52 Railroad Transportation

interstate, rates, railroads, powers, commissions, act and commerce

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Federal legislation, other than the Inter state Commerce Act, affecting the railroad industry includes the Sherman Anti-Trust Act of •1890, and the amended Clayton Anti-Trust Law of 1914; the Erdman Con ciliation and Arbitration Act of 1898 as amended by the Newland's Act of 1913; the safety appliance laws of 1893; the locomotive ash-pan act of 1908; the sixteen-hour con tinuous labor act of 1907; the eight-hour wage basis law of 1916, and the bill of lading act of 1916.

State Regulation of Railroads.— Regulation of the railroads by the States antedates Fed eral regulation by many decades. All of the States, except Delaware and Utah, now have commissions with rate-making powers. There are three general types of State commissions: (1) Public utility commissions withjurisdic tion, not only over railroads and other rail transportation facilities and agencies, but also over other public utilities, such as street rail ways, gas, electric, water, warehouse, telegraph and telephone companies; (2) railroad com missions with jurisdiction over railroads and a more limited number of other transportation and public utility concerns; and (3) corpora tion commissions with authority over public utility companies and also other corporations.* The powers of these commissions vary. Many of •them have powers similar to those of the Interstate Commerce Commission, while some of them are vested with greater powers as well as wider jurisdiction. Many possess powers with respect to railroad capitalization, some are authorized to prescribe complete schedules of maximum rates, and some have widely differing powers over railroad services and operation. Besides the commissions upon whom the States have conferred mandatory powers the legislatures of many States also regulate railroad charges and practices directly by statute. There are two-cent fare and maxi mum freight rate laws, and statutes regulating car service and demurrage, private sidings, grade crossings, terminal facilities, train service, safety appliances, head lights, the size of train crews, capitalization and other phases of rail road operation too numerous to describe in limited space.

As the extent of State regulation in creased a conflict developed between the States and the Interstate Commerce Commis sion. The United States Supreme Court in 1886 had drawn a line between Federal and State regulation when it decided that the Fed eral railroad laws applied only to interstate traffic. In later years it became apparent, how

ever, that although the States were not regulat ing interstate traffic directly •they were doing so indirectly. The making of an interstate rate may, because of business competition, vir tually compel a railroad to readjust some of its interstate rates or otherwise permit an un just discrimination against interstate shippers to stand. When, therefore, the Interstate Com merce Commission in its Shreveport Rate case fixed reasonable maximum rates from Shreve port, La., to points in Texas and ordered the railroads whose interstate rates in Texas were fixed at a lower level by the State of Texas to discontinue discriminating against interstate •traffic, the railroads complied by raising their rates on intrastate traffic moving between various points in Texas. In the test litigation that followed the Supreme Court in 1914 held that the Interstate Commerce Com mission had the power to overrule a State Com mission which fixes intrastate rates resulting in unjust discrimination against interstate traffic carried at rates which the Federal commission pronounces to be reasonable. In a series of later decisions involving similar conflicts in Ne braska, South Dakota, Illinois and Arkansas the courts reiterated the superior cower of the Interstate Commerce Commission in case of conflict between intra- and interstate rates, but insisted that the Commission's orders must be specific in defining the rate points or areas within which State-made rates are overruled.

Future of Control or Neither the Interstate Commerce Commission nor the States regulated the railroads with their usual energy while the lines were under control of the Federal Railway Administration. So long as the war continued no effort was made to thwart the wishes of the Director-General of Railroads. With the signing of the armistice. however, arose the desire for a permanent transportation policy. Many plans were pro posed ranging from government ownership to a return of the railroads to their owners, sub ject to direct or indirect guarantees of income and Federal regulation differing in many re spects from that which prevailed in the past.

Gaovsa G. HUEBNER, University of Pennsylvania.

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