During the late summer of 1906, Lane was in Washington or traveling through the South and West to attend the hearings of the Interstate Commerce Commission.  The Hepburn Act of 1906, among other extensions of power to the Commission, brought the express companies of the United States under its jurisdiction, and the Commission began the close investigation into the rates, rules, and practises, that finally resulted in a complete reorganization and zoning of the companies.  The new powers given the Commission, by this Act, inspired fresh hope of righting old abuses, associated with railroad finance, over-capitalization and stock-jobbing.  The Commission set itself to finding a way out of the ancient quarrel between shippers and railroads in the matters of rebating and demurrage charges.

In the latter part of the year, President Roosevelt called an important meeting at the White House, for the purpose of deciding whether an inquiry should not be made into the merging of the Western railroads, then under the control of E. H. Harriman.  Elihu Root, then Secretary of State; William H. Taft, Secretary of War; Charles Bonaparte, Attorney General, were present; Chairman Martin A. Knapp and Franklin K. Lane of the Interstate Commerce Commission, and the special Counsel for the Commission—­Frank B. Kellogg.  The matter of the proposed inquiry was discussed, each man being asked, in turn, to express his opinion.  Root and Knapp were not in favor of beginning an investigation of the railroad merger, Bonaparte, Kellogg, and Lane favored an immediate inquiry.  Lane declared that, in a few weeks, when the report of the Interstate Commerce Commission was published, it would be impossible to avoid making the inquiry.

At this point, President Roosevelt turned to William H. Taft, who as yet had expressed no opinion, saying, “Will, what do you think of this?” Mr. Taft said quietly, “It’s right, isn’t it?  Well, damn it, do it then.”  And the plans for the famous Harriman Inquiry, the first real step taken toward curbing the power of public utilities, were then taken under consideration.

During the inquiry, when E. H. Harriman was on the stand for hours, the Commissioners trying to extract, by round-about questioning, the admission from him that he would like to extend his control over the railroads of the country, Lane, who had been silent for some time, suddenly turned and asked Harriman the direct question.  What would he do with all the roads in the country, if he had the power?  With equal candor and simplicity, Harriman replied that he would consolidate them under his own management.  This answer rang through the country.

TO EDWARD F. ADAMS

Washington, February 16, 1907