The discussion of railway rates takes on a wider range each day. One writer likens the charges of carriers to tolls. Another to the duties of governments. Very well! Call them tolls or duties. But the fact that they represent actual disbursements for material, labor, and other necessary expenses incurred in operating, including a return on the money used in building, remains. There is a bona fide consideration in every case. Moreover, through association of interest, the people receive, in exchange for a nominal return on the capital invested in railroads, the experience, energy, and wisdom of an army of resolute and sagacious business men, gifted with a knowledge of the needs of the community, and possessing the capital and disposition to meet such needs. Their services could not otherwise be obtained. If the business were carried by the government, we should have to be content with hired agents of a perfunctory and very commonplace kind. The difference is the difference between genius and mediocrity, between energy and sloth, between experience and the want of it, between knowledge and ignorance, between wisdom and folly. This is one of the resultant benefits that grow out of the private ownership and management of railroads.

In the regulation of rates it has been claimed that they should be based on the average received by the carrier for the whole service rendered, after taking into account special rates, rebates, free transportation, and other necessary discriminations. The claim is based on the theory that these concessions are unnecessary; that the business that is done on

reduced rates would be carried on without such concessions; that they are, in fact, the result of collusion. I cite the case merely to illustrate the length to which folly and ignorance may extend, not as requiring an answer.

The carriers of the world reach every important source of supply and demand. This is why an unjust rate is impossible. To attempt its enforcement would be to cripple the industry it is to the interest of the carrier to foster. Markets are no longer local. Railroads have ceased to be so in their ability to control rates. A consolidation of all the railroads of a great country, like that of the United States, would, however, destroy competition in many minor directions, and would, consequently, entail more or less hardship. But it would still be preferable to government management, because it would be intelligent and business-like. A combination of all the carriers of the world is necessary to the creation of a complete monopoly. The railroads of every country, "the tides of the seas, the currents of rivers, the swells of lakes, the waters of canals, and the rivalry of adjacent nations, enforce transportation conditions."* Combinations of a local nature do not destroy or cripple competition. Nor do limited pools sensibly affect it. On the contrary, they strengthen it, because they render it more intelligent. Monopoly is no longer possible, except in the case of local products, such as gas, water, street railways, and the like. So long as car

* G. R. Blanchard, "Politico-railway Problems and Theories,"

page 43.

riers serve a common purpose, and their interests lie apart, there can be no such thing as a monopoly of rates. When competition ends, legislative interference may begin. Such interference under other conditions is not, however, necessarily injurious. If honestly, temperately, and discreetly exercised, it may prove highly beneficial. Its effect is to silence unjust clamor. It is only injurious when ignorantly or demagogically exercised. But in regard to the regulation of rates, so long as the markets of the world are supplied by carriers acting independently of each other, competitive forces are more effective in preventing injustice than the perfunctory act of any man or body of men. The beneficent effect of competition can not be overestimated. Its forces are "the efforts of rival sellers to secure a market for their goods, each striving to offer better terms than his competitors. Competition is what prevents any individual from fixing prices to suit himself, because his rivals will give lower prices, and he will get no business at all.”* Railways have not destroyed the principle of competition nor lessened its value. It has simply taken on a wider field than formerly. They have made it universal. But the great and varied interests that cluster about it, as exercised by them, render it difficult for the student to discover and analyze its operations. It affects everything we eat or wear. "The wheat of Dakota, the wheat of Russia, and the wheat of India come into direct competition. The supply at Odessa is an element in determining

* Arthur T. Hadley, "Railroad Transportation," page 63.

the price at Chicago. Cabbages from Germany contend with cabbages from Missouri in the markets of New York."*

In the operation of carriers, discriminations not based on natural causes are impossible. When thus superinduced, they are irresistible and irremediable. To attempt to enforce uniformity, under such circumstances, would be to entail evils infinitely greater than the nominal ones sought to be remedied.

The complaint so often put forth, that railroads have favored one individual at the expense of another, except on sound economic grounds, beneficial to the community, is generally untrue. Isolated exceptions to the rule prove nothing.

Much of the criticism bestowed upon railroads is sentimental, demagogical, or communistic. Much of it is merely the mouthings of ignorant men talking to ignorant men. It has, however, been an avenue to public notice and favor; a political "fad." Production is not retarded, but in every case expedited by the rates of carriers. They are nominal onlya pittance merely. "The cost of delivering bread from the baker to his customer is a larger element in the price of bread than the cost of getting wheat from the farmer to the miller, and flour from the

* Arthur T. Hadley, “Railroad Transportation," pages 65 and 66. "The value of the product of five hundred operatives in a coarse cotton factory in Massachusetts is over $1,000,000. All the western flour and meat which these operatives need in a year, can be moved from Chicago to Lowell at a cost of $600, and sometimes for less."- Edward Atkinson, "The Distribution of Products," page 38.

miller to the baker, though the one is but a few hundreds of yards, and the other as many hundred miles."*

The influences to which we owe the low rates of American railways-rates much less than those of other countries-are, in the main, due to better facilities and more economical methods, superinduced by intense and widespread rivalry. The immense distances traversed, and a desire to secure a load both ways, have had something to do with it. The amalgamation of rival and continuous lines has been beneficial. Combinations of sympathetic interests that are the result of natural causes are always good. Among these may be mentioned the consolidation of continuous railways and the formation of pools. On the other hand, combinations occasioned by extraneous influences, such as those caused by the interference or oppression of the State, are not likely to be so beneficial, because they are more or less artificial.

Englishmen and Americans make the same complaints in regard to the rates of railways, namely, that they are excessive; that special advantages are afforded competitive interests; that goods are in some cases carried at unduly low rates, losses being recouped elsewhere. Heretofore, England has permitted carriers to charge what the traffic will bear, to make special rates to meet particular circumstanThe necessity and value of these provisions have been generally recognized in every country where railroads are operated, save the United

ces.

* Arthur T. Hadley, "Railroad Transportation," pages 103, 104.