and property, have given to the cities special and very important advantages over the country stations. Some of these advantages have been given to large dealers, found principally in the cities, and given because of the extent of their patronage. But the large towns, as a whole, have been specially favored in rates over the country places, for the reason that the competition was felt mainly at such towns, and under the stress of competition the carriers have felt compelled to make rates which, except upon compulsion, they would not consent to make anywhere.

Pressure of competition has been most severe upon the carriers by rail whose lines touched the great rivers or other navigable waters of the country. Cheaper carriage is possible by water than by land, and a railroad directly competing with a steam-boat line must make low rates or abandon the traffic to the boats. But the exceptionally low rates were by no means restricted to such towns as were possessed of navi gable facilities; the interior cities were also favored, though the competition they enjoyed was exclusively between the carriers by rail. Nor could it always be said that low rates were forced upon the roads by the stress of competition; they were very often determined by agreement between the carriers controlling the business, and who possessed the same power to exact reasonable rates from the large towns as from the small. Always, however, in the large towns there were influences which were powerful in producing low rates, and the carriers even when they wished to so did not find it easy to resist them. But very often the interest of a carrier was so far identified with that of a town as to make the giving to it of exceptionally low rates a matter of choice.

While this state of things continued it was almost impossible that in any section of the country possessing already a number of established centers of trade, any smaller town, not yet of sufficient strength to command like favors, should escape a condition of subordination and dependence. Towns must either depend for their growth upon some very special and exceptional natural advantages, or they must have manufactures, or they must contrive to become the centers of a large jobbing trade. But for the success of his business either the merchant or the manufacturer must have the like favorable rates for the transportation of that which he buys and sells as are given to his competitor; this is indispensable. Any attempt of a small town to grow into rivalry with a large town, beginning with considerable differences in railroad rates against it, must be necessarily unsuccessful.'

The specially favorable rates which in one form or another were given to large dealers were not always given as matter of personal favoritism; perhaps they were quite as often given to enable proprietors to protect their business as against the rivalry of like business located on other roads and supposed to be obtaining similar concessions. Every town thought it must have its leading enterprises protected against the inroads which competitors might make through railroad favors, and there grew up a feeling in the large towns that the trade of the territory which they had customarily supplied belonged to them of right, and that any re-adjustment of freight rates should not fail to preserve their dominion over it.

It was not at first clearly perceived by every one that the provisions of the act to regulate commerce which prescribed rules of impartial accommodation as between persons, occupations, and localities were really intended to go so far as to place in respect to such accommodations the smallest and most obscure hamlet in the country in the scale of right against the largest and most powerful city, entitling each to the same

favorable regard from the carriers which served them. The large towns not unnaturally accepted the provision against discrimination as between localities as one that protected them against their competitors; they did not readily appreciate the fact that it also protected as against them a single patron of a road at a local station, and entitled him to favorable consideration irrespective of any question of competition; that the purpose was that there should be no unreasonable discrimination as between country and city, any more than between large towns. Indeed, under all the circumstances, the prohibition, so far as it applied to localities, was likely to be specially beneficial to country places; and the prohibition of the greater charge upon the shorter haul on the same line in the same direction, except when the circumstances and conditions were dissimilar, was also calculated to be chiefly beneficial to the smaller towns, since the large towns almost always received such benefit as resulted from the making of the lesser charge. How great the differences were, and how depressing they must necessarily have been upon small towns, some idea may be had from an examination of tariff sheets which showed that a carrier sometimes charged for the trans portation of property from one terminus of its line to stations short of the other fully three times as much as it charged by the same tariff sheets for the carriage of like property from the same starting point past the same stations to the other terminus.

It may be assumed that the railroad managers who made these ratesheets did not in general do so under the influence of any desire to favor the considerable town at the expense of all others, provided they could, with proper regard to the interests of their roads, establish relatively equal rates as between all stations. When they made rates which thus violated the princples of relative justice, their action was always defended as being a necessary result of the logic of the situation which they would have been glad to escape from had any means of escape been open to them. But whether willingly done, or, on the other hand, done under stress of compulsion by those who would have preferred to do otherwise, the consequences were unmistakable. The small towns bore the heaviest proportionate burdens, and unless on general grounds it was desirable that the cities be specially fostered and favored, the effect must from a social point of view be undesirable for the country. It was impossible that it should be made to seem right to the common mind that such distinctions should exist; the sense of justice received a shock when one was told that the small dealer in the country town was made to pay three times as much for the carriage of his goods as the city merchant paid upon the like quantity, for even a greater distance; and a well-founded feeling of discontent arises among any peo ple when it can see things done under the protection of its laws which seem to be plainly and unmistakably unjust.

It will probably not be claimed by any one that it is desirable to give by law or through the use of public conveniences an artificial stimulus to the building up of cities at the expense of the country. In great cities great social and political evils always concentrate, grow and strengthen, and the larger the cities are the more difficult it is to bring these evils under legal or moral restraints. This fact is so generally recognized that the feeling may be said to be practically universal that the interest of any country is best consulted when public measures and the employment of public conveniences favor the diffusion of population and the profitable employment of industrial energy everywhere, rather than the concentration of population in few localities.

When in consequence of the carriers establishing such rates as the

principles of the act to regulate commerce requires, some of the towns of the country found that, to some extent, business they had formerly enjoyed was slipping away from them, their commercial or other business organizations called upon the Commission for protection under circunstances that made their cases present grounds of strong apparent equity. For it was found that while the law which requires rates to be made relatively just and fair was in its application to localities intended specially for the benefit of the small towns which were formerly discriminated against, yet when it came to be given effect it had the result that some one or more large towns in any particular section of the country would apparently receive the principal benefits while other large towns, competitors to it, would to some extent be injured. This result would follow from the fact that the making of more favorable rates to small towns would enable them to have a choice of markets not possessed before, and perhaps invite them to pass by one trading town which had formerly monopolized their trade to a more distant and larger town where the opportunity for choice in buying and to obtain customers in selling would be greater. Whenever this was the case the larger market seemed to be reaping the principal benefit of the favorable rates to the smaller towns; and the complaint was then made by the towns which suffered from the loss of business, that the rates instead of operating justly, discriminated unfairly in favor of the larger town to the prejudice of those which had the right to compete with it.

The first complaint presenting this view was made by merchants of Danville, Va., who claimed that the rates of the Richmond and Danville Railroad Company discriminated against their town and in favor of Richmond. The rates, as expressed on the rate-sheets, did not appear to be unequal or unfair; they seemed to be made with due regard to relative distances, but they allowed no controlling force to the fact that Danville was an important center of trade for a considerable surrounding country, and were so made as to be as favorable to the small stations on the line of the road as they were to the cities. The consequence was that a merchant in a small town on the far side of Danville from Richmond, desiring to procure supplies which Danville merchants were accustomed to procure from Richmond and then resell along the line of the road, found himself able, instead of purchasing in Danville, to buy in Richmond, and by shipping the goods to his place of business direct and without unloading at the intermediate city to put them in stock at less. cost for transportation than he could have procured them for had they been first sent to Danville and then to the final destination as a second shipment. He would also, by thus dealing, save the profits which the dealer in Danville had formerly received from his business.

It was inevitable that this advantage should, to some extent, be availed of, and the consequent loss of business to Danville was thought by the complaining party to amount to demonstration that the rates which occasioned the loss gave to Richmond an unfair advantage. The proper remedy was supposed to be for the Commission to hold that the aggregate rates from Richmond to Danville and from thence to the final destination should not exceed the rate which was made from Richmond to the same point as a through rate. No other rule, it was said, could possibly operate with justice.

A similar claim was afterwards advanced on behalf of a commercial organization in Omaha, which claimed protection against rates which operated prejudicially to the dealers in their city, and in favor of dealers in Chicago. The same idea has been at the basis of complaints made on behalf of dealers in Detroit and in other localities; but in every

case it was apparent that the rates complained of were rates iutended to be made in conformity to the spirit of the act, and without any purpose of benefiting or injuring other towns than those to which they were given. And it might also be seen that these peculiar incidental benefits could not be monopolized by a few commercial centers, nor could any one of them gather benefits without reaping losses also. If the dealers in small towns beyond Omaha are now enabled to pass by that city and make purchases in Chicago, which they were accustomed to make in Omaha, so they may pass by Chicago, also, and make them, perhaps, to like advantage in Philadelphia, New York, or Boston. They can now reach out in all directions as they could not before, and even for family supplies there may be a choice of markets, which formerly was not available.

Such a state of facts as was shown in the instances mentioned does not present a case calling for the protection of commercial centers as against each other; what should be done obviously is, to leave just and equal rates to have their natural effect under the influence of legitimate competition. The law can not be blamed for incidental consequences when its rules are just and justly applied. It could not be denied that the rates given to the smaller towns in the cases mentioned were just to them, and the large towns could not, with any propriety, demand that, for their own benefit, rates unjust to the smaller towns should be imposed. All they could claim was that rates should be relatively just when all stations were considered. The carriers could not go further in aid of the competition of cities than to make them so.

In some cases in which it was complained that excessive rates were charged, the evidence offered to make out the excess consisted largely in showing that the rates formerly paid, after deducting the rebates which were allowed, were much below the rates now exacted. Evidence to this effect would come almost exclusively from large dealers, and it did not usually show that the public in general at the same locality had formerly been given more favorable rates than they now had. But the evidence was incomplete for the purpose designed because it did not take a comprehensive view of the whole field, but was confined to a single place. Proof that a railroad company is now on an average, when all its stations are considered, charging higher rates than formerly, may be taken as a strong prima facie showing that present rates are excessive; but their being higher at a single locality may be a result of an equalization of rates as between localities, which necessarily advances those which formerly were proportionally too low, and reduces in like degree those which formerly were proportionally too high. If the rates are now found to be made on correct principles, and are relatively fair as between localities, it can not be a just ground for complaint that some town which formerly was greatly and unjustly favored, finds its rates advanced. Not unlikely it may turn out on investigation into the circumstances of such a case that the advance was necessary to enable a carrier to make the proper concessions to other localities.

To what is above said regarding the effect upon large towns of a strict enforcement of the long and short haul clause of the act, a partial exception must be made of towns and cities upon the trans-continental lines. All the interior towns, large and small, will receive benefits therefrom; the incidental injurious effects will fall mainly upon the terminal cities.

UNIFORM CLASSIFICATION.

In the first annual report of the Commission attention was called to the fact that rates for railroåd transportation are to some extent ad

justed on principles analogous to those on which taxes are laid: the articles or the interests that can least afford to bear such burdens are given the benefit of low rates which the carriers can not afford to give to all, and higher proportional rates are levied upon the articles and interests which would feel the burdens less. This method of adjusting rates has been and is of very high value to the country; indeed, it may be said to be indispensable.

The business of a railroad company as a carrier of freight is to exchange for the people the products of different sections and countries, and this exchange, as to many commodities in a country so large as ours, or indeed in any considerable country, would be restricted to compara tively small sections if articles which are at once bulky and cheap and articles which in small compass comprise very great value were alike charged rates for transportation which disregarded the value as an element of estimation, or took it into account only so far as reasonable insurance against loss or injury might render prudent. Railroad managers very soon discovered that they could not measure their rates exclusively by the standard of cost of carriage of the several kinds of traffic, separately considered; but it was wise for themselves and best for the country that the cost of carriage be considered in the aggregate and that the rates which are to be the compensation for the service performed be then apportioned on special consideration of the value of the service to the kinds of traffic severally. Such an apportionment would seldom be burdensome to articles of high value, but it would relieve cheåper articles from burdens which, if apportioned strictly to the cost to the carriers of their transportation, would render carriage for considerable distances out of the question.

But a practice based upon any such general principle will almost inevitably in its application be subject to many exceptions. Every railroad serves a certain territory, and every part of the country has to some extent interests to be served which are special and peculiar to it, and these it will naturally desire to have specially considered by local, official, and corporate authorities, whether the business in hand be the imposition of taxes or the adjustment of rates for transportation; and as many other circumstances besides cost of transportation and value must always be taken into account, such as bulk or weight of articles, convenience of handling, special liability to injury and necessity for speedy delivery, and the field of production or of consumption, so that there can never be any fixed or definite rule for the measurement of the charge to be made upon any particular traffic, it is always possible for the railroad manager in making rates to yield something to the special interests of his section, and still keep in view the general principles upon which he will professedly act.

As rates are apportioned by means of classification of articles which are expected to be offered for carriage, a pressure from sectional and local interests has been continuously brought to bear upon the authorities making the classifications to have them so made that those interests may be favored which the roads to use the classification will more particularly serve. For the most part the classifications have been made by the carriers themselves; in a few instances they have been made by State commissions, but under influences corresponding to those which have influenced the carriers in the same work. The carriers, it inay be assumed, have primarily consulted their own interests, but they have also at the same time consulted the local feeling and the local interests, and have commonly found that their own interests were best subserved in doing so.