Free The Great Pierpont Morgan by Frederick Lewis; Allen Page A

business from rival concerns by cutting rates. If they are allowed a commission on sales, they will divide it with the buyer; if they are not allowed such a commission they will find a hundred different ways, less obvious but hardly less effective, of rendering a rate agreement nugatory.” Sometimes even the men who gathered round a table to decide on the price they would all charge had their tongues in their cheeks; as a leading industrialist remarked, a price compact usually lasted about as long as it took the quickest man to get to a telegraph office or a telephone and put in a selling order at a lower price. Among the trunk lines there remained a semblance of co-operation, largely as a result of Morgan’s influence; but over the country as a whole the granting of rebates and the sale of blocks of tickets by railroad passenger agents to scalpers went right on, as did the building of rival and blackmail lines, especially in the West. In short, the industry was still in an anarchic condition. By the end of 1888 so few American railroads were earning enough money to pay dividends on their swollen capital that the English investors to whom Morgan felt responsible were protesting vehemently, and he decided that it was time to turn on the heat.
    So now he called a new and much larger and more ambitious conference; and this time he allied with him, in issuing the call, several other investment banking houses. It was as much as to say, “We represent the owners of your companies. These owners are sick and tired of the way you arebehaving. They want earnings. And to that end they want you people to co-operate.”
    By this time there was a new element in the picture. Public fury at the behavior of the railroads had led a number of state legislatures, as early as the eighteen-seventies, to try to regulate the lines within their state borders; and when, in 1886, the Supreme Court of the United States had decided that only the federal government could regulate interstate commerce, it had been manifest that some sort of federal law would have to be passed. So in January 1887 the Interstate Commerce Act was adopted at Washington. It sternly forbade rebates and any sort of discrimination in rates, and it set up an Interstate Commerce Commission to see that freight and passenger rates were reasonable and just, and to require public disclosure of all rates charged. This, to be sure, was little more than a gesture to placate indignant farmers and business men, especially in the West and South; for after its frequent fashion, Congress had given the law enforcers so little authority that there were dozens of ways of circumventing them, and if these failed, one could always go to court and get a decision against them. The almost incredible fact is that between 1887 and 1905, of the cases appealed from the Interstate Commerce Commission which got all the way up to the Supreme Court fifteen out of sixteen were won by the railroads against the shippers or other complainants who had brought them!
    Naturally, Morgan had been opposed to the passage of the Interstate Commerce Act. He had thought that the abuses in the railroad industry could best be cured by the sort of reform measures upon which he was engaged—substituting co-operation for competition, and honest financing for buccaneering. He had a deep contempt for politicians, and thought that people like himself could handle things much better. He wanted to see the railroads of the country respectably run, at profits steady enough and large enough to maintain the value of their securities; and if reliable men ran these enterprises, who but a demagogue could object? The trouble with these ignoramuses in Washington, he felt, was that they seemed to make no distinction between the crying abuses of the industry and the perfectly sound action it must take to maintain values.
    Nevertheless, the law was on the books; and so, when a great company of railroad presidents from all over