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$ 136. Interstate Commerce Commission.
Congress, under its sovereign and exclusive power to regulate commerce among the several states, has the power to create a commission for the purpose of supervising, investigating, and report. ing upon matters or complaints connected with or growing out of interstate commerce.'
The railroads in the United States transport each year a close approximation to 500,000,000 persons, and employ in this service, directly and incidentally, not far from one million individuals, or one in twelve of the entire male population of the United States. The vast extent of territory over which this work is carried on, the different existing conditions, and the various circumstances which affect the carriage render it no easy task to enforce the statute passed by Congress, having for its main purpose the equalization and uniformity of rates, by abolishing unjust discriminations. It cannot be denied that the history of the railroad business in this country has been one of favoritism; the strong, by reason of their very strength, being enabled to avoid the payment exacted from the weak, froin whom undue tariff was collected to reimburse the loss from those propitiated by the railroad interest. Enormous sums were expended to corrupt legislation, often even to secure just rights; and it was deemed possible and proper to win the favorable consideration of officials, to whom money could not be offered, by complimentary passes. In the same manner influential members of every local community through which the road might be built, were complimented into quiet acquiescence in the corporate usurpation of the rights of the public or of private citizens. To reimburse these illegitimate expenditures, illegal charges were made for services rendered to those who could not enforce their rights, and watered stock was issued to represent the outlay for corruption and extravagance.
• The Act to Regulate Commerce doubtless intends that there shall be such reasonable compensation and fair return, whenever in the conditions into which the carrier service has become involved it is practicable. It is proper to assume that the same intent exists in the state legislation on the subject of internal carriage. State commissions have in many cases reduced rates, and reductions have been ordered in special instances by the Interstate Commission, because charges were found higher than the traffic would bear, but more frequently to make them proportional and relatively just. But in the main the rates now charged by railroad managements are such as have been fixed by the roads themselves under the stress of severe competition. A comparison of the rate sheets, published under the Act, with those in force before the Act passed, shows a tendency to the decrease year by year in the tariff. The tendency has been marked towards an equalization of rates and towards the removal of anomalies which made the rates oppressive wherever the competition was but slight or nominal.
Kentucky & I. Bridge Co. v. Louixrille & N. R. CO. 2 Inters. Com. Rep. 351,
2 L. Ř. A. 289, 37 Fed. Rep. 567.
$ 137. Interstate Commerce Act Construed.
. The purpose of the Interstate Commerce Act requires that when circumstances will fairly admit of it, charges to all points for like service should be made relatively eqnal. Discrimination must consist in the doing for or allowing to one party or place what is denied to another; it cannot be predicated of action which in itself is impartial. Less desirable traffic must be accepted
' upon reasonable terms, as well as that which is more desirable.” Goods of like description," and "goods of same description," refer not to the contents of the parcels, but to the parcels themselves—that is, like or different for the purpose of carriage. To render a preference of one over another unlawful, under the Act to Regulate Commerce, it is not necessary that it should be accomplished by any "device;" and it is equally true that the ingenuity of man cannot invent a "device" for the perpetration of an unlawful preference on the part of a carrier engaged in interstate coinmerce, without incurring the penalties prescribed by the statute.' The offense under the second section of the Act consists in charging, demanding, collecting or receiving by a com
Crews v. Richmond & D. R. Co. 1 Inters. Com. Rep. 703. 2 Riddle v. New York, L. E. & W. R. Co. 1 Inters. Com. Rep. 787. Great Western R. Co. v. Sutton, L. R. 4 H. L. 226; Nitshill etc. Coal Co. v.
Caledonian R. Co. 2 Nev. & McN. R. & Canal Cas. 39; Merry v. Glasgoro
R. Co. 4 R. & Can. Traf. Cas, 383. *Scofield v. Lake Shore & M. S. R. Co. 2 Inters. Com. Rep. 67.
mon carrier to which the Act applies, from any person or persons, a greater or less compensation for service rendered or to be rendered, in the transportation of persons or property subject to the Act.' So, a discount allowed by a railroad company where consignments of coal in one year shall amount to 30,000 tons or upwards is an unjust discrimination. A common carrier by rail, to which property is offered for transportation, caunot in any indirect manner and by refusal to perform obligations imposed by law upon it, enforce its contracts, but must for that purpose resort to the customary remedies. Nor can a common carrier, as a reason for refusal to afford to another common carrier the customary, reasonable and equal facilities for the interchange of traffic, assign the fact that such other common carrier supplies no public necessity, the public having been fully accommodated without it.' The provisions of section 1, requiring charges to be reasonable and just, and of section 2, forbidding unjust discrimination, apply when exceptional charges are made under section 4, as they do in other cases."
§ 138. Ticket Brokerage. Rates obtained from ticket brokers lower than those offered at the regular offices of the company effect unjust discrimination.'
The subject of brokerage in railroad tickets, or "scalping,” as it is usually termed, has to some extent been referred to in annual reports of the Interstate Commerce Commission, and has also been commented on more at large in special reports made upon investigations. The report for 1889 recommended specific legislation by Congress to restrain as far as possible this illegitimate and reprehensible business, now very generally regarded as one of the worst incidental evils connected with transportation. A A bill was introduced in both houses of Congress at an early period in the next session, embodying the essential features recommended by the commission. It failed to pass, and in fact is believed not to have been reported by the committees of either house. It is understood that strenuous opposition was made to the passage of the bill by the ticket scalpers of the country. It is believed upon trustworthy information in possession of the commission that railroad managers generally are in favor of efficient legislation for the overthrow of this evil, and that a strong public sentiment exists against its toleration.
'Griffee v. Burlington & M. R. R. Co. 2 Inters. Com. Rep. 194. * Providence Coal Co. v. Providence & W. R. Co. 1 Inters. Com. Rep. 363. Kentucky & 1. Bridge Co. v. Louisville & N. R. Co. 2 Inters. Com. Rep. 103. * Re Southern R. & SS. Axso. 1 Inters. Com. Rep. 278. * Re Passenger Tariffs and Rate Wars, 2 Inters. Com. Rep. 340.
With the great increase of railroads and the competition existing among them for patronage, ticket brokerage has become a large business and very profitable to those engaged in it. It is carried on with the greatest amount of boldness and success in the larger cities of the country where the most eager competition exists between railroads. A few illustrations will serve to show the extent to which the business has been carried.
From various reports received by the commission it appears that in New York City there exists thirteen scalping offices, in which, including proprietors and clerks, about thirty persons are employed, at an estimated expense for ottice rent and clerk hire of $20,000 to $25,000 a year, and with an estimated annual profit from the business of $90,000 to $100,000; that at Chicago there are fifteen scalping offices, whose combined annual expense for rent and clerk hire amounts to about $70,000; that in Cincinnati there are nine scalping ottices, with an annual expeuse for rent and clerk hire of about $20,000, and that at Kansas City there are seven scalping offices, with an estimated annual expense for rent and clerk hire of about $18,000. When it is considered that this business is carried on in nearly all the principal cities of the country, and that the net profits probably amount to four times the expenditure for carrying it on, it is evident that the profits from this illegitimate business exceeds the sum of a million dollars annually.
The ticket broker has no necessary, useful or legitimate function. He is a self constituted middleman between the railroad and the passenger. All railroads have accessible and convenient offices and agents for the sale of tickets. The public can be fully accommodated by the regular agencies of the roads without the intervention of superfluous and obtrusive middlemen.
As there could be no tield of operation for this class of persons
if the railroad companies obtained full established rates for all transportation furnished by them, the expenses of the business and the profits made by those who conduct it must necessarily in the first instance come out of the carriers, and represent simply the discount suffered by them from their established fares and the resulting diminution of revenue. But indirectly this diminution of revenue is made up by the public, for while the business continues the carriers have it in mind in making their rates, and charge higher rates than would be necessary for fairly remunerative revenue if there were no such drain upon them to support the auxiliary force of scalpers.
The business is therefore hurtful both to the roads and to the public in a financial sense, and the extent of the injury it is scarcely possible to measure. The harm done by an army of unscrupulous depredators upon a legitimate business cannot be computed by any known standard. Lawless greed recognizes no limits, and weak compliance by its victims only stops at exhaustion. But the moral injury both to railroad officials and to the public is even greater. To railroad officials the business serves as an invitation and an excuse for dishonest practices. It is used as a cover, deceitful and transparent, it is true, for evasions of law and for dishonorable violations of compacts among competing roads to maintain agreed schedules of rates. The public morals are affected by the natural inference that railroad officials are deficient in sense of honor and integrity, and that if the railroad code of ethics permits one road to cheat another it is equally permissible for the public to cheat the railroads. The inevitable tendency of the practice, therefore, is to eliminate the moral element and the rule of action that element inculcates-business honorfrom the practical field of transportation.
In whatever aspect ticket scalping may be viewed, it is fraudulent alike in its conception and in its operations. The competition of roads affords the opportunity for the work of the scalper. Without rival roads competing for business he could have no field. The prospect of selling more transportation at a discount than at the established rate, and so diverting business dishonestly from a competitor, is the temptation to a road to let a scalper do for it secretly what it does not dare do openly. The weak excuse