Although the determination of prope

roads for the carriage of mails is, obvi in the relationship of the national gov was not until 1916 that the problem wa tion of the agency of the national gov with the carriers. As far back as 18 rates of pay based on weight of mail and equipment supplied in the form of mai the rates thus established were made by 1878, and 1907, and by administrative tion."

With the establishment of the parce issue as to proper compensation for climax. A joint congressional commi the railroads were entitled to an incr recommended the adoption of a space of the existing weight basis. By the Stat. L., 412), the commission was dir the basis and amount of compensation for the services which are necessarily to the consent of the commission, th authorized to put into effect the space

1 Dixon, Railroads and government, p. 6

tion to the degree that he deemed it practicable and necessary at rates provided in the law. The commission was directed to conduct hearings and to report on the operation of the system. Following the introduction of the space basis system on nearly all of the railroads on November 1, 1916, the commission, after hearing, on December 23, 1919, approved the new system and made its adoption compulsory on all mail routes, effective March 1, 1920.

Under its authority to conduct upon its own motion proceedings of investigation into the rates and practices of carriers and to issue orders as a result of such proceedings to the same effect as though formal complaint had ben filed, the commission undertook an inquiry into express rates in 1912. The occasion for the investigation at this time was not only the pendency upon the commission's docket of a number of cases, attacking the rates and practices of express companies throughout the country, but also the receipt of numerous protests from shippers. As a result of its general investigation into which all pending complaints were merged, the commission reported "that many of the practices of the express companies were utterly inexcusable, that their methods were archaic, their rates discriminatory and unreasonable." Subsequently, a complete renovation in the methods and rates of the express companies was effected. Through routes and joint rates were established for the first time and the through charge, previously constructed out of the sum of local rates, was eliminated. The practice of double collection of charges was stopped, discriminatory rates were abolished, and a system of rate computation by zones and blocks and class rates was initiated which simplified the tariffs both for the companies and the public.

Various duties were assigned to the commission in this period by Congress which were only indirectly related to its sphere of activity. By the act of May 23, 1908, the enforcement of the act relating to the service of the street railway companies in the District of Columbia was assigned to the commission. Prosecutions for violations of any provisions of the act were to be conducted on information of the Interstate Commerce Commission filed in the police court by or on behalf of the commission. The commission found itself unable to give proper attention to these duties and asked to be relieved therefrom.

mended to Congress in 1913 that it connection with the parcel post, or, i

a clearer statement be made of the d the standards to be applied.

The Erdman Law of 1898, which federal machinery for amicable adjus common carriers in interstate comm tives, remained practically a dead lett above. But from the time of settleme the firemen and enginemen of the So 1907, the act was invoked with incre became necessary to relieve the Chair merce Commission from the duty of sioner of Labor in executing the pro of March 4, 1911 (36 Stat. L., 13 United States was authorized to design ber of the Interstate Commerce Comm Court to exercise the powers confer upon the Chairman of the Interstate the law of 1898. In 1913 a perma Board of Mediation and Conciliation, provisions of the Newlands Act (Act o 103), which replaced the law of 1898.

ery for amicable adjustment of disputes between the carriers and their employees engaged in train service or operation was removed from the jurisdiction of or contact with the commission.

Congress utilized the commission in this period for the conduct of numerous special investigations. Only two of the most significant ones need be mentioned here for illustrative purposes. Pursuant to Joint Resolution of Congress of March 7, 1906, amended March 21, 1906, the commission conducted an investigation as to transportation by common carriers of coal or oil owned by them directly or indirectly, direct or indirect ownership by carriers of coal or oil properties, and systems of car supply and distribution by railroads engaged in transportation of coal or oil. Various reports on these matters were published as congressional documents in the years 1907-1909. The commission's conclusions, published in June, 1914, threw considerable light on the issues involved in the enforcement of the "commodities clause" of the Interstate Commerce Act, aimed primarily at separation of coal mining and transportation. It concluded that public and private business should be clearly separated, that credit should not be granted to private industry by the railroads, and that the commodities clause should be enforced and extended to all traffic. In a report dated April 11, 1916, the outcome of an investigation conducted pursuant to a Senate resolution of May 16, 1914, the commission pointed out the extent of common control or ownership between rail and water carriers.

62

Period of Positive or Constructive Legislation. With the enactment of the acts of 1906 and 1910 and the abolition of the Commerce Court which for a time threatened to emasculate by judicial interpretation the provisions of these acts; and in view of the Supreme Court's liberal interpretation of the commission's powers, it appeared that effective control of common carriers had been established and that the long struggle for regulation of the railroads in the public interest had been won. Only a few years elapsed before it became obvious that the railroad problem had not been solved, and that there were several fundamental defects in the existing system of regulation. A general realization of these defects and the lessons brought by the war led to a new

62 31 I. C. C., 193.

attitude toward the railroads which was reflected in legislation of a new type.

Defects of the System of Federal Regulation. The circumstances under which the interstate commerce laws had been enacted, as described above, were of a nature to lead those who were entrusted with the administration and enforcement of those laws to assume a restrictive rather than a liberal policy toward the railroads. The public viewed the commission as a governmental agency, primarily established to prevent increasing railroad rates, and the law placed the burden of proof as to the necessity for increased rates upon the carriers. The following paragraph from a decision of the commission in 1910 shows clearly its point of view at this time:

We must not regard too seriously, however, the effort of railroad counsel to establish this commission in loco parentis toward the railroads. .. This country cannot afford to have poor railroads, insufficiently equipped, unsubstantially built, carelessly operated. . . . Nevertheless, it is likewise to be remembered that the government has not undertaken to become the directing mind in railroad management. We are not the managers of the railroads. And no matter what the revenue they may receive, there can be no control placed by us upon its expenditure, no improvements directed, no economies enforced."

Furthermore, with an increasing degree of regulation, there was a corresponding increase in the diffusion of responsibility for the successful management of the carriers between law makers, administrative commission, and railroad executives. Another defect in the regulatory systems was the fragmentary nature of the commission's powers.

The interstate commerce laws as they were in 1914 represented in large measure the fruits of a process of " building step by step based upon experience and demonstrated necessity." Litigation over constitutional questions also had much to do with the form of the law as it stood at that time. The processes of piecemeal legislation and judicial interpretation culminating in a more or less suitable adaptation to the conflicting demands of carriers and shippers, could hardly have been expected to result in a logically

20 I. C. C., 317.