n the
present interstate commerce law was enacted, most traffic associations
had the pooling feature, and most of the competitive railway traffic
was pooled, thus eliminating all competition in rates.
Pooling agreements have never been legal in this country. Being
illegal by the common law, they could not be enforced in the courts.
Section 4 of the interstate commerce law made it unlawful for the
carriers subject to the act to pool their freights or the earnings
from their freight traffic, and made it necessary for the traffic
associations to reorganise without the pooling agreements. Until March
22, 1897, it was supposed that the associations, without pooling
agreements, were legal; but, on that date, in the case of the United
States _vs._ the Trans-Missouri Freight Association, the United States
Supreme Court held that the law of July 2, 1890, popularly known as
the Sherman anti-trust law, applied to railways, and made it illegal
for railway companies to contract with each other to maintain rates.
Thus at the present time traffic associations are permitted neither to
contain a pooling feature nor to provide arrangements for the
enforcement or maintenance of rates, although the charges may be
reasonable and be sanctioned by all the carriers interested. The
associations may now legally exercise those functions which are
connected with the joint business of their members, and they may act
as bureaus of information regarding the competitive traffic. They
have no power to make or to maintain rates.
TRAFFIC ASSOCIATIONS INCLUDING POOLING SHOULD BE LEGALISED
The best performance of the service of transportation by rail requires
the fullest possible co-ordination of the different parts of our
transportation system and the largest attainable measure of
co-operation among the agents who perform the service. Section 4 of
the act of 1887 and the law of July, 1890, as far as the latter
relates to railways, are based on an unsound theory. Provision having
been made for that kind and measure of governmental regulation of
railway rates that will insure reasonable charges, the railways should
be permitted to co-operate in rate-making and be given power to pool
their competitive business.
CLASSIFICATION OF RAILROAD FREIGHT
There are thousands of varieties of freight offered to the railroads
for transportation. If each class of commodities were charged the same
freight rate per ton per mile, the charges upon many articles of
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