ADDRESS
OF
SILAS W. GARDINER,
(REPRESENTING THE CENTRAL YELLOW PINE ASSOCIATION.)
DELEGATE TO THE
INTERSTATE COMMERCE
LAW CONVENTION,
MELD AT
CHICAGO,
%
OCTOBER 26th AND 27th, 1905.
SOME REFLECTIONS
AS TO
PRESIDENT ROOSEVELT'S RECOMMENDATIONS
FOR
Governmental Regulation of
Freight Rates
through the
Administrative Arm of the Government,
Rather than through the Judiciary.
The Interstate Commerce Law Convention is the
outgrowth of efforts by the business interests of the
United States to impress upon congress the extent and
persistence of the demands of the people of all parts of
the country for legislation outlined and asked for by the
president in his last annual message to congress.
He asked for a law that would clothe the Interstate
Commerce Commission with power to investigate any
rate that may be complained of as excessive or unjust,
and if said rate should be found to be unreasonable or
unjust to substitute a rate (a maximum rate supposedly)
that it should adjudge as reasonable and fair to both the
shipper and to the railroad, and that the rate so sub¬
stituted shall go into effect and so remain unless or until
reversed by a competent court of review.
The Interstate Commerce Caw Convention is now
gathered here in response to the call of the chairman,
Hon. E. P. Bacon, of September 18, 1905, for the pur¬
pose of considering ways and means of carrying out and
having enacted into law the aforesaid suggestions of the
president as to the placing control of rate making under
governmental regulations. The convention is not called
or convened to devise or to consider any other plan or
method of dealing with the subject of governmental
regulation of railroads or of rates.
While this convention does not stand for any parti¬
cular bill or measure, the legislation needed to meet the
requirements of present conditions is substantially that
which has been formulated in a modified form of the
Esch-Townsend bill. It is endorsed by the president
and also is satisfactory to the Interstate Commerce
Com mission.
It provides that the rulings and orders of the govern¬
mental authority shall go immediately into effect (within
a reasonable time, which would mean simply time enough
to prepare and issue a new rate sheet). This will pre¬
vent the years of litigation that are now necessary in
order to get a disputed rate question settled. To illus¬
trate this point, the cattlemen of Texas have been con¬
tending against what they believe to be an excessive rate,
for several years. The Central Yellow Pine Association
has been litigating against an advance of two cents a
hundred, on yellow pine, which was put into effect April
15, 1903, and the end of the case is not yet in sight,
although tens of thousands of dollars have been swal¬
lowed up in expenses of litigation. The association has
had a favorable decision by the Interstate Commerce
Commission, and the Georgia Lumbermen have won
their case in the federal court of Georgia, but the rail¬
roads still continue to enforce the advanced rate, and it
amounts to millions of dollars that the railroads are
gathering in of the shippers' money.
The railroad people and those who are allied with
them in opposition to any sort or kind of government
regulation that would regulate, are pleased to sneer at
the proposed bill, and to characterize it as 4'confiscatory
legislation," and "commercial lynch law" and that such
a law, "would result in slow paralysis of railway initia¬
tion," etc. Their whole campaign has been one of
sophistry and misrepresentation.
There are in the United States something like
206,000miles of railroads, of which mileage about 125,000
miles, over one-half, are under the jurisdiction of state
laws and state commissions, as to their powers of rate
making within the borders of the respective states.
Does any one ever hear of "confiscatory rates" or "com¬
mercial lynch laws" in these states ?
It is simply preposterous and those who make these
claims and charges and predict the direful calamities
to follow any efforts to control rate making, and who
invent the sensational catch-phrases above quoted,
know that they are totally misrepresenting the president
and his recommendations for governmental control of
rates. They do it simply to befog and confuse the situa¬
tion and mislead the people. They know that in those
states where rates are controlled, the railroads are as
prosperous as are the railroads in the country at large.
They also know that neither the Esch-Townsend
bill nor any other bill that has been proposed contem¬
plates the general overhauling of the railroad freight
schedules, and arbitrary substitution of new rates.
These bills assume that rates generally are fair and
satisfactory. It is only when rates are advanced or
complained of as unjust that the government is to inves¬
tigate and decide as to the justness of the challenged
rate.
To make this question perfectly clear and thus em-
Ph asize the seriousness of the conditions as they now
prevail, let us for a moment suppose that conditions
were just the reverse of what they are. Let us suppose
that the government has had tor a generation the un¬
questioned or undisputed right, after a rate has been
complained of, and upon investigation found to be ex¬
cessive and unjust, to name a rate that it considers
just and fair to the shipper and compensatory to the
railroad—a maximum rate.
Let us now suppose that the railroads should ask
the people and congress to abrogate this right and safe¬
guard for the people and to relegate the entire rate mak¬
ing power to the railroads, without recourse or appeal;
that the interests of the people should be completely
turned over, body and soul, to the tender mercies of the
railroads.
Would there not go up from the people a loud cry
unto Jupiter that they might be spared from so calami¬
tous a consummation ?
I would ask in all candor is there a senator or a
congressman who would have the nerve, the temerity
or the audacity to recommend or advocate such a
measure ?
And yet this is the very condition the people
are now in. The railroads, under the laws as
they now stand, are the sole rate-making power of
our land. The courts are denied jurisdiction to
interfere in behalf of the people, as rates once
promulgated and duly published become the legal
rates from which there is no escape, because the
a
courts have no power or authority to say what
is a fair or just rate, and it is astounding that
some of our law makers knowing this to be true
can have the nerve, the temerity and the audacity
to oppose such an amendment to our laws as the
president recommends, and it is passing strange that
they will tolerate the assertions of railroad man¬
agers that this proposed measure is nothing short
of "confiscatory legislation" and "commercial
lynch law."
Let it be remembered that under the laws now in
effect the railroads are fully protected against any sort
of confiscation. The courts accept jurisdiction and will
always be ready to abrogate a rate that is manifestly too
low, or confiscatory, but they cannot on the other hand,
protect the people against an excessive or unjust rate,
because the rates are made according to law, and are
legal rates, although they may be extremely extortionate
and even confiscatory. Any rate that the railroads
may choose to make is legal if it is duly published,
and no court can set it aside and substitute a fair
rate. It can only be done by the administrative
arm of the government, and so it is that while the
railroads may confiscate the property and the fortunes
of individuals and have done so in many instances,
there is not at present any legal method of pre¬
venting a continuation of such conditions; and this is
why it is so important that President Roosevelt's recom¬
mendations shall at the coming session of congress be
enacted into law, in order that the rulings and orders of
the government may be enforced and made immediately
effective.
There is another thing that we should remember
in connection with this matter, to-wit i the rail¬
roads have nothing at stake, and therefore nothing
to lose in advancing rates, but they have millions to
gain. The reason is that if the people fight
against the advanced rates the railroads can under
present conditions keep the matter in the courts
for four or five years and all the time continue
to collect the advanced rates, and at the end of it
all the most that can be done is to order the railroads to
desist from any longer charging the rate. In the
meantime the railroads have gathered in millions of
dollars of the people's money and there is no recourse
or help for it. This is clearly shown in the cases of the
cattle men of Texas and the Central Yellow Pine Asso¬
ciation against the railroads now in courts. The con¬
troversy as to whether the commission should name a
''maximum" rate or a "reasonable" rate is not at all
relevant to our discussion, as these words under the pro¬
posed law would be considered as synonymous terms.
As before stated, the object of the convention is simply
to devise ways and means to secure legislation along the
lines recommended by President Roosevelt.
FURTHER COMMENT.
It has been made clear, both during the convention
and since, by the pronouncements of Hon. E. P. Bacon,
Chairman of the Interstate Commerce Convention, by
Judge S. H. Cowan of Fort Worth, Texas, by Judge
Joseph H. Call of California and by Senator Philander C.
Knox of Pennsylvania, formerly United States Attorney
General, that there is no need of creating any new or
special courts to handle or adjudicate the cases that may
arise as the result of this proposed legislation. The
courts as at present constituted and administered are
fully competent and the laws provide for their increase
or enlargement, to any extent necessary for the dispen¬
sation of justice to everybody.
The only legislation needed is simply that asked for
by the President, and it should be broad enough to cover
all interstate transportation service, including all charges,
regulations and exactions in connection therewith,
whether provided by the railroads themselves or through
arrangements with others, and should confer the author¬
ity of the government to examine and supervise the
books and accounts of transportation companies as it
does the national banks.
SILAS W. GARDINER.
November ioth, 1905.