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The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, February 26, 1906, Image 2

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Persistent link: https://chroniclingamerica.loc.gov/lccn/sn83045366/1906-02-26/ed-1/seq-2/

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[Declares Beef Trust Papers Were
Not Given to Prose-
Chicago, Feb, 26.Commissioner of
Corporations Garfield was again on the
stnd in the packers' case today. The
first questions asked by Attorney
BVnes, acting for the packers, related
to the consultation between Mr. Gar
field and Attorney General Moodv.
Garfield said that in September, 1904,
lie talked with the attorney general
regarding the case and also with H. H.
Hrvyt, solicitor general of the depart
ment of justice, -who acts for Mr. Moody
in his absence.
"Did the department of justice ask
for any of the information you had
seared?" asked Mr. Hynea.
the solicitor general made a
request in Julv, 1904." The witness
said that the request was repeated in
September, but that he did not accede
to either request.
"When next were you requested?
"When I was 'directed by the presi
dent to turn over information concern
ing persons who knew alleged viola
tions of the law."
Talked with President.
"Did you tell the president that you
tad told the packers that there was
no co-operation between the department
of justice and Your department?"
had stated that to him a number
of times."
"Did yon turn over any list of wit
nesses to the department of -justice?
I turned over to Mr. Bethea, at
that time district attorney in Chicago,
about 700 names of persons who said
that they knew of violations of the
"Did any of your agents report to
the department of iustice or to Dis
trict Attorney Morrison!"
"As far as I know, I should say
"Have you here now the informa
tion vou got from the packers which
was turned over to the attornev gen-
"None of that information was ob
tained from the packers."
"Did some of the information turned
over contain conversations with the
"Some of it."
Refused Bethea's Request.
"When you were asked by Mr.
Bethea,, the formei distuct attorney,
did you refuse?"
I refused portions of his request."
"What portions?"
"He asked if my agents here in Chi
cago could report to him and I told
him definitely that they could not, as
our departments were separate."
"Did you tell the president that
you had told the packers that the two
"departments were not operating to
I did not, because it was perfectly
understood that the department was
Mr. Hynes asked that the court order
that the latter part of the answer be
stricken out. and it was ordered, despite
the obiection of the district attorney.
During a five-minute recess Commis
sioner Garfield explained that the
names turned over to the department of
justice were so delivered at the request
of the president. All of the names, the
commissioner said, were obtained from
sources other than the packers. Attor
ney Miller, counsel for Armour & Co.,
then took up the cross-examination^
24th Annual Reduced-Price Sale.
The Great Plymouth Clothing House.
Kuhn, 'Loeb & Co. Retire from
Field, but Stick to Banks and
Trust Companies.
New York, Feb. 26.Members of the
firm of Kuhn, Loeb & Co. have deter
mined to retire from all railroad boards
in which the firm is represented, it was
announced today. The reason given for
this step is a steadily increasing diffi
culty which the members of the firm
have been experiencing in meeting the
demands of their own ^business, and at
the same time giving the necessary
time and attention to the performance
of theii duties as directors of corpora
Jacob H. Schiff is the head of the
firm of Kuhn, Loeb & Co.
Pursuant of this policy, members of
the firm on Wednesday -last resigned
from the following boards: Union Pa
cific "Railroad company, Baltimore &
Ohio railroad, Baltimore & Ohio South
western, Chicago & Alton. Denver & Rio
(Jrande, Northern Securities company,
Oregon Short Line railroad, Oregon
Railroad & Navigation company, Rio
Grande Western railroad. Southern Pa
cific company, Pacific Mail Steamship
company, and a number of subsidiary
It is understood that members of the
firm of Kuhn, Loeb & Co. have not re
tired from the boards of the various
banks, trust companies and similar cor
porations with which they are now
"Eubber' rubber!" Glove rubbers
are full of it. All "rubbers" aren't.
Special to The Journal.
Hamlev Falls, Minn., Feb. 26.A de
liberate attempt was made to burn this
village early today. A fire, undoubted
ly of incendiary origin, started in the
bowling alley a building owned by
the Amund estate. When the fire hose
was laid, it was found the nozzles were
securely plugged with white .lead and
stones. The hard work of the fire de
partment and volunteers 'was the only
thing that prevented a disastrous blaze.
The fire was confined to one building.
Few are entirely free from it.
It may develop so slowly as to cause little if
any disturbance during the whole period ot
It may then produce dyspepsia, catarrh,
and marked tendency,to consumption, before
manifesting itself in much cutaneous erup
tion or glandular swelling.
It is best to be sure that you are quite free
from it, and you, can rely on
JR i Hood's Sarsaparilla
jp !fco*ridtyou of it radically and permanently.
[onday Evening,
Continued From First Page.
China, in all probability, will be Ma3or
General Arthur McArthur, who has
been studying the Chinese situation on
the ground and is
plans along which hev
to have laid
wil work when
the time comes.
No Peril, Says Minister.
Sir Chentung Liang Cheng, the Chi
nese minister, does not understand the
warlike preparations this country is
making, and he insists that there abso
lutely is no reason for them, at least
so far as the situation in his country is
It is only fair to say that the British
and German embassies are as ignorant
ot the development of an abnormal sit
uation in China as is the representative
of the Celestial empire. The fact that
only American officers apprehend an up
rising is considered strange by Euro
pean diplomats, who see in the action of
President Roosevelt a move which will
have important international effect and
seriously affect their interests
the far east.
This aspect of the matter has caused
the representatives of European govern
ments to make repeated inquiries, but
the answer is always the same, that the
American consuls in China believe a
serious situation is developing and that
it is deemed advisable to take measures
for giving adequate protection to Amer
ican life and property.
'Nothing Alarming.''
I would certainly be informed if an
uprising were imminent," said Sir
Chentung Liang Cheng today,'' but as
a matter of fact my advices, official and
personal, show that there is nothing
alarming in the situation. Our people
are awakening, but it is a slow process
for them to substitute the methods of
the west for those observed for cen
turies in the empire. The awakening
is bound to come, however, and thtf
Chinese people will know their rights
and be able to uphold them.
"The reform movement began in
1898, but at that time the government
was not favorable to modern education
and other reforms. After the Boxer
outbreak the government realized the
necessity of introducing reforms and en
couraging foreign education."
"What is the attitude of the Chinese
people toward the United States?"
Attitude Toward America.
I do not think our people are hos
tile to your country. I know the gov
ernment is exceedingly friendly and re
members with satisfaction the many
kindly and generous things done by the
American people in their behalf. While
the native merchants participated in
the boycott, I think they are sorry they
did so. They have been injured far
more than have been the foreign mer
In my opinion the boycott is only
talk. Private information I have re
ceived convinces me it is not serious.
I think there is no reason," con
tinued the minister "to apprehend dan
ger to Americans in China.
The state department is concerned
over information it has received show
ing that China is moving energetically
to organize an army of 780,000 men,
which was contemplated by an edict is
sued by the empress dowager last sum
Significant Action Taken in the Im
perial Capital.
Peking, Feb. 26.-The guards around ?*d-
the Forbidden City have*been doubled
and all the palaces and residences of
high officials are especially guarded.
The police, who have hitherto carried
batons, are now armed with rifles. AH
the officials that are accessible either
refuse any information or profess lgno
lance of the reasons for the precautions
that have been taken, and as a result
many rumors are afloat.
The chief of police and other offi
cials were summoned to the palace on
Saturday, and the display of force im
mediately followed their conference.
Possibly the only cause is the alarm of
the empress dowager over the treva
lenct of revolutionary rumors recently.
The Chinese minister at Tokio a few
days ago telegraphed the government,
warning it against several revolutiona
ry students who are departing from
lapan to China.
Two packages of dynamite have been
found in the street outside the gate
leading to the palace. Apparently they
weie dropped by someone afraid to
carry them.
One report finding credence is that
there is a quarrel afoot within the pal
ace between the partisans of the em
press dowager and the emperor over
the selection of an heir to the throne,
but it is not confirmed.
All the information obtainable indi
cates that the military measures at the
palace were only precautionary and
were taken because of rumors that
The finding of the packages of dyna
mite outside the palace gates, which is
somewhat myBtenous, probably caused
uneasiness, as the court has been nerv
ous since the outrage in the Peking
railway station on Sept. 24.
The canard that Saturday had been
designated as the day for disturbances
appears to have been born in the United
States. Telegrams describing the mili
tary preparations of the American gov
ernment for trouble in China have been
widely published the Chinese news
papers, and are considered as decidedly
New Orleans, Iowa, Feb. 26The car
nival here was formally opened today,
the entry of Rex being tne chief event. A
slight shower fell during zne earlier part
of the day.
Kodol digests what you eat. Believes
indigestion, dyspepsia, sour stomach,
belching. NO FUNDS FOR
One copy of the code was decidedly
overworked today. It was an unbound
copy sent up to the governor late 'Sat
urday. The board of control borrowed
it and proceeded to study it. "When
they struck the big snap-, word was sent
to the governor. He had already sent
for the copy to confer with the attor
ney-general's department. Governor
Johnson delivered it to C. S. Jelley,
and the two consulted over it for some
time. The conference in the governor's
office followed.
The binders turned out 100 copies
this afternoon, which were sent out
from the document room in the old
capitol to supreme court and district
judges, heads of state departments and
a start made on the distribution to
county officials.
The code, with its annotations, fills
1,15 9 pages and the constitution 5 1
r 7
Accep no sulJstitute but insist on having] pages moire.' Th index"fills 170 pages^
i$ Hood's. Liquid or tablets, lQft.Dos.es Ik making 1,3$Q pages in .the volume,
Question Is Most Practicable and Equitable Action, Says
Albert E. Clarke, Former Railroad Counsel, Discussing
Regulation from Standpoint of a Lawyer.
By Albert E. Clarke of Minneapolis, Formerly General Counsel of the Minneapolis
& St. Louis Railroad Company.
Every discussion of the question of
railroad regulation, should bo prefacea
by the adoption of the following pre
amble, and resolution:
Whereas,'the right of the government
to regulate the management and oper
ation of railroads, is fully established,
and is not subject to question:
Be it therefore resolved, that the
purpose fcof this discussion is to de
termine the best and most practicable'
method of exercising that right, and
making it effective.
In the absence of legal restriction,
the governmental power of the states
is unlimited. All organic and consti
tutional law is restrictive. A state
legislature may pass any law not pro
hibited by its own, or the federal con
stitution. While the powers of the
federal government are limited, its
right to regulate corporations, subject
to constitutional limitation, is fully es
The constitution of the United States
provides that no state shall pass any
law which impairs the obligation of a
contract. But for this provision the
charter and business of every corpora
tion, public and private, would be sub
ject to repeal, amendment, alteration
and regulation, at the will of each state
The constitution of the United
States, as well as the constitution of
every state in the unio% except North
Carolina, contains a provision that pri
vate property cannot be taken for pub
lic use, except upon payment of just
compensation. Every court has, by
various lines of reasoning, construed
this to mean that private property can
not be taken for private use, against
the owner's objection, even upon the
payment of just compensation.
But for this provision, the right of
eminent domain could be delegated to,
and exercised by private corporations,
for the acquirement, by condemnation,
of the private property of individual
citizens for the use, of such corpora
tions. With this constitutional pro
vision effective, the state cannot dele
gate this power to any corporation, to
be used for its own exclusive profit
and its delegation to railroad corpora
tions, is conclusive of the fact that
they are in fact, and in law, public, as
well as private in character, and in obli
gation. They are designated by the
courts as quasi-public corporations. In
the two propositions that all organic
and constitutional law is restrictive,
and that the power of governmental
control of public corporations remains
in the state, free from constitutional
restriction, lie the key to the problem
of railroad regulation.
Status of the Corporation.
there was to be trouble here Saturday, and tp what class of corporations does
state control of public corporations.
There are but few who seem to appre
ciate the wondrous forensic knowledge
of the great judge, who, in those days
of little things, as compared with the
things of today, in construing the slaw
with reference to the charter of this,
little New England school, pronounced
an opinion which, in this age of cor
porations, is as far beyond criticism,
in logic, language, and principle, when
applied to existing conditions, as it was
when applied to the facts of the case in
which it was written. It applies, with
out the alteration of a sentence, to the
situation with which we are confronted
The rules which seem to be clearly
established by the decision in the Dart
mouth college case are as follows:
The state cannot, by the repeal or
amendment of the law which consti
tutes the charter of a purely private
corporation, divest such corporation of
any right, franchise or exemption, with
which it was invested by its charter
nor can it vest the property of such
corporation in the state, nor dispose of
the, same without the consent, or de
fault, of the corporation.
A purely private corporation may
lose its franchises by misuser, or non
user and such franchises' may be re
sumed by the government, after a
judicial judgment of forfeiture.
The state may regulate, modify, en
large or restrain the powers of public
Jn sharp contrast to the rule that the right of regulation is rfully established
power of the state is unlimited, unless
restricted, isf.th^e rule thatTa corpora
unless it ^^expresaly^ panted.
A corporation, not being a natural per
son, is without natural rights. Even
its right to exist is a franchise, granted
by the state.
John Marshall, the first chief justice
of the supreme court of the United
States, in his opinion in the Dart
mouth college case, defined and forever
fixed the status of corporations in the
political and judicial history of this
government. These are the words,
which by his utterance, became the
official definition of the supreme court:
A corporation is an artificial being,
invisible, "intangible, and existing only
in contemplation of law. Being the
mere creature of law, it possesses only
those properties which the charter of
its creation confers upon it, either ex
pressly or as incidental to its very
This definition is comprehensive and
complete. It is the utterance of the
highest courr. It is final. If then,
the power of the state is unlimited,
unless restricted by organic or consti
tutional law, it necessarily follows that
it possesses the power to regulate the
corporations which it has itself cre
ated, unless such power has been sur
rendered, or is restricted. Has this
been done and if so, to what extent
the limitation or restriction apply?
The question propounded is the pre
cise question decided in the Dartmouth
college case and the opinion in that
celebrated case exactly covers the ques
tion of the right of the state to regu
late railroad corporations.
The case was decided in 1819, and
has become noted in political and legal
circles, because of the fact that it es
tablished the rule of law, that the
charter of a corporation is a contract
between the incorporators and the
state. It is also generally regarded as
establishing the rule that a charter
once granted cannot be altered or
amended by the state, without the con
sent of the corporation but this state
ment is true only in part. It is true
as applied to the charters of purely
private corporations. It is not true as
applied to the charters of purely public
corporations nor is it true as applied
to the franchises and privileges of
quasi-public corporations, the exercise
of which are o a character so public
that their exercise involves the exercise
of powers inherent in the government.
Chief Justice Marshall, after care
fully describing Dartmouth college as
a private eleemosynary institution,
speaking of its charter, states the ques
tion before the court as follows: "Can
this be such a contract as the consti
tution intended to withdraw from the
power of state legislation?" Because
it was a purely private corporation, it
was held to be exempted from state
regulation, by the constitutional limita
tion. Again and again, does the great
jurist emphasize the fact that Dart
mouth college is an eleemosynary insti
tution, private in ownership, organiza
tion and purpose and again-and.again
is it made (clear that the right of
the state to 'regulate every public cor
poration is recognized) *,nd must be
Thruout the whole opinion, which is
recognized and accepted in 1906, as in
1819, as a most masterly" exposition of
the law, binding upon all courts, runs
the persistent assertion -of, the right.oX,'
Public Character Established.
The public character of railroad cor
porations is established by the single
fact that they are permitted to exercise
the right of eminent domain. Eminent
domain is the right, or power, of a
sovereign state, to appropriate private
property to public use. Its exercise en
ables railroad corporations to condemn
land for right of way, and other pub
lic uses.
The right of eminent domain is an
attribute of sovereignty4,
THE ^MINNEAPOLIS JOURNAL. February 26, 1906.
it is inherent
in the state, as the trustee of the sov
ereign rights of the people. It cannot
be exercised exeept by express authori
ty from the state and, under the con
stitutions of the several states, as
well as the federal constitution,
cannot be delegated to any cor
poration for its personal benefit. By
its%cceptance and exercise, a railroad
corporation admits its own public char
acter, places itself beyond the limita
tion of the provisW of the federal
constitution which forbids a state to
pass any law which violates the obliga
tion pf a contract* jand, under the rule
established Jn tJitfJDartnjouth college
case, subjeots itself as a public corpo
ration, to government regulation. This
It is exercised in many ways. The con
gress, and the state legislatures have
exercised it by requiring the use of au
tomatic couplers, alir brakes and other
safety devices by compelling railroad
companies to build connecting tracks,
establish stations, supply track scales
and comply with numerous require
ments of public convenience and safety.
The right to regulate the rates and
charges for transporting persons and
property exists at common law it was
exercised by the courts before the first
railroad W6B built and is exercised
reference to railroads today. The
doctrine that railroad carriers have the
right to charge what they choose for
the transportation which they sell, and
which constitutes their whole stock in
trade, has never been recognized. It
has never been the law of this, or of
any other country. The right to regu
late railroad rates has existed ever
since railroads have existed to deny it
is useless and as illogical as to deny the
right of the state to regulate the meth
od of exercising the elective franchise.
There is but one question concerning
the right of railroad regulation which
remains open that is the method of ex
ercising the established right.
It is a curious fact, that the storm
center of the argument in behalf of
railroad interests, is this question which,
has never been a question. Writers
of more or less ability continue to argue
in favor of the right of railroad car-,
riers to charge what they pleaBe for
the transportation they have for sale
seeking to apply to these public service
corporations, which exist thru the grace
of the state, and build up their property
by the exercise of the delegated powers
of the state which created them, the
same rules which govern the ventures
of private business.
Difficulties Not Insurmountable.
Efforts are put forth by the repre
sentatives of railroad interests, to im
press the public mind with the complex
ity of railroad operation, and the mag
nitude of the difficulties in the way of
railroad regulation,
I' doubt whether this question, fear
lessly and honestly met, is more com
plex or more difficult than other large
questions connected with the govern
ment and business of a great nation.
All questions of national government
are complex and difficult, because of
their magnitude.
In finance, in diplomacy, in the judi
cial construction and administration
of the laws, the various departments of
government are confronted with diffi
culties and complications, which they
are oblifed to meet and solve, and do
meet and solve, as presented and this
is done as a matter of course, and with
unhesitating promptitude. Mistakes
are sometimesno doubt frequently
made, and rectified by methods born of
experience but in no instance, except
in the matter of the regulation of cor
porations, is there any apparent doubt
as to the power or ability of the gov
ernment to successfully meet the re
quirements of the situation. The
greatest difficulty in the path of rail
road regulation is the fact that those
who possess the power are either afraid
or disinclined to exercise it. When the
congress of the United States earnest
ly, honestly and in good faith desires
the regulation of railroads, it will be
speedily accomplished. There are no
a reasonably effective law nor should
there be any gater difficulty in en*
forcing it than is attendant upon the
enforcement of other important laws.
The will of the people ds thwarted by
the people's representatives.
The indispensable feature of an ef
fective law for the regulation of rail
road rates', is one which invests the in
terstate commerce commission, or such
other body as may be created for that
purpose, with the power to fix rates.
One party or the other must at all
times possess this power the govern
ment or the railroads. Under the pres
ent law the government at no time pos
sesses it. If the courts declare a rate
unreasonable, the railroad makes an
other, which may be equally unrea
The railroads, who have hereto
fore alone possessed and exercised
the power, have made it clear that
as interested parties they cannot
be trusted. They are notoriously
and admittedly violators of law.
That they are interested parties,
is of course conceded that they
are habitual violators of law, is
passes issued by the officials of the
railroads they are asked to regulate,
and the rebates are paid, the franchises
rates? Is it not true, that they have
abused the rate-making power? Is
there any reason why the people, who
pay, should be influenced to continue
the, power in their hands?
Government Is Impartial.
On the other hand, the government
has no interest except to deal justly,
fairly and honestly with the railroads
and with the people. It has no inter
est which it can divorce from the in
terest of both parties. To cripple the
railroads by the establishment of un
reasonable and unremunerative tariffs,
would be a serious blow to state, and
national prosperity. Every public in
terest demands the careful protection
of railroad interests upon the one hand,
and the protection of the interests of
the people on the other hand. The com
mission, clothed with a power which
will enable it to command considera
tion and respect, will occupy a position
which will compel the able traffic
managers of our great railways to
render honest, earnest, and capable as
sistance( in /establishing rates which
are just and fair.
If the rate-making power is
permitted to remain with the car
riers alone, their traffic managers,
some of whom are said to com
mand salaries equal to, or larger,
than that of the president of the
United States, will continue to
bend all their energies, and to de- I
vote all their skill, to prevent in
terference with the tariffs, which I
are put in effect in the sole in
terest of their employers. This
they will do in the future, as they
have done in the past but wben
a body of men representing the
government, is invested with the
rate-making power, the effort of
the traffic manager will be to se
cure a rate which is fair to the
company he represents not alone
to prevent the installment of a
rate which is fair to the people.
JTo commission would assume to make
rates without consultation with the
representatives of railroad interests. If
a mistake be made the commission
would have the power po correct it. If
an unjust or oppressive order should be
made by the commission, the courts are
open to the carrier. The real question
is this: Shall the rate-making power
be extended to a commission which is
wholly disinterested, or vested, exclu
sively, in the carriers who have so per
sistently disobeyed the law, and dis
regarded the interests of the people?
Rebates Still Given.
To deny the fact that rebates have
been and are paid to secure and retain
business would be idle. To deny that
the concessions thus made by railroad
companies are compensated by the
rates collected from others
jght,oXinsurmj5U^aWe,dJfj|oulfaes in^framing rate., mad^e by the commission, can & give- railrc
come effective. If it be true that the
rate making power cannot be delegated
to the commission, it cannot be dele
gated to any other body and it follows,
necessarily, that rate making must be
done by congress. The way to have this
important constitutional question deter
mined is to enact the Dolliver bill into
a law and the test will come speedily.
'Appeal Proposition Doubtful.
The federal courts do not sit to try
moot questions, and can scarcely be
expected to pass upon the constitution
ality of an act of congress in advance
of an attempt to practically enforce it
neither is it consistent to ask congress
to enact a law embodying an expressed
doubt of its own validity, and provid
ing for its review by a co-ordinate
branch of the government, before it can
be made effective. Nor can an appeal
be taken from an order of the com
mission, fixing a rate, to the courts.
The act of the commission would be
legislative and no appeal can be taken
from legislative action to a judicial
tribunal. Whether a law providing for
such an appeal would be valid is more
than doubtful, and the first question
which would arise would be the consti
tutionality of the law providing for
It is the law of the land, that n^o such an appeal. The great danger of
railroad carrier has the right to dis- establishing a precedent for an appeal
criminate between its patrons. It is from legislative action, if it can be
forbidden that any railroad company don under any circumstances, is mani-
shall by any device whatever, give to fest, as by such means the functions
any person, company, firm, corporation of the legislative department would be
or locality, any undue or unreasonable suspended and its authority practically
preference or advantage over any oth- nullified. The position taken by the
er person, company, firm, corporation' opponents of thfr legislation, who do
or locality yet rebates are paid and to any length to
accepted/private car lines usurp and i establish the independence of railroads
exercise the franchises of the carriers, government control, emphasizes
monopolize their business, and rob the ^J,?*
7 action. Judicial supervision and con-
people our lawmakers ride free upon tructio
en orc
of the carriers surrendered to private assuminge possesC(mthe and the
car lines, and passes issued by rail- right to do so. It can hardly afford to
road companies, in express violation of assume or admit the unconstitutionality
law. Is, it not true that the railroad of its own acts in advance of a judicial
companies, who demand the first right decision. The people look to it for a
to fix their own rates, are interested law which will accomplish something,
parties and are self-confessed violators Let"the bill be passed and let the ques-
of law, and that they have heretofore tion of its constitutionality be met when
so fixed the rates, as to enable them i it arises in a genuine attempt to en-
to pay rebates, and supply free trans- force it. Railroads have no right to
portation, at the expense of those who ask that laws which affect their inter-
comply with the law, and pay tariff ests
equally idle. Eegular tariffs are pub
lished. Tariff rates are collected,from
all shippers, and a part of the money
collected refunded to the favored ones.
It necessarily follows that a uniform
rate, less than the published tariff with
out' reduction or rebate, which would
return the same net revenue to the car
rier, would represent a considerable
general reduction of rates. It is use
less to look for an effective remedy
which does not include some provision
for placing the power to make rates in
the hands of representatives of the
The lack of governmental supervision
and regulation is largely responsible
for the existing abuses of corporate
I do not desire to be understood as
denying the original right of railroad
carriers to make rates what I mean is
this: When a complaint is made to" the
commission that a rate is unreasonable
or oppressive, and is found to be so,
the commission should have the power
to make a new rate, which should at
once become effective, and should be
subject to judicial review by the courts,
like any other legislative or adminis
trative act.
The Dfclliver senate bill apparently
meets the requirements of the situation.
Its opponents, who are in fact, and in
truth, opponents of all railroad regu
lation, insist that, as rate making ia. a
legislative function, it cannot be dele
gated to an administrative body like
the interstate commerce commission
and that the bill should be so amended,
that it shall provide for a judicial de
7 prompt and sitive
a legislative act must be
the actual pas
& bon a flde aemp
jo xh
grespower enacttst laws,
open except
by ordinar the same methods
open private citizens.
-*w *w a
No Need of Appeal Provision,
The rights of the railroads and the
people, are now defined with sufficient
accuracy to enable the courts to make
the Dolliver-Hepburn bill practically ef
fective. It was held in the case of
Eailway company vs. Dey, 35 Federal
Eeporter 879, that railroad companies
have the right to charge and receive
a compensation which will enable them
to pay the cost of the service rendered,
interest on their bonds, and some divi
dend. A rate which does not enable
them to do this is confiscatory. A rate
which enables them to do this is not
confiscatory. Here, then, is a test as
to the constitutionality and validity of
any rate made by the commission. It
is a judicial test, which may be speedily
applied, if a speedy decision is desired.
A rate made by the commission under
the Dolliver bill is a law as it ought to
be. If it does not afford just compen
sation, measured by the above rule, it is
an unconstitutional law and the circuit
courts of the United States have full
jurisdiction, ana power, to so determine.
Nothing in the proposed bill limits or
assumes to restrict that power.
The same case holds that the act of
the legislature of the state of Iowa,
which authorizes the board of railroad
commissioners to make and enforce a
schedule of rates for railroad charges,
is not unconstitutional, as an attempted
delegation of legislative power.
This decision was made by Judge
Brewer, then circuit judge, and now
associate justice of the supreme court
of the United States. So far as I
know, it has not been overruled or criti
cized by that court.
There are other decisions which hold
that the rate-making power may be del
egated to commissions.
State vs. Bailroad Co., 38 Minn. 298.
People vs. Harper, 91 111. 357.
Georgia Bailroad Co. vs. Smith, 70
Ga. 694 Tilley vs. Savannah, etc., Bd.
Co., 5 Fed. Bep. 641 Hildreth vs. Craw
ford, 65 Iowa 339.
The right seems to be recognized in
Stone vs. Turst Co., 116 U. S. 307. No
case can be found wherein it has been
held that the power to make rates may
not be delegated to a commission, altho
and passed upon. It seems idle, in the
face of these decisions, to urge its un
constitutionality as a reason for not en
acting a law which is demanded by the
The people are looking to congress
for a law which will accomplish some
thing. Let it pass this bill, and let the
question of its constitutionality be met
when it arises in a genuine attempt to
enforce it.
Bate Making "Systems."
It is argued on behalf of the car
riers that because their traffic managers
are acquainted with the cost of trans
portation, and familiar with the system
of rate making, they, alone, should be
permitted to make the rates, and the
shipper should be relegated to the
courts for redress. As has been already
explained, courts have no power to
make rates, and can afford no substan
tial redress. As to the methods of rate
making, it is true, as stated by A.
B. Stickney, a railroad president and
an able and consistent advocate of gov
ernment regulation, that there is no
system of rate making deserving of the
name. S
termination of this question, before a I'of the actual cost of all transportation
x'_.v^^ ,be-*tq?o^nc
the point has been freuently presented sion, it is easy to see that great minda
Practical rate making has here
tofore consisted in fixing the high
est rate the traffic will bear a
simple rule, requiring little tech
nical skill in applications in pay
ing such rebates as are necessary
to secure, or keep desirable busi
ness from competitors, and in the
absence of competition, charging
the highest rate which can be ex
acted and collected.
The railroad manager has no informa
tion as to the cost of furnishing trans
portation, which cannot readily be ac
quired by any experienced accountant,
by an inspection of the records of the
accounting department of a railroad, if
the books are* honestly kept. The rail
road manager looks to these records for
his own information the traffic man
ager has no knowledge of the cost of
carriage, other than that which he de
rives from the same source. So far as
it can be demonstrated by any system
of accounting, it is within the knowl
edge of any honest and capable account
ant. The distribution or apportionment
t_.-.-=_ raaroao^^ or a given di- J&j*^
It- almost makes you*
sick to think of it, but it,
isn't nearly as bad as it.
used to be. The improved
SCOTT ft BOWNE, 409 Paul Strtmt, New York.
vision, between the different classes of
goods carried, is largely, in act almost
wholly arbitrary and is a matter of
bookkeeping. Such apportionments are
necessary, proper and desirable in or
der that each class of merchandise may
be charged with its fair proportion of
the entire cost, having in mind the
character and values of the several
commodities. These matters are ques
tions of classification, with which
a commission can deal easily and un
derstandingly, thru its expert agents.
Authority Explicitly Stated.
Coming back directly to the question
of authority, I quote from two deci
sions of the supreme court of the
United States. In Smyth & Ames, 169
United States, page 544, Justice Har
lan, delivering the opinion of the court,
A railroad is a public highway, and
none the less so because constructed
and maintained thru the agency of a
corporation deriving its existence and
powers from the state. Such a corpor
ation was created for public purpose*.
It performs a function of the state.
Its authority to exercise the right of
eminent domain and to charge tolls
was given primarily for the benefit of
the public. It is under governmental
control, tho such control must be ex
ercised with due regard to the consti
tutional guarantees for the protection
of its property."
Again, at pages 545, 546, in the same
case, the court says:
A corporation maintaining a public
highway, altho it owns the property it
employs for accomplishing public ob
jects, must be held to have accepted ita
rights, privileges and franchisges sub
ject to the condition that the govern
ment creating it, or the government
within whose limits it conducts its busi
ness, may by legislation, protest her
people against unreasonable chargea
for the services rendered by it."
In the case of Chicago $ Grand
Trunk Railway vs. Wellman, 143 United
States, page 344, Justice Brewer says
"The legislature has power to fix
rates ^and the extent of judicial inter
ference is protection against unreason
able rates."
In the face of these utterances of tha
court of final jurisdiction and last re
sort, what use to argue as to the power
or right of the government to regulate
railroad corporations or to fix railroad
The decisions of the courts, and the
principles upon which they rest, are
strangely unfamiliar to many by whom
they should be best understood. One
railroad manager has written and pub
lished a pamphlet article, in which he
argues, in apparent good faith, that
because the power to exercise the right
of eminent domain is delegated by the
state to railroad corporations for the
public interest, and not for the personal
benefit of the carriers, and because rail
roads are public highways, they should
be exempt from state regulation. A
the reasons enumerated are the identi
cal reasons stated by the most eminent
judges for reaching a contrary conclu-
method of refining it*^!**
makes it much easier to S
take, and when made into
Scott's Emulsion almost
every one can take it
Most children like it and
all children that are not,
robust are benefited by it.
When the doctor says
Take cod liver oil," he
generally means Scott's
Emulsion ask him if he
doesn't. They know it is
more easily digested and
better than the plain oil.
differ. There are, however, able men,
occupying high positions in railroad ad
ministration, who do not hesitate to
admit both the propriety and necessity
of reasonable and proper governmental
regulation. These men nave always
advised cheerful compliance with the
law and the results of their policy is
manifested in the prosperity of the
properties entrusted to their control.
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