Under this heading reference is again made to the two principal objects of the act to regulate commerce, the publication and observance of traiff rates, and the correction on complaint, of established tariff rates. The Commission says in substance that successful regulation of rates depends upon the effective operation of both branches of regulations. The act, as amended by the Elkins Law of February 19, 1903, and which deals with the publication and invariable application of tariffs, appear to be operating successfully as applied to carriers subject to its provisions; but, as elsewhere explained, it is believed that these provisions might be made somewhat more definite and extended to apply to other agencies connected with transportation which may now be used as a means of affording concessions to shippers, which in effect reduces the cost of moving their products.

The Commission calls attention to the fact that there has been no amendatory legislation conferring power over this rate and making the orders of the Commission effective. In the present state of the law, after careful and often extended investigation, the Commission may find a rate complained against to be unreasonable and order the carrier to desist from charging that rate for the future; but it can not though the evidence may and usually does indicate it, find and order the reasonable rate to be substituted for that which has been found to be unlawful. Any reduction of the wrongful charge amounts to technical compliance and frees the carrier from any legal obligation under the order. The Commission can condemn the wrong, but it can not prescribe the remedy. Two cases of unreasonable rates decided during the year are cited as showing some reductions from the rate found unreasonable, but which were not so great as those recommended by the Commission.

Carriers are entitled to ignore the order of the commission and await the judgement of the circuit court upon a petition by the Commission and another trial of the issues in that court. The more important the case may be, the greater the benefit conferred upon shippers or communities, the less likely is the order of the Commission to be obeyed. The Commission must not only render a just decision, but one that is convincing to the carrier, to afford the relief from unlawful rates contemplated in the statute. If the decision of the Commission is right, the public is entitled to have it go into effect. If it is wrong, its operation could be enjoined upon showing to that effect by the carrier in a suitable and summary proceeding in the Federal court. The amendments to the statute recommended by the Commission involved no fixing of whole tariffs of rates in the first instance or at any time, but simply the redressing of transportation wrongs shown to exist after full investigation, during which all affected interests have been heard; and when an order is issued against a carrier under such procedure it should by operation of law become effective upon the date therein specified.

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In the fixing of rates by carriers upon all commodities for transportation in all directions and between all points reached by railroads, it is inevitable that much injustice, unfairness, unreasonableness preference, and discrimination will be practiced, withstanding the greatest care and ripest judgment may be exercised by the railway officials. These errors of judgment on the part of the railway officials constitute the reason for Federal regulation and the basis of the present wide-spread demand for an amendment of the existing statute which will enable their speedy correction.

The Commission alludes to the persistent misrepresentation by many who are interested in opposing this legislation,

that the amendments desired would confer upon the Commission the power to arbitrarily initiate or make rates for the railways, and that it would be most dangerous to place this vast authority in the hands of five men, especially five men who have had no experience as railway traffic managers. No such power has been asked by or is seriously sought to be conferred upon the Commission. Though the popular demand may eventually take that form, under the stress of continued delay in remedying ascertained defects in the present plan of regulation, the amendment recommended by the Commission, as to authority to prescribe the reasonable rate upon complaint and after hearing, would confer in substance the same power that was actually exercised by the commission from the date of its organization, in 1887, up to May, 1897, when the United States Supreme Court held that such power was not expressed in the statute.

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The law provides for a complaint, full hearing, a report and opinion, and an order. This proceeding is essentially judicial in character and form, and bears no resemblance in any degree to the arbitary action which would result under authority to make tariffs of rates absolutely for the railways, either in the first instance or after some form of hearing or investigation. situation is regarded as increasingly grave, in view of the rapid disappearance of railway competition and the maintenance of rates established by combination, attended as they are by substantial advances in the charges on many articles of household necessities. Though the law is extremely defective, aggrieved shippers have no other resource than to appeal to the Commission in the hope of some relief from conditions which they regard as intolerable.

All concede that rates should be reasonable and just. When they are not so, there is now no adequate means of making them reasonable and just unless the carrier can be convinced and persuaded to do so. The interests of one party can not be safely relied upon to determine and protect the

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rights of another. Authority to quire the establishment of joint through rates over connecting and continuous lines is also believed to be necessary, if authority to correct an unreasonable or unjust rate should be granted.

Much importance has been attached to this report, and much publicity and discussion is being given to it on account of the somewhat radical and very positive recommendations regarding the regulation of rates charged by the railways of the country for the transportations of interstate commodities. Also the President in his message to the present congress took an emphatic stand upholding the recommendations of the Commission in part as follows:

"The Government must in increasing degree supervise and regulate the workings of the railways engaged in interstate commerce; and such increased supervision is the only alternative to an increase of the present evils on the one hand or a still more radical policy on the other." "The most important legislative act now needed as regards the regulation of corporations is this act to confer on the Interstate Commerce Commission the power to revise rates and regulations, the revised rate to go at once into effect and stay in effect unless and until the court of review reverses it."

PRIVATE CARS IN FREIGHT TRAFFIC.

The evils of the private cars in freight traffic is treated quite extensively in the report, some of which are as follows:

(1) Concessions are made to particular shippers in refrigeration charge which amount to the payment of a rebate.

(2) A practical monopoly has been created in the use of private cars for the movement of certain commodities, especially fruit, which has enormously increased to the public the cost of transportation.

(3) When the owner of the car becomes a dealer in the commodity transported, the fact of ownership gives him an important advantage over his competitor.

(4) When the owner of the car is also the owner of the commodity trans

ported, an excessive rental for the car may amount to a preference in the freight rate, as against the shipper who does not own his car.

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Instances of rebates granted by car companies from the icing or refrigeration charges on fruits are mentioned. It is claimed that these icing charges, whether made by the carrier or by the private car company, are compensation private service not part of the transportation service performed by the common carrier, that they are therefore not required to be published, and are not subject to regulation under the statute. Practically the icing charge is part of the shipper's cost of transportation. The fruit shipper must use the railroad, he must use the refrigerator car, and the car must be iced. The effect upon the shipper of fruit is exactly the same if his competitor receives a concession in the icing charge as it is if he receives a corresponding preference in the freight

rate.

When the owner of private cars is also a shipper, to whatever extent the amount paid by the railroad for the use of the car exceeds a reasonable compensation the owner of the car is preferred in the matter of the freight rate over the shipper of the same commodity who owns no cars, and this point is discussed at some length in the report.

The Commission has held that these exclusive contracts, when they result in unreasonable icing charges, are unlawful, and that the failure of the carrier to publish such charges is also a violation of the statute. We feel reasonably certain that these holdings are correct, and will be finally sustained.

The private

car lines and the railroad companies earnestly insist, however, that the icing is a private service 'over which this Commission has no jurisdiction under the present law; and if it should turn out after three or four years of litigation that our opinion is wrong, the shipper will be entirely without remedy.

Without conceding the correctness of the claims stated by the carriers and car lines, there can be no doubt that great good would be accomplished by such legislation as would leave no room

for such contentions, and provide more adequate and certain remedies for the suppression of these abuses. The only way in which complete remedy can be afforded is by investing this Commission, or some other tribunal, with power to inquire whether these charges are reasonable, and to make them reasonable if found unreasonable. This can be accomplished in two ways:

(1) By making the common carrier responsible in the matter of this special equipment and refrigeration service, if they are not now responsible.

(2) By bringing the car line companies which provide this refrigeration for interstate shipments under the jurisdiction of the act to regulate commerce, and making their charges subject to the determination of this Commission

TERMINAL RAILROADS.

The terminal railroad owned and controlled by shippers is believed by the commission to be a most dangerous means of giving preference to favored persons. A few instances of large excess over fair compensation for services performed are given by the Commission, which seem to entirely justify their calling attention to the growth of these practices. From every point of view they commend this matter to the serious attention of the Congress.

In speaking of voluntary submission of controversies to it, the Commission calls the attention of Congress to the point that some, at least, of the most important controversies involving the rates and methods of railway carriers are rather between competing communities, or producing regions, than between rival lines of railway. It will be seen at once what a tremendous and farreaching condition is involved in this statement—a condition which predicates that the vast railway development has extended far beyond the point at which any of the great systems finds its interests so identified with a single community as to feel indifferent to the demands and needs of competing communities; and the commission frankly confesses that there may be entire sincerity in the contention on part of officers of a great railway system that any adjust

ment which satisfies the rival communities to be served can not be seriously objectionable from its point of view. The Commission thinks its usefulness would be very much increased if its determinations, in cases of voluntary submission of controversies, were sanctioned by authority not now possessed, and urges Congress to make amendments recommended for that purpose.

In speaking of the character of cases now pending before it, the Commission thinks it probable that, directly or indirectly, almost every locality and nearly all the people of the United States are affected. This shows the people the increasing necessity, and the expanding functions, of the Commission, or that the continual push of industrial activity is developing new and hitherto unknown conditions and opportunities. The Commission comments upon use of safety appliances as follows:

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"The good effect of the amending act, especially in securing more effective control of trains through the increased use of air brakes, is marked. Since the law become fully operative the number of brakemen employed on trains has been reduced on some eastern roads upon the stated ground that the control of trains by air brakes renders the employment of the former number unnecessary. The number of cars inspected during the year was 208,177, of which 65,183, or 31.31 per cent of the whole number were found defective. A smaller number were inspected this year than last, because the provision in the new law relating to air brakes has entailed much additional work in inspection and securing evidence in airbrake violations. The inspection is made, as far as possible, according to the standards of the Master Car Builders' Association. These include all matters relating to the safety of employés, and the inspection is therefore not confined strictly to appliances required by law. Such action tends to promote uniformity in equipment and practice.

The law is generally well observed, so far as the proportion of air-brake cars in service is concerned, but many of these cars are run in such defective con

dition as to be really inoperative in respect to use of the air brake. Instances of defects are given, and the failure of carriers to properly educate employés in the use of air brakes is noted.

On account of the greatly increased size of trains, the opinion has been expressed that locomotives should be equipped with two air pumps, to work singly or in combination. In any event, the small pumps now used should be replaced with pumps of the largest capacity.

Air-brake cars are frequently found cut out without anything to indicate the reason for such action. This is generally due to the negligence of trainmen, who fail to apply defect cards. Trainmen are often careless in the observance of those conditions which lead to proper compliance with the law.

Many of the defects in cars found not in compliance with the statute were of such a nature as to require men to go between the cars to couple and uncouple them, thus placing their lives in danger and violating the spirit and letter of the safety-appliance statute. While 31 per

cent of the freight cars inspected were found defective, only 42 out of 2,319 inspected passenger cars were found improperly equipped. The number of defective passengers cars was less than 2 per cent of the whole, and these defects were generally of a minor character and were immediately repaired.

The number of trainmen killed in coupling accidents during the year was 278, and the number injured was 3,441. A large proportion of these deaths and injuries were due to defective equipment, compelling the men to go between the cars to couple and uncouple, and might have been avoided had proper attention been given to the maintenance of safety appliances. When the same attention that is now devoted to passenger equipment is given to freight equipment, the number of deaths and injuries will largely decrease.

Two prominent roads entering St. Louis have issued notice that they will refuse to receive cars from other roads unless the coupling appliances are in good condition. This action has pro

duced most excellent results and should be extended to other parts of the country.

The number of prosecutions for violation of various provisions of the safetyappliance law is noted. None of the suits have come to trial, and in most cases they have been settled without trial by the roads confessing judgment and compromising the amount of the penalties to a greater or less extent. These prosecutions spur the roads to activity in maintaining their safety appliances in better condition.

The extension of time granted to the Colorado and Southern and Denver and Rio Grande, to enable them to apply to Congress for a change in the amended law permitting them to dispense with the driving-wheel brake on their narrowgauge locomotives engaged in road service and substitute the water brake therefor, was further extended by the Commission upon application of the roads. These carriers presented a bill for this purpose, and it was favorably reported by the committees of both Houses at the last session, but did not come to a vote. In view of such action in Congress, the further extension until March 1, 1905, was granted.

Through concurrent action with the Civil Service Commission, improved. rules have been adopted for the appointment of safety-appliance inspectors. The greatest care is taken to ascertain the technical knowledge of applicants for these positions and to enable the Commission to secure the services of the very best men.

RAILROAD ACCIDENTS.

The article in the report on railroad accidents opens with a table giving the principal totals for the years ending June 30, 1902, 1903, 1904. There were 43,266 employés injured and 3,367 killed in 1904, as compared with 33,711 injured and 2,516 killed in 1902. The figures for 1903 are intermediate between those for 1902 and 1904. In 1904 there were 8,077 passengers injured and 321 killed; in 1902, 6,089 injured and 303 killed; in 1903 there were 6,973 injured and 321 killed. The increase in the number of deaths of passengers in

train accidents in 1904 compared with 1903 is 64 per cent. The fact that there were ten unusually disastrous accidents during the year is mentioned. The number of deaths resulting from these ten accidents, eight of which were collisions, is about 23 per cent of the total number killed in all the train accidents of the year, which comprise over 6,000 collisions and 4,800 derailments. Although there has been earnest discussion of the subject in the public press, it is noticeable that the very magnitude of the questions involved appears to have produced some confusion, and in the multitude of causes assigned the real question in many cases has been lost sight of. The paramount requirement, as pointed out in the last annual report, is an effective measure for the prevention of collisions.

The Commission urges with added emphasis, if possible, the same means recommended in its last annual report -the adoption of the block system. As to whether the cost of introducing the block system would be a burden on the railroads, no definite claim upon their point has been presented, and it has been mentioned only in a vague way. The cost of introducing the manual block system can scarcely be called a burden when we see it introduced on single-track lines of not very heavy traffic and find no prominent mention of expense in the annual reports of the companies. The same reasons that existed for the introduction of the automatic coupler and air brake by the provisions of the safety appliance act of 1893 apply to the prevention of collisions by compulsory use of the block system. The report discusses the use of automatic versus nonautomatic signaling, and says that the question is one of immediate capital expenditure. Considered strictly on its technical merits, the block system is the acme of simplicity. It is the simple embodiment of the theory that no train shall ever be started from a point on any main-line track until it is known that such track is clear of all other trains up to a certain point beyond. In other words, a space interval must always be main