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 A RIGHT OF THE STATES 
 
 AN ADDRESS 
 
 DKXiZVKKKD BY 
 
 AliFRED P. THOM 
 
 OF Waskington, D. C. 
 
 BKFOKK TUB 
 
 STATE BAR ASSOCIATION OF TENNESSEE 
 
 JUNE 25. 1915 
 
 CHATTANOOGA
 
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 A RIGHT OF THE STATES 
 
 AN ADDRESS 
 
 DELIVERED BY 
 
 ALFRED p. THOM 
 
 OF Washington, D. C. 
 
 BEFORE THE 
 
 STATE BAR ASSOCIATION OF TENNESSEE 
 ON June 25, 1915, at Chattanooga 
 
 Mr. President and- Gentlemen of the Tennessee Ba/r Asso- 
 ciation: 
 
 One hundred and twenty-six years ago the United States 
 became a nation. On the 4th of March, 1789, they joined 
 in putting into effect the Constitution which formed them 
 into "a, more perfect union" and organized them to take their 
 place as a unit among the nations of the earth. 
 
 Only recently they had been separate and distinct colonies 
 of Great Britain, legally foreign to each other, and were 
 bound together by no ties except a sense, common to them 
 all, of oppression and discontent and a common aspiration 
 and purpose of liberty. They combined to declare and to 
 fight for their independence, and to assert that, as free and 
 individual States, they had "full power to levy war, conclude 
 peace, contract alliances, establish commerce, and to do all 
 other acts and things which independent States may of right 
 do." 
 
 le
 
 During the succeeding epoch-making struggle, which 
 marked the birth of a new nation, they souglit to bind them- 
 selves together by something more enduring than the sym- 
 pathies and exigencies of the existing war, and, to this end, 
 adopted as their bond, of union the Articles of Confederation. 
 Jealous, however, of their separate and distinct autonomies, 
 they were miserly in tlieir grant of power to the central au- 
 thority which they created. Wanting it to be efficient, but 
 determined that it should possess none of their cherished 
 sovereignty, they withheld from it the power to provide, 
 through its own agencies, a national revenue. It could not 
 levy taxes, but was made dependent upon the States for their 
 respective contributions. It, therefore, could not build or 
 equip a navy, nor raise or arm or pay an army. Thus it 
 had no effective power to provide for the common defense, 
 to protect any national right, or to command the respect or 
 the fair treatment of foreign nations. Likewise, it had no 
 power to control or regulate trade, either foreign or domestic. 
 That power was carefully reserved by the States to themselves 
 individually. 
 
 The Articles of Confederation were, therefore, soon found 
 to be utterly inadequate to a national existence. It is true 
 that they remained untouched during the continuance of the 
 war. This, however, was not because they were satisfactory, 
 but because every public energy, to the exclusion of all ques- 
 tions of domestic organization, was devoted to the achieve- 
 ment of independence. 
 
 A government without a purse, and hence without power 
 to provide for the common defense, or to insure domestic 
 tranquillity, was a mere "rope of sand" and could not long 
 endure. From the standpoint of mere national existence, it 
 was found utterly inadequate.
 
 But there was another cause for dissatisfaction, which, in 
 the condition of the public mind, temporarily freed from 
 the fear of foreign invasion and insistently turning to the 
 necessity of rebuilding domestic prosperity after the waste of 
 war, was hardly of less importance than a provision for the 
 common defense and for the preservation of the national ex- 
 istence. The needs of trade were becoming more and more 
 apparent and its just regulation the subject of greater and 
 more universal public concern. 
 
 In considering the causes which brought our Federal Con- 
 stitution into existence, it is of peculiar interest at this time 
 to study the influence which the desire for a uniform regula- 
 tion of commerce had upon its adoption and upon its char- 
 acter. 
 
 When the war ended and independence was an accom- 
 plished fact, each State possessed a sovereignty which was 
 practically unlimited over its foreign commerce and over its 
 commerce with the other States. Between many of them 
 there was a race of greed and selfishness for commercial ad- 
 vantage and supremacy. 
 
 It will be noted that each State possessed the power of im- 
 posing export taxes and could thus keep its products at home, 
 excluding them from the use and enjoyment of the people of 
 the other States; that each State possessed the power of im- 
 posing import duties and thus could exclude people of the 
 other States from its markets; and that each State retained 
 complete control over its own ports, and thus, by its com- 
 mercial policy, could, through the competition of ports, regu- 
 late or break down the commercial policy of another State 
 in regard to its own ports and in regard to its own com- 
 merce.
 
 These powers were large enough, not only to create State 
 rivalries and State enmities, but to elevate the States of great- 
 est commercial power into complete commercial, and finally 
 into complete political, ascendancy over their weaker sister 
 States. 
 
 Nor were these powers merely theoretical. They were 
 brought into active and oppressive operation. They were 
 made the means of commercial war by one State upon 
 another. 
 
 For example: 
 
 Virginia, by her export duties and inspection laws, with 
 the incidental tax, sought to keep her tobacco at home. 
 
 Maryland, by her inspection laws and taxes, sought to do 
 the same with regard to her potash and pearlash. 
 
 Massachusetts prohibited the exportation of grain or un- 
 manufactured calfskins and imposed an onerous inspection 
 tax on exports to other States of tobacco, butter, and other 
 products, while North Carolina laid, for a limited time, an 
 embargo on the exportation to other States of com, wheat 
 flour, beef, bacon, and other necessaries of life. 
 
 Turning to imports: 
 
 New York, by imposing an import duty, sought to exclude 
 from its markets the butter, milk, and other dairy products 
 of New Jersey and the firewood of Connecticut. 
 
 Rhode Island imposed an ad valorem tax of five per cent 
 on all articles imported into that State from the other States 
 as well as from foreign countries, with a proviso for recip- 
 rocal relief. And so with other States. 
 
 In regard to the commercial rivalry and war of ports, it 
 was customary for States having available ports to impose 
 an unlimited tax on all goods reaching this continent
 
 through their ports, and thus subjecting, for the benefit of 
 themselves, the people of the other States to a substantial 
 burden of taxation. 
 
 For example, the ports of Boston and New York were at 
 one time far behind Newport in the value of their imports, 
 and Rhode Island, according to the Supreme Court of the 
 United States, paid all the expenses of her government by 
 duties on goods landed at her principal ports. 
 
 The condition at that time of commercial selfishness and 
 greed between the States is thus described by Fiske in his 
 work on the "Critical Period of American History, 1783- 
 1789," at page 144: 
 
 "Meanwhile, the different States, with their differ- 
 ent tariff and tonnage acts, began to make commer- 
 cial war upon one another. No sooner had the other 
 three New England States virtually closed their ports 
 to British shipping, than Connecticut threw hers wide 
 open, an act which she followed by laying duties upon 
 imports from Massachusetts. 
 
 "Pennsylvania discriminated against Delaware; 
 and New Jersey, pillaged at once by both her greater 
 neighbors, was compared to a cask tapped at both 
 ends. The conduct of New York became especially 
 selfish and blameworthy. That rapid growth which 
 was soon to carry the city and State to a position of 
 primacy in the Union had already begun. After the 
 departure of the British the revival of business went 
 on with leaps and bounds. The feeling of local 
 patriotism waxed strong, and in no one was it more 
 completely manifested than in George Clinton, the 
 Revolutionary general, whom the people elected Gov- 
 ernor for nine successive terms. * * * j^ ^gg \^[^ 
 first article of faith that New York must be the great- 
 est State in the Union. But his conceptions of states-
 
 manship were extremely narrow. In his mind, the 
 welfare of New York meant the pulling down and 
 thrusting aside of all her neighbors and rivals. 
 * * * Under his guidance, the history of New 
 York, during the five years following the peace of 
 1783, was a shameful story of greedy monopoly and 
 sectional hate. Of all the thirteen States none be- 
 haved worse except Rhode Island. 
 
 "A single instance, which occurred early in 1787, 
 may serve as an illustration. The city of New York,, 
 with its population of thirty thousand souls, had long 
 been supplied with firewood from Connecticut, and 
 with butter and cheese, chickens and garden vegeta- 
 bles, from the thrifty farms of New Jersey. This 
 trade, it was observed, carried thousands of dollars out 
 of the city and into the pockets of detested Yankees 
 and despised Jersey men. It was ruinous to domestic 
 industry, said the men of New York. It must be 
 stopped by those effective remedies of the Sangrado 
 school of economic doctors, a navigation act and a 
 protective tariff. 
 
 "Acts were accordingly passed obliging every 
 Yankee sloop which came down through Hell Gate, 
 and every Jersey market boat which was rowed across 
 from Paulus Hook to Cortlandt street, to pay entrance 
 fees and obtain clearances at the custom-house, just as 
 was done by ships from London or Hamburg ; and not 
 a cart-load of Connecticut firewood could be delivered 
 at the back-door of a country-house in Beekman street 
 until it should have paid a heavy duty. Great and 
 just was the wrath of the farmers and lumbermen. 
 The New Jersey legislature made up its mind to re- 
 taliate. ♦ * * Connecticut was equally prompt. 
 At a great meeting of business men, held at New Lon- 
 don, it was unanimously agreed to suspend all com- 
 mercial intercourse with New York. Every mer-
 
 chant signed an agreement, under penalty of two 
 hundred and fifty dollars for the first offense, not to 
 send any goods whatever into the hated State for a 
 period of twelve months. By such retaliatory meas- 
 ures, it was hoped that New York might be compelled 
 to rescind her odious enactment. But such meetings 
 and such resolves bore an ominous likeness to the 
 meetings and resolves which in the years before 1775 
 had heralded a state of war; and but for the good 
 work done by the Federal convention another five 
 years would scarcely have elapsed before shots would 
 have been fired and seeds of perennial hatred sown 
 on the shores that looked toward Manhattan Island." 
 
 But these discriminations and exactions of one State as 
 against the trade of another, this fierce commercial rivalry, 
 this internecine warfare which threatened the commercial 
 destruction of some States and the undue elevation, pros- 
 perity and dominance of others, were not the only reasons for 
 the insistent demand, which preceded and finally controlled 
 the Constitutional Convention of 1787, in regard to the estab- 
 lishment of a system of just and equitable regulation of com- 
 merce between the States by an authority fairly representing 
 them all. 
 
 The question of commercial regulation, in addition to its 
 commercial relation to the trade between the existing States, 
 possessed also a most important and commanding political 
 aspect. The development of the great West was then going 
 on and had been stimulated by the emigration thither from 
 the older States incident to the readjustments after the war, 
 and the settlement of the whole western region was proceed- 
 ing with great rapidity. The West was spoken of by George 
 Washington as a "rising world," and signified particularly,
 
 8 
 
 in the minds of the statesmen of that day, the territory now 
 constituting the States of Tennessee and Kentucky and the 
 States afterwards carved out of the territory northwest of the 
 Ohio and east of the Mississippi rivers. The question of the 
 future poHtical aifiUations of this large and important terri- 
 tory was a question of prime and of vast importance to the 
 then existing States. Great Britain was on the northern 
 boundary with its Dominion of Canada, and Spain on the 
 south commanded the mouth, and hence commanded the 
 navigation, of the Mississippi River. The course of trade is 
 determined by the inducements that are offered and the 
 facilities it can command. And political relationships are 
 strongly influenced by commercial ties and interests. It was 
 therefore one of the most important problems of that day to 
 bind this great and developing western country to the east- 
 em States by the ties of intimate commercial intercourse. 
 This could not be done if the eastern States could enrich 
 themselves by imposts upon the commerce paid for by the 
 people of the West or by excluding the competitive products 
 of the West from the eastern markets. 
 
 Great Britain or Spain, close neighbors on the north and 
 south, could easily outbid such a policy of narrowness and 
 greed as the people of the West saw already in operation in 
 many of the most important eastern States, and it was appar- 
 ent that, whether or not such a policy should be adopted, 
 could not be safely left to the individual States. 
 
 George Washington, in speaking of the future political 
 affiliations of these pioneer western people, said : 
 
 "If we cannot bind these people to us by interest, 
 and it is not otherwise to be effected but by a commer- 
 cial knot, we shall be no more to them after a while 
 than Great Britain or Spain, and they may be as
 
 closely linked with one of those powers as we wish 
 them to be with us, and, in that event, they may be 
 a severe thorn in our side." 
 
 It thus became politically, as well as economically, neces- 
 sary to find a way of fairly regulating commerce in the inter- 
 est of all, free from the narrowness, the greed and the selfish- 
 ness of particular States. 
 
 The only way of remedying these commercial evils, which 
 were flagrant and were universally recognized, and of meet- 
 ing the political exigencies of the situation, was, according to 
 the practically universal belief of the day, to exclude the 
 States from the power to regulate commerce among the States 
 and with foreign nations, and to confer that power upon a 
 central authority which should fairly and equitably represent 
 them all. 
 
 The public consciousness on this subject was, prior to the 
 convention, indicated in a great variety of ways and from a 
 great variety of sources. 
 
 Alexander Hamilton declared for a central government 
 with "complete sovereignty over all that relates to war, 
 peace, trade, and finance." 
 
 James Monroe, as chairman of a committee of Congress, 
 in 1785 submitted a report declaring that: 
 
 "The United States in Congress assembled shall 
 have the sole and exclusive right and power of deter- 
 mining on peace and war, except in the cases men- 
 tioned in the sixth article, * * * and of regulat- 
 ing the trade of the States, as well with foreign 
 nations as with each other." * * * 
 
 James Madison moved in the General Assembly of Vir- 
 ginia a resolution for a convention of delegates of all the 
 2e
 
 10 
 
 States "to take into consideration the trade of the United 
 States; to examine the relative situation and trade of the said 
 States; to consider how far a uniform system in theircommer- 
 cial regulations be necessary to their common interest and 
 permanent harmony," etc. 
 
 There were similar expressions of view in the legislatures 
 of Rhode Island, of Connecticut, of New Jersey, in resolutions 
 of town meetings and in reports of committees of Congress. 
 
 The Madison resolution resulted in the assembling of the 
 Annapolis Convention in 1786 and in a recommendation, 
 by the delegates there assembled to consider the regulation of 
 commerce, that Congress should call a general convention of 
 all the States to meet in Philadelphia on the second Monday 
 in May, 1787, "to devise such further provisions as shall ap- 
 pear to be necessary to render the Constitution of the Federal 
 Government adequate to the exigencies of the Union." 
 
 This was the convention which framed the Constitution, 
 and the declaration of the Supreme Court of the United 
 States in the case of Cook vs. Pennsylvania, 97 United States, 
 574, is amply justified, to the effect that: 
 
 "A careful reader of the history of the times which 
 immediately preceded the assembling of the conven- 
 tion which framed the American Constitution cannot 
 fail to discover that the need of some equitable and 
 just regulation of commerce was among the most in- 
 fluential causes which led to its meeting." 
 
 The result of its deliberations on the four large subjects 
 of national concern enumerated by Alexander Hamilton — 
 which are the four fundamental essentials of national exist- 
 ence and efficiency — and as to which Hamilton declared that 
 the Federal Government should possess complete sovereignty,
 
 11 
 
 namely, the purse, war, peace, and commerce, is exhibited in 
 the following clauses of the Constitution : 
 
 "The Congress shall have power: 
 
 "To lay and collect taxes, duties, imposts and ex- 
 cises, to pay debts and provide for the common de- 
 fense and general welfare. * * * 
 
 "To borrow money on the credit of the United 
 States. 
 
 "To regulate commerce with foreign nations and 
 among the several States, and with the Indian tribes. 
 
 "To declare war. * * * 
 
 "To raise and support armies. 
 
 "To provide and maintain a navy." 
 
 The fullness, the competency and the completeness of no 
 one of these powers has ever been questioned, except of the 
 power to regulate commerce. 
 
 It is universally recognized that it is a right of each State 
 that the Federal Government shall provide for the common 
 defense; that the Federal Government shall determine as 
 between peace and war ; that it shall raise and support armies 
 and shall equip and maintain a navy. 
 
 But there are other rights of the States not less important 
 and not less sacred. These include the right to avail them- 
 selves, separately and individually, of the protection guar- 
 anteed to them and to their people by the Federal Constitu- 
 tion against the selfishness in trade of their sister States. 
 
 In adopting the Commerce Clause of the Constitution they 
 intended to secure protection against this very thing. In the 
 light of the history of its adoption, is it not, since the Con- 
 stitution, a right of New Jersey that New York shall not 
 regulate the trade between them as it did when it excluded 
 the products of New Jersey industry from the New York
 
 12 
 
 markets ; is it not a right of the State of Connecticut, since the 
 Constitution, that its products shall not be excluded from the 
 markets of New York and Boston by State action, and is it 
 not since the Constitution, a right of each of the States that 
 Virginia and North Carolina and Tennessee and the great 
 food-producing States of the West shall not be able, as Vir- 
 ginia and North Carolina once did, to put an embargo upon 
 the shipments of their products beyond their respective 
 borders, and shall not be able to exclude the people of the 
 other States from the riches of their farms, of their forests, 
 of their mines, and of their factories? Is it not a right of 
 each State that Congress alone, which represents all, shall be 
 the exclusive arbiter of what is right and just in interstate 
 and foreign trade, and that no State shall be permitted to ad- 
 vance itself at the expense, and to the disadvantage of the 
 others, perchance by its narrowness, its greed, and its selfish- 
 ness in trade? 
 
 The existence of this exclusive power in Congress to regTi- 
 late interstate and foreign commerce is of no less impor- 
 tance — is in fact of far larger importance — as a State's right 
 now, than it was when the Constitution was adopted. 
 
 Commerce itself in these one hundred and twenty-six years 
 has assumed a far greater consequence in the affairs and des- 
 tinies of men and of nations, than it had in those early days. 
 Steam and electricity have come with their mighty revolu- 
 tionizing influence and have brought all the States and all 
 the nations into close and intimate commercial relationships. 
 Men no longer deal in trade most largely with their imme- 
 diate neighbors, but find it essential to their success to have 
 free and unimpeded and adequate access to the markets of 
 the world.
 
 13 
 
 The interests of the producing States — particularly the 
 States of the South and West where there are no markets of 
 the first importance — imperatively require easy and quick 
 transportation to the world's great market cities, such as New 
 York, Philadelphia, Boston, and Chicago in this country, 
 and. Liverpool, London, Paris, and Berlin abroad. 
 
 It may be safely stated that at least eighty-five per cent of 
 the trade of Tennessee, and of the United States generally, 
 moves in interstate and foreign commerce. It traverses vast 
 distances ; it must pay low mileage rates to reach and to com- 
 pete in these distant markets ; it cannot, because of the value 
 of time and the small margins of profit, permit frequent 
 handlings or breakings of bulk. 
 
 To meet these economic conditions — to satisfy the essential 
 needs and to accommodate the movement of this great 
 traffic — it has become necessary to create long and con- 
 tinuous lines of railroad in the place of the short and discon- 
 nected lines which were once adequate to the requirements of 
 trade. These large systems of railroad, which have come 
 in obedience to the economic law which demands continu- 
 ous, rapid, and unbroken transportation, necessarily extend 
 across, and are, under existing law, in many respects subject 
 to the varying policies of many States. 
 
 The problem of greatest magnitude which concerns the 
 country in regard to them, is how their continuity of service 
 shall be preserved unimpeded and what shall be the quality 
 of adequacy and efficiency which their transportation facili- 
 ties shall possess. 
 
 It must be remembered that the transportation capacity of 
 the carriers marks the maximum limit of the trade, and 
 hence of the producing capacity, of the people whom they
 
 14 
 
 serve. No more will be — no more can be — produced than 
 can be carried to market. Therefore, each State, being de- 
 pendent for its prosperity upon the producing capacity of its 
 people, is deeply concerned that the transportation capacity 
 of the carriers which serve it shall be adequate and shall not 
 be crippled or impaired. 
 
 A broad and wise policy in dealing with the instrumen- 
 talities of commerce is, therefore, a matter of supreme interest 
 to all the States, A narrow, or niggardly, or selfish policy, 
 if adopted by any one of the States through which a railroad 
 passes, may seriously cripple and depress the commerce of 
 every other State which the railroad serves. 
 
 No adequate conception of the railroad problem, as it 
 affects the development of the country and the growth of its 
 commerce, can ignore the necessity that transportation facili- 
 ties must be all the time growing and improving to keep pace 
 with the growth and expansion of commerce — otherwise 
 there will be no growth or expansion of commerce. 
 
 Such an increase in railroad facilities involves the constant 
 input of new capital, for no railroad is ever finished except 
 in a dead country. It is a mere platitude to say that new 
 capital can only be attracted by credit. While no one State 
 through which a railroad passes can alone establish its credit, 
 a single State can impair or destroy it. 
 
 If a railroad runs through and serves eleven States, ten of 
 them may be guided by broad and liberal views and may he 
 controlled by the policy of encouraging the establishment 
 and maintenance of adequate transportation facilities. The 
 eleventh may, however, have no adequate commercial out- 
 look or may be temporarily under the domination of small 
 and time-serving politicians. It may reduce rates on State
 
 15 
 
 traffic so as to barely escape the line of confiscation. It may 
 be unwilling that its State traffic shall contribute anything to 
 the liberal program, favored by the other ten, which would 
 build for the future and insure the present and continuing 
 adequacy of the transportation facilities on which all are 
 equally dependent. 
 
 In such a case, what shall be done? Shall the ten States 
 bow to the will or caprice of the one and allow it to control? 
 Shall they permit the narrow views of the one State to limit 
 the standard or the character or the quality of facilities 
 which their people shall enjoy? 
 
 If, on the other hand, the standard of facilities is not 
 brought down to this low level and is to be made adequate 
 to the needs of all, then the commerce of the other ten 
 States, or interstate commerce, or both, must bear the burden, 
 which the dissenting State has refused to share, of building 
 up adequate transportation facilities. 
 
 In either case, the dissenting State, in a very effective way, 
 regulates the commerce and the business opportunities of all. 
 It either determines the standard of the commercial facilities, 
 and therefore the commercial opportunities of the other 
 States, or it throws on them an unfair and undue proportion 
 of the burden of sustaining them at a level of higher effi- 
 ciency. 
 
 Moreover, in the Shreveport case, recently decided by the 
 Supreme Court of the United States, and in another State 
 which I shall not more particularly identify, State rates 
 have been greatly reduced for the avowed purpose of pre- 
 serving State markets for State trade, and thus excluding and 
 discriminating against the trade of other States. 
 
 Is it not a right of each of these States, thus oppressed by
 
 16 
 
 the narrow and selfish policy of one, to have its commerce 
 freed from these State restrictions and regulated by Congress, 
 representing all the States, in accordance with the compact of 
 the Constitution? 
 
 I have refen-ed to the great importance to the welfare of all 
 the States of transportation facilities — to the complete de- 
 pendence of the States upon their adequacy, their efficiency 
 and their readiness for service. I have called attention to 
 the credit of the carriers — their capacity to obtain new 
 money — as bearing an important, and in fact controlling, 
 relationship to the problem of transportation. 
 
 In this connection, and as exerting an important influence 
 on the financial capacity of the carriers, it is appropriate to 
 consider their capacity to issue and to dispose of their secu- 
 rities. 
 
 It is manifest that, if such issue is to be regulated by the 
 individual States, every State is at the mercy of the others. 
 A bond, to bp available in the market, must, as a rule — espe- 
 cially now when most bonds are necessarily junior liens — be 
 secured upon the whole railroad line; and this crosses many 
 States. One of the States, therefore, if it possesses the power 
 to regulate the issue of securities of an interstate carrier, may 
 disappoint and defeat a financial plan approved by all the 
 other States and necessary to the carrier's transportation eflB- 
 ciency. 
 
 Even if the State does not press its authority to the extent 
 of absolutely declining to sanction the issue, it may selfishly, 
 and as a political exp()dient, attach a condition that a desig- 
 nated portion of the proceeds shall be spent within its borders 
 where it may not in fact be needed, when the needs of inter- 
 state commerce and the commerce of other States fairly re- 
 quire that the whole shall be expended elsewhere.
 
 17 
 
 The power of the State to consent, or to withhold its con- 
 sent, is equivalent to a power to control the character and the 
 location of additional transportation facilities against the 
 views and the interests of all the other States. 
 
 But even if the necessity for the new capital is universally 
 recognized, and the approval of the States is not ultimately 
 withheld, the time necessary to permit the investigation and 
 to secure the approval of so many would, or might, constitute 
 a fatal obstacle in the way of a successful financial operation. 
 Promptness — ability to avail without unreasonable delay of a 
 favorable market — is essential to success in placing large 
 financial offerings. 
 
 Conceive the not impossible case suggested by a recent 
 dramatic event in the history of the world. 
 
 A railroad company has been maturing for some time past 
 a large financial plan with the purpose of taking advantage 
 of a general market such as we all know recurs at periods 
 some times widely separated. A great steamer, say the 
 Lusitania, sails at a moment of international tension. Those 
 in charge of the financial policy of the railroad are justified 
 in believing that something may happen to that steamer 
 which will affect international relations and destroy for 
 many months, and perhaps for years, a market for securi- 
 ties. So far as their own business preparation is concerned, 
 they are ready to bring out the carefully matured plan and 
 place their securities. It becomes then a question of days be- 
 fore the possibility of disaster to that steamer may be realized. 
 Meanwhile some State commission, for some such reason as 
 has been suggested, is delaying the approval of the issue. 
 It does delay until the disaster happens and so defeats the 
 financial plan, with the result that there is at least an indefi- 
 3e
 
 18 
 
 nite postponement of additional railroad facilities essential to 
 the best interest of the commerce of the country. 
 
 Of course, the chances for such delay are increased just in 
 proportion to the number of States which must be consulted 
 in the matter of regulation. 
 
 From whatever standpoint, therefore, it be considered, 
 the destructive effect of a power in the several States to de- 
 termine and limit the financial capacity of the carriers, 
 through a regulation of the issue of their securities, is appar- 
 ent. It is manifest that the financial capacity of a carrier 
 which serves many States is a matter of transcendent impor- 
 tance to them all. No one of them should be allowed to con- 
 trol or to injuriously affect it. It is a right of each of the 
 States that a matter so important, and in which all of them 
 have so vital an interest, shall not be controlled by one which 
 may have a selfish interest or an illiberal policy. 
 
 It is a right of the States, in respect of this matter oi com- 
 mon and supreme concern, that an authority, which is the 
 authority of all, whose power is delegated by all, which rep- 
 resents all and which acts for all, shall alone be the arbiter of 
 what may be conflicting views and interests, and shall alone 
 regulate and control. 
 
 And yet sixteen States have enacted statutes, each asserting 
 for itself the individual right to control the issue of stocks 
 and bonds of interstate carriers. And the end is not yet, for 
 many other States are considering legislation which will give 
 to them a power which they see is already being exercised by 
 others. 
 
 Another striking illustration of the exercise by one State 
 of a power to discriminate against and to injure the com- 
 merce of other States and interstate commerce is found in the
 
 19 
 
 State laws which impose heavy penalties for failure to fur- 
 nish cars or other instrumentalities of commerce within a 
 limited time. 
 
 One of the States now imposes a fine of five dollars for each 
 day of delay; an adjoining State fixes the fine at one dollar 
 per day ; and the interstate commerce law fixes no per diem 
 penalty at all. A case may well be imagined where a carrier 
 is reasonably supplied with equipment, but a large portion 
 of it has moved in the regular channels of commerce to a 
 point on or off its line and distant from the place where the 
 demand for it is made. If, under these circumstances, there 
 is a demand for a car by a shipper of intrastate traffic in the 
 State which imposes a heavy fine for delay, and is also made 
 by a shipper in the State which imposes a light fine, and is 
 also made by a shipper in interstate commerce as to which no 
 fine at all is imposed, and there is at the moment, by reason 
 of special circumstances, only one car available to meet all 
 three of these demands, it, of course, results that the carrier 
 in self -protection must deliver the one available car to the 
 shipper in the State which imposes the largest fine, and the 
 other must go without. In other words, the greediest, the 
 most selfish and the most unreasonable State thus secures by 
 its own laws a preference for its own commerce over the com- 
 merce of its sister States and over interstate commerce itself. 
 
 Is it not a right of the other States to have the question 
 of a fair distribution of available car supply determined, not 
 by one of the interested States, but by the authority which 
 represents them all and can see that a rule of equity and fair- 
 ness shall prevail? 
 
 In addition to what has been said, a long and formidable 
 list of State statutes, already in effect, might be given, which,
 
 20 
 
 without the consentof the other States, impose serious burdens 
 of expense upon their commerce, and thus upon their people. 
 All discriminate, or have the effect of discriminating, against 
 their commerce, both State and interstate. 
 
 Thus, three States have passed laws making it illegal for a 
 carrier having repair shops in the State to send any of its 
 equipment, which it is possible to repair there, out of the 
 State for repairs in another State; fifteen States have at- 
 tempted to secure preferred treatment of their State traffic, 
 either by heavy penalties for delays or by prescribing a mini- 
 mum movement of freight cars, some of them requiring a 
 minimum movement of fifty miles per day, whereas the aver- 
 age movement for the United States is not over twenty-six 
 miles per day — one of these States imposing a fine of ten 
 dollars per hour for the forbidden delay ; twenty States have 
 hours-of -service laws, varying from ten to sixteen hours; 
 twenty States have full-crew laws; twenty -eight States have 
 headlight laws, with varying requirements as to the character 
 of the lights, and fourteen States have safety-appliance acts. 
 
 Let me take an illustration from* a single class of these 
 statutes. I will select the Full Crew laws of the States of New 
 Jersey and Pennsylvania. 
 
 These laws impose upon the railroads operating within 
 their respective limits an expense for unnecessary employes 
 amounting to more than one million seven hundred thou- 
 sand dollars a year. There is nothing in these State laws 
 putting the burden of this expense on their own traffic alone. 
 That burden extends to all the traffic these railroads carry, 
 and thus the traffic of Virginia and Tennessee and Missis- 
 sippi and of all the American States whose traffic enters New 
 Jersey or Pennsylvania is laid under tribute by these State 
 enactments.
 
 21 
 
 Or, the proposition may be stated another way. The ex- 
 pense put upon the railroads by the Full Crew statutes of 
 these two States would pay the interest at five per cent upon a 
 capital fund of more than $34,000,000.00. By requiring an 
 amount equivalent to the interest on this capital to be ex- 
 pended on useless employes — at least on employes as to 
 which the other States were not consulted — instead of being 
 used to obtain new capital, these two States have by their 
 own independent action reduced the borrowing capacity of 
 the railroads t9 the extent of $34,000,000.00. That amount 
 of capital would have bought 
 
 1,360 Locomotives, 
 
 Or 3,400 Steel Passenger Cars, 
 
 Or 34,000 Freight Cars, 
 
 Or 1,133,000 Tons of Steel Rails, 
 
 Or would have block-signaled 13,600 miles of road. 
 
 Thus, facilities immensely valuable to the traffic of the 
 other States have been made impossible — not by their own 
 action, but by the independent action of New Jersey and 
 Pennsylvania. 
 
 It is apparent that these and similar statutes which impose 
 burdens and create discriminations violate the principle of 
 just and equal treatment as against the States which have a 
 more liberal policy, and constitute serious invasions of the 
 field of regulation by the States which adopt them to the sub- 
 stantial prejudice of those which have not sought to obtain 
 special or preferential treatment. 
 
 Again, it may be asked, is it not a right of the States that 
 no one State shall possess the power of imposing a burden 
 which the people of other States must help to bear, or of 
 securing a preference for its own traffic over the traffic of the 
 others?
 
 22 
 
 In order to secure equality of burden and of privilege and 
 the benefit of an adequate and efficient transportation system, 
 the power to regula^te commerce among the States and with 
 foreign nations was, by their own action, withdrawn from the 
 individual States and conferred upon Congress, which rep- 
 resents them all. 
 
 In fact, it may be truly said that the Constitution itself 
 was the offspring of the insistent demand of the States for 
 protection in trade against the other States. It is, therefore, 
 peculiarly a right of the States to have this purpose fully 
 and fairly carried into effect. 
 
 It seems not unprofitable to turn from the problem of 
 commercial regulation, considered only as a problem of 
 peace, to the lessons we must learn in regard to it from the 
 great events now occurring on the continent of Europe. 
 
 It will be merely fatuous in us to close our eyes to the fact 
 that the organization of society will be revolutionized in 
 consequence of the historic developments of the past year. 
 
 We had fondly dreamed that the possibility of great wars 
 had disappeared in the purer light of civilization, and that 
 the barbaric and savage instinct of nations had been obliter- 
 ated by the advance of moral and intellectual principles 
 among mankind. 
 
 This dream has been rudely dissipated and the world has 
 been made to realize that, when it comes to war, there has 
 been no advance in humanity or morality since the Goths 
 and Huns and Vandals fought and slew and pillaged four- 
 teen centuries ago. The only difference is a difference in 
 slaying power and in efficiency. These have advanced as 
 Science has marked out the way. The lesson has been 
 taught, in the blood and agony and tears of nations, that
 
 23 
 
 hereafter, when it comes to the test, it is only the organized 
 and efficient nation which can survive. 
 
 The world has marveled to see a nation, with compara- 
 tively small territorial possessions, rise in arms against the 
 strongest nations of the earth and defy them all with its 
 organized energy and power. 
 
 Whatever may be the ultimate result of this titanic strug- 
 gle, the lesson of national efficiency has been taught and will 
 never be forgotten. Its influence has reached even to this 
 remote Western Hemisphere, and hereafter men will put a 
 new value on our national union and will recognize the neces- 
 sity for stronger and more perfect national organization to 
 meet the dangers which all of us see may easily assail us. 
 W^e have had it borne in upon us that the most militant and 
 most efficient nation of Europe has outgrown its territorial 
 limits and is looking for other lands to colonize, into which 
 it will introduce its own national ideals, its own national effi- 
 ciency and its own militant and aggressive spirit. 
 
 If it should happen that her policies embrace the acquisi- 
 tion and colonization of certain parts of South America, our 
 Monroe Doctrine would stand in the path of her ambition. 
 Whatever course we may then pursue — whether we limit the 
 application of this doctrine to North America or undertake 
 to enforce it as to the entire Western Hemisphere — we shall 
 be confronted by greatly increased international complica- 
 tions and will need both national power and national effi- 
 ciency to deal with the conditions which will be certain to 
 arise. 
 
 Steam and Electricity and Science have done their work 
 and have made great nations essential to meet these mighty 
 forces. The day of the small, weak, and defenceless State 
 has passed just as the day of the sailing vessel and the wooden 
 ship is gone.
 
 24 
 
 Wisdom requires us to recognize the change which these 
 mighty forces and these mighty events have wrought. We 
 cannot step backward and disintegrate ourselves into separate 
 States. We must be efficient as a nation if we are to deal 
 successfully with our national emergencies. 
 
 All this, I trust, will not involve us in the necessity of be- 
 coming a military nation, but it undoubtedly puts upon us 
 the imperative obligation to organize our industrial life upon 
 the most efficient basis. Our resources must not only exist, 
 but they must be easily available. We must realize that the 
 agitation must cease for a divided sovereignty in respect of 
 functions which are in essence national. We must appre- 
 ciate that efficient transportation is an essential condition of 
 national efficiency, and if we are to halt or weaken our trans- 
 portation systems at State lines, by permitting the imposition 
 of burdens or the exercise of hurtful, inharmonious or unwise 
 regulation, we will make national efficiency impossible. The 
 creation of transportation facilities for a great nation is not 
 the work of a day. It is a matter of slow and difficult growth 
 and is the work of "forward looking" men, who must antici- 
 pate conditions and have facilities in readiness for use when 
 they are needed. 
 
 Is it wise for us to subject a matter of such universal con- 
 cern and of such national importance to the uncertain 
 policies and partial and inadequate outlook of a single 
 State? The Constitution confides it to Congress, which rep- 
 resents the general welfare and common interests of all the 
 States. The evolution of forces, the progress of events, and 
 the growth of nations emphasize the wisdom and necessity 
 of reposing the power of commercial regulation, which so 
 essentially involves the national interest and the national 
 efficiency, in the hands of the authority which is alone re-
 
 25 
 
 sponsible to all the people for the performance of national 
 duties and the preservation of our national liberty. 
 
 If it was to the interest of the individual States to have a 
 single and impartial regulation of interstate commerce and 
 its instrumentalities when the question was the free introduc- 
 tion into New York of the firewood of Connecticut and the 
 dairy products of New Jersey, it is far more so now in view 
 of the influential relationship which transportation has come 
 to bear to our national efficiency and to the liberties and 
 destinies of our people. For we must remember that in a 
 period given up to a frenzy for overlegislation no business 
 interest dependent for its stability upon the public confi- 
 dence can long survive, if it is assailable, as the transporta- 
 tion business now is, on so many sides and from such an 
 infinite variety of sources. 
 
 We must realize that inevitably commerce will eventually 
 be regulated exclusively by the Federal Government. The 
 existing system of private ownership cannot long endure if it 
 is to be permanently subjected to the increased burdens and 
 conflicting policies of a dual, or of a many sided, regulation. 
 It must be put under one master with a harmonious and con- 
 structive policy, or it will inevitably fail. When this failure 
 comes and governmental ownership takes the place of the 
 present system, the States will be deprived of all power, and 
 Congress alone will necessarily regulate every detail of rail- 
 road management and all the instrumentalities of commerce. 
 
 It must also be realized that the regulation of interstate 
 commerce and its instrumentalities is no violation of the 
 rights of the States, is no invasion of their prerogatives, is in 
 no sense in derogation of their reserved sovereignty, but in 
 reality is merely the specific performance of the contract 
 which each State bargained for when it subscribed to the 
 4e
 
 26 
 
 Constitution. It is their covenanted right, and the cove- 
 nanted right of each of them, as well as their highest interest, 
 that the commerce in which one in common with another 
 State is interested shall be regulated by the fair and impartial 
 judgment of the authority which alone springs from and is 
 responsible to them all. 
 
 As was said by Chief Justice Marshall in McCuUough vs. 
 Maryland, 4 Wheaton, 405, in speaking of the powers of the 
 Federal Government, of which one is the power to regulate 
 commerce among the States and with foreign nations: 
 
 "It is the Government of all; its powers are dele- 
 gated by all; it represents all and acts for all. 
 Though any one State may be willing to control its 
 operations, no State is willing to allow others to con- 
 trol them." 
 
 Perhaps in no State of the Union are these views more uni- 
 versally accepted th^n in the State of Tennessee. 
 
 Like other States, she has been confronted with the great 
 economic problems which have agitated and perplexed the 
 people. Temptation to seize an immediate and temporary 
 advantage has been held out to her, as it has been presented 
 to the other States. But her people have not been seduced 
 into extremes or into the excesses of a shortrsighted, narrow 
 and destructive policy. 
 
 They have built for the future, and, by their legislative 
 history of constructive fairness, have pointed the way to bet- 
 ter, things and have established the position of their State 
 high in the annals of the soundest statesmanship of 
 America.
 
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