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This provision, expressly directing the Legislature to pass laws to prevent unjust discrimination, is a recognition of the palpable fact that there may be discriminations which are not unjust, and, by implication, it restrains the power of the Legislature to a prohibition of those which are unjust. That was undoubtedly the object of the Legislature in passing the existing law. This is clearly shown by its title. But the Act itself goes further. It forbids any diserimination whatever, under any circumstances, and whether just or unjust, in the charges for transporting the same classes of freight over equal distances, even though moving in opposite directions, and does not permit the companies to show that the discrimination is not unjust. The mere proof of the discrimination makes out a case against the railway companies, which they are not allowed to meet with evidence showing the reason or propriety of the discrimination, and then, upon this sort of ex parte trial, imposes, as a penalty for the offense, a forfeiture of the franchise, which would often be equivalent to a fine of millions of dollars. The object of the law is commendable, but such a proceeding, to be followed by such a penalty for the first offense, cannot be sustained. It could only have been authorized through the inadvertence of the Legislature.

The law as it now stands, makes an offense out of an act which might be shown not to be an offense, but an exercise of a wise discretion, really beneficial to the people of the State, and while debarring the companies from all right of explanation, confiscates their franchises upon the first conviction. The Legislature cannot raise conclusive presumption of guilt against a natural person from an act that may be innocent in itself, taking from him the privilege of showing the actual innocence or propriety of the act, and confiscating his property as a penalty for the supposed offense. Those provisions of our Constitution which forbid the deprivation of life, liberty, or property, except by due process of law, and which guarantee "the right of trial by jury," as heretofore enjoyed, and the right in all criminal prosecutions to appear and defend in person and by counsel, would all be violated by such a law. Those provisions, it is true, are designed to apply to natural persons, but artificial persons must be permitted to invoke the spirit of justice which prompted them, so far as may be necessary to protect their property and franchises against the operation of a law that substantially condemns without a trial. That the naked fact that a railway company charges a larger sum for transporting freight of the same class over a given distance than it is charging for the same distance over another part of its road, or in the opposite direction, is not, of itself, conclusive evidence of an unjust discrimination, will be manifest on a moment's consideration. Take, for instance, the road of the appellant, with one terminus at Chicago and the other at East St. Louis. At one season of the year more freights are moving from Chicago towards East St. Louis than in the opposite direction. The consequence, of course, is that the supply of empty cars at the latter point will be in excess of the demand. There is a water route between these points which also touches several intermediate stations upon the road. Now, unless the railroad company is permitted, under such circumstances, to induce shipments over its line by lowering its freights, it is evident that a portion of its cars will return empty. This would, of course, necessitate a higher charge for freight moving towards St. Louis than it would be necessary to impose if return freights could be secured by lowering the rates on the return trip. To forbid the company to lower the rates of return freight would thus benefit no one, and would work an injury both to the company and to the people along the line. At other seasons of the year the larger amount of freights is moving in the opposite direction, and then the operation must be reversed.

We give this illustration for the purpose of showing that a difference of price for the same distance of transportation is not necessarily an unjust discrimination, and that any law must be fatally defective which infers guilt, as a conclusive presumption, from the mere fact of difference of rates, without permitting the companies to show why the different rates were adopted.

We think the principle enunciated in the above named case is more in harmony with our system of government than that of the Supreme Court of the United States in the Granger Cases. In the former case the Court set aside a statute which made an offense out of an act which might be shown not to be an offense, "but the exercise of a wise discretion really beneficial to the people of the State," while the latter holds that there is no power in the Court to right a legislative wrong.

Invested as this Board is, with judicial, as well as legislative powers, it would be derelict to its duty to the producers as well as the carriers, did it not exercise a discriminating judgment in the determination of all questions as to the reasonableness of the rates to be established. Besides, an enlightened sense of justice demands that we shall do right.

PUBLIC HIGHWAYS.

In many of the public discussions and published reviews on the railroads, their functions and duties, the term "public highways" is

applied to them; this application has led to much confusion. If the functions of a railroad are understood, it matters little what it is called. Its functions are not those of a public highway in the sense it was formerly used, and never can be, for that term meant a road which all had the right to travel on at their own pleasure in their own vehicles. A railroad is not a highway of this sort. If by the term it is intended to imply that a "public use" attaches to it, we accept the definition. We are particular to have it thus defined, in order that we may exercise the powers conferred upon this Board to the extent of the admitted "public use," whenever the public good may require. We hold that the property of a railroad company of every species is private. Each stockholder's interest is his private property. While the State has a right to insist upon equal and like treatment, under similar circumstances, for all who are similarly situated, we are not prepared to admit the "public use" to the extent of impairing the value of private property of citizens who have invested it in a business which is with the people.

A common carrier by railroad is proprietor of the roadway and all the rolling stock and equipment necessary to its successful operation. The rates are not only for the transportation services as rendered by common carriers over public roads and waters, but also for the use of the roadway, its maintenance, and for the risk assumed in its construction. These latter are the principal factors which distinguish carriers by rail and carriers by water. We will not assume that a railroad built and owned by private citizens bears the same relation to the public as a public waterway or highway. While we claim that there is a public use in the railroad owned by private parties, the public use extends no farther than the right of each person and his property to be transported on payment of a reasonable sum as compensation.

The carrier, in the one case, has no right to charge for the use of the "road" and "waterway" because they belong to the public. In the other he has, because it is a part of his own property. Because the organic law "declares railroads and other transportation companies common carriers," and established a commission clothed with powers far-reaching, we do not proceed upon the hypothesis that the State owns the roads, and may do with them whatever the excitements engendered by a political campaign may dictate. Our chief object should be to harmonize the relations of "production and transportation," and to impress this economic fact upon the minds of the representatives of each, viz.: that "the development and necessities of trade in practice always have nullified, and inevitably must nullify the special Acts, no matter how carefully and skillfully they may be prepared." It took conservative old England forty years to learn this important fact, but having learned it, Parliament has at last settled down upon the basis that the interference in the details of working the traffic of her railroad companies is mischievous, and works more injury to the public than non-interference. Although this fact has been demonstrated repeatedly in the United States, yet it remains in party politics in this State.

Each party bids against the other in the amount it will save the people by reductions in the income of the transportation companies. A few merchants join this or that party that will promise the lowest special rates, regardless of the influence that such attacks on capital may engender among those who regard the rights of property but

lightly. All this is political immorality, and the intelligent leaders of each of the parties ought to be above it. If these attacks on capital go on a few years more may we not ask this question, at this time: Will the political ethics that would deprive capital invested in railroads of its income hesitate to take the principal also, and if successful in this case, will it hesitate at confiscation of capital invested in other channels? We desire to extend the analysis of the "public use" of private property to commercial transactions other than those of transportation. All business is more or less with the public.

There is a greater public use in the articles "bread and meat" than in transportation. The one is necessary to existence, the other makes existence much more desirable. The business of A. T. Stewart was with the greatest number of people he could control. His transactions yearly were as great in the aggregate as those of the New York Central Railroad Company. He made contracts with manufacturers, both in this country and in Europe; he made special prices to cash customers and gilt-edged patrons; he established branch houses as feeders for his New York house, and in all these immense transactions, each of which was an individual transaction, and millions of people were remotely dependent upon his regularity in serving them; yet the idea of public supervision of his business was never dreamed of even remotely. The Granger decision says: When private property becomes of public interest the public has a right to control it. It says, by implication, also, that the extent of this "public use" is a legislative and not a judicial question. That the Court has no power to redress a legislative wrong. However much against public policy the Acts may be, redress must be sought at the polls and not in the Courts. Some recent judicial decisions have a decided leaning in another direction, notwithstanding the former opinion.

We are of opinion that there is a well defined line where "public use" ceases, and "private right" commences, which has been definitely marked by the Supreme Court of Illinois, already referred to.

There are no investments of capital in any industry, that are not of interest to the general public, no matter whether it be in reclaiming the desert lands of the Counties of Kern and Lassen; the swamp lands of the Sacramento and San Joaquin Rivers; or the iron foundries and mills of San Francisco. All these investments are of the greatest interest to the people at large. Will you admit, however, that the public has an interest superior to your own, except for taxable purposes? The same code of morals that would deprive the capital invested in transportation property of its legitimate earnings, will apply to the latter with equal force.

DISCRIMINATION.

Why should this term applied to transportation be considered less complimentary than when applied to any other branch of business, or to a person? It is certainly complimentary to be considered of a discriminating mind. It is not complimentary to be unable to distinguish between different things. There is no trade or occupation that could prosper without the exercise of a judicious discrimination. Nature has discriminated largely in the creation, and man, the higher type of created beings, has not succeeded in all the ages past in overcoming them entirely. But the organic law of this State declares.

that there shall be "no discrimination by transportation companies in their charges between places or persons." This declaration would seem to be a "declaration of independence" of differences founded on natural conditions.

Were this Board to attempt the enforcement literally of this portion of the organic law, it would, first of all, be necessary to divest itself of that power of discrimination which our respective constituencies believed we possessed, when they elected us to the important positions of Railroad Commissioners. The judicial character with which the organic law has invested our office, has enabled us to exercise a judicious distinction, however, between "just and unjust" discriminations. Discrimination, by itself, should excite no fear. It is only when it is preceded by the word "unjust," that it should attract public notice. Injustice alone should merit a penalty.

We will now attempt to illustrate what, to us, appears to be "just and unjust" discrimination. The organic law, as it now stands, without the exercise of the discretionary power which the judicial character of our office clothes us, would require the fixing of a penalty for an act which might be shown to be no offense at all. All places do not enjoy the same natural advantages, neither can their disadvantages be entirely overcome by the arts of man. The earth was not made a level plain; had it been, it would probably have been enshrouded in water, and its inhabitants been of a different character than they are. But in all the history of creation we find judicious discriminations on every side, material, physical, mental, and moral. Of the material and physical discriminations, while we have not the power to overcome them, we will endeavor to explain why it is that the ingenuity of man has not yet been able to do so, and, also, why it would not be either expedient or desirable.

The Cities of New York and San Francisco are situated opposite each other, facing the two great natural highways of the world's commerce. Formerly the commerce between these cities was by the way of Cape Horn, about 18,000 miles, or by the Isthmus of Panama, about 16,000 miles. For many years these two routes furnished the only means of communication, and they were invaluable and served us well. They are invaluable still, and will continue to be through all time. But the active developing forces of commerce demanded a quicker communication between the East and the West, and the demand was responded to by the completion of the first transcontinental railway. Those living along its route against whom nature had discriminated most largely, rejoiced that so much of nature's discriminations had been overcome. The "prairie schooner" and the mule team gave place to the locomotive and "palace car." The feed stations of the wayside disappeared and thriving prosperous towns took their places. Mines were developed; desert lands were converted into productive farms, and civilized society became firmly established where a few years ago there was naught but waste places. Now, what has this to do with discrimination? We answer, very much. We are told that the Central and Union Pacific Railroad Companies discriminate against all these places that have been redeemed by the labor of the hardy settlers of these thriving towns along their line.

We admit that discrimination, so called, does prevail all along the line from the Missouri River to San Francisco. These discriminations, however, are not arbitrary unless made by these companies,

but are the result of natural conditions, over which they have no control.

San Francisco and New York are so situated to the markets of the world, that they obtain all the benefits desirable therefrom. At each of these places, the competition afforded by the two oceans, places them in position to establish the rates on all the through traffic between them by railroad. Their natural position guarantees this. As we recede from either, towards the center of the continent, the competitive forces at these points gradually recede also, until the central point is reached. From thence, in either direction, the competitive forces begin to be felt, until its full power is reached at either terminus.

No regulation of whatever nature can overcome these differences until railroads can transport persons and property as cheaply as vessels on navigable water can perform the same service. But we are asked, "Why are railroads allowed to discriminate against Reno, Salt Lake, and other intermediate points, by charging the shippers at these points more than they charge the shippers at San Francisco, when the distance is much greater to the latter point? Or, to be more specific, why is the rate from New York to Reno four dollars and fifty cents per hundred pounds, while it is only two dollars and fifty cents to San Francisco, three hundred miles further." We answer that the railroad company does not make the rate to San Francisco. It simply takes what the merchants will pay. The ocean establishes the railroad rates to San Francisco, and they must take that or not get the traffic. In other words, if the railroad company could establish the rate to San Francisco as well as to Reno, and made the difference of two dollars per hundred pounds, we should think its managers did not understand their business. But if the rate from New York to Reno by itself is reasonable, and the rate by water route to San Francisco was less than the rail route to Reno, there can be no injustice done to the latter by allowing the railroad to compete for the San Francisco business. By leaving the railroad free to do this, it will increase its through business; and whatever of profit there is made on the latter will to that extent enable the company to reduce the rates at all intermediate points. Reno, Wadsworth, Humboldt, and Salt Lake, being situated between two chains of mountains, are among the places which nature has discriminated against most heavily on the overland route. To reach either of them all freight and passengers have to be elevated to an altitude of eight thousand feet, and lowered again.

Before the completion of the Central Pacific and Union Pacific roads, the rates from New York to San Francisco were as high on nearly all, and on many classes of goods higher than now, while the rate to either of the places named was from twenty-five to fifty dollars per hundred pounds. In dollars and cents the natural discrimination was from forty-five down to twenty dollars per hundred pounds against these places. To the extent of the difference between the present rates and those prevailing before the construction of the railroads, all these places have been benefited. As commerce expands in the directions of Japan, China, Australia, the Pacific Islands, and Western Mexico, thus securing an increase of traffic between San Francisco and New York, the rates to these intermediate points can be reduced still further and the discriminations lessened. We state it as an axiom, that any competitive traffic which

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