Remember me most affectionately to your wife, and believe me always most faithfully yours,
FRANKLIN K. LANE
At the same time an affectionate letter of appreciation went to Benjamin Ide Wheeler.
IV
RAILROAD AND NATIONAL POLICIES
1906-1912
Increased powers of Interstate Commerce Commission--Harriman Inquiry--Railroad Regulation--Letters to Roosevelt
During the late summer of 1906, Lane was in Washington or traveling through the South and West to attend the hearings of the Interstate Commerce Commission. The Hepburn Act of 1906, among other extensions of power to the Commission, brought the express companies of the United States under its jurisdiction, and the Commission began the close investigation into the rates, rules, and practises, that finally resulted in a complete reorganization and zoning of the companies. The new powers given the Commission, by this Act, inspired fresh hope of righting old abuses, associated with railroad finance, over-capitalization and stock- jobbing. The Commission set itself to finding a way out of the ancient quarrel between shippers and railroads in the matters of rebating and demurrage charges.
In the latter part of the year, President Roosevelt called an important meeting at the White House, for the purpose of deciding whether an inquiry should not be made into the merging of the Western railroads, then under the control of E. H. Harriman. Elihu Root, then Secretary of State; William H. Taft, Secretary of War; Charles Bonaparte, Attorney General, were present; Chairman Martin A. Knapp and Franklin K. Lane of the Interstate Commerce Commission, and the special Counsel for the Commission--Frank B. Kellogg. The matter of the proposed inquiry was discussed, each man being asked, in turn, to express his opinion. Root and Knapp were not in favor of beginning an investigation of the railroad merger, Bonaparte, Kellogg, and Lane favored an immediate inquiry. Lane declared that, in a few weeks, when the report of the Interstate Commerce Commission was published, it would be impossible to avoid making the inquiry.
At this point, President Roosevelt turned to William H. Taft, who as yet had expressed no opinion, saying, "Will, what do you think of this?" Mr. Taft said quietly, "It's right, isn't it? Well, damn it, do it then." And the plans for the famous Harriman Inquiry, the first real step taken toward curbing the power of public utilities, were then taken under consideration.
During the inquiry, when E. H. Harriman was on the stand for hours, the Commissioners trying to extract, by round-about questioning, the admission from him that he would like to extend his control over the railroads of the country, Lane, who had been silent for some time, suddenly turned and asked Harriman the direct question. What would he do with all the roads in the country, if he had the power? With equal candor and simplicity, Harriman replied that he would consolidate them under his own management. This answer rang through the country.
TO EDWARD F. ADAMS
Washington, February 16, 1907
MY DEAR ADAMS,-- ... I think the standpoint taken by our railroad friends in 1882 is that which possesses their souls to-day. I am conscious each time I ask a question that there is deep resentment in the heart of the railroad official at being compelled to answer, but that he is compelled to, he recognizes. The operating and traffic officials of the railroads are having a very hard time these days with the law departments. They can not understand why the law department advises them to give the information we demand, and I have heard of some most lively conferences in which the counsel of the companies were blackguarded heartily for being cowards, in not fighting the Commission. You certainly took advanced ground in 1882, ... --there can be no such thing as a business secret in a quasi-public corporation. ... Very truly yours,
FRANKLIN K. LANE
TO BENJAMIN IDE WHEELER PRESIDENT, UNIVERSITY OF CALIFORNIA
Washington, March 31,1907
MY DEAR MR. WHEELER,-- ... I have taken the liberty of giving Mr. Aladyin, leader of the Group of Toil in the Russian Duma, a note of introduction. He's an immensely interesting young man, a fine speaker and comes from plain, peasant stock. He will talk to your boys if you ask him. During these days of panic in Wall Street the President [Roosevelt] has called me in often and shown in many ways that he in no way regrets the appointment you urged. I have been much interested in studying him in time of stress. He is one of the most resolute of men and at the same time entirely and altogether reasonable. No man I know is more willing to take suggestion. No one leads him, not even Root, but no one need fear to give suggestion. He lives up to his legend, so far as I can discover, and that's a big order. The railroad men who are wise will rush to the support of the policies he will urge before the next Congress, or they will have national ownership to face as an immediate issue, or a character of regulation that they will regard as intolerable.
You will be here again soon and I hope that you will come directly to our house and give us the pleasure of a genuine visit. ... Sincerely yours,
FRANKLIN K. LANE
TO ELIHU ROOT
Washington, February 14, 1908
My DEAR MR. SECRETARY,--I have lately been engaged in writing an opinion upon the jurisdiction of the Interstate Commerce Commission over ocean carriers engaged in foreign commerce, and it has occurred to me that an extensive American merchant marine might be developed by some legislation which would permit American ships to enjoy preferential through routes in conjunction with our railroad systems. The present Interstate Commerce Law, as I interpret it, gives to the Commission jurisdiction over carriers to the seaboard. It is the assumption of the law that rates will be made to and from the American ports and that at such ports all ships may equally compete for foreign cargo.
Might it not be possible to extend the jurisdiction of the Commission over all American vessels engaged in foreign trade, and with such ships alone--they alone being fully amenable to our law --permit the railroad which carries to the port to make through joint rates to the foreign point of destination? There is so vast a volume of this through traffic that the preference which could thus be given to the American ship would act as a most substantial subsidy. There may be objections to this suggestion arising either out of national or international policy which render it unworthy of further consideration. It has appealed to me, however, as possibly containing the germ of what Mr. Webster would have termed a "respectable idea." Faithfully yours,
FRANKLIN K. LANE
TO E. B. BEARD
Washington, December 19, 1908
MY DEAR MR. BEARD,--I have not seen the article in the CALL, to which you refer, but have heard of it from a couple of Californians, much to my distress. Of course I appreciate that at a time of strain such as that which you shippers and business men of California are now undergoing, it is to be expected that the most conservative language will not be used. ... The trouble is with the law. ... It is only upon complaint that an order can be made reducing a rate, and I understand that such complaints are at present being drafted in San Francisco and will in time come before us but such matters cannot be brought to issue in a week nor heard in a day, and when I tell you that we have on hand four hundred cases, at the present time, you will appreciate how great the volume of our work is, and that you are not alone in your feeling of indignation or of distress. If you will examine the docket of the Commission, you will find that the cases of the Pacific Coast have been taken care of more promptly within the last two years than the cases in any other part of the United States. I have seen to this myself, because of the long neglect of that part of the country. ...
I want to speak one direct personal word to you. You are now protesting against increased rates. I have outlined to you the only remedy [a change in the law] that I see available against the continuance of just such a policy on the part of the railroads, and I think it might be well for you to see that the Senators and Representatives from California support this legislation. It is not calculated in any way to do injustice or injury to the railroads. ... This is a plan which I have proposed myself, and for which I have secured the endorsement of the Commission. The San Francisco Chamber of Commerce has endorsed it. The whole Pacific Coast should follow suit enthusiastically.
Please remember that I am not the Commissioner from California; that I am a Commissioner for the United States; and that it is not my business to fight the railroads, but to hear impartially what both sides may have to say and be as entirely fair with the railroads as with the shippers. I am flattered to know that the railroad men of the United States do not regard me as a deadhead on this Commission. My aggressiveness on behalf of the shipping public has brought upon my head much criticism, and it would be the greatest satisfaction for those who have been prosecuted for rebating or discovered in illegal practises to feel that they were able in any degree to raise in the minds of the shippers any question of my loyalty to duty.