"PROSPERITY" AT ANY COST
"Prosperity" At Any Cost WHAT was the Interstate Commerce Commission created for anyway? Was it established to protect the railroads from tyranny and oppression at the hands of the public? Was it...
...Was it really the office of this great Commission to guarantee railroad profits and sterilize corrupt railway finance...
...That is the reason why the railroads "have spoken very plainly and very earnestly" in favor of "accepting" the President's plan of government guardianship of soapsuds and bubbles...
...And it was many years before the public discovered that it had been betrayed as to the most important provisions of the law...
...and that those who framed the law PURPOSELY OMITTED TO AUTHORIZE AND EQUIP THE COMMISSION TO FIND THE VALUE OF RAILWAY PROPERTY...
...Was it found necessary to install the Commission over these coy and innocent corporations to keep the wicked people from tempting them astray...
...And so the President wants a law authorizing and directing the Interstate Commerce Commission to superintend and regulate railway finance...
...So they elected some very able men to the United States Senate and to the House of Representatives, and they maintained a very strong lobby, and, for thirteen years, they prevented the enactment of the law...
...What is the meaning of our President's message of January twentieth...
...Why, even the terms of the law of 1887, and all the amendments and acts supplementary thereto, in every section, line, and syllable, proceed upon the assumption that it was necessary to order the railroads to perform their obligations to the public, and that it was necessary for the protection of the people to declare many of their practices unlawful, and to prohibit them under penalties provided in the act...
...The railroads cannot be prosperous if left to manage their own finances because they rob themselves...
...He says, "great harm and injustice has been done to many, if not all, of the great railroad systems of the country by the way in which they have been financed.'' He says this is "NOW RECOGNIZED...
...The President says, "we cannot postpone action in this matter without leaving the railroads exposed to many serious handicaps and hazards, and the prosperity of the railroads and the prosperity of the country are inseparably connected...
...Hence the government is to be required to carry not only the burden of regulating railway rates and services but it must also take on the obligation of regulating railway finance and of so regulating the financial operations as to insure "railway prosperity...
...Is this long-deferred hope to be realized...
...But the public was beguiled into believing that a commission had been established to protect it against the tyranny and oppression of the railroads, and that the Commission was fully empowered and equipped to enforce ADEQUATE SERVICE, IMPARTIAL SERVICE, and REASONABLE RATES...
...Then, smelling sweet and clean and marked "inspected and passed by the government, '' we shall have railway finance ready for a joy ride...
...The country cannot enjoy prosperity unless the railroads are prosperous...
...And the railroads, and those who played the game with them, one or the other and sometimes both, have suffered...
...It will then be able to give its attention to removing all the "harm" and "injustice" and "hazard" from railway finance and insure "railway prosperity," and thereby "general prosperity" and thereby the prosperity of this Administratiopn...
...and they assumed the risks that go with that kind of investment...
...They were looking for large profits, easy money...
...It has always had the superior right, and upon it has always rested the obligation to enforce reasonable rates and services, even if those who have been playing the financial game,—insiders as well as outsiders,—get pinched In the operation In this way the government may INDIRECTLY establish and INDIRECTLY conserve honesty and stability in the private business department of railway finance, without taking on the monster burden, without incurring the labor, the expense, the hazard of "superintending and regulating the financial operations by which the railroads are henceforth to be supplied with the money they need...
...It will certainly require some years to carry the work to completion...
...There have been speculation and dishonesty in railway finance from the beginning, as the whole world has known from the beginning...
...that the Commission was authorized to enforce provisions against discrimination, that is, it could EQUALIZE rates and services as between persons and places, BUT THAT IT COULD NOT ESTABLISH AND ENFORCE REASONABLE RATES BECAUSE IT HAD NO MEANS OF ASCERTAINING AND PROVING RATES TO BE UNREASONABLE...
...Or are the people, after asking for bread for half a century, to be given a stone...
...After the packers were caught with the goods and were proven to have been selling tubercular and other diseased meats, they were eager to have government inspection and branding...
...Of course, that was not exactly the understanding when the Act creating the Commission was passed in 1887...
...So the railroads want a mass of rotten, lumpy-jaw securities sprinkled with formaldehyde and baptized in benzoate of soda...
...There you have it...
...Was the Commission ordained as guardian for incompetent philanthropists, who had been lured into building railroads to advance civilization and christianize the unbroken West...
...Harm and injustice have been done to the great railway systems," says the President...
...It was not the public...
...Finally, Congress obeyed an aroused public opinion and amended the law, authorizing the Commission to ascertain the fair value of the property of all railways engaged in interstate commerce...
...It was the railway management, chosen by those who owa the property...
...And so this long struggle for the control of railway rates and services, beginning in 1870, promises, after a period of fifty years of heart-breaking defeat and delay for the people, to end, by 1920, in fully preparing and equipping the Commission to do the one great thing for which it was primarily established,—that is, TO ASCERTAIN AND ENFORCE REASONABLE RATES...
...And the railroads proceeded upon the assumption that they could get along very well without an Interstate Commerce Commission "meddling" with their rates and services...
...It was one of the last and one of the most important acts of his Administration...
...But, still entertaining the opinion that the Commission was not created for their especial advantage and that any enlargemeat of its powers over them would seriously interfere with their charging rates as high as the traffic would bear, the railroads, through their Senators and Representatives in Congress, were able successfully to resist the enactment of the legislation sought, for a great many years...
...It is an enormous undertaking...
...The impression was quite general at that time, and for some dozen years prior thereto, and for almost twenty-seven years thereafter, that the public...
...was the injured party,—the railroad the offender...
...And he wants it at once, and the railroads want it and want it at once, too...
...President Taft approved the law...
...The "prosperity of the railroads" is to be guaranteed by the government assuming the supervision AND THE RESPON-SIBDUTY of their financial affairs...
...This Administration must succeed,—if it is to succeed itself...
...But is this promise to be fulfilled...
...And then the public, still cherishing the belief that the Commission was established to regulate railway rates and services in the public interest, demanded that the law be so amended as to provide for ascertaining the fair value of the property of the railroads used for the benefit of the public The Commission, sensible of its own impotency to deal with the railroads, without knowing the value of their property, joined in urging Congress to make the necessary amendment to the law...
...But that was the fault of the government, because it tolerated the inconvenience...
...that the only means of establishing that rates were unreasonably high would be to ascertain the value of the property of the railroad, the cost of maintaining and the cost of operating the property...
...As every one knows, this has always been recognized...
...If it cannot do both—and of course it has not been able to more than touch the outer edges of the problem of rate regulation down to the present time—it will of course toss aside all but a perfunctory supervision of rate regulation and railway valuation...
...Then we shall have "railway prosperity" and that is one of the modest undertakings upon which this Administration is ready to embark...
...The public has sometimes been inconvenienced by this phase of railway finance, because of its indirect reaction on the service...
...There is less of it now than ever before, because the public is becoming too wise to go on blindly buying the water-logged railway securities...
...Is the Interstate Commerce Commission, created for the protection of the public against railroad greed and oppression, which controls all of the highways to market, to be turned over to the service of the consolidated railway systems of the country...
...Is it to be made manager of railway finance for the great interstate railways of the country...
...That was their own business...
...It cannot succeed unless the country is, or thinks it is, enjoying prosperity...
...EVERY GREAT POWER ASSUMED OR CONFERRED CARRIES WITH IT AT LEAST EQUALLY GREAT RESPONSIBILITIES AND OBLIGATIONS,—let that be remembered...
...Yes, but who did the harm and injustice...
...Finally, when it could no longer be defeated, they were influential enough to weaken and render ineffectual many important provisions of the statute...
Vol. 6 • February 1914 • No. 6
