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REPORT

OF THE

INTERSTATE COMMERCE COMMISSION.

WASHINGTON, D. C., December 14, 1905. To the Senate and House of Representatives :

The Interstate Commerce Commission has the honor to submit its nineteenth annual report for the consideration of the Congress.

In previous reports the Commission has repeatedly called attention to the necessity for certain amendments and additions to the present act to regulate commerce. Of these the most important is the delegation of authority to the Commission to determine what rate should be substituted for the future in place of one found, after full hearing, to be unlawful, with the further provision that an order of the Commission prescribing such substituted rate should take effect within a reasonable time unless vacated and set aside by judicial proceedings. As this question has become thoroughly understood, and as the proposed legislation is now under consideration by the Congress, it seems unnecessary at this time to repeat either the recommendations heretofore made or the reasons upon which they are based. It may be suitable, however, to state briefly the recent action of the Commission in this regard and the circumstances under which that action was taken.

After the adjournment of the last Congress and during the spring and early summer of this year the Senate Committee on Interstate Commerce conducted an extended inquiry, which appears to have developed every important argument bearing upon the question. Toward the close of this inquiry opportunity was afforded to the members of the Commission to express their views, and they were heard at considerable length. The Commission was thereupon asked to submit its recommendations in writing to the committee, and has lately complied with that request. The recommendations so made were presented in the form of a bill, .which, with the letter of explanation transmitting the same, is printed as an appendix to this report.

The form of the proposed measure, as will appear upon inspection, is an amendment of certain sections of the present statute. This

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statute was passed in February, 1887, and has been in force since that time. Its provisions have become familiar to the various interests affected by its administration, and several of its sections have been judicially construed. For this and other reasons it is believed that needful changes in the law should be made by specific amendments rather than by the enactment of an independent measure. We are of the opinion that this course would simplify legislation and be more likely to avoid uncertainty of meaning. There appears to be little occasion to alter the general plan and framework of the original act, and it would seem advisable to increase its effectiveness by amending particular sections.

Aside from the main question—the grant of power to the Commission, after hearing, to fix the future rate—several other amendments are proposed with the view of improving the law as a remedial measure, and these amendments will now be referred to under appropriate headings.

ENLARGEMENT OF JURISDICTION.

It will be seen that the changes proposed in the first section are designed (a) to somewhat increase the jurisdiction of the law as to the carriers subject to its provisions and (b) to bring within the scope the law certain charges and practices which are not now subject to regulation or respecting which there is dispute as to the power of the Commission. The first purpose is accomplished by leaving out of the first paragraph the phrase “under a common control, management, or arrangement,” in order to reach certain classes of carriers which are now exempt from the obligations and requirements of the act. The second purpose is sought to be accomplished by enlarging the definition of the term “ transportation," so as to include the charges for various services, such as refrigeration and the like, which are now claimed to be beyond our authority. The obligation to furnish and provide the services here referred to is also imposed, which is likewise a point now in dispute. No other changes are proposed in the first five sections of the act, which are commonly spoken of as containing its principal or substantive provisions. In other words, the only amendment suggested in this regard is an enlargement of jurisdiction. In this connection, and as illustrative of the matters here referred to, the subject of refrigeration charges may be properly considered.

REFRIGERATION CHARGES.

At the present time large quantities of perishable commodities are transported over such distances that artificial refrigeration is necessary. From comparatively small beginnings this traffic has grown to enormous proportions. In the transportation of these commodities the icing is just as essential as the hauling of the car. The owner of the commodity transported can no more provide the refrigeration than he can provide the transportation itself. The consequences of exacting an exorbitant icing charge or of imposing upon one shipper a higher charge for refrigeration than is imposed upon his competitor are precisely as serious as the same kind of extortion or discrimination would be in the transportation charge itself. Every reason which requires that the freight rate should be published and maintained, subject to supervision and control by the Commission, applies to these charges for refrigeration.

As the business is now conducted, some railroad companies furnish refrigeration themselves, but in most cases it is furnished by independent companies which usually provide the car, for which the railway pays, and the ice, for which a charge is made against the shipper. Formerly there were several of these companies, but to-day the business has fallen into the hands of two or three, of which the Armour Car Lines is the principal. Extended investigations by the Commission have led to the conclusion that the charges imposed are, in some cases at least, exorbitant, and that those charges are not uniformly exacted.

The Commission has held that the furnishing of refrigeration is a part of the transportation itself, and that the railway is, under the present law, obliged to publish and maintain these charges for icing. The railways, however, confidently insist, first, that the providing of refrigeration is a local service, not a part of the transportation, which is not and can not be put under the supervision of any Government tribunal; and, second, that even if the Congress might impose upon the carrier the duty of furnishing this service, it has not done so; that the service is furnished by private persons, and not, therefore, subject to the jurisdiction of the Commission.

In view of the great importance of these charges to the shipper, we suggest that the Congress ought to make that service, by express provision in the law, a part of the transportation itself. We do not at this time recommend that carriers should be prohibited from using private cars or from employing the owners of such cars to perform the icing service if they find that course to their advantage, but we do recommend that these charges should be put on the same basis as all other freight charges. They should be published and mainta the same as the transportation charge, and be subject to the same supervision and control.

PUBLICATION AND FILING OF TARIFFS.

The sixth section, which relates to the publication and filing of tariffs and kindred matters, has been wholly recast, with the view of improving its phraseology and giving greater certainty as to its obligations. It will also be seen that the proposed amendment of this section gives the Commission a considerable latitude of discretion, which is now lacking, and thus supplies a needful element of flexibility. While the time of notice of tariff changes is extended to sixty days, as a tentative proposal, it will be observed that this may be regarded as a standard or maximum requirement which the Commission can modify as circumstances may seem to require. While we think that sixty days is not too long in the great majority of cases and that such length of notice would add greatly to the stability of rates, which is a matter of much importance, we are not particular as to the exact time so long as it materially exceeds the present limitation, but we do strongly favor the discretionary features of this proposed section as a most useful change from the hard and fast rules of the existing statute. The plan proposed would enable the Commission to allow very short notice of changes in export rates, for example, and even to dispense with publication in proper cases. In a word, the aim is to give to this section adaptability to commercial conditions and business requirements, which ought not to be subjected to one unvarying requirement.

IMPORT AND EXPORT TARIFFS.

It has always been a mooted question whether the present act requires carriers to file and maintain the tariffs under which they transport imports and exports to and from the port of export and of entry. At the present time such rates are filed and in the main observed in case of a large part of that traffic. Certain carriers, however, deny their obligation to observe these tariffs even when they do file them; and in other portions of the country no attempt is made to publish and maintain such rates.

After extended investigation into the subject the Commission reached the conclusion some time ago that the present law required the publication and maintenance of these rates, and that good policy also demanded the same course. There is no substantial reason why domestic rates should be published and maintained which does not apply with equal force to export and import rates; and to require publication in one case and dispense with it in the other opens wide the door to alt sorts of discriminations, not only with respect to import and export traffic itself, but also with respect to domestic traffic where the same person handles both species of business.

In view of the fact, however, that it was earnestly insisted that to enforce this rule would seriously interfere with our foreign business, especially in the handling of cotton through the southern ports and of certain exports and imports through the Pacific coast ports, the

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