The American Railway: Its Construction, Development, Management, and Appliances

The conditions were not favorable; the result of Fink's efforts to bring order out of chaos was slow and by no means uninterrupted. Yet on the whole, as was admitted even by opponents of the pooling system, it contributed to steadiness and equality of rates. The arrangement of these agreements was hampered by their want of legal status. While the law did not at that time actually prohibit them, it refused to enforce them. Existing thus on sufferance, they depended on the good will of the contracting parties. None but a man of Fink's unimpeached integrity and high intellectual power could have kept matters running at all; and even he could not prevent the adoption of a policy of making hay while the sun shines, more or less regardless of the future. The results of the trunk-line pool were unsatisfactory—most of all to those who believed in pools as a system; but it is fair to attribute a large part of this failure to the absence of legal recognition, which in a manner compelled the agreements to be arranged to meet the demands of the day rather than of the future.

Meantime an equally important contribution to the solution of the railroad question was being worked out in another quarter. In the year 1869 the Massachusetts Railroad Commission was established. Its powers were so slight that it was not regarded as likely to be an influential public agency. Fortunately it numbered among its members Charles Francis Adams, Jr.; a man whose efficiency more than made up for any want of nominal powers. In his hands the mere power to report became the most effective of all weapons. Representing at once enlightened public judgment and far-sighted railroad policy, he did much to bring the two into harmony and protect the legitimate interests on both sides from short-sighted misuse for the benefit of either party. The detail of his work is matter of past history; perhaps its most prominent result was to introduce to State legislation the idea of a railroad commission as an administrative body. Those States which had no stringent laws appointed commissions to take their place; those which had overstringent ones appointed commissions to use discretion in applying them. In either case, the existence of a body of men representing the State, but possessing the technical knowledge to see what the exigencies of railroad business demanded, was a protection to all parties concerned.

But matters were rapidly passing beyond the sphere of State legislation. Each new consolidation of systems, each additional development of through traffic, made it more impossible to control railroad policy by the action of individual States. It could only be done by a development of the law in the United States courts or by Congressional legislation. The former result was necessarily slow; each year showed an increased demand for special action on the part of Congress. But such action was hindered by divergence of opinion in that body itself. One set of men wished a moderate law, prohibiting the most serious abuses of railroad power, and enforced under the discretionary care of a commission. These men were for the most part not unwilling to see pools legalized if their members could thereby be held to a fuller measure of responsibility. On the other hand, the extremists wished to prescribe a system of equal mileage rates; they would hear of no such thing as a commission, and hated pools as an invention of the adversary. Between the two lay a large body of members who had no convictions on the matter, but were desirous to please everybody and offend nobody—a hard task in this particular case. It was nearly nine years from the time Mr. Reagan introduced his first bill when a compromise was finally effected—largely by the influence of Senator Cullom. As compromises go, it was a tolerably fair one. The extremists sacrificed their opposition to a commission, but secured the prohibition of pools; the disputed points with regard to rates were left in such a shape that no man knew what the law meant, and each was, for the time being, able to interpret it to suit the wishes of his Congressional district.

The immediate effects of the law were extremely good. There were certain sections of it, like those which secured publicity of rates and equal treatment for different persons in the same circumstances, whose wisdom was universally admitted. Indeed it was rather a disgrace, both to the railroad agents and to the courts, that we had to wait for an act of Congress to secure these ends; and most of the railroads made up for past remissness in this respect by quite a spasm of virtue. In some instances it was even thought that they "stood up so straight as to lean over backward." But this was not the only part of the law which proved efficient. The very vagueness of the clause concerning the relative rates for through and local traffic, which under other circumstances might have proved fatal, put a most salutary power into the hands of the Interstate Commerce Commission, and one which they were not slow to use.

The President was fortunate in his selection of commissioners; above all in the chairman, Judge T. M. Cooley, of Michigan, a man whose character, knowledge of public law, and technical familiarity with railroad business made him singularly well fitted for the place. The work of the Interstate Commission, like that of its Massachusetts prototype, shows how much more important is personal power than mere technical authority. It was supposed at first that the commission would be a purely administrative body, with discretion to suspend the law. Instead of this, they have enforced and interpreted it; and in the process of interpretation have virtually created a body of additional law, which is read and quoted as authority. With but little ground for expecting it from the letter of the act, they have become a judicial body of the highest importance. Their existence seems to furnish a possibility for an elastic development of transportation law, neither so weak as to be ineffective nor so strong as to break by its own rigidity.

But the final test of their success is yet to come. They have laid down a few principles as to the cases when competition justifies through rates lower than those at intermediate points. But the application of these principles is as yet far from settled; and it is rendered doubly hard by the clause against pools, which does much to hamper the roads in any attempt to secure common action on the matter of through rates. Each ill-judged piece of State legislation, and each reckless attempt to attack railroad profits, increases the difficulty. There was a time when the powers of railroad managers were developed without corresponding responsibility. In many parts of the country we are now going to the other extreme—increasing the responsibility of railroad authorities toward shipper and employees, State law and national commission, and at the same time striving to restrict their powers to the utmost. Such a policy cannot be continued indefinitely without a disastrous effect upon railroad service, and, indirectly, upon the business of the country as a whole.