railways, short distances apart, have different local freight rates based on their different through rates, the local patrons paying the highest rates suffer most, because they cannot avail them. selves of competing roads. This is not a fanciful suggestion. The rates of the Burlington route between Chicago and St. Paul, as I write, range from 40 cents for first class to 73 cents on the lowest class, and apply also to intermediate freights. A second line charges the same low through rates, but keeps up its former local rates. On yet other and shorter lines, the rates are from 60 cents to 12 cents between the same points, applicable to both through and local tonnage. The law justifies these three policies, but every public interest would be promoted if the same through and local charges were maintained on all those lines through a pool as formerly. In this foundation principle the pool was more just than is the law.

Were one railway capable of transporting all the tonnage passing both ways between New York and Chicago, the law requires that its charges should be uniform for like services. There being eight competing lines, the law says that if they contract to secure equal rates by a pool, they shall be estopped, but they may collect the same charges by other means. Can legislative inconsistency go farther? The public interest clearly requires, whether there be one, two, or eight lines between Chicago and New York, that their rates be uniform, or at least that the differences existing between them shall be published, because shippers must know transportation charges as they know the rates of exchange or the market values of commodities. The rates of transportation must also be pre-determined in order to be published under the law. Conference, conciliation, and reconciliation must therefore provide for differences of judgment prior to issue and publication. If the eight lines declined such conference and each issued a tariff based on individual judgment, resulting in eight different through rates and eight bases for local rates under the long and short haul clause of the law, the mercantile public would be thrown into confusion, and would promptly and justly protest. Senator Cullom's committee anticipated this contingency, and said in the report which accompanied its first bill:

"A basis of fixed rates would seem to depend upon a general pre-determination of the rates to be established by the carriers interested. It seems necessary, therefore, to leave a way open by which such agreements can be made, in order to avoid the constant friction that would otherwise be occasioned."

The people nevertheless believe that if the New York Central and Pennsylvania Railroads covenant to maintain the same competitive freight rates jointly which each is required to maintain separately, there is a monopolistic act or tendency. In what manner an agreement to pool reasonable rates between two or more great routes can result in public injury has never been shown by antagonists of pooling, nor have they ever indicated wherein lies the difference between other pledges to maintain rates, if observed, and the use of the requisite pool procedure to carry those pledges into practical, honest, and permanent effect.

It is the rates alone which form the marrow of the commercial transaction. If 50 cents is a just and reasonable transportation charge per barrel on flour from Chicago to New York, exacted alike by all carriers, in what manner does it concern or injure the public if an agreed division of that sum is made be tween the same carriers? This query has never been answered. Good legal minds go farther, and believe that after the proceeds of reasonable rates have reached the treasuries of the carriers, payments therefrom to adjust pool balances are not illegal. Judge Deady, of Oregon, concentrated this view in the following dictum :

"It is not apparent how a division of the earnings of two roads can concern or affect the public, so long as the rate of transportation on them is reasonable."

As to the opening of new lines: if, where two railways already existed, a third one, built between the same points, agrees that, instead of reducing and antagonizing the former just rates, it will accept, say, one-fourth the proceeds derived from all the traffic, at the rates before prevailing, wherein lies the injury to the public? The three lines will surely divide the traffic in some proportions as the result of public patronage; why not divide it in fixed proportions, decided both by public use and railway facilities and agreement? The mere construc

tion of a third line cannot make the former reasonable rates of two carriers unreasonable. The rates are rather juster than before, because capital, invited by law, gives the two cities the facilities of three lines for no compensation over the sums the first two lines would have received for a lesser service. There is no inherent or abstract public right which requires that reasonable rates shall be reduced as the number of railways is increased; and if the rates remain the same and reasonable, why should they not be administered by a pool as well as by any other method?

The only answer is that the principle of pools is widely misunderstood. Senator Platt defined a pool sharply in the Senate debate:

"What is a pool? It is simply an agreement between competing railroads to apportion the competitive business; that and nothing more."

Pools sought to divide the actual carriage of competitive tonnage among the various lines substantially as the public had done before, and adjusted any inequalities by the transfer of tonnage, or money, or both. They provided for uniform and non-discriminating rates by all lines. They consolidated the facilities of the united railways, as if they were one enlarged railway carrying the tonnage of a community as one firm. They allowed all lines to use all cars, especially replacing one line with another in time of casualty. It was co-operative railway confederation, serving a community with combined and increased facilities, and relative peace succeeded states of strife, wherein rival railways resorted to various rates and reprehensible devices to secure uncertain instead of fixed parts of the same aggregate tonnage.

That discriminations continued under pools is true, but pooling did not cause them. Nor can it be denied that both old and new companies, in order to increase their pooled apportionments of tonnage, frequently resorted to rebates, openly reduced rates, fictitious weights, etc. New lines especially, being usually at first deficient in terminal facilities, tracks, sidings, equipment, etc., as compared with older ones, could not secure the business at equal rates, and resorted to these devices. All

this was, however, in violation of every pool agreement ever made; and the managers who practiced such methods then are the first to violate now the Inter-State Law by other equally reprehensible discriminations or devices. Certain it is that the law has not stopped them. They flourish unregulated by statute now, whereas the pools were gradually restraining the evils and removing the causes that incited them.

All these injurious practices were called "competition," by theorists and the recipients of forbidden favors, and the moldy proverbs that "competition is the life of trade," and that "through competition people get their rights," were invoked to support the shallow plea that pools should not be legalized. Messrs. Allen G. Thurman, E. B. Washburne, and Thomas M. Cooley said of railway rivalry in their report, as an advisory railway commission:

"A species of railway competition has prevailed from time to time which has brought satisfaction to few persons, and which has resulted in inequalities and disorders greatly detrimental to trade. . . . The mere statement of these results is sufficient to show that this is not what in other business is known and designated as competition. Competition is the life of trade, but this is its destruction."

Mr. Nimmo, chief of statistics, said of these contests:

"During the struggles referred to, success waited upon intrigue and false representations. The freight agents deceived the merchants and the merchants deceived the freight agents."

Senator Cullom's committee said of this phase:

"If competition is to have full sway, as it does now, the constant changes it would necessitate would render it impossible to maintain fixed rates."

The astute remarks of Judge, afterward Senator, Howe, upon competition, are incisive:

"I believe universal observation will attest that for the last quarter of a century competition in trade has caused more individual distress, if not more public injury, than the want of competition. Indeed, by reducing prices below or raising them above values, as the nature of the trade prompted, competition has done more to monopolize trade or secure exclusive advantages in it than has been done by contract."

The unthinking do not reflect that railway rivalry differs es

sentially from mercantile competition. The Broadway merchant does not sell at the prices of the dealer in the same wares in the Bowery, yet in their just differences lie the economies of the poor and the luxuries of the rich. This differs from railway competition. The rates of the best railways are in large part determined by those of the poorer ones. The sale prices

of some commodities in Baltimore and Boston have small influence on those at New York for the same articles, but the transportation rates to and from all those cities are so intimately related to each other that they must bear fixed relations. Moreover, the railways must compete with the water avenues, and these also irrevocably keep railway rates down to reasonable standards.

Mercantile axioms, therefore, have little practical application to the rate of railway transportation. Commerce is a barter, which constantly risks losses in the hopes and calculations of profit. Railway rates cannot be so based and changed. Trade is uncertainty. Railway rates should be certainties. There may be a proper difference of $1 per barrel between the price at which the same flour is sold in Avenue A and on Fifth Avenue, but this does not justify the same or any difference in the rates for transporting the same flour. Railway rates should be alike to rich and poor for a like service.

Railway pools have from this misconception been regarded by the people as appliances to restrict due rivalry and enhance rates. Witness these figures in refutation. When the Trunk Line pool went into effect in New York, in July, 1877, the westward rates from New York to Chicago on the four classes of merchandise were $1, 80 cts., 60 cts., and 45 cts. per 100 pounds. In the reverse direction they were $1.20, 90 cts., 70 cts., 70 cts., 70 cts., and 25 cts. At the present time they are, in both directions, 75 cts., 65 cts., 50 cts., 35 cts., 30 cts., and 25 cts.

Not only have the rates been thus reduced, but business has increased. The westward tonnage of New York city increased from 715,808 tons in 1877 to 1,125,417 tons in 1886, those being the first and last years of that pool. Corresponding gains appear from the other seaboard cities westbound. Not an allegation of the opponents of pools was verified by the facts at