CHAPTER XLVII

PROVISIONS OF FEDERAL RAILWAY RATE ACT OF 1910

Laws prior to 1910-The Commerce Court-Actions for enforcement of Act are in name of the United States-Interstate Commerce Commission given jurisdiction over interstate telegraph, telephone, and cable lines-Commission given power to suspend proposed rates, and power to establish through routes and rates -The long-and-short-haul clause made stronger-Commission to pass upon increase of rates lowered to meet water competition-Shippers may control routing of freight and may require carriers to state what the rates are-Added measures to prevent rebating-A commission to report on regulation of issue of stocks and bonds-Conditions under which Federal judges may enjoin enforcement of state laws-Other miscellaneous provisions The provisions omitted from the law.

FOR a period of nearly a quarter century the Federal Government has exercised an increasing control over the rates and services of railroads. In 1887 the Federal Government enacted the Interstate Commerce Law; in 1897 the Supreme Court applied the Sherman Antitrust Act to railroads; in 1903 the Elkins Antirebating Law was enacted; and in 1906 the Hepburn Rate Act vitally amended the original Interstate Commerce statute. Meanwhile, the various state governments have created railroad commissions and enacted regulating statutes. The state and federal courts have also increased their scope of control.

These measures and methods of control have been pre

viously explained and need not be further discussed in this connection. On June 18, 1910, President Taft signed another railroad rate act, the Mann-Elkins act, which changes the Interstate Commerce Law in many important respects. It is a lengthy law 2 containing eighteen sections, but its leading provisions may be briefly outlined:

1. The Act first provides for the creation of a "Commerce Court," with a fourfold jurisdiction:

First, it has authority over the enforcement of any order of the Interstate Commerce Commission except those involving the payment of money, lengthy provision being made for the enforcement, by the regular courts, of orders for the payment of money.

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Second, it has jurisdiction over all cases brought to enjoin, set aside, annul, or suspend, in whole or in part, any order of the Interstate Commerce Commission. Section 3, however, provides that no order of the commission may be thus set aside or enjoined "otherwise than upon notice and after hearing, except that in cases where irreparable damage would otherwise ensue to the petitioner, said court or judge thereof may on hearing after not less than three days' notice to the Interstate Commerce Commission and the Attorney General, allow a temporary stay or suspension in whole or in part of the order of the Interstate Commerce Commission for not more than sixty days from the date of his order, pending application to the court for its order or injunction, in which case the said order shall contain a specific finding, based upon evidence sub

1 E. R. Johnson, "American Railway Transportation," Part IV, "The Railways and the State"; G. G. Huebner, "Five Years of Railroad Regulation by the States," in Annals of the American Academy of Political and Social Science, vol. xxxii, pp. 138-156, July, 1908.

2 The law is reproduced in extenso in Appendix I of this volume.

mitted to the judge making the order and identified by reference thereto, that such irreparable damage would result to the petitioner and specifying the nature of the damage."

Third, the Commerce Court has jurisdiction over all cases of rebating brought under Section 3 of the Elkins law; and,

Fourth, over all mandamus proceedings arising under Sections 20 or 23 of the Interstate Commerce Law. These sections conferred upon the circuit and district courts of the United States the right to issue a mandamus to compel compliance with the provisions of the act, and to compel the movement of interstate traffic for any shipper, or the furnishing of cars, or other facilities upon terms as favorable as those given to any other shipper.

The Commerce Court has the jurisdiction formerly exercised by circuit courts over the above-mentioned cases. At the beginning the President is to appoint five additional circuit judges for terms of from one to five years, and thereafter the Commerce Court is to consist of five judges from the circuit courts, assigned to it from time to time by the Chief Justice of the United States. Its chief purposes are to expedite court review of cases appealed from the commission, to constitute a body of judges who will become expert in matters involving railroad rates and services, and to avoid conflicting decisions and uncertainties of legal interpretation. The President stated it to be of supreme importance that the decision of such questions shall be as speedy as the nature of the circumstances will admit, and that a uniformity of decision be secured so as to bring about an effective, systematic, and scientific enforcement of the commerce law,

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rather than conflicting decisions and uncertainty of final result." Its jurisdiction is exclusive in that no district or circuit courts may try the kind of cases assigned to it; but appeals may be made to the Supreme Court of the United States within sixty days after judgment has been passed. An injunction of the Commerce Court restraining the enforcement of an order of the commission may also be appealed to the Supreme Court within thirty days, and all such cases have priority in the Supreme Court over all others except criminal cases.

2. The second general feature of the Rate Act of 1910 is that any of the above-named cases brought before the Commerce Court or the Supreme Court are, according to Sections 4 and 5, brought by or against the United States, and are in charge of the Attorney General of the United States. The commission may still be represented by its counsel as a party to a suit, but the cases are not, as formerly, brought against the commission. The interests of the Government are in charge of the regular Department of Justice instead of the commission's counsel. The commission itself previously initiated and defended litigation in the courts, and "this blending of administrative, legislative, and judicial functions," in the opinion of the President, tended to impair the efficiency of the commission by clothing it with partisan characteristics, and robbing it of the impartial judicial attitude it should occupy in passing upon questions submitted to it."

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3. By Section 7 the scope of the commission's jurisdiction is widened so as to include telegraph, telephone, and cable companies. All unjust and unreasonable charges are

p. 4.

1 Special Message of the President of the United States, Jan. 7, 1910,

2 Ibid., pp. 5-6.

declared to be unlawful, but it is especially stipulated that they may classify their messages into "day, night, repeated, unrepeated, letter, commercial, press, government, and such other classes as are just and reasonable, and different rates may be charged for the different classes of messages."

4. The commission's powers over rates and fares is materially increased. Section 11 empowers the commission to begin proceedings and to fix maximum rates upon its own initiative. Formerly it could correct rates only upon complaint. Section 12 empowers it to establish classifications either upon complaint or its own initiative. This section also grants to it the important power of suspending proposed rates pending inquiry. Any new rates, fares, or classifications filed with the commission may be suspended by it for a period of 120 days, hearings held regarding their propriety, and the proposals annulled if found unreasonable. If the commission cannot conclude its hearings within the time stated it may extend the time of suspension for a period not exceeding six months. In all such proceedings the burden of proof rests upon the carrier proposing the increase. Section 9 grants the commission specific power to reject any tariff or schedule tendered for filing which does not "provide and give lawful notice of its effective date."

5. The commission's powers over through rates and routes is in various ways increased. Sweeping, though somewhat indefinite, provisions are contained in Section 7 as to the interchange of cars and the establishment of through routes. Carriers are required "to provide reasonable facilities for operating such through routes, and to make reasonable rules and regulations with respect to the exchange, interchange, and return of cars used therein, and

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