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3, 1905. lic use, those from whom it is taken must be given fair compensation therefor. There is but one way to meet this constitutional requirement and that is to issue to them government bonds to the full value of their holdings in railroad securities. When they have been so compensated they need worry no longer concerning the future of the American railroad system. If the rates made by the government officers charged with that duty and the methods of operation adopted by government functionaries do not leave a sufficient balance, after paying wages and other costs of operation, to meet the interest on the bonds issued to pay for the railroads, Congress will have to impose a general tax sufficient to meet the deficit. And why not? If the railroads are to be run by the government, that is by the politicians, it is clear that the people who order the change, must pay the cost. It cannot fall directly upon a class which is powerless to prevent a change which its leaders have consistently advised against. “Let justice be done.” By all means, Mr. President, if government ownership is the only alternative to legislative spoliation, let us have government ownership—provided the government is willing to pay the cost! At any rate, when that proposition is brought forward, the people will know just what they have to meet and will be ready to meet it. The committee on interstate and foreign commerce of the lower House of Congress—the Hepburn committee—on Tuesday of this week prepared a new rate regulation bill, throwing aside those of Messrs. Hepburn, Esch, Townsend and Davey heretofore published; and the Republican members of the committee expressed the hope of getting their new bill passed by the House this week. It is evident that some of the members of the committee have been in constant conference with President Roosevelt, and there appears to be a general disposition to try to secure action by Congress at the present session. The new bill increases the Interstate Commerce Commission from five members to seven and creates a court of transportation. The commission is to have power to declare what shall be a reasonable rate, in place of a rate found unjust, and such new rate shall become operative in 30 days. Thirty days more is allowed for an appeal to the court of transportation. The court will review these cases sitting as a court of equity. The commission may apportion joint rates if the carriers do not. The proceedings before the commission, including the evidence, shall be sent to the court of transportation within ten days after notice. Proceedings before the court are to be conducted by the attorney general, but the commission may, with his approval, employ special counsel. Violation of an order of the commission subjects the carrier to $5,000 fine for each day. The President is to appoint two additional commissioners and the salaries of the seven, shall be $10,000 each. The court of transportation is to be composed of five circuit judges, no two from the same circuit, and each appointed for five years. The court shall hold four regular sessions in Washington each year and special sessions elsewhere. The President is to appoint five additional circuit court judges. The findings of fact made by the commission shall be received as prima facie evidence in the court, and no new evidence shall be admitted before the court if by proper diligence it could have been brought before the commission. Appeals from the court of transportation to the Supreme Court of the United States must be taken within 30 days; the Supreme Court shall give these appeals precedence over all cases except criminal cases.

Some eight months ago (May 27, 1904) we pointed out the new and somewhat unique set of problems imposed on state railroad commissions by the street railways—assuming what may almost be considered axiomatic, that the rest of the country will follow the New England precedent and put both steam and electric lines under single commissions. Massachusetts now furnishes a striking example of these new complications: The New Haven Company has just bought up the Berkshire street railway, a long competing “cross country” line. The steam company will naturally want to transfer to its “holding” organization, the “Consolidated Railway” corporation, the acquired property. But unlike the street railways acquired by the New Haven at and near Worcester, the Berkshire has absolutely no physical connection with the Consolidated Railway system and does not even touch the Connecticut state line. Corporatively and geographically it is a separate entity and, as respects holding companies, the fixed policy of Massachusetts has been the segregation of acquired lines and treatment of the holding company as an individual stock-holder. It looks now, however, as though the policy would be modified, at least as regards the steam companies. For the Massachusetts commission, whose sayso usually “goes” with the state legislature, points out the tendency of those corporations to absorb electric roads, and, in approval of it, cites (1) the trained judgment and larger re and (2) harmony of operation in focusing sources that it brings to the electric lines, and distributing passenger traffic. The commission even goes farther and adds that, to secure the best public service “it is by no means clear that … it is at all essential that the competitive conflict (of steam and trolley) should be prolonged” and “a review by the legislature of the reasons for the present character of our laws upon this subject would seem to be timely.” All this suggests, in an example localized to Massachusetts, the many new enigmas in steam-trolley relations which state commissions are fronting. They involve questions of merger, operation, layout, fares, returns, new capitalization, and, in fact, almost the whole range of railroad and railway questions raised in duplex steam-trolley phases. And, beyond the wider question of policies, is the considerable mass of new legislation—some of it empirical—needed to make those policies effective.

On January 30 the Supreme Court granted the application of E. H. Harriman and others, for a writ of certiorari to review the decision of the Circuit Court of Appeals in favor of the Northern Securities Company, and assigned the case for hearing on February 20. The lower court had granted an order restraining the pro rate distribution of the shares of the Great Northern and Northern Pacific railroads held by the Northern Securities Company. The Circuit Court of Appeals dismissed this injunction and the present decisions means the that the Supreme Court will take up the entire record of the courts below, and that the case will likewise be argued on its merits before the Supreme Court on the day set. The contention turns on the old question as to whether control of the North Pacific shall rest with the Harriman interest by virtue of a return of the exact shares which they turned in to form the Northern Securities Company, or whether this control will pass to Mr. Hill by virtue of a pro rate distribution of Northern Securities assets, which would give Mr. Harriman a considerable minority holding of Great Northern stock which he did not have before and does not particularly want, but would deprive him of the majority holding of the Northern Pacific with which he went into the holding company.

On this same day, January 30, the Supreme Court also handed down a very interesting decision with regard to the so-called beef trust, holding it to be a combination in restraint of trade and commerce in violation of the Sherman anti-trust law. The injunction issued last spring by Judge Grosscup restraining the members of the so-called trust from conspiring to depress the price of cattle and to raise the price of dressed beet was affirmed, with certain slight modifications. The opinion was delivered from a united bench, and is noteworthy for its disregard of technicalities and the evidence which it furnishes that the Supreme bench means to interpret the Sherman law in accordance with the spirit and not with the letter of the the requirements, in the many places where the spirit and the letter conflict. Judge Holmes, in delivering the opinion of the court, said that intent was almost essential to a combination in restraint of commerce among the states, and that it was essential to an attempt to monopolize commerce among the states. “Where acts are not sufficient in themselves to produce a result which the law seeks to prevent, for instance, the monopoly; but require further acts in addition to the mere forces of nature to bring that result to pass, an intent to bring it to pass is necessary in order to produce a dangerous probability that it will happen. But when that intent, and the consequent dangerous probability, exists, this statute, like many others, and like the common law in some cases, directs itself against the dangerous probability as well as against the completed result.”

The experiment of three cent fares within a certain zone, now being tried by the street railways in Cleveland, is not to be taken seriously as evidence of any impending change in street car fares. Cleveland is the scene of ex-Mayor Tom Johnson’s activities, and the traction people, in the present interval of calm, are probably glad to be able to collect some colorless and dispassioned evidence as to the practical working of a three cent fare. It is easy to see that date thus collected might be of use in another radical campaign. From an operating standpoint, street railway managers are skeptical of the advantages gained from offering reduced rates on city lines, where there is no interurban complication. Where six tickets are sold for 25 cents, on purely local street railway systems, it is not apparent that the sales are in any way increased; the extra ticket amounts to little more than a gift to the public. The inducement to ride at a slightly lower fare does not create nearly enough new business to offset the cost, and it has been proved in several localities that the extra five cents on every sixth ticket made the different between profit and loss for the whole street railway system.

This work, which is most comprehensive, covering the entire field of commercial and