus far, was repealed in March, 1875, and the Governor, in his message to the Legislature in that year, stated that "the evils resulting from letting the railroads alone have scarcely any present existence here." A new law was passed, creating the office of Commissioner, to be elected by the people, whose duties related mainly to the collection of statistical and other information. "Practically the railroad question has been remitted to common law proceedings, and the functions of the Commissioner are confined to the collection and compilation of statistics." * * *

Under the stimulus of individual freedom applied to her railroad system, Minnesota has advanced in industrial development with rapid strides. There is little antagonism between shipper and carrier at present.

The question of the regulation of railroad rates in Illinois commenced much earlier than in any of the Western States. Having few interior navigable waters, the producer, in most cases, was dependent upon railroad transportation for reaching the principal local markets. Ignorance of economic law by railroad managers, created much friction between the producer and the carrier by rail. This antagonism culminated in 1870, in the adoption of a new Constitution, which declared the railroads to be "public highways," and imposing upon the Legislature the duty of establishing reasonable. maxima rates for railroad transportation. It also conferred upon the Legislature the "power to make laws for the purpose of prohibiting unjust discriminations." The Legislature, in 1871, passed an

Act to prevent any discriminations by the different railroads of the State for the transportation of freight. The roads were classified according to their earnings; the rates actually charged in 1870 being the standard. A Board of Commissioners was created, charged with the duty of carrying the provisions of the law into effect. This law was entirely disregarded by the railroad companies of the State, and coming before the Supreme Court of the State, on appeal, it was pronounced invalid, upon the ground that it made " no proper distinction between just and unjust discriminations." This opinion of the Illinois Supreme Court, which was elected during the Granger excitement, possesses emphatic significance at the present time, when it is important to know where public control over private property ceases and private rights commence.

Although the statutes of the State of Illinois prescribe what shall be deemed prima facie evidence of "extortion" and "unjust discrimination," yet the Courts, in determining all such complaints, adopt the common law principle, viz.: that there must be exercised a judicious distinction as to what is a "just and unjust discrimination," and that the final determination of the question of what is "just and reasonable" is purely a judicial question.

Perhaps no State has attained greater notoriety through inflexible regulations of railroad charges than the State of Wisconsin. We have not space in this report to traverse all the various phases it assumed. One of the incidents growing out of the action of the State in granting public aid to encourage the investment of capital in railroads was, that as the people had asked authority to tax themselves to obtain railroad facilities in advance of population and industrial development, they in some unexplainable manner had acquired an interest different from that "public use" which obtains to capital ordinarily invested in railways, steamboats, and other carrying facilities for hire. This sentiment prevails to some extent even at this time.

The people of Wisconsin, on realizing the fact that the aid given to encourage the construction of certain railroads did not give them any legal control or rights over them that did not pertain to any road, whether they had aided in its construction or not, became intensely excited, and to even up, they resolved to restrict their charges. The dissatisfaction culminated in the passage of the so called "Potter law," said to be the most stringent legislative enactment which has yet been enacted in this country. There can be no doubt of there being good cause for the complaints made in that State. The diversion of the aid donated by the people, and the proceeds of the land grants, to other than the objects for which they were denoted, aroused the most intense feeling of hostility to the railroad management. It was an inflexible and unchangeable statutory regulation, regardless of commercial law, or the ever varying conditions and fluctuations in trade alone, that would appease them. It made no difference whether the distance was one mile or a hundred. It treated connecting lines as continuous, but made no provision for division of earnings. The Commissioners who were to enforce it set forth in their report to the Legislature the various inconsistencies of the law. They also reached the conclusion, after a thorough study of the question, as nearly every Railroad Commission has reached, that inflexible statutory regula

tions of common carriers results in injury to both the producer and the carrier. In their report in 1874 they say:

Surely there is no apology for the exercise, on the part of the State, of any power over corporations which can be as safely and as wisely exercised by the corporations themselves. There is no principle of American Government so thoroughly or so properly established as that which limits the province of legislation, at all times and under all circumstances, to enactments for the general good, and which denies to Government the right or the duty of unnecessary interference with private or public enterprise.

The law has since been modified so as to restore harmony between the parties most interested.

The information obtained through the investigations of the Commissioners, has tended to correct the erroneous views regarding transportation which had been entertained, and there has been shown a disposition by railroad companies to comply with the legitimate demands of the people with regard to their commercial and industrial interests.

It was

Michigan established a Railroad Commission in 1873. invested with power to investigate, and give publicity to its investigations, and to obtain such other information as would promote the interests of the "railroads and the public." Like all transportation commissions, whether invested with power to establish fares and rates or not, he found an insurmountable difficulty in establishing an inflexible relation between production and transportation. The market values of commodities transported, and volume of business, which was ever varying, and competition, were some of the difficulties which were a bar to such legislation. In consideration of these and other facts, the Commissioner, in his subsequent reports, has expressed his opinion that the State should rather seek to develop its railroad system by a liberal policy than that of repression; and there has never been adopted any law limiting freight charges in the State. The supervision exercised in the discharge of his duties has tended to prevent unjust discrimination and extortion, and has been the means also of aiding in adjusting differences between shippers and the railroad companies. Rates have been steadily reduced on all the roads as traffic has increased.

Ohio has never pursued a radical policy towards her transportation companies. A Commissioner, charged with similar duties to those of the State of Michigan, is appointed by the Governor. Apparently there is little cause of complaint against the transportation companies of Ohio. The policy pursued by the Massachusetts Commission has worked well in that State.

In Iowa the influence reflected from Wisconsin in her contest for supremacy with the railroad companies, created much interest for five or six years. Complaints of exorbitant charges and unjust discriminations, were as loud as in her sister State to the north of her. One of the chief causes of the complaints was the alleged unjust discriminations made between shippers. The published rates of some of the companies, are said to have afforded no indication of the actual rates charged, except to occasional shippers. Special rates, it was alleged, were made forty per cent below the published rates. Such practices were calculated to paralyze legitimate trade, because so directly opposed to the principles of law in relation to the duties. of common carriers.

In 1874 the Legislature passed a railroad tariff law, establishing the maximum rates for fare and freight, and prohibiting unjust dis

criminations. Like most of the laws establishing inflexible rates for railroad companies, the law of 1874 was very crude, and from the fact that most of roads operating in the State of Iowa were owned and operated in other States, the law could not affect them except on the local traffic, which was only from fifteen to twenty per cent of the whole traffic. So antagonistic became the people to regulations they deemed injurious to their State, that it has been alleged that they would not assist the railroad companies in subduing fires if only railroad property was exposed. Much of this hostility arose from the discriminations which the law itself produced. A thorough investigation of the whole subject revealed the defects in the law. This led to subsequent modifications, designed to correct the mistakes of inexperience in railroad legislation. The question now seems settled on a permanent basis.

The causes that operated in Illinois, Wisconsin, and Iowa, reflected their influence to the State of Missouri, and as the "Potter law," so called, had been pronounced a panacea for all the ills that ignorance or cupidity in railroad management had engendered, this law was adopted almost entire. The Act of 1875 provided for the appointment of three Commissioners, charged with the duty of annually reporting to the Legislature in regard to the economic, commercial, and financial interest of the various roads of the State; of attending to the enforcement of the laws with reference to matters of safety and police, and with the duty of prosecuting all violations of the State laws in regard to railroads. The Commissioners, like those of Wisconsin, Illinois, and Iowa, soon discovered the most glaring defects in the law, the failure to provide the proper means for its enforcement being the least. It has proved as ineffectual in Missouri as in the adjacent States.

Maine, New Hampshire, Vermont, Pennsylvania, Georgia, and a few other States, have created the office of Railroad Commissioners, but with one or two exceptions, no power to establish fares and rates has been conferred. They still recognize as applicable to common carriers the old common law rule, that the charges must be just to the carrier and reasonable to the shipper.

Having very briefly reviewed the action of several of the States in their efforts at government control of transportation by railroads, we have deduced from their experience a line of conduct for the government of our actions towards the transportation companies of this State. In addition to the experience of the Commissioners of the States to which reference has been made, we have the experience of our immediate predecessors also. In the Appendix will be found tables showing what is being done in the direction of reducing the cost of transportation by the active forces at work in developing and extending our commerce. The system of railroads in the United States may said to be characteristic of our people and government. The latter is the result of ideal growth, and only a people imbued with a strong sense of individual freedom could have formulated a system so regulated with checks and balances, and maintained it for a century, when the active forces of commercial development were so powerful. As dangers have advanced and threatened, the strong native sense of the people has found a practicable method of averting them. As political necessities have arisen, we have thus far in our career been able to devise a way of settlement for all similar emergencies. So with our railroad system. Half a century has passed