those points; because rates went down, charges were more uniform and tonnage increased. Such results prove either that those pools did not seek to maintain former charges, or could not. Whichever of these conclusions is reached, the public would seem to incur no risk in giving legal sanction to a plan under which their charges were reduced and their trade enlarged. The essential mutual carrying question, therefore, is not how the railways shall divide their tonnage or money, but in what manner shall like and just rates be made stable and non-preferential and industrial development be encouraged. Professor Hadley, of Yale, says on this point: "To the business community, regularity and publicity of rates are more important than mere average cheapness. Business can adjust itself to high rates easier than to fluctuating ones, and railroad competition of necessity makes rates fluctuate." Public benefits rarely accompany spasmodic reductions in carrying rates, but such reductions injure the shareholders, who are entitled to the first justice in the administration of their properties. The public is not entitled to less than reasonable rates, even though such rates should yield large profits. If carriers are legally restricted in the public interest from charging more than just rates, they should be similarly restricted in a like public interest from charging less than reasonable rates. They should, in other words, be assured the legal enjoyment of just rates. The law itself says carriers shall not charge "more or less." Fluctuating rates must rise as much above reasonable charges as they may have fallen below them, in order to produce the profit to which railway investors are justly entitled. To deny this is to defend the principle of confiscation. The public, per contra, is entitled to stable, reasonable, through and local rates. I believe legalized pools to be the best agencies to attain these ends. In England they have been called "joint purses," and have been sanctioned and administered through the Clearing House and under the supervision of the Board of Trade. The French Government restrains railways in one territory from entering districts assigned to others. In Germany the government purchase of railways has resulted in uniform charges and an assign ment of the most direct traffic to each. In Belgium the same policy is pursued. No pools in this country ever sought to go so far as all this, but if American railways were under state management the government would be compelled to restrict the senseless competition the law not only permits but fosters. Government would then require like rates for like services by all lines. It would also require traffic sent by the most direct lines, as it now forwards the mails. It would probably district the country, and would not permit freight to go, for instance, from New York to St. Paul via St. Louis, though so-called competition now claims that this should be permitted, with rates even lower than by the more direct routes, to compensate for the longer distance. Certainly the government would not make its lowest charges over the longest lines, nor permit the manager of one district to disturb the rates in another. The nation enforces equal customs dues, internal-tax regulations, export rebates, and postage, although discriminations exist which are justifiable in view of uniformity. The government will take a letter by the carrier system from a residence in New York and deliver it at another in San Francisco, for two cents, but it requires correspondents to walk to and from post-offices thirty miles apart in New Jersey, while charging in the latter instance, for less terminal and carrying cost and onefiftieth the distance, as much as it charges in the former. It makes a loss in one case and a gain in the other, and averages them over a national area. The government does not everywhere pay railways the same rate for carrying the mails, but the postage is uniform. The cost of collecting customs is not everywhere the same, but the duties are. These principles must have some fair recognition when railways practice them. The public took relatively small risks in railway building. The city of Chicago never subscribed to railway construction, yet witness its enormous obligations to railroads. The public clamored for railways until they got them, and now clamor perhaps more loudly against them. Town, county, and State bonuses were offered to secure their construction; but, the roads once secured, legislation, forgetful of their benefits, restricts them as it restricts no other ventures, until at present the rights of railways seem narrowing to those of protest and loss. The law also enables large forwarders to concentrate their traffics, to depress rates, and to induce a senseless railway strife from which they reap harvests. If railways charge only reasonable rates, they should have the right to maintain them by a pool if necessary. If the rates are alleged to be unreasonable, the courts and the Inter-State Commission can decide that averment as well under pools as under their prohibition. If, say, five large shippers of one commodity may combine to force all their traffic over one or more railways which reduce rates to meet their views, why should not five railways pool, without increase of rates, to prevent those unjustifiable reductions, and the losses and wrongs to investors and shareholders? Should the right of combination exist only as against railways? One railway may, perhaps, carry an entire traffic more cheaply than can eight railways dividing it equitably, but the States and the government having chartered, recognized, and stimulated the eight railways, they are each entitled to reasonable shares of the traffic at equal rates. Why, therefore, should not the law say to shippers as it does to the railways: "Traffic shall not be carried at unreasonably low rates any more than at unreasonably high rates. Unreasonably high rates affect shippers unjustly; unreasonably low rates affect investors, labor, and public credit unjustly. One invites industrial disaster, the other monetary disaster; both are public injuries. If we regulate one, the other too must receive just attention. We forbid railway owners to combine to the public injury, and we will with even-handed justice forbid shippers to combine to injure the interests of railway owners, or railways to injure each other, by senseless strife below reasonable rates." I know that this is carrying public equity to a higher plane than legislators reach under the musketry of ballots, but it is not the less equity. When legislators shall be moved or restrained by public danger, a financial crash, stagnation of trade, injury to public credit abroad and at home, poverty of investors, and the like, from longer voting away vested or just rights, the public pendulum may perhaps swing as justly toward conservation as now unjustly toward confiscation. That it has already swung too far toward the latter is proven by the evolution of transportation. The stage-coach, the Cumberland wagon, and the canal-boat restricted the distribution of our products within the limited circumferences of their deliveries. The vestibuled train, the express company, and the magnificent system of internal railway freight transportation we now possess have extended the nation's commercial touch to the shores and marts of new worlds, but the national benefits will be changed to the hurt of the commonwealth if the unjust conditions now sought to be legally forced upon railways are not arrested by justice. The first American railway charter was granted in 1826. As late as 1880 the longest railway in the world was in South Carolina. The railway mileage of the Union at the close of 1886 was 134,817* or 137,986 miles.† Grant's "Atlas" gives the railway mileage of all Europe, added to that of Australia, Egypt, and Brazil, as 130,962 miles in 1886. Our rates for rail carriage averaged but about one-half the rates in those countries. The railway rates which were heralded less than thirty years ago in public celebrations and orations as opening new empires in our arable area are now regarded as extortionate and monopolistic. Witness the following. The Governor of New York said in his message for 1860: "I cannot doubt either the wisdom or the justice of imposing, for a few years, a moderate toll per ton, during the season of navigation, upon all freight passing over railroads competing with the canals, or of requiring these roads to pay an equivalent in money annually into the treasury." The New York "Times" of September 3, 1859, called the carriage of through freight by rail a "railroad conspiracy;" and the New York "Herald" of November 8, 1859, said that "columns upon columns of replies from prominent men of all parties in all sections of the State now triumphantly vindicate the justice of the alarm sounded by the Herald' for rescuing the canals from the danger with which they are threatened." A State convention held in Syracuse in December, 1858, resolved "To recommend the passage of a law by the next legislature which shall confine the railroads of this State to the business for which they were originally created." *Grant's Atlas." Poor's "Railway Manual" for 1887. At the height of this agitation the average freight rate of the Poor, for 1886, gives the average railway charge per ton per mile in the United States at 1.042 cents, the total weight carried in 1886 at 482,245,254 tons, and the weight moved one mile at 52,802,070,529 tons. It is difficult to realize what this dif ference of charge means on the tonnage cited. The actual reduction of 2.145 cents per ton per mile equaled over one thousand and one hundred millions of dollars on the tonnage of 1886. Stated otherwise, the gross freight earnings of the railways of the United States in 1886 were $550,359,054.* Had the rates obtaining in 1857 been charged in 1886, this sum would have been nearly three times as great, or one thousand one hundred and ten millions of dollars more than the enormous amount cited. This reduction was made while pools existed, and notwithstanding the allegation that railways used all the machinery they could invent, and all the legislative protection they could invoke to preserve their rates, "charge what the traffic would bear," etc. It passes belief that the Empire State thus recorded itself less than thirty years ago. State legislation sought then to advance an average railway rate of 3 cents per ton per mile in 1859 by adding canal tolls to rail rates to preserve the State monopoly. The nation now legislates as if the railways were oppressive monopolies because they charge one-third of that sum. When it is realized that the total State debts at the close of 1886 aggregated but $1,830,529,000, the saving to the people in this reduction of railway freight rates alone, not including the large reduction in passenger fares, is more apparent. The question may therefore again reasonably be asked, in view of these striking results, Wherein has lain or now lies the danger to the rights, equities, or commerce of the people, from the evolution of transportation through natural causes and through pools? In every other calling an investor reaps permanent harvests from courage, sagacity, and means, if put into fortunate ventures. The corporate shareholder may be ruined at any time by adverse *Poor's Manual." |