ever, the commerce destroyers of the smaller nation may capture or destroy many merchant vessels of the larger power, and will necessarily have far more opportunities to do so, on account of the great number of vessels scattered all over the world, while the more powerful nation will not be able to retaliate in the same manner, not from any weakness of its own, but on account of the fewness of its adversary's vessels.

Under existing rules, a great mercantile nation will also have to spread its navy around the whole world to protect its peaceful commerce, thus weakening it for coast defense, blockades and attacks upon the enemy's strongholds and navy. If private commerce were exempted, although the enemy's merchantmen could not be captured, the navy could concentrate its forces upon the other points of attack and defense much more effectually, and ultimately be of greater benefit than if it were partly employed in protecting its own citizens from individual losses, and hunting for spoils, with the hope of weakening the adversary's financial resources. The other European nations are generally in favor of the rule of exemption, with the possible, although by no means certain, exception of France, to whom, however, belongs the credit of having in 1823, during the then existing war with Spain, made the earliest recorded announcement, during war, that the right of capture of merchantmen would be waived (although the principle had been first adopted in theory by the United States and Prussia in 1785). Since then, however, her course has varied, and during the war of 1871 she refused to reciprocate the exemption offered by Germany as to private property, thus forcing the abrogation of the rule, as announced by Germany at the commencement of the war.

Germany is apparently in favor of reforming the rule, and local efforts are now being made to have the government take the matter up; but it is trusted that this country will have the credit at the present time of taking the lead in this step, not only as to the suggestions already made, but as to the complete consummation so earnestly desired.

Italy is already bound to accede, as the rule is part of her civil and military law, and has also been embodied in treaties with several powers, including the United States. Austria has within the last thirty-five years, at least twice, exempted private property, once in a war with Italy and once in a war with Germany.

Russia is to some extent committed to the rule, as it is a step toward that universal peace which the Czar has asked all of his fellow sovereigns to assist him in obtaining by reducing the armaments of Europe.

All of the South American states will doubtless be eager for the adoption of the rule, and will gladly enter the conference. Bolivia, although hardly a maritime power, has already, in a treaty with the United States, provided for the adoption of this rule.

The nations of the East, China and Japan, are in such positions, both as to their navies and their commerce, that the rule of exemption will have far greater advantages than the right of capture, and they will doubtless gladly favor any measure which will definitely establish the rule.

Under all the existing circumstances, therefore, this is the most opportune time for the assembling of an international convention to consider the subject, and it is eminently proper that it should be held in this country, and at the seat of our Government.

Congress should not hesitate either to clothe the Executive with authority to enter into correspondence with the governments of the principal maritime nations, as suggested by the President, or to appropriate the necessary funds to defray the expenses of the International Congress as soon as the invitations are accepted, and the preliminaries arranged. It is of the utmost importance that there should be no delay, for the subject might be taken up and carried out by some other government, as soon as the consummation appears inevitable, and we should then be deprived of the honor and credit to which we are rightfully entitled, as the first nation to suggest the reform after the matter had lain dormant for a quarter of a century.

CHARLES HENRY BUTLER.

THE POWERS OF THE INTERSTATE COMMERCE

COMMISSION.

BY MILTON H. SMITH, PRESIDENT OF THE LOUISVILLE & NASHVILLE RAILROAD.

IN an article in the NORTH AMERICAN REVIEW for November, Mr. Charles A. Prouty, of the Interstate Commerce Commission, presents an ingenious argument in favor of certain demands which the Commission has assiduously pressed upon Congress for the last year or two.

Mr. Prouty strives to show that the rate-making power desired by the Commission is not a rate-making power; but he admits that the power ❝ certainly is great." The best way to ascertain just what this power is, is to take the precise language of the Cullom Bill, which represents exactly what the Interstate Commerce Commission proposes. After providing for a hearing, this proposed amendment reads as follows:

"If the Commission is of the opinion that the rates, fares, or charges, as filed and published, or the classification, or the privileges, facilities and regulations published in connection therewith are unreasonable or otherwise in violation of law, it shall determine what are and will be reasonable and otherwise lawful rates, fares, charges, classification, privileges, facili ties or regulations, and shall prescribe the same, and shall order the carrier or carriers to file and publish, on or before a certain day, to take effect on a certain day, schedules in accordance with the decision of the Commission.

"A rate, fare, or charge established by the order of the Commission shall not be increased, nor shall a classification, privilege, facility or regulation so established be departed from, without the consent of the Commission, granted upon application of the carrier after due notice and upon full hearing."

This language certainly speaks for itself and leaves nothing to implication. Mr. Prouty argues upon the assumption that the Commission can take action only upon a sworn complaint, but

the act permits the Commission to originate these proceedings without any complaint whatever. The Commission may thus proceed on its own motion and bring before it in one proceeding as many carriers as it may choose, and change as many rates, fares, charges, classifications, privileges, facilities and regulations as it may wish, and prescribe the same, and order the carriers to file and publish on or before a certain day, to take effect on a certain day, schedules in accordance with the decision of the Commission. This is tremendous power, and there is no ground for believing that it would be sparingly or cautiously exercised, for, in the Cincinnati and Chicago Freight Bureau cases, the Commission made orders directly affecting about thirty carriers, requiring very material changes in rates on several thousand commodities from Chicago and Cincinnati to eight important commercial centres in the Southern States, thereby radically changing the entire rate situation as to all south-bound traffic in the territory between the Atlantic and Mississippi, and even further West.

Under the most drastic State Commission laws, the Commissions are authorized to make schedules of charges and reasonable rates of transportation. If the Interstate Commerce Act is amended, as desired by the Commission, that Commission will have precisely the same power. The carrier will have to file all of its interstate rates with the Commission; the Commission will inspect those rates; if it believes them reasonable it will not change them; otherwise it will. A hearing and an investigation are provided for, but that does not affect the power. The most sovereign State Commission is presumed to act only upon investigation, and would not refuse to give the carrier a hearing. Under the plan of the Interstate Commerce Commission, its orders can go into effect without any resort to any judicial tribunal for their enforcement, and the rates made by the most thorough-going rate-making State Commission can have no greater effect than that. Under the Federal Constitution, the rates made by the most powerful Commission, or even by the Legislatures themselves, are susceptible of review if they are confiscatory in character, and under the powers of review proposed by the Interstate Commerce Commission it seems quite clear that the railroads can expect no relief from the courts upon a review of the rates made by the Commission, unless they show substantially that the rates are confiscatory in character. In its Eleventh Annual Report, the Commission

admits that the right of review which it proposed "would not probably embarrass the practical operation of the law;" in other words, it would not embarrass the Commission in the extensive rate-making in which it will engage if this power is conferred upon it.

Railroad commissions can be of but two sorts: First, those which are designed to enforce the law, by instituting prosecutions and by assisting complainants against the railways both in the courts and out; and, second, those which, in fact, are empowered to take charge of the traffic departments of the railroads and make rates for them. No one can read the debates in Congress without being convinced that the Interstate Commerce Commission was intended to be simply of the first-named class. The proposition now is to change the Commission entirely by putting it into the second class, and to constitute it thereby the virtual traffic manager of all the railways in the United States.

The amendments sought by the Commission involve a radical change in the policy of the law. The purpose of the present Interstate Commerce Act was summed up by the Select Committee of the Senate in its report submitted with the bill, which, with some modifications, was finally enacted, as follows:

"The provisions of the bill are based upon the theory that the paramount evil chargeable against the operation of the transportation system of the United States as now conducted is unjust discrimination between persons, places, commodities or particular descriptions of traffic. The underlying purpose and aim of the measure is the prevention of these discriminations, both by declaring them unlawful and adding to the remedies now available for securing redress and enforcing punishment, and also by requiring the greatest practicable degree of publicity as to the rates, financial operations and methods of management of the carriers."

In speaking of discriminations between persons similarly situated, the Committee said:

"This is the most flagrant and reprehensible form of arbitrary discrimination. Individual favoritism is the greatest evil chargeable agains the management of the transportation system of the United States."

Traffic evils are of three kinds: First, discrimination between individuals at the same locality; second, discriminations between different localities; third, excessive rates. The Interstate Commerce Act was evidently designed to correct the first and second classes of these evils, and especially the first class. The third class of evils could hardly have been said to exist as an independent class. Rates in general were extremely low when the Interstate Com