Regulation Recommended by State Commissions -- Importance of Rail and Water Coöperation -- Review of Question -- Hostile Attitude of Railroads, Both Domestic and Foreign -- Studies in America and Europe to Find Remedy -- Panama Canal Act -- Status of Law in New York State -- Characteristics of Effective Law -- Same Relations Needed between Canal and Railroad as between Separate Railroads -- Action by New York Necessary -- Attempted Legislation -- Regulating Law Passed -- Analysis of Law -- Rail Connections at Canal Terminals -- Delay in Invoking Law.

In our discussion of the terminal question and again in our consideration of the work of the Commission on Barge Canal Operation we have seen something of the need of amicable and coöperative relationships between railways and canals. The lack of such relationships had been recognized by canal men as one of the chief reasons why waterway shipping had been on the decline, but it remained for the Terminal Commission and the Commission on Operation to give authoritative public voice to the demand for a change. Indeed until the investigations of these commissions and of two nearly contemporaneous national commissions there had been no large general appreciation of how completely the railways had dominated the canal situation by their hostile actions. Finally New York State enacted a measure calculated to remedy the evil. This was in 1917 and it was brought about only after several years of hard work by canal advocates.

It will be recalled that the Terminal Commission in its final report in 1911 had recommended that "a commission composed of representatives of the leading commercial organizations in different parts of the state should investigate conditions affecting interchange of freight, the subject of prorating and through-rating, the recognition of through bills of lading and of through-rates at points of interchange, as between water and rail carriers." The answer to this recommendation, it will also be remembered, was the Commission on Barge Canal Operation, the question of rail and canal relationships being one of its main subjects of investigation. This latter commission reported to the Legislature of 1913 and made recommendations for certain enactments which in general were embodied in the law of 1917. The State, however, was not entering an unexplored field in this legislation. The National government by its Interstate Commerce Act and its Panama Canal Act had led the way and New York's law was based on the Congressional acts and the Federal experience.

In reviewing the work of the two State commissions we did not discuss the subject of rail and water relationships very fully, leaving it rather for the present occasion. But a little investigation will show how important a subject it is, how, like the terminal question, it lies at the very foundation of canal success, the lack of connections and coöperative relationships with railways being sure to render ineffectual and almost useless any canal, however complete and splendidly equipped in all else that canal may be. We may see how the railroads, by operating their own boat lines and by refusing to interchange, to prorate and to through-rate and to recognize through bills of lading, have been able to minimize or even entirely to eliminate waterway competition. At least such is the claim of canal advocates and there seems to be abundant evidence to substantiate their assertions.

Even before the Commission on Operation had made its recommendations to the Legislature canal men were alive to their peril and had taken action which resulted in introducing two bills during the same session, aimed at the joint regulation of rail and canal rates. This action was taken by the State Waterways Association at its annual convention on September 20, 1912. Its immediate cause was a paper before the convention on "The Needs of Legislation as to the Relations between Rail and Water Carriers," by William J. Roche of Troy.

If we are to understand the situation that confronted the State and know why it eventually took the action it did, we must of necessity review the history of railroad competition with waterways and also learn what had been said on the whole subject by men who spoke with the authority of intimate acquaintance with the facts. Such a comprehensive grasp of the case Mr. Roche's paper gives us. It is made up largely of quotations from these men who spoke with authority and in addition it tells us what the United States had done and what the status was in New York state. We can do no better than to avail ourselves of the compilation thus made and quote from the paper at some length.

"The Panama Canal Act and the discussions attendant upon its passage through Congress," said Mr. Roche, "have again sharply drawn attention to the relations between carriers by rail and carriers by water, and to the necessity of adopting and enforcing definite public policies concerning the two classes of carriers. ...

"The questions have been asked: Should railroad corporations be allowed to operate boat lines? Are the State and the nation engaged in developing waterways only to have these waterways become mere adjuncts to the railroad systems? In view of the large appropriations which are being made, are we rearing and fattening waterway lambs for railroad consumption? What statutory measures are required to ensure fair treatment of the water carrier by the rail carrier and the efficiency of the public waters as agencies of commerce?

"The history of transportation both in Europe and in this country tells us of the dangers of permitting the unrestricted use of waterways by railroad corporations. The past points a warning finger to the future. Railroads acquired water lines, not to put them to use for transportation purposes, but to put them out of use, and thus eliminate competition and establish monopoly. They laid hands on the choicest sites in harbors and along lakes and rivers for freight stations. They refused to issue through bills of lading when part of the route was over a water line. They cut rates on the boat lines which they controlled until their competitors sold out or were starved out. They declined to make joint rates and to prorate with water carriers. Physical connections between the railroad stations and docks where vessels received and discharged their cargoes were denied. Discriminations of various kinds, including rebating, were practiced. The result was a tremendous decline and, in come cases, extinction of water-borne commerce. The Board of United States Engineers for Rivers and Harbors, expressing their view as to the cause of the decline of water transportation, say:

" 'The prevalent cause leading to the decline of water transportation is without doubt the railroad. The railroad corporation of large resources and facilities for its business successfully competes with navigation companies or individual boats with limited resources and facilities; and, competing, naturally does not enter into such relations with its competitor as to increase the business of the latter, declining to prorate, or to recognize through bills of lading. Moreover, railroads have established rival boat or barge lines through which competition has been discouraged.'

"The New York Barge Canal Terminal Commission state in their report of 1911:

" 'The attitude toward the water carriers that has long obtained by the railroads has been one of pronounced hostility. Through transportation, that is to say, the carriage of freight originating outside of the State, has almost reached the vanishing point.'

"Mr. Allen stated at the 1909 Convention of the Rivers and Harbors Congress in referring to the Mississippi River:

" 'Again the railroads have paralleled the river, have reduced the rates of carriage until it is impossible for boats to make a reasonable interest on their investment, and when they have gone out of business their rates have been restored or increased and railroads thus have monopolized traffic.'

"At the same Convention, United States Senator Burton of Ohio said, referring to the advantages enjoyed by railroads:

" 'Then there is a second class of advantages that are arbitrary, due to their lowering of rates to drive waterways out of business. The best illustration with reference to that which I know, is a case where a barge line on the Mississippi was carrying freight at 25c. a hundred very profitably. The railways put down the rate to 10c. a hundred until the barge line was driven out of business; then the railroads put the rate to 50c. a hundred, where it has remained ever since. Now, that ought not to be allowed; legislation ought to prevent anything of that kind. ... Gentlemen, it is hardly reasonable to spend $3,000,000 on a waterway that will not be useful, except to make a million-dollar railroad behave itself. There ought to be, in the armory of the law, something more potent, more ready than [original text has "that".] that. ... What does the fact that railroads buy out competing water lines prove? It proves that they can afford to buy in order to get rid of a competitor. Why? Because that method of transportation is cheaper than their method of transportation.'

"At the Convention of the National Rivers and Harbors Congress in 1911, Mr. Wilkinson stated:

" 'On the introduction of the railways, Germany passed through an experience corresponding to ours. For a long period the waterways lost their importance as a factor in the development of the commerce of the country. The Germans thought, as we have thought, that when the railways came in they could afford to neglect their waterways. In the meantime the railways secured control of the canals, harbors, and waterfronts, and either closed up water-borne traffic or raised the tariff rates for water carriage to force transportation by rail until the cost of raw materials became so prohibitive that factories were forced to close down, throwing people out of employment, and great distress prevailed.'

"It is well known that in England, which in the earlier days was intersected by many canals, inland water transportation is in a backward condition, because the railroads acquired control of the waterways, and that acts of Parliament intended to change the situation, have had but little effect because they came too late.

"Commissioner Herbert Knox Smith says, regarding the attitude of the railroads towards water carriers:

" 'Probably the greatest single deterrent to water-terminal advance is the present adverse attitude of rail lines toward independent water traffic, in their exclusive control of frontage, in refusal or neglect to co-ordinate with general water traffic, and in refusal to prorate generally with water lines in through movement of traffic. Until this underlying relation of rail to water systems is adjusted on some common sense basis of harmony, there is little hope of great advance in water terminal conditions.'

"United States senator Bristow declared with reference to the Pacific Mail lines that they have been 'commercial pirates' run wholly in the interest of the transcontinental railroads for the purpose of using the Panama Canal in private commerce and to destroy any steamship lines that wished to establish legitimate competition with these railroads by the Isthmian route; that an absolute prohibition of the use of the canal to steamship lines, the stock of which or any part of which is owned or controlled directly or indirectly, by railroads doing a transcontinental business is necessary, and that if such a provision should not be incorporated in the bill, the canal would be of little benefit to the American people and American commerce.

"The Directors of the San Francisco Chamber of Commerce pithily said:

" 'A railroad cannot honestly compete with itself, whether by means of box cars or ships.'

"The testimony on the subject is abundant and comes from authentic sources both foreign and domestic. In this country, complaints of the practices of railroad corporations in their efforts to eliminate waterway competition, have been numerous and their extent continental. There can be no better guide to the future than the lessons taught by the past, particularly when the teaching is general and prolonged. Coincident, therefore, with the commencement of a new era of waterway development and with the expenditure of vast sums of public money for that purpose, men's minds have naturally turned to the discussion and formulation of policies that would result in securing an adequate return for the moneys thus expended, that would prevent a monopoly of transportation, that would insure the advantages of waterway competition in the movement of the products of the field, the forest, the mine and the factory and that would aid in the upbuilding of the industries of the nation.

"A review of the methods intended to accomplish these ends is pertinent.

"In his message to Congress in December, 1910, President Taft said, concerning the Panama Canal:

" 'I cannot close the reference to the canal without suggesting as a wise amendment to the Interstate Commerce Law, a provision prohibiting interstate commerce railroads from owning or controlling ships engaged in the trade through the Panama Canal. I believe such a provision may be needed to save to the people of the United States the conflicts of the competition in trade between the eastern and western seaboards which this canal was constructed to secure.'

"Commissioner Prouty of the Interstate Commerce Commission declares:

" 'If the waterways of this country are to be of substantial benefit in the way of reducing rates of transportation, it is absolutely essential that rail carriers be prohibited from owning or controlling, directly or indirectly, competing water carriers.'

"Dr. Crowel, Associate Editor of the Wall Street Journal, writes:

" 'Investors are not going to put capital into a waterway enterprise from which railway competition can drive the investor in the course of a few years. Hence, protection by law must be given against unfair competition.'

"The New York Barge Canal Terminal Commission state:

" 'Upon the Continent of Europe it should be said the railroads are either owned by the Governments outright, or they are in part so owned. The supervision of the railroads and the regulations imposed upon them by the general Government are designed to and have the effect of permitting the freest possible development of the waterways and this largely accounts for the splendid progress made in waterway and harbor improvements and in the growing commerce so notable everywhere.'

"The National Waterways Commission made an exhaustive investigation of questions relating to water transportation both in this country and in Europe, and in their report recently presented to Congress they say:

" 'The lack of adequate regulations [original text says "rgulations". makes it possible for the railways to effectually control or to crush out water competition through their ownership and control of boat lines. It is a well-known fact that the trunk-line railways, through their control over terminals at Buffalo and their ownership of steamship companies on the Great Lakes, have been able to dominate the lake and rail package freight business between New York and Chicago and also to a considerable extent the grain traffic. On the business thus controlled the water rates have risen, while on the coal, iron and grain traffic not controlled by the railways the water rates have steadily declined. In like manner the New York, New Haven & Hartford Railroad practically dominates water transportation on Long Island Sound by reason of its ownership of the New England Navigation Company. Independent companies have been unable to compete successfully, owing to the advantage which their railway-owned competitor enjoys. The steamship companies plying between the North Atlantic and Southern ports in the coastwise trade are likewise working in harmony with the connecting and competing railways by which they are owned or controlled, so that little, if any, active competition exists. Also on some rivers the railways have acquired control of the packet lines.

" 'While this rapidly increasing control of railways over water lines tends to bring about harmony and co-operation between them which is necessary for the development of transfer traffic, it also has possibilities of harmful results which require regulation. Where the railways grant prorating arrangements to boat lines which they own or control, while denying the same privilege to competing independent lines, the latter are practically precluded from securing any transfer traffic, while on the local or port-to-port business they must meet the competition of the railway-owned boat lines, which are at liberty on this business to cut rates to any extent they choose. Under such conditions it is very difficult for independent lines to succeed, and the cases are numerous where they have been forced to retire from the field. ...

" 'Sedulous care is taken by most European countries for the protection of inland water-borne traffic against railroad competition. In France this is accomplished by enforcing a differential of 20 per cent in favor of the waterways as against railways, with the evident intention of maintaining both methods of transportation. In a majority of the other countries in which water transportation has reached its highest development, the railroads wholly or partially belong to the State. This is true in Germany, Austria, Hungary, Holland and Belgium. The well-established policy in these countries is to secure co-operation between railways and waterways by official control of railway rates with a view to maintaining profitable traffic on the latter.'

"In an appendix to the report, I find:

" 'It may prove cheaper for a railway to control water carriers than to complete against them, especially when the natural advantages of the former are great. Thus it was the policy of railroads at one time to purchase outright or secure a controlling interest in competing canal companies. The common method in the United States now is for the railways to own or control boat lines. Where they also own the terminal facilities at a port it is a very easy matter to prevent serious competition from independents. The view was once held that the waterways were free highways on which competition would always exist, but what has transpired in the United States during the last decade indicates that even water transportation may be monopolized or so effectively controlled that it is hazardous for independent boat lines to enter the field.'

" 'The experience of all countries has been that as long as the railways were not subject to strict control, they have succeeded in crushing out or controlling water competition. The regulation of railway activities for the protection of water carriers has, accordingly, been found necessary in all countries before the normal development of water transportation could take place.'

"Guided by such experiences and recommendations, and to make certain that one of the great waterways of the world, connecting the two principal ocean highways, would be an efficient medium of commerce, free from the control of the other great force in the transportation world, Congress inserted the following provision in the Panama Canal Act, which was approved August 24, 1912, to wit:

" 'From and after the first day of July, nineteen hundred and fourteen, it shall be unlawful for any railroad company or other common carrier subject to the act to regulate commerce to own, lease, operate, control, or have any interest whatsoever (by stock ownership or otherwise, either directly, indirectly, through any holding company, or by stockholders or directors in common, or in any other manner) in any common carrier by water operated through the Panama Canal or elsewhere with which said railroad or other carrier aforesaid does or may compete for traffic; and in the case of the violation of this provision each day in which such violation continues shall be deemed a separate offense.'

"The act also confers upon the Interstate Commerce Commission jurisdiction to determine questions of fact as to the competition or possibility of competition, after full hearing, on the application of any railroad company or other carrier and that application may be filed for the purpose of determining whether any existing service is in violation of the section and for an order permitting the continuance of any vessels or barges already in operation. ...

"Of course this statute relates only to interstate commerce. It does not affect the commerce which originates and terminates within the State itself, and which in a State like New York is vast in extent. Many persons are not aware of the fact that the bulk of the tonnage carried upon the Erie and Champlain Canals is intrastate. There is also the commerce of very large proportions on the Hudson River between the numerous cities along its banks, between New York and Troy. The same is true in many other States. This makes it of the highest importance that State Legislatures shall promptly proceed to declare policies and enact legislation which shall be in substantial harmony with this act of Congress; otherwise an embarrassing divergency of policies and practices will ensue.

"The Transportation Corporations Law of this State provides for the formation of navigation corporations which may operate vessels upon the seas, sounds, lakes, rivers, canals or other waters. That law contains this provision:

" 'No railroad corporation shall have, own or hold any stock in any such corporation' -- meaning in any navigation corporation.

"Daniel O'Connell, the Irish lawyer and orator, boasted that he could drive a coach and four through an act of Parliament. Similarly, it will be readily seen that this statute can be made utterly ineffective. The railroad corporation need not hold the stock of the navigation company, in its own name, if it desired to control the latter. Many devices could be resorted to, in order to obtain such control. There is the familiar medium of the holding company. ... For the purpose therefore, of making the statute [original text says "statue"] effective and of keeping the waterways free from railroad control, I prepared an amendment to the existing law, and had the same introduced in the sessions of the Legislature in 1911 and 1912; but there was no hearing on the bill. ...

"Congress has proceeded step by step to regulate railroad traffic and extend the powers of the Interstate Commerce Commission. In 1906 authority was given to the Commission to establish through routes and joint rates as the maximum to be charged, and to prescribe the diversion of such rates and the terms and conditions under which through routes should be operated, and it was declared that 'this provision shall apply when one of the connecting carriers is a water-line.' In 1910, Congress undertook to check an abuse by providing that whenever a rail carrier shall, in competition with a water route, reduce the rates on carriage of freight to or from competitive points, it shall not be permitted to increase such rates, unless after a hearing by the Interstate Commerce Commission it should be found that the proposed increase arose upon changed conditions other than the elimination of water competition.

"It was seen, however, that the foregoing and like provisions would not, of themselves, sufficiently stimulate and protect water-borne traffic. Other things had to be enacted to bring about that co-ordination of water and rail lines which is essential to the development of cheap, rapid and adequate transportation. Congress undertook to provide for some of these in the Panama Canal Act as follows:

"When property may be or is transported from point to point in the United States by rail and water, through the Panama Canal or otherwise, (but not entirely within the limits of a single State) the Interstate Commerce Commission is given jurisdiction of such transportation and of the carriers, both by rail and water, (a) to establish physical connection between the lines of the rail carrier and the dock of the water carrier by directing the rail carrier to make suitable connection between the two or by directing both to co-operate in this respect, wherever such connection is reasonably practicable and the amount of business to be handled is sufficient to justify the outlay; (b) to establish through routes and maximum joint rates between and over such rail and water lines and to determine the terms and conditions under which such lines shall be operated in the handling of the traffic; (c) to establish maximum proportional rates by rail to and from the ports to which the traffic is brought or from which it is taken by the water carrier and to determine to what traffic and in connection with what vessels and upon what terms and conditions such rates shall apply.

"These are further distinct steps intended to encourage and protect transportation by water routes. Heretofore the relations, or rather the absence of relations and co-operation between the rail and water carriers have greatly tended to restrict the selection by the shipper of the route upon which he desired to send his goods and to force him to bill them by an all-rail route. They operated to retard the rapid movement of merchandise and generally to inconvenience merchants and manufacturers. The policy that prevailed was the reverse of that which was in force as to railroad lines.

"Under State law, railroad corporations are required to make physical connections with the railroads of other corporations and to afford competing roads equal terms of accommodation and privileges in the transportation of cars, passengers, baggage and freight, and equal facilities in the interchange and use of cars; and the Public Service Commission has power to establish through routes and joint rates for the transportation of property upon railroads and to declare the portion of such rates to which the same shall be paid and secured. All this is demanded in the public interest. The law should require as much as this from the railroads, which derive their charter from the sovereign power, in favor of the waterways built and maintained by public moneys, and of the shippers who desire to make use of these waterways.

"Provisions of the kind noted, as well as one requiring the issuing of through bills of lading of merchandise shipped over both rail and water lines, should be placed in the Public Service Commission Law of this State. At the present time the Public Service Commissions have no jurisdiction or supervision over common carriers by water. This was decided by the Commission of the Second District in the case of Murray's Line against the Delaware & Hudson Company. It was also decided in that case, that the fact that a railroad company charged a shipper partly by water and partly by rail, more for transporting property between two points on the railroad than it charged for the same service when the property transported was received from a connecting railroad and carried under a joint tariff arranged by the two railroad companies, did not establish a charge of undue preference or discrimination under the law of the State. Of course the inevitable effect of such a ruling and such a condition of law is to deprive waterways of their natural advantages and to discourage transportation by such routes.

"The argument is advanced that the railroads should be allowed the same use of the waterways as other corporations or as individuals, and that if abuses should develop by reason of such use, correction could be made by State or national commissions having authority in the premises. It is an old saying that 'an ounce of prevention is better than a pound of cure.' A statute which prevents an objectionable condition from arising, is much better than a state of law under which the condition may arise and then undertakes to provide a remedy for correcting the abuses which have grown up. Haling railroad corporations before Public Service Commissions is a lawsuit; it is a slow and expensive process. Many individuals would rather suffer wrongs than enter upon litigation. The true remedy, therefore, is not regulation but is exclusion. ...

"We know the things that have militated against transportation by waterways; it is time to move in the direction of preventing their continuance. Congress has set the pace; the State of New York should take it up. No commonwealth is more deeply concerned than the Empire State. The State has a right to limit the powers and activities of the corporations which derive their very life from the laws of the State and to regulate their relations with other corporations and with individuals carrying on business that is affected with a public interest. ...

"Every consideration demands that one agency alone shall not be allowed to have anything approaching a monopoly of the transportation of persons and property. The merchant and manufacturer who choose to ship partly by rail and partly by water should be given the same advantages that are accorded to them when they ship their goods by connecting lines of railway. There is a splendid future before the State of New York in commercial and industrial activities, if we solve our transportation problems upon right lines. Bitter will be the disappointment of the people in waterways as economic factors, unless legislation is enacted that will keep off the over-shadowing hand of the railroad and permit of the freest development of these highways."

The action of the State Waterways Association at its convention in 1912 was to appoint a committee on legislation and direct it to prepare suitable bills and endeavor to have them enacted into law. This committee consisted of Mr. Roche, chairman, George Clinton and Henry W. Hill of Buffalo, Lewis Nixon and Frank S. Gardner of New York and John D. Kernan of Utica.

The committee drafted two bills and had them introduced in the Legislature. The purpose of one was to make effective the Transportation Corporations Law, which, although it prohibited railroad corporations from owning stock in any navigation company, was openly or covertly violated. This bill was taken almost word for word from the Panama Canal Act. The other bill brought navigation companies and water lines under the jurisdiction of the Public Service Commission. Under the existing law they were not so included.

No hearing was given on the Senate bills and it seemed impossible for the Waterways committee to secure one. A hearing was held by the Assembly Judiciary Committee, at which the bills were opposed by attorneys for two large railroad systems. Both measures seem to have died in the reference committees. That influences powerful enough to kill them were set in motion is the belief of their sponsors. This was not an opportune session, however, for any unusual legislation. It was at this time that Governor Sulzer and the Legislature were embroiled in what proved to be mortal political combat.

During each legislative session thereafter similar bills were introduced and strenuous attempts were made by the Waterways committee to have them passed. In 1917 they achieved their end. Chapter 805 of the laws of that year was entitled "An act to amend the Public Service Commission Law in relation to common carriers by water." An analysis of this act shows that it contains ten main items. Divested of some of their legal verbiage the new provisions of the law are as follows:

After adding carriers by water to the list of common carriers subject to the supervision of the Public Service Commission, the act makes it unlawful for any common carrier to charge any greater compensation in the aggregate for transportation for a shorter than for a longer distance over the same route in the same direction, the shorter being included within the longer distance, or to charge any greater compensation as a through rate than the aggregate of the intermediate rates.

Whenever a rail carrier in competition with a water route reduces rates to competitive points, the rail carrier is not permitted to increase these rates until it has proved to the Public Service Commission that the proposed increase rests on changed conditions other than the elimination of water competition.

In all instances where competing lines of railroads or carriers by water constitute portions of a through route, the shipper shall have the right to determine over which of the competing lines his freight shall be transported. The law gives the shipper the privilege of designating over which of two or more competing routes, either rail or water, his goods shall go and makes it the duty of the initial carrier to route the shipment and issue a through bill of lading as directed by the shipper and also to transport the goods over its own line and deliver them to the connecting carrier in accordance with these instructions. It makes it incumbent also on each carrier to turn to transport and deliver the shipment as directed in the bill of lading.

The Public Service Commission has power to order carriers by rail and carriers by water to establish through routes and joint rates, and in case the companies fail to do this the Commission is to establish reasonable rates and fix the portion each carrier is to receive.

The Commission has power to establish physical connection between the lines of the rail carrier and the dock of the water carrier by directing the rail carrier to make connection with a track built from the dock, or by directing either or both carriers to make suitable connection, provided this connection is reasonably practicable and justified by the amount of business. The Commission has full authority also to determine the terms and conditions upon which these connecting tracks shall be operated and what sum shall be paid to or by either carrier, even in cases where the dock is owned by others than the carrier. The law specifically provides for rail connections at Barge canal terminals, giving the Commission authority to compel rail carriers to make connection between their tracks and these terminals, at the joint expense of the State and the rail carrier. The operation of such connections is to be in accordance with regulations prescribed by the Commission.

The Commission is empowered to establish through routes and order maximum joint rates between rail and water lines and to determine all the terms and conditions under which such a line shall be operated.

The Commission has authority also to establish maximum proportional rates by rail to and from places to which traffic is brought or from which it is taken by the water carrier and to determine to what traffic and upon what terms such rates shall apply.

If any rail carrier enters into arrangements with any water carrier for the handling of business, the Commission may require such carrier to enter into similar arrangements with any or all other common carriers by water.

No common carrier by rail shall own or have any interest whatsoever, either directly or indirectly, in any manner, in any common carrier by water with which it does or may compete for traffic, or in boats carrying freight upon any water route with which the rail carrier competes. The Commission is given jurisdiction to determine questions of fact as to competition or the possibility of competition, after a full hearing. For determining these questions proceedings may be instituted, either upon application of a carrier or at the volition of the Commission. The status of existing service in regard to this provision may be inquired into and application for new service not in conflict with the provision may be filed.

The requirements of the General Public Service Commissions Law in regard to the filing, the publication and the changes of rates and charges by common carriers are extended to include rail and water carriers on a through route which is partly by rail and partly by water. This provision, however, does not apply to shipments which are wholly by water and are independent of any railroad service.

Such in general are the provisions of the amendment. It applies of course only to intrastate traffic; the Interstate Commerce Commission has jurisdiction over traffic passing from one state into another. It will be noticed that a section prohibiting ownership or control of boats by railroad companies is contained in this law. This section accomplishes what was proposed in 1913 in the attempt to change the Transportation Corporations Law.

In the working out of a portion of this law some difficulty has been encountered. At most places where the railroad companies have been asked to make connections with canal terminals and interchange freight the request has met with compliance, but at Erie basin, Buffalo, the New York Central railroad company, with whose tracks the terminal is connected, refused to perform a switching service between the terminal and industries located on its tracks in Buffalo or with industries situated on the tracks of other railroad lines in Buffalo with which the New York Central connects. The Superintendent of Public Works, therefore, filed a complaint against the railroad with the Public Service Commission, alleging a violation of the law and asking for an order from the Commission to compel the company to perform the service demanded. The Commission decided in favor of the State, but the railroad disputed the authority of the Commission and in effect refused to comply with its order. The matter was taken to court and the decision rendered was that the Public Service Commission was without power to act. The case has been appealed.

Interchange facilities between railroads and the Barge canal now exist at Buffalo, Rochester, Syracuse, Utica, Schenectady, Troy, Albany and Oswego; also on the Hudson river at Hudson and Beacon.

It is possible now by a combination of Barge canal and lake lines to get through rates, through bills of lading and like privileges for inland ports, but any appreciable degree of coöperation between the canal and the railroads is still lacking. Although the machinery of the law has been provided for securing this coöperation, it has not yet been set in motion. The reason is that canal operators think it much better, even if slower, to secure this end by amicable ends than by force. Moreover the operators are not in a position to make any demands for interchange with railroads. Their shipping is so meager that all available boats are required to carry between the Great Lakes and the Atlantic seaboard the bulk cargoes that pass over the Lakes in steamers or barges. There is another strong reason for not invoking the law, particularly the Federal law. Questions concerning interstate traffic come before the Interstate Commerce Commission and any appeal to this body is considered most inadvisable. In the first place it would be the opening wedge toward giving the commission jurisdiction over Barge canal carriers and thus restoring such conditions as prevailed during the United States control of the canal. No well-wisher of the waterway desires a repetition of that experience. Also it is believed that the commission is unfriendly toward canals, the majority of its members being men with railway proclivities. What the operators plan to do is to demonstrate to both the shippers and the railways what service by canal is just as reliable as is that by rail. They have established minimum canal rates; they give through bills of lading, grant insurance on all water-borne freight and extend other facilities which greatly improve the service they now offer. They expect that when the service is perfected and the fact becomes widely known public opinion will demand and secure a coördination of rail and water carriers.