the question of the legality of their combining even in this simple manner. The railroad was regarded as a public benefactor in its early days. Before 1872 the federal government had promised as an aid to railroad building 155,000,000 acres of public lands, an area almost equal to the New England states, New York, and Pennsylvania combined;1 nineteen different states had voted sums aggregating two hundred million dollars for the same purpose; and municipalities and individuals had subscribed several hundred million dollars to help railway construction. Attempts to regulate railway charges were confined almost wholly to limitations placed in the railway charters by the state authorities; but these were so liberal that the roads rarely were in danger of violating them. In 1869 Massachusetts formed a state board of railroad commissioners whose duty included hearing complaints of discrimination or unjust treatment of shippers. It had power to prescribe and enforce a uniform system of accounts, but possessed no judicial authority. Commissions were formed in many states, some with advisory, and others with mandatory power, and a few with general powers over corporations. In 1877 appeared the first report on internal commerce from the United States bureau of statistics, a division in the department of the interior founded 1 Johnson, Am. Railway Transportation, 314. 2 For map showing character of commissions by states, see ibid., 360; Haines, Restrictive Railway Legislation, 234. as a result of the Senate committee on transportation lines to the seaboard. The railway as a national problem was presented first in the interstate combinations by which "trunk lines" were formed; yet Congress had placed itself on record in the act of 1866,1 commonly known as "the charter of the American railway system," as favoring such unification. The act was intended to "facilitate commercial, postal, and military communication among the several states," and permitted steam railroads to carry passengers and freight from one state to another and connect with roads. of other states to form continuous lines, but without affecting state charters. No serious attempt was made by state or federal powers to interfere with these early consolidations. About 1870 a change in public feeling towards the railroads, because of discrimination in rates, manifested itself in hostile legislation, especially in the western states. The farmer and rural shipper were indignant because they paid higher rates than the city shippers, and their wrath was intensified by the panic of 1873. The general discontent was largely responsible for the spread among the western farmers of the organization called the Patrons of Husbandry, but commonly known as the "Grangers." " Its object was to do away with the "middle-man" and his profit by direct dealing between the pro 1 U. S. Statutes at Large, XIV., 66. 2 Dunning, Reconstruction (Am. Nation, XXII.), 228. 2 ducer and consumer. The so-called Granger laws, passed by Illinois, Iowa, Wisconsin, and Minnesota— the grain-producing states of that time were intended to establish a uniform rate for transporting and warehousing grain and other classified products, and to require schedules of rates to be published each day together with the rates in force during the previous year. The agitation was responsible for the insertion of a provision in the constitution of California in 1879 requiring railroad rates to be fixed by the state through a commission. This legislation ignored the fact that railroad tariffs are most difficult things to form, involving more than forty elements in the computation.1 The volume of traffic, cost of construction, climate, products, land, water, grades, and competition are a few of the many factors to be considered. Like most legislation of the kind, the Granger laws went too far: the roads insisted that enforcement of the laws would mean confiscation of their property, and they stopped railway extension in every hostile state, thereby injuring its prospects until the objectionable legislation was repealed. They also found it easy to delay prosecutions in the local courts through the practice of giving free transportation. Many of these Granger cases found their way into the Supreme Court of the United States, and decisions were rendered in 1876 and the years fol 1 Noyes, Am. Railroad Rates, chap. iii.; Haines, Restrictive Railway Legislation, chap. vii. lowing. A majority of the court held in the case of Munn vs. Illinois1 that a state had power to regulate charges made by a common carrier-in this instance a warehouse—and that such regulation was not in violation of the company's charter as a contract; that the public was, in fact, a partner in such a public corporation; but that state regulation must not establish rates so low that they would be equivalent to confiscation of the property of the carrier. Also, the right to regulate rates within the state might legally effect commerce passing outside the state, until the federal government legislated upon interstate commerce. Dissenting justices held that the state had no right to meddle with railroad corporations because engaged in private and not public business. The principles here established held in the remaining cases with some variations." Whatever advantage the public might have gained from these decisions was destroyed by the continued critical financial condition of the railways. In 1873 more than two-fifths of the total railway mileage was in the hands of court receivers; and in 1877 the aggregate debts of the railway companies was estimated at more than double the national debt. Be 'Munn vs. Illinois, 94 U. S., 113; McPherson, Hand-Book of Politics, 1878, p. 97. 'The other prominent "Granger cases were: C. B. & Q. R.R. Co. vs. Iowa, 94 U. S., 155; Peik vs. C. &. N. W. Ry. Co., 94 U. S., 164; C. M. & St. Paul R.R. Co. vs. Ackley, 94 U. S., 179; Winona & St. Peter R.R. Co. vs. Blake, 94 U. S., 180; Shields vs. Ohio, 95 U. S., 319. tween 1876 and 1879 nearly four hundred and fifty railroads were sold under foreclosure of mortgage. Real recovery was not felt until about 1881. The Grangers, not confining their reforms to one line and courting various political parties, lost their influence in the state legislatures. The states began to repeal the restrictive laws; new issues arose to attract public attention; and the agitation subsided for the time being, to arise a few years later in a demand for federal regulation of railroads. In 1872 President Grant suggested to Congress an investigation of "various enterprises for the more certain and cheaper transportation of the constantly increasing surplus of western and southern products to the seaboard.1 The result was the Windom report, made in the Senate in 1874,2 which suggested that Congress had the power to construct as well as to regulate railroads and to bring the pooling companies to terms in that manner. At the same time the House heard the McCrary report and passed the McCrary bill, which provided for regulation of railroads along the line of the Granger acts; but the Senate failed to pass it. In 1881 the House considered the Reagan bill, which prohibited pools, required publicity of rates, but left the enforcement of the act to the federal courts.4 It was considered 3 1 Richardson, Messages and Papers, VII., 195. • McPherson, Hand-Book of Politics, 1882, pp. 125-129. |