Note 94 — SECTION XV. PROPOSALS FOR FIXING RATES BY RAILWAY COMMISSION— CONCILIATION COURTS.

Report of the Committee of Commerce, House of Representatives of the United States, March 8th, 1886.

“The Committee on Commerce, to whom was referred the bills (H. R. 309) to establish a Board of Commissioners of interstate commerce, and for other purposes; (H. R. 770) to regulate interstate commerce through a national court of arbitration (H. R. 1,572) to create an interstate commerce commission, and to regulate its powers and duties; (H. R. 1,669) to establish a bureau of transportation in the Department of the Interior; (H. R. 2,412) to regulate interstate commerce and to prevent unjust discriminations by common carriers; and (H. R. 3,929) to establish a Board of Commissioners of interstate commerce, and to regulate such commerce, beg leave to report said bills back to the House, and ask that they be laid on the table, and to report the accompanying bill as a substitute for H. R. 2,412, and recommend its passage.

“The subject matter of these bills has been so fully and elaborately discussed for several years past, that it is not deemed necessary in this report to enter into an elaborate explanation of the provisions of the bill reported to the House. Your committee may state, however, that the several bills referred to them rest upon three different theories.

“House bills 309, 1,572, 1,669 and 3,929 are framed upon the idea of providing a governmental commission, and of making detailed regulations of freight rates. The theory of these bills did not need the approval of the committee.

“House bill 770, ‘To Regulate Interstate Commerce through a National Court of ‘Arbitration,’ looks to the establishment of a court with power extending in some measure to the regulation of commerce between States, with provisions extending to the regulation of subjects not believed to be within the jurisdiction of Congress, and not embracing in its provisions matters of regulation believed to be necessary in a bill of this kind; and a single court to be held at Washington City, as provided in this bill, would not be sufficiently convenient to the people.

“The bill which we report to the House, and which is an amendment of House bill 2,412, is based upon the theory of furnishing civil remedies in the courts of ordinary jurisdiction to parties for the most conspicuous grievances complained of in railroad management, prohibiting what should not be done, and commanding what should be done; proposing remedies for the violation of its provisions, and avoiding any attempt at detailed regulation of freight rates. This was deemed best as the first effort at legislation upon this subject. The interests involved are so large, and their successful management so important to the country, that it was not deemed advisable to run any risk of embarrassing the management of the railroads of the country, and at the same time it was deemed necessary for the protection of the interests of the people to control and circumscribe the exercise of the monopoly powers of these corporations, to prevent them from making extortionate charges and unlawful exactions upon the people.

“The examination of this subject will show that the attempt to establish a system of legislative rates is impracticable, for the reason that what would be a reasonable rate for one road would be ruinous, perhaps, to others, as the charges for the transportation of freights are largely controlled by the amount of business done by the several roads.

“For instance, what would be a reasonable rate of charges on the Pennsylvania Railroad would not be a reasonable rate upon a road in the new States and in a sparsely settled portion of the country.

“The same difficulty lies in the way of attempting to protect the people by the adoption of maximum rates. What would be a reasonable maximum upon one road would not be reasonable upon others. A maximum high enough to protect the railroads against harm would be too high to benefit the people on most of the roads, and a maximum low enough to protect the people on some roads would be ruinous to the interests of many other roads, so that it is not believed best to attempt to protect the interests of the public by the legislative rates or by the maximum rates.

“The bill which we report to the House, instead of adopting either of these plans, provides that the charges of the railroads shall be reasonable; that persons engaged in the transportation of interstate commerce by railroads shall furnish without discrimination the same facilities for the carriage, receiving, delivery, storage and handling of property of a like character, and shall perform with equal expedition the same kind of services connected with contemporaneous transportation.

“These constitute a portion of the leading features of the bill which we report to the House. It is believed that the enactment and enforcement of such a law will provide for the just and necessary abridgment of the monopoly powers of these corporations, and protect the people against unreasonable charges and extortionate exactions, and will at the same time not interfere with or embarrass the management of railroad corporations in anything which it is reasonable and just they should do. And the Committee believe it wiser and better to provide for the enforcement of the provisions of such a law through the instrumentality of the ordinary courts of justice, and by the judges and juries of the country than by the orders of a commission. The machinery of the courts is already in existence, and will require no additional expense, and is within convenient reach of the people everywhere, and is fully able to adjudicate all cases which may arise under this bill and by methods with which the people are familiar, while no plan of a commission which has been proposed could be conveniently accessible to all the people, and if a plan should be presented which would provide a jurisdiction convenient to all the people it would necessarily be cumbrous and very expensive. In this view a commission is unnecessary, unless it is the purpose of Congress to enter upon the detailed regulation of freight rates.”