Chapter I: Preface

This work is one of the consequences of a conversation years ago with Dr. C. F. Taylor, of Philadelphia, editor and publisher of _The Medical World_ and of Equity Series. The doctor said that Equity Series should have a book on the railroad question. The writer replied that there was room for a book dealing with the political, industrial, and social effects of different systems of railway ownership and control. A plan was adopted for a book, to be called “The Railways, the Trusts, and the People,” which is now on the press of Equity Series. For the preparation of this work the writer travelled through nine countries of Europe and over three-fourths of the United States, studying railways, meeting railroad presidents and managers, ministers of railways, members of railway commissions, governors, senators, and leading men of every class, in the effort to get a thorough understanding of the railway situation. He also made an extensive study of the railroad literature of leading countries, and examined thoroughly the reports and decisions of commissions and courts in railroad cases in the United States.

As these studies progressed, the writer became more and more convinced that the heart of the railroad problem lies in the question of impartial treatment of shippers. The chief complaint against our railroads is not that the rates as a whole are unreasonable, but that favoritism is shown for large shippers or special interests having control of railways or a special pull with the management. This book consists, in the main, of the broad study of railway favoritism, which was made as a basis for the generalizations outlined in the brief chapter on that subject in “The Railways, the Trusts, and the People,”—one of the thirty chapters of that book. This study reveals the facts in reference to railway favoritism or unjust discrimination from the beginning of our railway history to the present time, discloses the motives and causes of discrimination, discusses various remedies that have been proposed, and gathers hints from the railway systems of other countries to clarify and develop the conclusions indicated by our own railroad history.

Special acknowledgments are due to Dr. Taylor, who paid a part of the cost of the special investigations on which the book is based and has taken a keen interest in the progress of the work from its inception, and also to Mr. Ralph Albertson, who has worked almost constantly with the writer for the past eight months and more or less for two years before that, and has rendered great assistance in research, in consultation and criticism, and in the checking and revision of proof.

FRANK PARSONS.

BOSTON, March, 1906.

CONTENTS

CHAPTER PAGE
I. THE LAW AND THE FACT 1
II. PASSES AND POLITICS 3
III. PASSENGER REBATES AND OTHER FORMS OF DISCRIMINATION IN
PASSENGER TRAFFIC 17
The Deadhead Passenger Car 18
Ticket Scalping 19
IV. FREIGHT DISCRIMINATION 23
V. THE EARLY YEARS, HEPBURN REPORT, ETC. 25
The Granger Laws 26
The Hepburn Investigation 27
VI. THE SENATE INVESTIGATION OF 1885 AND THE INTERSTATE
COMMERCE ACT 37
VII. THE INTERSTATE COMMISSION 43
VIII. EFFECTS OF THE INTERSTATE ACT 49
Direct Rebates 53
IX. SUBSTITUTES FOR REBATES 57
X. DENIAL OF FAIR FACILITIES 66
XI. CLASSIFICATION AND COMMODITY RATES 70
XII. OIL AND BEEF 73
XIII. IMPORTS AND EXPORTS 84
XIV. LOCALITY DISCRIMINATIONS 87
XV. LONG-HAUL DECISIONS OF THE SUPREME COURT 95
XVI. TEN YEARS OF FEDERAL REGULATION 104
XVII. THE ELKINS ACT AND ITS EFFECTS 110
XVIII. THE WISCONSIN REVELATIONS 120
XIX. THE COLORADO FUEL REBATES AND OTHER CASES 124
XX. FREE CARTAGE, STATE TRAFFIC, DEMURRAGE, THE EXPENSE BILL
SYSTEM, GOODS NOT BILLED, MILLING-IN-TRANSIT 142
XXI. MIDNIGHT TARIFFS AND ELEVATOR FEES 147
XXII. COMMODITY DISCRIMINATIONS 150
XXIII. DISCRIMINATION BY CLASSIFICATION 155
XXIV. VARIOUS OTHER METHODS 159
XXV. TERMINAL RAILROADS 166
XXVI. PRIVATE-CAR ABUSES 174
XXVII. THE LONG-HAUL ANOMALY 208
XXVIII. OTHER PLACE DISCRIMINATIONS 216
XXIX. NULLIFYING THE PROTECTIVE TARIFF 221
XXX. SUMMARY OF METHODS AND RESULTS 228
XXXI. DIFFICULTIES OF ABOLISHING DISCRIMINATION 241
XXXII. REMEDIES 252
Pooling 265
Wrestling with the Long-Haul Abuse 270
A Drastic Cure for Rebating 271
XXXIII. FIXING RATES BY PUBLIC AUTHORITY 274
Alleged Errors of the Commission 279
XXXIV. CAN REGULATION SECURE THE NEEDFUL DOMINANCE OF PUBLIC
INTEREST? 306
XXXV. HINTS FROM OTHER COUNTRIES 313

APPENDIX
A. LATEST DECISIONS OF U. S. SUPREME COURT 335
B. PRESIDENT HADLEY AND THE HEPBURN BILL. ENGLISH EXPERIENCE
IN THE REGULATION OF RATES 337

INDEX 345

THE HEART OF
THE RAILROAD PROBLEM