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FIRST ANNUAL REPORT

OF THE

INTERSTATE COMMERCE COMMISSION.

DECEMBER 1, 1887.

WASHINGTON:
GOVERNMENT PRINTING OFFICE.

1887.

INTERSTATE COMMERCE COMMISSION.

Hon. THOMAS M. COOLEY, of Michigan, Chairman.
Hon. WILLIAM R. MORRISON, of Illinois.
Hon. AUGUSTUS SCHOONMAKER, of New York.
Hon. ALDACE F. WALKER, of Vermont.
HON. WALTER L. BRAGG, of Alabama.

EDWARD A. MOSELEY, Secretary.

(2)

REPORT

OF THE

INTERSTATE COMMERCE COMMISSION.

Hon. LUCIUS Q. 0. LAMAR,

Secretary of the Interior : SIR: The undersigned, Commissioners appointed under "An act to regulate commerce,” approved February 4, 1887, in discharge of the duty imposed by the twenty-first section of said act, which directs the Commission on or before the first day of December in each year to make a report to the Secretary of the Interior, to be by him transmitted to Congress; the report to "contain such information and data collected by the Commission as may be considered of value in the determination of questions connected with the regulation of commerce, together with such recommendations as to additional legislation relating thereto as the Commission may deem necessary,” beg leave respectfully to report:

It is provided in the act referred to that its provisions shall apply toAny common carrier or carriers engaged in the transportation of passengers or property wholly by railroad, or partly by railroad and partly by water when both are used, under a common control, management, or arrangement, for a continuous carriage or shipment from one State or Territory of the United States or the District of Columbia to any other State or Territory of the United States or the District of Columbia, or from any place in the United States taan adjacent foreign country, or from any place in the United States through a foreigu country to any other place in the United States, and also to the transportation in like manner of property shipped from any place in the United States to a foreign country, and carried from such place to a port of transshipment, or shipped from a foreign country to any place in the United States, and carried to such place from a port of entry either in the United States or an adjacent foreign country: Provided, however, That the provisions of this act shall not apply to the transportation of passengers or property, or to the receiving, delivering, storage, or handling of property wholly within one State, and not shipped to or from a foreign country from or to any State or Territory as aforesaid.

It is further provided that

The term “railroad” as used in this act shall include all bridges and ferries used or operated in connection with any railroad, and also all the road in use by any corporation operating a railroad, whether owned or operated under a contract, agreement, or lease; and the term “transportation "shall include all instrumentalities of shipment or carriage.

The railroa:l mileage of the United States, computed to the close of the fiscal year 1886, of the companies respectively, was 133,606. The number of corporations represented in this mileage was 1,425, but by the consolidatiou or leasing of roads the number of corporations controlling and operating roads as carriers was reduced to 700. It is estimated that 4,380 wiles of road bave been constructed since the foregoing statistics were obtained, making a total mileage at this time of 137,986. It is impossible to say with entire accuracy what is the number of railroad companies subject to the provisious of the act, but it is believed that not less than 1,200, operated by about 500 corporations as 9293 -1

1

carriers, engage either regularly or at times in interstate commerce, so as to make the act applicable. The Commission has as yet no statistics of its own collection to lay before the public, but in a manual generally accepted as reliable, the cost of construction and equipment of the 133,606 miles of road is estimated at $7,254,995,223, and the funded debt of the companies at $3,882,966,330. Interest, ac ording to the same authority, was paid by these companies for the last fiscal year to the amount of $187,356,540, and the aggregate payment to stockholders in dividends was $80,094,138.

Some idea of the magnitude of the interest which the act undertakes to regulate may be obtained from these figures, but they fall far short of measuring, or even of indicating, its importance. The regulation of no other business would concern so many or such diversified interests or would affect in so many ways the results of enterprise, the prosperity of commercial and manufacturing ventures, the intellectual and social intercourse of the people, or the general comfort and convenience of the citizen in his every-day life. The railroads provide for the people facilities and conveniences of a business and social nature which have become altogether indispensable, and the importance of so regulating these that the best results may be had, not by the general public alone, but by the owners of railroad property also, is quite beyond computation.

The act to regulate commerce was passed under the authority cop. ferred upon Congress by the Federal Constitution 6 to regulate commerce with foreign nations, among the several States, and with the Indian tribes," and in recognition of a duty which, though long delayed, had at length, in the opinion of Congress, become imperative. The reasons for the delay are well understood. When the grant of this power of regulation was made by the Constitution the commerce between the States which might be controlled under it was quite insignificant both in volume and value. It was for the most part carried on by means of coastwise vessels and by water craft of various kinds which were sailed or otherwise propelled on the lakes, rivers, and smaller streams of the interior. On the land there was very little that could be said to rise to the digpity of interstate commerce, and the regulation of that little, as also of that which was exclusively State traffic, was for the inost part left to the rules of the common law. The exceptional regulations, if any seemed to be called for, were made by the State laws. In a few cases where persons had associated themselves together as regular carriers of persons on definie route, exclusively

a ll ere granted to thew by the States as such carriers, the usu il'p to such grauts being a belief ou the part of the State authorities that without the exclusive privilege the regnlar transpo.tation would not be adequately and reliably provided for.

For the regulation of commerce on the oceau and other navigable waters Congress very promptly passed the necessary laws; but its ju. risdiction within the limits of the States was not very clearly understood, and it was not until the great case of Gibbons v. Ogden, decided in 1824, that it was authoritatively and finally determined that the waters of a State, when they constituted a lighway for foreign and interstate commerce, are, so far as concerns such commerce, as much within the reach of Federal legislation as are the high seas ; and consequently that exclusive rights for their navigation cannot be granted by States whose limits embrace them.

But while providing from time to time for the regulation of commerce by water, Congress still abstained from undertaking the regulation of commerce by land. The reasons for this continued to be the same as

at the first. The land commerce was insignificant in amount, and the rules of the common law were in general found adequate to the settlement of the questions arising out of it. The commerce of trappers and hunters, of traders with the Indians, or that of the early settlers in the wilderness, needed only the most primitive modes of conveyance; the emigrant wagon in one direction and the pack-horse and canoe in the other, performed in respect to it the functions now performed by the rail. road train and the steam-boat. The use of such primitive instrumentali. ties required little regulation by either State or national law. When Congress provided for the construction of the Cumberland road as a great national highway, it was thought quite undesirable to regulate its use by national law or to take national supervision of the commerce upon it; and, with the commerce on the ordinary high ways, it was left to the supervision and care of the States respectively through or into which the road should be built.

With the application of steam as a motive power for propelling vessels the conditions were immediately, to a cosiderable extent, changed. An impetus was given to the internal commerce of the country which promised immense results, and which made immediate and imperative demand for other and very different highways to those which accom. wodated the pack-horses and heavy wagons of the early traders and settlers. But even then the circumstances were favorable to a prolongation of State control. The first improved high ways were turnpikes; the next in grade were canals; but the highways by water as well as the highways by land were provided for by the States. The General Gov. ernment made some appropriations for canals where they were needed as improvements in existing navigation, but the great artificial channels of water transportation were State creations. Such was the case with the Erie Canal, which during the period when emigration to the wilder. ness was greatest, and when improvement in the new Territories was most rapid, constituted the most important of all the bighways con necting the interior with the sea-board. Such also were the canals which were constructed to connect the Delaware with the Hudson, the Chesapeake with the Ohio, the waters of Lake Erie with the Ohio at Portsmouth, at Cincinnati, and at Evansville, the waters of Lake Michigan with the Mississippi, and many others now almost forgotten, but which were of great temporary importance and value.

As the States constructed these great interstate highways, it was not unnatural that they should be left in charge of the regulation of trade upon them, especially as no complaint was made that their regulations were unjust, or that they discriminated unfairly as against the citizens or the business of other States. When, in 1830, steam-power began to be applied to the propulsion of vehicles upon land, the same reasons as regards control continued to prevail. The roads constructeil for such vehicles were authorized by and built under the authority of the States; the corporate charters under which they were operated, and which prescribed the rights, privileges, and powers of the associated owners were State laws; the States determined for them the measure of their taxation, and limited if it seemed politic their charges and their profits. The States thus touched them so nearly in all their interests and all their functions that Federal intervention seemed not only unnecessary but intrusive unless State power should be abused; and the abuse not often appearing, intervention was scarcely thought of by any one.

For a long time, therefore, the power of the Federal Government in the regulation of commerce between the States was put forth by way of negation rather than affirmatively; that is to say, it was put forth

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