done in the past,1 but, on the contrary, went vigorously to work "to bring about such new conditions as would render these provisions operative to the fullest extent practicable."2 The salutary and effective means adopted was to hold a series of general conferences with the controlling officers of the carriers located in the sections in which demoralization existed or was threatened and by such conferences and all other proper and available means to exercise mediatory offices for the prevention of infractions of the law. Critics of the Commission, among them those who profited or hoped to profit by secret rate-cutting, did not hesitate to assert, with some superficial show of accuracy, that these conferences, if effective at all, must result in agreements that would be perilously near to those prohibited by the Sherman anti-trust law3 which had been twice declared by the Supreme Court to forbid every restraint of the interstate commerce conducted by railways whether such restraint were reasonable or unreasonable. To this, however, the Commission was able to make the effective reply that it did not seek to obtain agreements not to reduce rates but merely concurrent promises to observe the law which forbids deviations from the formally published rates and prescribes the manner in which they may be legally modified. Certainly no statute can be construed to forbid agreements to obey some other and unrepealed rule of conduct prescribed by the same supreme legislative authority. As the result of these wise steps the Commission was able to say:

5

"All reports agree that there has been a marked improvement in the maintenance of published rates, and that unlawful practices by railroad carriers have been less general and conspicuous than for some years before. Secret discriminations are believed to be much less frequent than was formerly the case, and the general situation in this regard is undoubtedly much better than it was at the time of our last annual report."-Thirteenth Annual (1899) Report, p. II.

1 Thirteenth Annual (1899) Report, p. 9.

2 Ibid., p. 9.

3 Approved July 1, 1890. 26 Statutes at Large, 209.

4 Trans-Missouri Freight Association v. United States, 166 U. S., 290. Joint Traffic Association v. United States, 171 U. S., 505.

5 Thirteenth Annual (1899) Report, pp. 9-10.

The years immediately subsequent to that covered by the report from which the foregoing was quoted were years of unprecedented business activity during which the traffic offered for interstate transportation by rail frequently exceeded the capacity of the carriers and the incentive to rate-cutting was therefore weaker than during a period of less intensity of demand. Nevertheless it was not a period of complete exemption from the obnoxious and baneful practice of rebating. The Commission reports as follows:

"More instructive than any argument are the results of an investigation just made at Chicago into the movement of packing-house products, a more detailed account of which hereafter appears. The facts developed upon that investigation, and upon a previous investigation into the movement of grain and grain products, which is also referred to later, are of such a character that no thoughtful person can contemplate them with indifference. That the leading traffic officials of many of the principal railway lines, men occupying high positions and charged with the most important duties, should deliberately violate the statute law of the land, and in some cases agree with each other to do so; that it should be thought by them necessary to destroy vouchers and to so manipulate bookkeeping as to obliterate evidence of the transactions; that hundreds of thousands of dollars should be paid in unlawful rebates to a few great packing houses; that the business of railroad transportation, the most important but one in the country to-day, paying the highest salaries and holding out to young men the greatest inducements, should to such an extent be conducted in open disregard of law, must be surprising and offensive to all right-minded persons. Equally startling, at least, is the fact that the owners of these packing houses, men whose names are known throughout the commercial world, should seemingly be eager to augment their gains with the enormous amounts of these rebates which they receive in plain defiance of a Federal statute."-Fifteenth Annual (1901) Report, p. 6.

In the annual report next following that from which the foregoing was taken the Commission reported a new effort to improve conditions.1 This time it had relied neither upon the criminal processes provided under the law nor upon moral 1 Sixteenth Annual (1902) Report, pp. 7-13.

10

suasion in interviews and conferences, but upon the, then, somewhat doubtful powers of the Federal courts of equity. Injunctions against rate-cutting by many important carriers were sought and obtained, although the power to grant them, prior to the enactment of the Elkins law, was more than questionable, and they probably could not have been secured were it not that, as reported by the Commission,1 "railroad managers, as a rule, welcomed these injunctions as applied to the maintenTheir effect was such that the Commis

ance of rates,
sion was also able to state that:—

"It is asserted, and the Commission believes, that these railways have obeyed the injunctions, in the main if not altogether; that published rates have been exacted upon their lines, and very generally by other lines in competition with them. It can hardly be doubted that a very much better condition has existed for the last nine months in this respect than for any corresponding period in the last twelve years at least.”—Sixteenth Annual (1902) Report, p. 9.

The next report was issued after the Elkins law had been in force for a period of ten months. The injunctions which had been of doubtful legality prior to this change in the law were fully authorized by the new statute and the Commission was empowered to proceed to secure additional injunctions of similar character whenever it had "reasonable ground for belief" that rebates were being allowed. It reported that:—

It

"Without further reference to the changes effected by this amendatory legislation the Commission feels warranted in saying that its beneficial bearing became evident from the time of its passage. It has proved a wise and salutary enactment. has corrected serious defects in the original law and greatly aided the attainment of some of the purposes for which that law was enacted. No one familiar with railway conditions can expect that rate-cutting and other secret devices will immediately and wholly disappear, but there is basis for confident belief that such offenses are no longer characteristic of railway operations. That they have greatly diminished is beyond doubt, and their recurrence to the extent formerly known is altogether unlikely. Indeed, it is believed that never before in the railroad history of 1 Sixteenth Annual (1902) Report, p. 10.

this country have tariff rates been so well or so generally observed as they are at the present time.1-Seventeenth Annual (1903) Report, p. 10.

Confidence that the Elkins law was operating so successfully as to secure "the invariable application of tariff rates" was also expressed in the next report of the Commission. Even as late as May, 1905, the Chairman of the Commission, testifying before the Committee on Interstate Commerce of the Senate, said:

"Now, if I may add one word about the Elkins bill. A more effective and complete measure for its purpose has not come within my observation. It is invaluable."

At the same time Mr. Knapp said, concerning rebating, that when the Elkins bill passed, "the thing stopped over-night." But this condition of complete satisfaction did not long persist. The Nineteenth Annual Report bears date as of December 14. 1905, and contains the following:

"In our annual report for 1903 we endeavored to explain the changes in the regulating statute effected by the Elkins law, socalled, which was approved in the previous February, and made some favorable comments upon its operation. A similar opinion was expressed in the report made a year ago. Further experience, however, compels us to modify in some degree the hopeful expectations then entertained. Not only have various devices for evading the law been brought into use, but the actual payment of rebates as such has been here and there resumed."4

The foregoing quotation is from the last report under the law as it stood prior to August 28, 1906. The Twentieth Annual Report was issued on December 19, 1906, and, owing to the radical reorganization of the system of statutory regulation just going into operation, was, very properly, confined almost wholly

1 President Roosevelt was so impressed with the efficacy of the Elkins law that in his Annual Message to Congress, transmitted on December 7, 1903, he said: "The Congress .. has secured equal treatment to all producers in the transportation of their goods,

2 Eighteenth Annual (1904) Report, p. 6.

3 Hearings before Committee on Interstate Commerce, United States Senate, pursuant to Senate Resolution No. 288, Fifty-eighth Congress, Third Session, Vol. IV, p. 3306.

4 Page 13.

to a statement of the interpretation of and rulings under the new law. It contains no record of the year's experience as to maintenance of tariff rates, but such outside evidence as is available warrants the belief that the tariff rates were observed with comparatively rare exceptions. As has been seen, each statutory "new broom" has swept satisfactorily and there is no reason to believe that the present one is an exception in that respect. It is to be hoped that it will prove to have exceptional wearing qualities.

Reporting to Congress on December 1, 1906, Honorable William H. Moody, then Attorney-General of the United States, characterized the efforts to enforce the penalties for violations of the Act to regulate commerce of February 4, 1887, and its amendments (not including the Elkins law, which is not in terms an amendatory statute) as "not conspicuously successful." This statement is certainly a moderate one, for during the period of but a few months less than twenty years that it was in force there were, altogether, but seventeen convictions, no sentences of imprisonment were executed1 and the total fines imposed aggregated but $16,376, while the government failed in sixtytwo indictments out of seventy-nine.2 The Elkins law, declares the Attorney-General,—

"very much strengthened the hands of the government in dealing with discriminatory practices of railroads."-Annual Report for 1906, p. 11.

There were, however, no prosecutions for rebating instituted under this law during the first two years after its enactment, the first indictment being secured on July 1, 1905. Two more indictments were obtained in the following October, one in November, a large number in December and many more during the

1 On July 21, 1892, two persons were convicted of false weighing and sentenced to pay fines of $2,000 each and 18 months imprisonment, but both were pardoned before execution of the sentences. See pamphlet issued by Department of Justice, under date of March 7, 1907, entitled "Civil and Criminal Cases Instituted by the United States under the Sherman Anti-Trust Law of July 2, 1890, and the Act to Regulate Commerce, approved February 4, 1887, as amended, including the Elkins Act," p. 15.

2 Annual Report of the Attorney-General for 1906, p. 11.