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Copyright, 1906,
BY JOSEPH HENRY BEALE, JR.,

AND
BRUCE WYMAN.

L ARY OF THE
LELAND STANFORD, JR., UNIVERSITY

LAW DEPARTMENT.

PREFACE.

The passage of the Federal Railroad Rate Act of 1906 has both emphasized the present importance and added to the future importance of the law governing the regulation of railroad rates, In all interstate shipments, which comprise so large a proportion of our railroad traffic, and in the local shipments of a very large number of our States, the maximum rates are now regulated by law; either directly by legislature, or (as is usually the case) by the action of a commission under authority conferred by the legislature. - It is hardly necessary at this time to call special attention to the practical importance to every member of the community of the charges made by the railroads. To the vast majority these charges are an important part of the cost of their food; it is in the power of the great trunk lines, except where the law can restrain them, by an increase of rates to cause a famine as serious as would be caused by a complete failure of the crops. To a great number of our people, on the other hand,—to the great farmers of the interior, to the ranch men of the plains, to the planters of the South, to the manufacturers of the seaboard, and to the millions of their employes who are dependent upon their prosperity,-railroad charges are of greater immediate importance. The railroads, if unrestrained by law, can prosper or can ruin them; they can build up a great and flourishing business, or they can turn an industrious city into a wilderness again. That power such as this should be the subject of legal restraint is inevitable; that the legal qualities and limitations of such restraint should be of the greatest interest to the profession and to the people at large is clear.

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From the earliest times some restraint has been exercised over such lines of industry as are of vital interest to the public. The establishment of the King's peace, the protection of the weak against the actual physical violence of the strong, is the fundamental function of government in the modern sense; but of equal importance and of almost equal antiquity is the protection of the common people against the greed and oppression of the powerful. In matters not vital to the life and well-being of mankind the laws of society may be left free to operate, without limitation by the sovereign power; but in all that has to do with. the necessaries of life the protection of the sovereign is extended. He protects equally against physical violence and againsť oppression that affects the means of living.

In modern times the prevalence in commercial life of the principle of laissez faire has led to the formation of great industrial combinations. Great enterprises have taken the place of small ones, and great industries have been localized at the most convenient parts of the country. All this commercial organization has been based upon the development of railroads ; which are necessary not only to bring the raw material to the factory and to distribute the finished product, but also to supply with the necessaries of life every inhabitant of the country. The result has been the establishment of great and powerful corporations in whose hands is the railroad carriage of the country. But as these great combinations of capital have grown up under the law, so their legal rights must be subject to the rights of the whole people; great power brings as its consequence the need of control of that power for the good of the whole people.

Two ways only can be found to exercise such control. One way, thať advocated by the most radical statesmen, is the government ownership and operation of the railroads. The other way, which is in fact the conservative method of dealing with the problem, is the control of the rates and practices of the railroads for the public good. One or the other of these methods must be finally adopted. The conservative method is now on

trial. It behooves the lawyers to see to it that it be so intelligently tried, and that the law applicable to the case be so accurately enforced, that we may not be driven perforce to the radical alternative of public ownership.

The belief that this duty has, almost withouť warning, been thrust upon the profession, and that the average lawyer has not been prepared either by study or by experience to solve the difficult questions that may arise, has led the authors to prepare and publish this treatise, with the hope that it may help the profession to meet its new and perplexing problems. But in order to render such assistance, it seemed to the authors that a treatise which merely collected and discussed judicial decisions upon railroad rates would be a very imperfect work. The law of railroad rates is based upon the general principles of publicservice law and cannot be mastered without an adequate knowledge of thať law. The first task of the authors has therefore been to give a sufficient though concise view of such portions of the primary obligations of those in public employments, and particularly of carriers, as bears essentially on the problem of rates. For this portion of their subject the authors have been prepared by special studies during the last ten or twelve years ; and though the subject has not been greatly elaborated, it is their hope that this first part of the treatise will be found generally useful.

That portion of the subject which deals more particularly with the fixing of rates has been studied with patient care, and authorities have been sought wherever it was thought they could be found. As this is a topic in the law of public employments, the doctrines involved are the same whether the rates in question are those of railroads, or of gas or water companies, or of other companies engaged in a public employment. Cases therefore involving therates of these companies have been sought and cited. Even including these cases, the judicial decisions in which the law governing rates has been involved have been few and almost invariably recent; for the importance of the law is new. It has, therefore, seemed best to examine the most important decisions in detail and to give in many cases the very language of the courts; since thus only may the reader have an accurate knowledge of the current doctrine and its probable development. Not that the authors have hesitated to express their own opinions upon novel or difficult points; indeed, they fear that the bar may feel that they have been too free in giving their own views of the law.

In dealing with rate problems, the authors have cited and examined the decisions of the Interstate Commerce Commission in the same way that they have cited and examined those of the courts. They regard this course of action as most important. Not only in proceedings before the Commission itself, but even in the Supreme Court of the United States, these decisions have been cited as authoritative; and with the increased power given to the Commission by the late Act its opinions will have an increased importance and will contribute most materially to the development of the law.

Our purpose has involved not merely a study of the common law as it bears upon railroad rates, but an examination as well of the statutory provisions. We have given the full text of the Interstate Commerce Act as it now stands, with full annotations including the decisions of the Commission and of the Courts. We have also given such parts of the State acts as were thought to be of use in such a book, our idea being to let a lawyer in any State know what sort of statutes there are in other States.

This treatise aims to give not merely the law of railroad rates, but also the practice before the Interstate Commerce Commission. For this purpose those sections of the Act which touch on practice have been annotated with especial fulness, and in the Appendix have been included the Rules of Practice of the Commission and a set of approved Forms. This, it is hoped, will assist lawyers who will be engaged for the first time in prac

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