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During the year an Act was passed, chapter 283 of the General Acts of 1918, reducing the number of commissioners from five to three, and the term of office from five years to three years. The Act provided that two of the new appointments should be made from the existing membership of the Commission, but this rule was in fact followed in the case of all three appointments. No other change was made in the Public Service Commission law, except that the governor was empowered to select commissioners “regardless of political affiliation”, and that single commissioners were given the right, under certain restrictions, to conduct investigations, inquiries and hearings.

A table is herewith presented, similar to the tables in our last two annual reports, indicating the volume of work requiring the attention of the Commission during the year.

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It was thought by some that the passage of the special acts relative to the Boston Elevated Railway Company and the Bay State Street Railway Company and of the general “serviceat-cost" act for all street railway companies, together with the taking over of the railroad, telephone and telegraph properties by the Federal government, would materially reduce our duties, but the Commission has not been sensible of any such reduction. As in the two years previous, work was carried on by the commissioners throughout the summer months without vacation. The new situation has given rise to new duties, as will hereinafter appear.

RAILROADS. On December 28, 1917, the President took over the possession, use, control and operation of all the railroads of the

country engaged in general transportation, includ

ing controlled water lines, and provision was made by Congress for the operation of these transportation systems while under Federal control and for the just compensation of their owners in an Act approved March 21, 1918. Control may continue during the period of the war and for a reasonable time thereafter, not exceeding twenty-one months.

The situation has caused some uncertainty. The Act of Congress provided that the carriers, while under Federal control, should be “subject to all laws and liabilities as common carriers, whether arising under State or Federal laws or at common law, except in so far as may be inconsistent with the provisions of this Act or any other Act applicable to such Fedoral control or with any order of the President.” It was also provided that nothing in the Act should be construed “to amend, repeal, impair, or affect the existing laws or powers of the States in relation to taxation or the lawful police regulations of the several States, except wherein such laws, powers, or regulations may affect the transportation of troops, war materials, Government supplies, or the issue of stocks and bonds."

The language quoted leads to the inference that Congress did not intend to reduce State regulation to a nullity, but wished to preserve it, so far as it did not interfere in any proximate and tangible way with the transportation of troops

and munitions, and that this regulation which it sought to preserve included authority over intrastate rates, for the regulation of rates is undoubtedly an exercise of police powers. The interpretation placed upon the Act by the Railroad Administration, however, has apparently been very different. We say “apparently”, because no authoritative and comprehensive statement upon this subject has been made either by the Director General or by his immediate legal advisers. In practice it has been assumed by the Railroad Administration that the President, acting through the Director General, has power to initiate intrastate as well as interstate rates, regardless of the provisions of State statutes, and that the State commissions have no power of review over rates so initiated. They have been filed with the State commissions "for information only" and not in accordance with State statutory provisions. In the case of service, the practice has varied, but it has seemed to be the theory that the power of the Director General over service and accommodations is complete and that the State commissions may exercise authority, if at all, on sufferance only.

In regard to questions of local service and accommodations, We are glad to say that no dispute over authority has arisen in Massachusetts. The jurisdiction of the Commission in these matters bas not, so far as we are aware, been questioned by the New England representatives of the Railroad Administration. In the

case of rates, however, the situation is otherwise. At the time of our last annual report, Commissioner Anderson of the Interstate Commerce Commission had just finished hearings in Boston upon the application of all railroads operating in New England for approval of substantial increases in both passenger and freight rates. These hear

were held jointly with representatives of the State commissions of New England, in order that time might be saved and the benefits of mutual conference secured. On April 16, 1918. the Interstate Commerce Commission approved practically the increases which were sought — namely, an increase in single ticket passenger rates from 23 cents to 2 cents per mile and a corresponding increase in mileage ticket rates, an increase in trip-tickets rates of 25 per cent, and new class freight rates corresponding to the schedule which had recently been pre



scribed by the Interstate Commerce Commission for Zone B (Central Michigan) of Central Freight Association territory.

On May 25, 1918, however, before these new rates had been made effective, Director-General McAdoo issued an order, applicable all over the country, placing single-ticket passenger rates and mileage ticket rates on the basis of 3 cents per mile, increasing commutation and trip-ticket rates 10 per cent, and increasing freight rates in general 25 per cent. The passenger rates so authorized superseded those approved for New England by the Interstate Commerce Commission, but in the case of the freight rates the 25 per cent was added to the new class rates which the Commission had authorized, rather than to the old rates. This was at least the intent, although it has as yet been carried out only by the New Haven company. The Boston and Maine and the Boston and Albany companies for the time being increased the old rates 25 per cent, but expect to introduce the new and higher scale at an early date.

The rates so ordered by the Director-General were made effective intrastate as well as interstate, without compliance with the provisions of our statutes. In our judgment there is doubt whether they are lawful in Massachusetts. Under war conditions, however, the Commission did not feel justified in provoking litigation over the matter, but contented itself by informing the Director-General in writing, as well as the Federal manager and the president of each of the roads, that it questioned the legality of the rates and would feel free to take such action in accordance with this view, after the war was over, as the public interest might seem to demand. In our judgment, Congress ought, if possible, to clear up this doubt relative to intrastate rates in any action which it may take upon

the railroad situation. So far as Massachusetts is concerned, the question is not very important in the case of freight rates, for the great bulk of the traffic is interstate; but this is not true of passenger rates. In our opinion the State commissions ought at least to retain jurisdiction over intrastate passenger charges. This traffic is of great local significance, and should be dealt with in accordance with local conditions. The tendency of centralized national control will, we fear, be towards uniformity, and to treat the great suburban traffic moving to

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