CHAPTER X

REGULATION OF FREIGHT AND PASSENGER TARIFFS

Leaving the subject of temperance and prohibition for the present, the

next important question of a public nature in which I became interested

professionally was the question of the regulation of freight and

passenger tariffs by the general assembly of the state. The general

assembly of 1888 enacted a law providing for the election of three

Railroad Commissioners, and gave them authority to prepare schedules of

rates that might be charged by the railroads of the state for the

transportation of freight and passengers.

[Illustration: _Charles Clinton Nourse_

From Photograph by Pearson.

Des Moines]

Under this statute the people elected as Commissioners Frank T.

Campbell, Peter A. Dey, and Spencer Smith. In pursuance of the

authority of the statute these Commissioners proceeded to formulate

schedules of rates to be charged by the several railroads of the state.

The law required the Commissioners to publish for three successive

weeks in certain newspapers the date at which these rates should take

effect. Before the third publication was made the attorneys of the

Northwestern Railroad Company telegraphed to the Railroad Commissioners

requesting a change of the date of the taking effect of their proposed

schedule of rates, and received from the secretary of the board, under

the instructions of Mr. Dey, an answer that the time of the taking

effect would be changed accordingly. A new advertisement was prepared

and published, but before the three insertions were completed three of

the principal railroad companies operating in the state; to-wit, the

Northwestern, Chicago, Burlington & Quincy, and the Milwaukee & St.

Paul filed their petitions with the circuit court of the United States

for an injunction against the further publication of the notice, on the

ground that the rates fixed by the Railroad Commissioners were not

_compensatory_. The hearing of this application was had before

Justice Brewer at his residence in Leavenworth, Kansas. I was employed

by the Railroad Commissioners to appear in their behalf, and Mr. James

T. Lain, of Davenport, was employed by certain shippers of that place

to appear with me in the case. We argued the case before Justice

Brewer, and he granted the injunction on the 28th of July, 1888. This

injunction in large part was based upon the evidence of the

complainants' general manager to the effect that the Commissioners had

adopted a classification known as the western classification, which, as

compared with the classification known as the Illinois classification

made a difference against the railroads of fifty per cent. Subsequent

to the granting of these injunctions, upon complaint of certain

shippers the Railroad Commissioners, after a hearing before them,

proceeded to formulate new schedules, and in pursuance of what appeared

to be the principal objection at the former hearing they adopted a

classification more favorable to the railroad companies known as the

Illinois classification. Immediately upon this action of the Railroad

Commissioners the railroad companies filed a supplemental bill asking a

further injunction to restrain the Railroad Commissioners from putting

into effect these new rates with the new classification. Mr. Campbell

of the Railroad Commissioners immediately waited on me asking my

further appearance in the cause to argue the question of a further

injunction as against their new schedules and classification. He

expressed a doubt as to whether or not it was worth our efforts to

defeat this new application as he was disposed to think that Judge

Brewer would grant whatever the railroad companies might ask in this

behalf. I told him that he had a duty to perform as a public officer,

in my opinion, and if the Commissioners did their duty in making the

proper resistance to this new application, the responsibility would

rest with Judge Brewer if he failed in his duty. We accordingly made

the necessary preparation for a hearing, which was finally had at St.

Paul, Minnesota. In the argument of this case the attorneys for the

three railroads applying for the injunction made a very formidable

array of distinguished counsel embracing the ablest lawyers of Chicago

and Milwaukee. A. J. Baker was then Attorney General of the state of

Iowa and nominally appeared with me for the Commissioners, but gave me

no assistance whatever. We had for an audience in the argument of the

case many leading men of Minnesota, members of the State Grange of that

state, which association was then in session at St. Paul. I took into

the court-room a blackboard that I extemporized for the occasion and

taking several copies of the official reports of the railroads in

question, I put one copy in the hands of Justice Brewer, holding

another copy in my hand and putting the figures upon the blackboard,

showing the earnings of these railroads and what they were pleased to

call their fixed charges, and demonstrating beyond question that the

complaints made of the proposed railroad rates were without foundation.

The same person who had made an affidavit in regard to the difference

between the Illinois and the western classification had made a new

affidavit stating that there was an error in his former computation. I

criticised with some severity the reliability of the affidavits in

which mistakes occurred according to the convenience and exigencies of

this litigation. I had not much confidence in the result, however, but

I felt quite complimented when a number of the leading men of the

Minnesota Grange, who were present at the argument, made me a

complimentary visit at the hotel that evening. The attorney for the

railroad company who was expected to make the closing argument in the

case complained that he did not feel very well and only spoke about

fifteen or twenty minutes in a general way, without going into the

facts or figures in the case. My supposed assistant, the Attorney

General of the state of Iowa, took no part in the argument, and on my

way home that night I learned that he had been in conference with Mr.

Stickney of the Chicago Great Western Railroad Company, and had made an

arrangement with that gentleman for employment as attorney for that

corporation, to take effect at the close of his then official term

which was to occur in a few months. On the 2nd day of the ensuing

February, 1889, Justice Brewer filed in the circuit court his opinion

refusing the injunction on the supplemental bill and entering an order

dissolving the injunctions theretofore granted, at the cost of the

complainants. The railroad companies made no further fight against the

action of the Railroad Commissioners but acquiesced therein, and found

the earnings of their several roads "compensatory."

Concurrent with this proceeding on the part of the Northwestern

Railroad Company and the Chicago, Burlington & Quincy, and Milwaukee &

St. Paul, the Chicago, Rock Island & Pacific Railroad Company and the

Burlington, Cedar Rapids & Northern applied to and obtained from Judge

Fairall, of Iowa City, district judge of Johnson county, an injunction

against the Railroad Commissioners to the same effect as that issued by

Justice Brewer. I appeared with Mr. Lain before the district court and

argued a motion to dissolve this injunction before Judge Fairall, which

was refused, and from his order refusing to dissolve the injunction we

at once took an appeal to the supreme court of Iowa. This appeal was

heard and submitted to the supreme court by both printed and oral

argument, but after the action of Justice Brewer upon the supplemental

bill in the federal court, the attorneys for the Chicago, Rock Island &

Pacific Railroad Company and the Burlington, Cedar Rapids & Northern

dismissed their suit in the district court of Johnson county, and then

applied to the supreme court for an order dismissing the appeal in that

court. We resisted this application, but the court held that as the

original suit was dismissed the injunction itself necessarily was

dissolved, and as the appeal was only from an interlocutory order, the

court had no occasion to deliver an opinion upon the merits of the

controversy. The opinion of the court permitting these parties to

dismiss their suit in this manner will be found in 76th Iowa, 278.

Mr. A. B. Cummins, since Governor of the state of Iowa, has lately been

posing as the original friend of the people in this fight against

railroad injustice. It would be well to state here that I do not know

when he became a convert to the importance of regulating the action of

railroads in justice to the people, but as the foregoing was the first

great contest we had in Iowa on this subject, I give here a speech

delivered by that gentleman as late as December 22, 1891, at a banquet

of the Railroad Employees' Club, as follows:

It is the railroad, it is the spirit that has moved and stimulated

that property which has made it possible to people in the valley of

the Mississippi, which has made it possible to create within the

limits of the United States a greater wealth than has any other

nation on the face of the earth. I speak of the transportation

industry as limited to railways, and so limited, it is instructive

to reflect that the railways of the earth are now of the value of

something near $33,000,000,000, an appalling sum that no human mind

can appreciate, save when compared with some other species of

property. The railways of the earth, without reckoning either "wind

or water," are equal to one-tenth of all the property of the world.

The railways represent substantially one-third of all the invested

capital of mankind; and if all the currency of the civilized world

and its gold and all its silver and its currency in paper; all its

precious stones, its diamonds and rubies were heaped together in

such places as would contain them, they would still represent less

than one-half of the railway property of the world. The comparisons

indicate in what a stupendous enterprise you are now engaged. I

have no disposition, whatever, to convert a single sentiment

suggested by my brother Wallace, I do not recognize a conflict

between the farmers of the nation or the state of Iowa and the

railways. No fair man ought to recognize any such conflict, but

THAT THE STATE OF IOWA OR THAT HER ORGANIZED TRIBUNALS HAVE DONE

INJUSTICE TO THE RAILWAYS AND THROUGH THEM TO THE RAILWAY

EMPLOYEES, NO FAIR MINDED MAN CAN DISPUTE. These systems grew up;

they most naturally fall into the hands best adapted to organize

and handle them, and I would be the last man in the world to claim

that, as they grew up, as they were systemized and organized, that

wrong was not done here or wrong was not done there. I know too

well that there were grievous complaints justly made against the

management of railways not only in this state, but in many others.

But I beg the people of Iowa to remember, and the railway employees

to remember that, although railway managers and railway presidents

may sometimes be unjust, that affords no excuse whatever for the

sovereign power of the state of Iowa in being unjust. The wrongs of

capital produce, it is said, the anarchist--so it is with respect

to the wrongs perpetrated by the railway companies, the railway

organizations. They created a prejudice which, in its impetus, has

carried the attack made upon the railway property far beyond what

is justified by the sober second thought and judgment of those who

instituted it, and far beyond the limits which the fair-minded

people of Iowa now justify.

The constitution of the United States in express terms gives to the

congress of the United States the power to regulate commerce between

the states and with foreign nations. In pursuance of this power and

duty imposed by the constitution, the congress of the United States in

February, 1887, enacted a statute defining the duties and obligations

of common carriers engaged in the transportation of freight and

passengers between the states, and by express terms gave to the people

a right of action in the federal courts against any railroad company

violating its duty as defined by the act. This right of action was by

civil suit for such damages as inured to the party by reason of a

wrongful act of a common carrier.

The Chicago & Northwestern Railroad Company had a main line of road

extending from Chicago, in the state of Illinois, located through the

state of Iowa to Council Bluffs on the Missouri river. From the main

line of this road at Carroll, in Carroll county, this company had

constructed a number of branches running northwest from that point,

known as the Sac City Branch and the Sioux City and Mapleton Branch.

During the year 1890 we brought a number of suits against the Chicago &

Northwestern Railroad Company for unjust discrimination and overcharge

for shipments of corn and oats from various points on these branch

roads to Chicago, and also a number of suits for shipments made at

Carroll and points west on the main line of its road. The cases for

shipments on the branch lines of its road were settled by the company,

and we collected for our clients about $75,000. Suits for shipments on

the main line of its road were contested by the railroad company. We

tried two of these cases before the United States circuit court at Des

Moines, Judge Shiras presiding, and obtained verdicts and judgments in

the causes. The railroad company took a writ of error to the United

States court of appeals, and these causes were submitted to that court

upon both oral and printed arguments at the May term, 1892, of that

court, sitting at St. Louis, Missouri. After the causes had been so

submitted, Judge N. M. Hubbard who had made the argument in behalf of

the railroad company, left St. Louis and went to Chicago for

consultation with the general solicitor of that road, Mr. Goudy. After

a few days, the court of appeals still being in session at St. Louis,

Judge Hubbard appeared before the court, without any notice to me, and

had the order submitting the causes set aside and dismissed his appeal

or writ of error. After a few weeks had elapsed he sued out another

writ of error in the same cases to the United States court of appeals,

which, according to the arrangements for the sitting of that court,

would be held at St. Paul in the state of Minnesota, and Justice Brewer

of the supreme court of the United States would be in attendance as the

presiding judge of that court.

It would be too long and too tedious a story to enter into particulars

in regard to these suits, and the questions of fact and law involved in

them. The unusual and unwarranted conduct of the attorneys for the

Northwestern road in getting these cases before Justice Brewer for his

decision and determination was by no means a compliment to the judge

for whom they manifested such a strong partiality. Neither would I

indulge in any surmise as to the grounds for their partiality. It is

sufficient to say they were not disappointed in the result and that

Judge Brewer reversed both of these judgments.

I afterward determined if possible to obtain the opinion of the supreme

court of the United States upon the questions of law involved in these

cases. I accordingly brought another suit for another client; to-wit,

one E. M. Parsons, in a case involving an amount sufficient to entitle

me to an appeal directly to the supreme court of the United States,

having previously attempted to get the supreme court of the United

States to review the decision of Justice Brewer in the former cases

upon writs of certiorari, the same being denied by the supreme court.

Judge Shiras, presiding in the circuit court at Des Moines, in view of

the action of the circuit court of appeals in the other cases,

sustained a demurrer pro forma to my amended petition filed in the

Parsons case, and it was upon demurrer admitting the averments and

allegations in this petition that the case was heard before the supreme

court of the United States. Justice Brewer delivered the opinion in the

Parsons case in which he held that the statements of the petition did

not entitle the plaintiff to recovery. The opinion discloses the fact

that Judge Brewer was somewhat offended at my attempt to have the

supreme court pass upon the questions of law involved in the cases that

he had disposed of as the presiding judge in the court or appeals. I

had supposed that a judge of the supreme court of the United States

would regard it rather as a compliment than otherwise to his sense of

fairness to believe that he was capable of impartially and without

prejudice, sitting with his brother judges, to review one of his own

decisions, but the opinion shows plainly that I overestimated that

distinguished jurist, and that he thought more of his infallibility

than I did of his impartiality. This opinion of the court will be found

in the case of Parsons vs. The Chicago & Northwestern Railroad Company

in volume 167, _United States Reports_, 324. The court in this

opinion asserts the very extraordinary position that the Interstate

Commerce Law in providing a remedy whereby a shipper of grain might

recover his actual damages for a refusal of the railroad company to

comply with the law which was enacted for his protection, was in the

nature of a penal statute, and that the petition of the plaintiff in

such a case must expressly aver and negative the existence of any

possible excuse for the wrong committed by the railroad company.

One great benefit to the public of these suits against the Chicago &

Northwestern Railroad Company was to arouse public attention to the

necessity of further legislation by congress in order to carry out the

design of the original act for the protection of the public. Congress

had already by amendment to the act provided for penalties against any

parties violating its provisions, but the suits that I brought were

simply for actual damages and injuries, and not for any penalty

whatever under the law. The penal clause in the act as amended March 2,

1889, reads as follows: "That any common carrier subject to the

provisions of this act, or, wherever such common carrier is a

corporation, any director or other officer thereof, or any receiver,

trustee, lessee, agent, or person, acting for or employed by such

corporation, who, alone or with any other corporation, company, person,

or party, shall willfully do or cause to be done, or shall willfully

suffer or permit to be done, any act, matter, or thing in this act

prohibited or declared to be unlawful, or who shall aid or abet

therein, or shall willfully omit or fail to do any act, matter, or

thing in this act required to be done, or shall cause or willfully

suffer or permit any act, matter or thing so directed or required by

this act to be done not to be so done, or shall aid or abet in such

omission or failure, or shall be guilty of any infraction of this act,

or shall aid or abet therein, shall be deemed guilty of a misdemeanor,

and shall, upon conviction thereof in any district court of the United

States within the jurisdiction of which such offense was committed, be

subject to a fine of not to exceed five thousand dollars for each

offense: Provided, that if the offense for which any person shall be

convicted as aforesaid shall be an unlawful discrimination in rates,

fares, charges, for transportation of passengers or property, such

person shall, in addition to the fine herein provided for, be liable to

imprisonment in the penitentiary for a term of not exceeding two years,

or both such fine and imprisonment, in the discretion of the court."

The charge of Judge Shiras to the jury in the two cases tried before

the United States circuit court, before referred to, will be found in

full in volume 48 of the _Federal Reporter_, commencing on page 50,

and the opinion of Justice Brewer, presiding in the circuit court of

appeals, before referred to, in which he reverses these judgments,

will be found in the 10 U.S. court of appeals on page 430.

It may be interesting to any law student and to anyone who desires to

determine where right and justice should have prevailed, to compare the

charge of Judge Shiras to the jury and the principles of law recognized

by Judge Shiras, with the opinion of Justice Brewer. It is not within

my purpose to re-argue any of my causes in this paper.

It is sufficient to say that the supreme court held the provisions of

the inter-state commerce law, that gave to shippers a remedy for unjust

discrimination by a civil suit for damages, to be a penal statute upon

the ground that if the railroad company discriminated by charging one

person ten dollars for a particular service and charged another person

twenty dollars for a like service, then a suit to recover back the ten

dollars thus unjustly demanded and received by the railroad company was

in the nature of a statute to recover a penalty. Upon this mode of

reasoning a suit against any person or corporation who unjustly and

unlawfully gets possession of my money, for the purpose of recovering

back what they illegally obtained, would come under the head of a suit

to recover a penalty. The trouble with the supreme court of the United

States has been that they have uniformly regarded this legislation by

congress to protect the people against unjust charges and

discriminations as intended to punish the railroad companies of the

country, and the court has felt called upon to protect the railroads

from legislation interfering with their absolute control over their

freight and passenger traffic. The court has assumed the role of a

conservative element in the government, intended for the protection of

railroad property against the legislative power of the country.

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