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+The Project Gutenberg EBook of The Railroad Question, by William Larrabee
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+Title: The Railroad Question
+       A historical and practical treatise on railroads, and
+       remedies for their abuses
+
+Author: William Larrabee
+
+Release Date: July 2, 2009 [EBook #29294]
+
+Language: English
+
+Character set encoding: ISO-8859-1
+
+*** START OF THIS PROJECT GUTENBERG EBOOK THE RAILROAD QUESTION ***
+
+
+
+
+Produced by Peter Vachuska, Barbara Kosker, Chuck Greif
+and the Online Distributed Proofreading Team at
+https://www.pgdp.net
+
+
+
+
+
+
+
+
+
+
+The Railroad Question.
+
+
+
+
+  THE RAILROAD QUESTION
+
+
+  A HISTORICAL AND PRACTICAL TREATISE ON
+  RAILROADS, AND REMEDIES FOR THEIR ABUSES
+
+
+  BY
+
+  WILLIAM LARRABEE,
+  LATE GOVERNOR OF IOWA.
+
+
+  _Salus populi suprema lex._
+
+
+  NINTH EDITION.
+
+
+  CHICAGO:
+  THE SCHULTE PUBLISHING COMPANY.
+  1898.
+
+
+
+
+  Copyright, 1893,
+
+  BY
+
+  WILLIAM LARRABEE.
+
+
+
+
+
+PREFACE.
+
+
+The people of the United States are engaged in the solution of the
+railroad problem. The main question to be determined is: Shall the
+railroads be owned and operated as public or as private property? Shall
+these great arteries of commerce be owned and controlled by a few
+persons for their own private use and gain, or shall they be made
+highways to be kept under strict government control and to be open for
+the use of all for a fixed, equal and reasonable compensation?
+
+In a new and sparsely settled country which is rich in natural resources
+there may be no great danger in pursuing a _laissez-faire_ policy in
+governmental affairs, but as the population of a commonwealth becomes
+denser, the quickened strife for property and the growing complexity of
+social and industrial interests make an extension of the functions of
+the state absolutely necessary to secure protection to property and
+freedom to the individual.
+
+The American people have shown themselves capable of solving any
+political question yet presented to them, and the author has no doubt
+that with full information upon the subject they will find the proper
+solution of the railroad problem. The masses have an honest purpose and
+a keen sense of right and wrong. With them a question is not settled
+until it is settled right.
+
+It must be conceded that of all the great inventions of modern times
+none has contributed as much to the prosperity and happiness of mankind
+as the railroad.
+
+Our age is under lasting obligations to Watt and Stephenson and many
+other heroes of industry who have aided in bringing the railroad to its
+present state of perfection. Their genius is the product of our
+civilization, and their legacies should be shared by all the people to
+the greatest extent possible. An earnest desire to aid in attaining this
+end has prompted this contribution to the literature on the subject.
+
+The author is not an entire novice in railroad affairs. He has had
+experience as a shipper and as a railroad promoter, owner and
+stockholder, and has even had thrust upon him for a short time the
+responsibility of a director, president and manager of a railroad
+company. He has, moreover, had every opportunity to familiarize himself
+with the various phases of the subject during his more than twenty
+years' connection with active legislation.
+
+He came to the young State of Iowa before any railroad had reached the
+Mississippi. Engaging early in manufacturing, he suffered all the
+inconveniences of pioneer transportation, and his experience instilled
+into him liberal opinions concerning railroads and their promoters. He
+extended to them from the beginning all the assistance in his power,
+making not only private donations to new roads, but advocating also
+public aid upon the ground that railroads are public roads.
+
+As a member of the Iowa Senate he introduced and fathered the bill for
+the act enabling townships, incorporated towns and cities to vote a five
+per cent. tax in aid of railroad construction. He favored always such
+legislation as would most encourage the building of railroads, believing
+that with an increase of competitive lines the common law and
+competition could be relied upon to correct abuses and solve the rate
+problem. He has since become convinced of the falsity of this doctrine,
+and now realizes the truth of Stephenson's saying that where
+combination is possible competition is impossible.
+
+It is the object of this work to show that as long as the railroads are
+permitted to be managed as private property and are used by their
+managers for speculative purposes or other personal gain, or as long
+even as they are used with regard only for the interest of stockholders,
+they are not performing their proper functions; and that they will not
+serve their real purpose until they become in fact what they are in
+theory, highways to be controlled by the government as thoroughly and
+effectually as the common road, the turnpike and the ferry, or the
+post-office and the custom-house.
+
+This book has been written at such odd hours as the author could snatch
+from his time, which is largely occupied with other business. He is
+under obligations to many of our ministers and consuls abroad for
+statistics and other valuable information concerning foreign railroads,
+as well as to a number of personal friends for other assistance,
+consisting chiefly in rendering the railroad literature of Europe
+accessible to him.
+
+  WILLIAM LARRABEE.
+  _Clermont, Iowa, May, 1893._
+
+
+
+
+CONTENTS.
+
+
+     I. HISTORY OF TRANSPORTATION                        17
+
+    II. THE HISTORY OF RAILROADS                         46
+
+   III. HISTORY OF RAILROADS IN THE UNITED STATES        76
+
+    IV. MONOPOLY IN TRANSPORTATION                       90
+
+     V. RAILROAD ABUSES                                 124
+
+    VI. STOCK AND BOND INFLATION                        163
+
+   VII. COMBINATIONS                                    189
+
+  VIII. RAILROADS IN POLITICS                           205
+
+    IX. RAILROAD LITERATURE                             231
+
+     X. RAILROAD LITERATURE--_Continued_                273
+
+    XI. RAILROADS AND RAILROAD LEGISLATION IN IOWA      319
+
+   XII. THE INTERSTATE COMMERCE ACT                     349
+
+  XIII. THE RATE QUESTION                               370
+
+   XIV. REMEDIES                                        389
+
+  APPENDIX--TABLES AND STATISTICS                       459
+
+
+
+
+LIST OF AUTHORS AND WORKS CONSULTED AND QUOTED
+
+
+  ACWORTH, W. M.             The Railways of England
+
+  ADAMS, C. F., JR.          Railroads, Their Origin and Problems
+
+  ADAMS, H. C.               Public Debts
+
+  ADAMS, HENRY               History of the United States
+
+  ATKINSON, EDWARD           The Distribution of Products
+
+  BAGEHOT, WALTER            The English Constitution
+
+  BAKER, C. W.               Monopolies and the People
+
+  BEACH, CHARLES F., JR.     On Private Corporations
+
+  BLACKSTONE, W.             Commentaries on Laws of England
+
+  BOISTED, C. A.             The Interference Theory of Government
+
+  BOLLES, ALBERT S.          Bankers' Magazine
+
+  BONHAM, JOHN M.            Railway Secrecy and Trusts
+
+  BRYCE, JAMES               The American Commonwealth
+
+  BUCKLE, H. T.              History of Civilization of England
+
+  CAREY, H. C.               Principles of Social Science
+
+       "      "              Unity of Law
+
+  CARY, M.                   View of System of Pennsylvania Internal
+                               Improvements.
+
+  CLOUD, D. C.               Monopolies and the People
+
+  CLEWS, HENRY               Twenty-eight Years in Wall Street
+
+  COOLEY, THOMAS M.          Constitutional Limitations
+
+  CONGRESSIONAL RECORD.
+
+  COMPILATION OF ENGLISH LAWS UPON RAILWAYS.
+
+  DABNEY W. D.               The Public Regulation of Railways
+
+  DILLON, SIDNEY             North American Review
+
+  DORN, ALEXANDER            Aufgaben der Eisenbahnpolitik
+
+  DRAPER, J. W.              Intellectual Development of Europe
+
+  ENCYCLOPEDIA, AMERICAN.
+
+  ENCYCLOPEDIA BRITANNICA.
+
+  ENCYCLOPÄDIE (RÖLL'S) DES EISENBAHNWESENS, 1892.
+
+  FINDLAY, GEORGE            Working and Management of English Railways.
+
+  FINK, ALBERT               Cost of Railroad Transportation, etc.
+
+  FISHER, G. P.              Outlines of Universal History
+
+  FISK, JOHN                 American Political Ideas
+
+      "         "            Critical Period of American History
+
+  FOREIGN COMMERCE OF AMERICAN REPUBLICS AND COLONIES.
+
+  GRAHAM, WM.                Socialism Old and New
+
+  GIBBON, EDWARD             Decline and Fall of the Roman Empire
+
+  GREEN, JOHN K.             History of English People
+
+  GILPIN, WM.                The Cosmopolitan Railway
+
+  GRINNELL, J. B.            Men and Events of Forty Years
+
+  GUNTON, GEORGE             Wealth and Progress
+
+  GUIZOT, M.                 History of Civilization
+
+  HABOUR, THEODOR            Geschichte des Eisenbahnwesens
+
+  HADLEY, A. T.              Railway Transportation
+
+  HALL'S LIFE OF PRINCE BISMARCK.
+
+  HUDSON, J. T.              The Railways and the Republic
+
+  JEANS, J. S.               Railway Problems
+
+  JERVIS, JOHN B.            Railway Property
+
+  JEVONS, W. S.              Methods of Social Reform
+
+  KENT, JAMES                Commentaries on American Law
+
+  KIRKMAN, M. M.             Railway Rates and Government Control and other
+                               works.
+
+  LECKEY, W. E. H.           England in Eighteenth Century
+
+  LIEBER, FRANCIS            Political Ethics
+
+      "      "               Civil Liberty and Self-Government
+
+      "      "               Miscellaneous Essays
+
+  LODGE, H. C.               Life of General Washington
+
+  MARTINEAU, HARRIET History of England
+
+  MCMASTER, J. B.            History of People of United States
+
+  MACAULAY, T. B.            History of England
+
+  MOTLEY, J. L.              The Dutch Republic
+
+      "      "               The United Netherlands
+
+  PAINE, CHARLES             The Elements of Railroading
+
+  PATTEN, J. H.              Natural Resources of the United States
+
+  PEFFER, W. A.              The Farmer's Side
+
+  POOR'S RAILWAY MANUAL.
+
+  PORTER, HORACE             North American Review
+
+  RAWLINSON, GEORGE          Seven Great Monarchies
+
+  REDFIELD                   On Law of Railways
+
+  RECORDS OF CENTRAL IOWA TRAFFIC ASSOCIATION, 1886-1887.
+
+  RECORDS OF ASSOCIATION OF GENERAL FREIGHT AGENTS OF THE WEST.
+
+  RECORDS OF JOINT WESTERN CLASSIFICATION COMMITTEES.
+
+  REPORTS OF STATE BOARDS OF COMMISSIONERS.
+
+  REPORT OF HEPBURN COMMITTEE.
+
+  REPORTS OF UNITED STATES CENSUS.
+
+  REPORT OF WINDOM COMMITTEE.
+
+  REPORT OF BANKERS' ASSOCIATION, 1892.
+
+  REPORT OF CULLOM COMMITTEE.
+
+  ROEMER, JEAN               Origin of English People, etc.
+
+  REUBEAUX, F.               Der Weltverkehr und seine Mittel
+
+  RICHARDSON, D. N.          A Girdle Round the Earth
+
+  ROGERS, JAMES E. THOROLD   Economic Interpretation of History.
+
+  ROSCHER, WM.               Political Economy
+
+  SCHREIBER                  Die Preussischen Eisenbahnen
+
+  SCHURZ, CARL               Life of Henry Clay
+
+  SMITH, ADAM                Wealth of Nations
+
+  SPELLING, T. CARL          On Private Corporations
+
+  SPENCER, HERBERT           Synthetic Philosophy
+
+  STERN, SIMON.              Constitutional History and Political
+                               Development of the United States.
+
+  STICKNEY, A. B.            The Railroad Problem
+
+  STATISTIQUES DES CHEMINS DE FER DE L'EUROPE, 1882.
+
+  TAYLOR, HANNIS             Origin and Growth of the English Constitution.
+
+  THE AMERICAN RAILWAY.      Published by Charles Scribner's Sons.
+
+  VERSCHOYLE, REV. J.        History of Ancient Civilization
+
+  VON WEBER, M. M.           Privat-, Staats- und Reichs-Bahnen
+
+      "     "    "  "        Nationalität und Eisenbahn Politik
+
+  VON DER LEGEN, ALFRED      Die Nordamerikanischen Eisenbahnen.
+
+  WALKER, ALDACE F.          The Forum
+
+  WEEDEN, W. B.              Economic and Social History of New England.
+
+
+
+
+THE RAILROAD QUESTION.
+
+
+
+
+CHAPTER I.
+
+HISTORY of TRANSPORTATION.
+
+
+While the prosperity of a country depends largely upon its
+productiveness, the importance of proper facilities for the expeditious
+transportation and ready exchange of its various products can scarcely
+be overrated. The free circulation of commercial commodities is as
+essential to the welfare of a people as is the unimpaired circulation of
+the blood to the human organism.
+
+The interest taken by man in the improvement of the roads over which he
+must travel is one of the chief indications of civilization, and it
+might even be said that the condition of the roads of a country shows
+the degree of enlightenment which its people have reached. The trackless
+though very fertile regions of Central Africa have for thousands of
+years remained the seat of savages; but no nation that established a
+system of public thoroughfares through its dominion ever failed to make
+a distinguished figure in the theater of the world. There are some
+authors who go even so far as to call the high roads of commerce the
+pioneers of enlightenment and political eminence. It is true that as
+roads and canals developed the commerce of Eastern Asia and Europe, the
+attention of their people was turned to those objects which distinguish
+cultured nations and lead to political consequence among the powers of
+the world. The systems of roads and canals which we find among those
+ancients who achieved an advanced state of civilization might well put
+to shame the roads which disgraced not a few of the European states as
+late as the eighteenth century.
+
+Among the early nations of Asia of whose internal affairs we have any
+historic knowledge are the Hindoos, the Assyrians and Babylonians, the
+Phoenicians, the Persians and the Chinese.
+
+The wealth of India was proverbial long before the Christian era. She
+supplied Nineveh and Babylon, and later Greece and Rome, with steel,
+zinc, pearls, precious stones, cotton, silk, sugar-cane, ivory, indigo,
+pepper, cinnamon, incense and other commodities. If we accept the
+testimony of the Vedas, the religious books of the ancient Hindoos, a
+high degree of culture must have prevailed on the shores of the Ganges
+more than three thousand years ago. Highways were constructed by the
+state and connected the interior of the realm with the sea and the
+countries to the northeast and northwest. For this purpose forests were
+cleared, hills leveled, bridges built and tunnels dug. But the broad
+statesmanship of the Hindoo did not pause here. To administer to the
+convenience and comfort of the wayfaring public, and thus still more
+encourage travel and the exchange of commodities, the state proceeded to
+line these public roads with shade trees, to set out mile-stones, and to
+establish stations provided with shady seats of repose, and wells at
+which humane priests watered the thirsty beasts.
+
+At intervals along these routes were also found commodious and
+cleanly-kept inns to give shelter to the traveler at night. Buddha, the
+great religious reformer of the Hindoos, commended the roads and
+mountain passes of the country to the care of the pious, and the Greek
+geographers speak with high praise of the excellence of the public
+highways of Hindostan.
+
+Among the Babylonians and Assyrians agriculture, trade and commerce
+flourished at an almost equally remote period. The ancient inhabitants
+of Mesopotamia cultivated the soil with the aid of dikes and canals, and
+were experts in the manufacture of delicate fabrics, as linen, muslin
+and silk. To them is attributed the invention, or at least the
+perfection, of the cart, and the first use of domestic animals as beasts
+of burden. Their cities had well-built and commodious streets, and the
+roads which connected them with their dependencies aided to make them
+the busy marts of Southeastern Asia.
+
+During the later Babylonian Empire immense lakes were dug for retaining
+the water of the Euphrates, whence a net-work of canals distributed it
+over the plains to irrigate the land; and quays and breakwaters were
+constructed along the Persian Gulf for the encouragement of commerce.
+While highways among the Babylonians served the development of
+agriculture and the exchange of industrial commodities, they were
+constructed chiefly for strategic purposes by the more warlike
+Assyrians, whose many wars made a system of good roads a necessity. The
+Greek geographer Pausanias was shown a well-kept military road upon
+which Memnon was said to have marched with an Assyrian army from Susa to
+Troy to rescue King Priam. Traces of this road, called by the natives
+"Itaki Atabeck," may be seen to this day.
+
+The Phoenicians, who were the first of the great historic maritime
+nations of antiquity, occupied the narrow strip of territory between the
+mountains of Northern Palestine and the Mediterranean Sea. From their
+situation they learned to rely upon the sea as their principal highway.
+They transported to the islands of the Mediterranean as well as the
+coast of Northern Africa and Southern Europe heavy cargoes consisting of
+the product of their own skill and industry as well as of the manifold
+exports of the east. They sailed even beyond the "Pillars of Hercules"
+into the Atlantic Ocean and the North Sea. Through their hands "passed
+the gold and pearls of the east and the purple of Tyre, slaves, ivory,
+lion and panther skins from the interior of Africa, frankincense from
+Arabia, the linen of Egypt, the pottery and fine wares of Greece, the
+copper of Cyprus, the silver of Spain, tin from England, and iron from
+Elba."
+
+But while the Phoenicians for their commercial intercourse with other
+nations relied chiefly upon the sea, the great highway of nature, they
+neglected by no means road-building at home. They connected their great
+cities, Sidon and Tyre, by a coast road, which they extended in time as
+far as the Isthmus of Suez. They also established great commercial
+routes by which their merchants penetrated the interior of Europe and
+Asia. Caravan roads extended south to Arabia and east to Mesopotamia and
+Armenia, penetrating the whole Orient as far as India, and even the
+frontiers of China. The Phoenicians thus became the traders of
+antiquity, Tyre being the link between the east and the west.
+
+The Persian Empire, which under Darius stretched from east to west for a
+distance of 3,000 miles and comprised no less than two million square
+miles, with a population of seventy or eighty millions, had, with the
+exception of the Romans, perhaps the best system of roads known to
+ancient history. Indeed, it is doubtful whether without it such a vast
+empire, more than half as large as modern Europe, could have been held
+together. Each satrap, or prefect of a province, was obliged to make
+regular reports to the king, who was also kept informed by spies of what
+was taking place in every part of the empire. To aid the administration
+of the government, postal communication for the exclusive use of the
+king and his trusted servants connected the capital with the distant
+provinces. This postal service was, four or five centuries later,
+patterned after by the Romans. From Susa to Sardes led a royal road
+along which were erected caravansaries at certain intervals. Over this
+road, 1,700 miles long, the couriers of the king rode in six or seven
+days. Under Darius the roads of the empire were surveyed and distances
+marked by means of mile-stones, many of which are still found on the
+road which led from Ecbatana to Babylon. These roads crossed the wildest
+regions of that great monarchy. They connected the cities of Ionia with
+Sardes in Lydia, with Babylon and with the royal city of Susa; they led
+from Syria into Mesopotamia, from Ecbatana to Persepolis, from Armenia
+into Southern Persia, and thence to Bactria and India.
+
+The Chinese commenced road-building long before the Christian era. They
+graded the roadway and then covered the whole with hewn blocks of stone,
+carefully jointed and cemented together so that the entire surface
+presented a perfectly smooth plane. Such roads, although very costly to
+build, are almost indestructible by time. In China, as well as in
+several other countries of Asia, the executive power has always charged
+itself with both the construction and maintenance of roads and navigable
+canals. In the instructions which are given to the governors of the
+various provinces these objects, it is said, are constantly commanded to
+them, and the judgment which the court forms of the conduct of each is
+very much regulated by the attention which he appears to have paid to
+this part of his instructions. This solicitude of the sovereign for the
+internal thoroughfares is easily accounted for when it is considered
+that his revenue arises almost entirely from a land-tax, or rent, which
+rises and falls with the increase and decrease of the annual produce of
+the land. The greatest interest of the sovereign, his revenue, is
+therefore directly connected with the cultivation of the land, with the
+extent of its produce and its value. But in order to render that produce
+as great and as valuable as possible, it is necessary to procure for it
+as extensive a market as possible, and, consequently, to establish the
+freest, the easiest and the least expensive communication between all
+the different parts of the country, which can be done only by means of
+the best roads and the best navigable canals.
+
+In Africa the Egyptians and Carthaginians are the only nations of
+antiquity of which we have much historic knowledge. The former kept up a
+very active commerce not only with the south, but also with the tribes
+of Lydia on the west and with Palestine and the adjoining countries on
+the east. To facilitate commerce, they constructed and maintained a
+number of excellent highways leading in all directions. One of the most
+important among these was the old royal road on the coast of the
+Mediterranean Sea, or the "Road of the Philistines" of the Scriptures.
+This road crossed the Isthmus of Suez and led through the land of the
+Philistines and Samaria to Tyre and Sidon. Another road led, in a
+northwesterly direction, from Rameses to Pelusium. This, however,
+crossed marshes, lagoons and a whole system of canals, and was used only
+by travelers without baggage, while the Pharaohs, accompanied by their
+horses, chariots and troops, preferred the former road. A third road
+led from Coptos, on the Nile, to Berenice, on the Red Sea. There were
+between these two cities ten stations, about twenty-five miles apart
+from each other, where travelers might rest with their camels each day,
+after traveling all night, to avoid the heat. Still another road led
+from the town of Babylon, opposite Memphis, along the east bank of the
+Nile, into Nubia. Much of the commerce of Egypt in ancient times, as in
+our day, was conducted on the Nile and its canals. The boatman and the
+husbandman were, in fact, the founders of the gentle manners of the
+people who flourished four thousand years ago in the blessed valley of
+the Nile. There is one canal among the many which deserves special
+mention. It flowed from the Bitter Lakes into the Red Sea near the city
+of Arsinoe. It was first cut by Sesostris before the Trojan times, or,
+according to other writers, by the son of Psammitichus, who only began
+the work and then died. Darius I. set about to complete it, but gave up
+the undertaking when it was nearly finished, influenced by the erroneous
+opinion that the level of the Red Sea was higher than Egypt, and that if
+the whole of the intervening isthmus were cut through, the country would
+be overflowed by the sea. The Ptolemaic kings, however, did cut it
+through and placed locks upon the canal.
+
+Carthage was a Phoenician colony. The city was remarkable for its
+situation. It was surrounded by a very fertile territory and had a
+harbor deep enough for the anchorage of the largest vessels. Two long
+piers reached out into the sea, forming a double harbor, the outer for
+merchant ships and the inner for the navy. This city early became the
+head of a North African empire, and her fleets plied in all navigable
+waters known to antiquity. Her navy was the largest in the world, and
+in the sea-fight with Regulus comprised three hundred and fifty vessels,
+carrying one hundred and fifty thousand men. Though we have but meager
+accounts of the internal affairs of Carthage, there can be no doubt that
+much attention was given, both at home and in the colonies, to the
+construction of highways, which were distinguished for their solidity.
+It is said that the Romans learned from the Carthaginians the art of
+paving roads.
+
+European history began in Greece, the civilization of whose people
+passed to the Romans and from them to the other Aryan nations which have
+played an important role in the great historical drama of modern times.
+The physical features of the Balkan Peninsula were an important factor
+in the formation of the character of its inhabitants. The coast has a
+large number of well-protected bays, most of which form good harbors.
+Navigation and commerce were greatly stimulated in a country thus
+favored by Nature. Nearly all the principal cities of Hellas could be
+reached by ships, and the need of internal thoroughfares was but little
+felt. Nevertheless, public highways connected all of the larger towns
+with the national sanctuaries and oracles, as Olympia, the Isthmus,
+Delphi and Dodona. Athens, after the Persian wars the metropolis of
+Greece, was by the so-called Long Walls connected with the Piræus, its
+harbor. This highway, protected by high walls built two hundred yards
+apart, was over four miles long, and enabled the Athenians, as long as
+they held the command of the sea, to bring supplies to their city, even
+when it was surrounded by an enemy on the land.
+
+Rome is the connecting link between antiquity and mediævalism. The great
+empire sprang from a single city, whose power and dominion grew until
+it comprised every civilized nation living upon the three continents
+then known. Under the emperors, the Roman empire extended from the
+Atlantic to the Euphrates, a distance of more than three thousand miles,
+and from the Danube and the English Channel to the cataracts of the Nile
+and the Desert of Sahara. Its population was from eighty to one hundred
+and twenty millions. The empire was covered with a net-work of excellent
+roads, which stimulated, together with the safety and peace which
+followed the civil wars, traffic and intercourse between the different
+regions united under the imperial government. More than 50,000 miles of
+solidly constructed highways connected the various provinces of this
+vast realm. There was one great chain of communication of 4,080 Roman
+miles in length from the Wall of Antoninus in the northwest to Rome, and
+thence to Jerusalem, a southeastern point of the empire. There were
+several thousand miles of road in Italy alone. Rome's highways were
+constructed for the purpose of facilitating military movements, but the
+benefits which commerce derived from them cannot easily be
+overestimated. These military roads were usually laid out in straight
+lines from one station to another. Natural obstacles were frequently
+passed by means of very extensive works, as excavations, bridges, and,
+in some instances, long tunnels. The resources of the Roman Empire were
+almost inexhaustible, and no public expenditures were larger than those
+made on account of the construction of new roads. The fact that many of
+these roads have borne the traffic of almost two thousand years without
+material injury is abundant proof of the unsurpassed solidity of their
+construction. The Roman engineers always secured a firm bottom, which
+was done, when necessary, by ramming the ground with small stones, or
+fragments of brick. Upon this foundation was placed a pavement of large
+stones, which were firmly set in cement. These stones were sometimes
+square, but more frequently irregular. They were, however, always
+accurately fitted to each other. Many varieties of stone were used, but
+the preference was given to basalt. Where large blocks could not be
+conveniently obtained, small stones of hard quality were sometimes
+cemented together with lime, forming a kind of concrete, of which masses
+extending to a depth of several feet are still in existence. The
+strength of the pavements is illustrated by the fact that the substrata
+of some have been so completely washed away by water, without disturbing
+the surface, that a man may creep under the road from side to side while
+carriages pass over the pavement as over a bridge. The roads were
+generally raised above the ordinary surface of the ground. They
+frequently had two wagon-tracks, which were separated by a raised
+foot-path in the center, and blocks of stone at intervals, to enable
+travelers to mount on horseback. Furthermore, each mile was marked by a
+numbered post, the distance being counted from the gate of the wall of
+Servius. The mile-post was at first a roughly hewn stone, which in time
+was exchanged for a monument, especially in the vicinity of Rome and
+other large cities. The most celebrated road of Italy, which has always
+excited the admiration of the student of antiquity, was the Via Appia,
+the remains of which are still an object of wonder. It was first built
+from Rome to Capua by Appius Claudius Cæcus in the fourth century before
+Christ, and was afterwards continued as far as Brundisium. It was broad
+enough for two carriages to pass each other, and was built of solid
+stone. The stones were hewn sharp and smooth, and their corners fitted
+into one another without the aid of any connecting material, so that,
+according to Procopius, the whole appeared to be one natural stone. Each
+side of the street had a high border for foot-passengers, on which were
+also placed alternately seats and mile-stones. In spite of its age and
+heavy traffic parts of this road are still in a good state of
+preservation. After the completion of the Via Appia similar roads were
+constructed, so that under the emperors seven great highways started
+from Rome, viz.: the Via Appia and Latina to the south; two, Valeria and
+Salaria, to the Adriatic; two, Cassia and Aurelia, to the northwest; and
+the Via Æmilia, serving for both banks of the Po.
+
+Nor were the provinces by any means neglected. During the last Punic war
+a paved road was constructed from Spain through Gaul to the Alps, and
+similar roads were afterwards built in every part of Spain and Gaul,
+through Illyricum, Macedonia and Thrace, to Constantinople, and along
+the Danube to its mouths on the Black Sea. So, likewise, were the
+islands of Sardinia, Corsica, Sicily and Great Britain crossed by them.
+It has justly been said that the roads of the Roman Empire, whose strong
+net-work enlaced the known world, were the architectural glory of its
+people. These military roads caused in the various parts of the empire a
+wonderful social and commercial revolution. They made it possible for
+civilization to penetrate into the most remote retreats and to conquer
+their inhabitants more completely than could Cæsar at the head of his
+legions.
+
+The Romans also had an efficient postal service, which was first
+instituted by Augustus and greatly improved by Hadrian. The former, as
+Gibbon states in his "Decline and Fall of the Roman Empire," placed
+upon all roads leading away from the golden milestone of the Forum, at
+short distances, relays of young men to serve as couriers, and later
+provided vehicles to hurry information from the provinces. These posts
+facilitated communication through all parts of the empire, and while
+they were originally established in the interest of the government, they
+proved serviceable to individuals as well, for there is no doubt, that,
+together with the official dispatches, every courier carried private
+letters also.
+
+The expenses of the post were largely defrayed by the cities through
+which it passed, these cities being obliged to provide the stations
+established within their territories with the necessary stores. At the
+principal stations were found inns, where the proprietors were held
+responsible for injuries suffered by travelers while in their houses.
+
+The communication of the Roman Empire was scarcely less free and open by
+sea than it was by land. Italy has by nature few safe harbors, but the
+energy and industry of the Romans corrected the deficiencies of nature
+by the construction of several artificial ports.
+
+After the downfall of the Roman Empire its roads were either destroyed
+by the people through whose territories they led or by the conquerors,
+to render more difficult the approach of an enemy.
+
+Civilization and commerce greatly suffered through the downfall of Rome,
+and did not again revive until after the struggles of the Northern
+Christian races with the Southern and Eastern nations, which had become
+Mohammedan. The sixth and seventh centuries were the darkest in the
+history of Europe. Charlemagne, toward the close of the eighth century,
+caused many of the old Roman roads to be repaired and new ones to be
+constructed. He, as well as several of his immediate successors, made
+use of mounted messengers to send imperial mandates from one part of the
+realm to the other. The rulers of the succeeding centuries did not
+profit, however, by this example, and the roads of the empire again fell
+into decay. Moreover, the public safety was greatly impaired by robbers
+and feudal knights, whose depredations were so heavy a tax upon commerce
+as to greatly discourage it. Trade under these circumstances would have
+been entirely destroyed, had it not been for the merchants' unions which
+were formed by the larger cities for the protection of their interests.
+These organizations maintained the most important thoroughfares, and
+even furnished armed escorts to wayfaring merchants. Commerce thus
+flourished in, and commercial relations were kept up among, the cities
+immediate between Venice and Genoa, as well as the cities on the Rhine
+and Danube. Florence, Verona, Milan, Strasbourg, Mayence, Augsburg, Ulm,
+Ratisbon, Vienna and Nuremberg were flourishing marts, and through them
+flowed the currents of trade between the north and the south. Out of
+these commercial unions grew in time the Hanseatic League, which from
+the thirteenth to the fifteenth century controlled the commerce of the
+northern part of Europe on both the water and the land. The object of
+this league, which at the height of its power included eighty-five
+cities, was to protect its members against the feudal lords on the land
+and against pirates on the sea. Its power extended from Norway to
+Belgium and from England to Russia. In all the principal towns on the
+highways of commerce the flag of the Hansa floated over its counting
+houses. Wherever its influence reached, its members controlled roads,
+mines, agriculture and manufactures. It often dictated terms to kings,
+and almost succeeded in monopolizing the trade of Europe north of
+Italy.
+
+It is characteristic of the social and political condition of this time
+that the postal service was not carried on by the state, but was in the
+hands of the various municipalities, convents and universities. During
+the fifteenth and sixteenth centuries national power and national life
+made themselves felt, and with a change in the political system the
+system of communication and transportation changed also. Louis XI. of
+France took the first step toward making a nation of the French when he
+transferred the postal service from the cities and other feudal
+authorities to the state. Two or three centuries later, France obtained
+a national system of roads and canals. The idea was largely due to
+Colbert, the minister of Louis XIV. It was, however, not executed in
+detail until the middle of the last century. Many abuses grew up in
+connection with it, but on the whole it was probably the soundest and
+most efficient part of the French administration. A system of lines of
+communication, radiating from Paris, was constructed by skilled
+engineers, and placed under the supervision of men of talent, especially
+trained for the purpose at the Ecôle des Fonts et Chaussées. The whole
+system was further improved by Napoleon, and has served as a basis for
+the present system of railroad supervision.
+
+The first artificial waterway constructed in France was the Languedoc
+Canal, connecting the Bay of Biscay with the Mediterranean. This
+gigantic work, designed by Riquet, was commenced in 1666, and completed
+in 1681. The canal is 148 miles long and its summit level is 600 feet
+above the sea, the works along its line embracing over one hundred locks
+and fifty aqueducts. A large number of canals have since been
+constructed, and France has at present over 4,000 miles of artificial
+waterways, or more than any other country of Europe.
+
+Nowhere else was the same completeness of organization possible. The
+regular mail service of Germany dates back to the year of 1516, when
+Emperor Maximilian established a postal route between Brussels and
+Vienna and made Francis Count of Taxis Imperial Postmaster-General. The
+postal service of the empire greatly improved up to the time of the
+Thirty Years' War, which completely demoralized it. After the war the
+individual states and free cities, usurping imperial prerogatives,
+established postal routes of their own and thereby crippled the national
+service. The same war also did great damage to the public thoroughfares,
+and the commercial and manufacturing interests of the German empire were
+until the end of the eighteenth century in a deplorable condition.
+Frederick the Great, recognizing the fact that the industrial paralysis
+of Germany was owing chiefly to its defective means of communication,
+commenced to construct turnpikes and canals in Prussia, and the minor
+German princes one by one imitated his example, until the Napoleonic
+wars again put an end to internal improvements. The good work was
+resumed, however, after the downfall of Napoleon, and in 1830 Germany
+was intercrossed by from three to four thousand miles of turnpike.
+
+In the Netherlands canals were constructed as early as the twelfth
+century. Being particularly well adapted to the flat country of Holland,
+they were rapidly extended until they connected all the cities, towns
+and villages of the country, and to a large extent took the place of
+roads. The largest canal of Holland is the one which connects the city
+of Amsterdam with the North Sea. It was constructed between the years
+of 1819 and 1825 at an expense of more than four million dollars. The
+city of Amsterdam owes to this canal its present commercial prosperity.
+
+Public roads and the state postal service are of comparatively recent
+origin in Great Britain. The first public postal route was established
+in 1635, during the reign of Charles I. In 1678 a public stage-coach
+route was established between Edinburgh and Glasgow. The distance is
+only forty-four miles, but the roads were so bad that, though the coach
+was drawn by six able horses, the journey took three days. It was
+considered a great improvement when in 1750 it could be completed in
+half the time originally required. In 1763 a mail-coach made only
+monthly trips between London and Edinburgh, eight long days being
+required for the journey, which to-day is made in less than twelve
+hours. The number of stage passengers between these two capitals
+averaged about twenty-five a month, and rose to fifty on extraordinary
+occasions. In those days coaches were very heavy and without springs,
+and travelers not unfrequently cut short their journeys for want of
+conveniences.
+
+Turnpikes in Great Britain do not even date as far back as
+stage-coaches. It is true the first turnpike act was passed as early as
+1653, but the system was not extensively adopted until a century later.
+Previous to that time the roads of England, such as they were, were
+maintained by parish and statute labor. In the latter half of the last
+century, under improved methods of construction, turnpike roads
+multiplied rapidly. Both roads and vehicles attained, previous to the
+advent of the railroads, such a degree of perfection that the
+stage-coach made the journey between London and Manchester, 178 miles,
+in 19 hours; between London and Liverpool, 203 miles, in less than 21
+hours; and between London and Holyhead, 261 miles, in less than 27
+hours.
+
+In spite of these improved facilities, the transportation of merchandise
+continued to be very expensive. Goods had to be conveyed from town to
+town by heavy wagons, and the cost of land-carriage between Manchester
+and Liverpool, a distance of thirty miles, was at times as high as forty
+shillings per ton.
+
+The various disadvantages of land transportation directed, toward the
+middle of the last century, the attention of the British people to the
+importance of a system of canals. They realized that these water
+highways would open an easier and cheaper communication between distant
+parts of the country, thus enabling manufacturers to collect their
+materials and fuel from remote districts with less labor and expense,
+and to convey their goods to a more distant and more profitable market.
+It would also facilitate the conveyance of farm produce to a greater
+distance and would thereby benefit both the producer and consumer. The
+canal era was formally inaugurated in 1761, when the Duke of Bridgewater
+presented to Parliament a petition for a bill to construct the canal
+which has since borne his name. The canal was commenced in 1767 and was
+completed in 1772. The next forty years were a period of great activity
+in canal building, but it was left to private enterprise, with very
+little aid from the government. Over a hundred canal acts were passed by
+Parliament before the year 1800. The largest canal of the British Isles
+is the Caledonian, extending from Inverness to Fort William, a distance
+of sixty-three miles. It was commenced in 1803 and completed in 1847,
+and cost £1,256,000. Other canals of importance are the Great Canal,
+which connects the North Sea with the Atlantic Ocean, and the Grand
+Function Canal, which is over one hundred miles long and connects most
+of the water-ways of central England with the Thames River. It is
+estimated that there were over 2,200 miles of navigable canals in Great
+Britain before the introduction of railroads.
+
+Canal-building in Spain dates back to the beginning of the sixteenth
+century, when Charles V. built the Imperial Canal of Aragon, which is
+over sixty miles long. The political and commercial decline of the
+country during the seventeenth and eighteenth centuries, however,
+brought the development of her highways to a standstill, and, with the
+exception of Turkey, probably no European country has at the present
+time more deficient transportation facilities than Spain.
+
+The comparatively high state of civilization which existed in the
+Italian cities during the middle ages, their commercial and industrial
+thrift and the importance of Rome as the metropolis of the Catholic
+Church combined to maintain many of the excellent ancient highways of
+Italy. A number of canals were built in Northern Italy as early as the
+fifteenth century, and it is claimed by some writers that locks were
+first used on the Milanese canals in 1497. But while public
+thoroughfares have always been well maintained in Northern Italy and
+even as far south as Naples, they were during the past two or three
+centuries permitted to greatly deteriorate in the southern part of the
+peninsula, to the great detriment of both agriculture and commerce. The
+condition of the large Italian islands is still more lamentable, Sicily
+and Sardinia being almost entirely devoid of roads. She that was the
+granary of ancient Rome to-day scarcely produces enough grain to supply
+her own people.
+
+Denmark and the Scandinavian peninsula had a good system of highways
+long before the railroad era. Among the many excellent canals of Sweden
+may be mentioned the Göta Canal, which was commenced by Charles XII. in
+the early part of the last century, but was not entirely completed until
+1832. It is, inclusive of the lakes, 118 miles long, and its
+construction cost $3,750,000, three-fifths of which was contributed by
+the state. This canal connects the Baltic Sea with Lake Wener, as well
+as, through the Göta-Elf, with the North Sea.
+
+Next to Turkey and Spain, no country of Europe has been as slow to
+appreciate the advantages of a system of highways as Russia. At the
+beginning of the nineteenth century the vast empire of the Czar had but
+a few roads connecting its principal cities, and these were almost
+impassable in the spring and fall. Much progress has, however, been made
+since then, and at present Russia has over 75,000 miles of wagon-road
+and artificial waterway, and 19,000 miles of railroad. A road has been
+built through Siberia, extending from the Ural Mountains to the city of
+Jakutsk on the Lena and sending out many branch roads north and south.
+The development of Russia's resources has kept pace with that of her
+system of highways, and the agricultural and mineral products of that
+country are in the markets of the world constantly gaining ground in
+their competition with the products of Western Europe and America.
+
+Passing now to the Western Hemisphere, we find that in ancient Peru the
+Incas built great roads, the remains of which still attest their
+magnificence. Probably the most remarkable were the two which extended
+from Quito to Cuzco, and thence on toward Chile, one passing over the
+great Plateau, the other following the coast, Humboldt, in his "Aspects
+of Nature," says of this mountain road: "But what above all things
+relieves the severe aspect of the deserts of the Cordilleras are the
+remains, as marvelous as unexpected, of a gigantic road, the work of the
+Incas. In the pass of the Andes between Mausi and Loja we found on the
+plain of Puttal much difficulty in making a way for the mules over a
+marshy piece of ground, while for more than a German mile our sight
+continually rested on the superb remains of a paved road of the Incas,
+twenty feet wide, which we marked resting on its deep foundations, and
+paved with well-cut, dark porphyritic stone. This road was wonderful and
+does not fall behind the most imposing Roman ways which I have seen in
+France, Spain and Italy. By barometrical observation I found that this
+colossal work was at an elevation of 12,440 feet." The length of this
+road, of which only parts remain, is variously estimated at from 1,500
+to 2,000 miles. It was built of stone and was, in some parts at least,
+covered with a bituminous cement, which time had made harder than the
+stone itself. All the difficulties which a mountainous country presents
+to the construction of roads were here overcome. Suspension bridges led
+over mountain torrents, stairways cut in the rock made possible the
+climbing of steep precipices, and mounds of solid masonry facilitated
+the crossing of ravines. Under the rule of the Spaniards the roads of
+the Incas went to ruin. In fact, throughout South America but little, if
+anything, was done by the mother country to aid transportation.
+
+North America, or at least that part of it which was settled by the
+Anglo-Saxon race, fared much better in this respect. The great utility
+of good roads was universally recognized even in the colonial times, but
+the scarcity of capital, the great extent of territory as compared with
+the population, and the want of harmonious action among the various
+colonies, delayed extensive road and canal building until after the
+establishment of the Union. Mistaken local interests but too often
+wrecked well-advanced plans, and what road-building was done during the
+colonial times was almost entirely left to individual exertion, without
+any direct aid from the government.
+
+The first American turnpike was built in Pennsylvania in 1790. From
+there the system extended into New York and Southern New England. Up to
+1822 more than six million dollars had been expended in Pennsylvania for
+turnpikes, one-third of which sum, or over $1,000 a mile, had been
+contributed by the commonwealth.
+
+In 1800 three wagon-roads connected the Atlantic coast with the country
+west of the Alleghanies, one leading from Philadelphia to Pittsburgh,
+one from the Potomac to the Monongahela, and a third passed through
+Virginia to Knoxville, in Tennessee. Much as was done during this period
+for the improvement of the roads, stage-coach travel remained for years
+comparatively slow. In 1792 Mr. Jefferson, then Secretary of State,
+wrote to the Postmaster-General to know if the post, which was then
+carried at the rate of fifty miles a day, could not be expedited to one
+hundred. Even this latter rate was considered slow on the great
+post-roads forty years later. In the year 1800 one general mail-route
+was extended from Maine to Georgia, the trip being made in twenty days.
+From Philadelphia a line went to Lexington in sixteen and to Nashville
+in twenty-two days. The government of the United States, appreciating
+the importance, for military purposes, of good roads leading to the
+frontiers, commenced the construction of national, or military, roads.
+A road was thus built from Baltimore through Cincinnati to St. Louis,
+and another from Bangor to Houlton, in Maine. In 1807 Albert Gallatin,
+Secretary of the Treasury, advocated the extensive construction of
+public roads and canals by the general government. Mr. Gallatin took the
+ground that the inconveniences, complaints, and perhaps dangers,
+resulting from a vast extent of territory cannot otherwise be radically
+removed than by opening speedy and easy communications through all its
+parts; that good roads and canals would shorten distances, facilitate
+commercial and personal intercourse, and unite by a still more intimate
+community of interests the most remote quarters of the United States,
+and that no other single operation within the power of the government
+could more effectually tend to strengthen and perpetuate that union
+which secured external independence, domestic peace and internal
+liberty. The principal improvements recommended by Mr. Gallatin were the
+following:
+
+1. Canals opening an inland navigation from Massachusetts to North
+Carolina.
+
+2. Improvement of the navigation of the four great Atlantic rivers,
+including canals parallel to them.
+
+3. Great inland navigation by canals from the North River to Lake
+Ontario.
+
+4. Inland navigation from the North River to Lake Champlain.
+
+5. Canal around the Falls and Rapids of Niagara.
+
+6. A great turnpike road from Maine to Georgia, along the whole extent
+of the Atlantic sea-coast.
+
+7. Four turnpike roads from the four great Atlantic rivers across the
+mountains to the four corresponding Western rivers.
+
+8. Improvement of the roads to Detroit, St. Louis and New Orleans.
+
+Mr. Gallatin also recommended that a sufficient number of local
+improvements, consisting either of roads or canals, be undertaken so as
+to do substantial justice to all parts of the country. The expenditure
+necessary for these improvements was estimated at twenty million
+dollars. Local jealousy and State rights prejudice practically defeated
+this movement, the Cumberland road, or National Pike, being the only
+result of any importance. The failure of the government to provide the
+country with adequate roads left the construction of turnpike roads to
+private enterprise, and these roads, before the general introduction of
+railroads, often yielded much profit to capitalists. Great as were the
+conveniences afforded by the turnpike, they were entirely inadequate for
+the development of the resources of the interior of the country. The
+products of a forest or a mine could not be transported upon them to any
+great extent. The crossing of a single water-shed, owing to the
+necessity for largely increased motive power, would often materially
+decrease the value of the goods to be transported.
+
+These drawbacks of land transportation directed, toward the close of the
+last century, the attention of the people of the United States to the
+necessity of providing for a system of canals that should bind together
+the various parts of their extended country in the interest of commerce.
+General Washington was among the first to urge upon his countrymen the
+introduction of this great highway of interstate traffic, although but
+little was done in this direction until after the War of 1812. The
+people of New York had from an early period of the settlement of their
+State been impressed with the importance of connecting the Hudson with
+the Western lakes. In 1768 the provincial legislature discussed this
+subject, but the political agitations of the times and the following
+revolutionary struggle arrested further proceedings. After the war the
+project was frequently brought before the legislature, but nothing was
+done until 1808, when the assembly appointed a committee to investigate
+the subject and to solicit the coöperation of the general government, if
+the project should be found practicable. The report of the committee
+concerning the practicability of the undertaking was in every respect
+favorable, and in 1810 the legislature provided for a survey of the
+entire route from the Hudson River to Lake Erie. The survey was made,
+but, the expected aid from the national government not being
+forthcoming, the matter rested until after the war with England. In 1816
+a new board of commissioners was appointed, and the following year an
+act was passed providing for a system of internal improvements in the
+State. On the 4th day of July next the excavation of the Erie Canal was
+commenced, and on the 26th of October, 1825, the first boat passed from
+Lake Erie to the Hudson. The canal was 378 miles long and four feet
+deep. It had a width of 40 feet at the surface and 28 feet on the
+bottom, and carried boats of 76 tons burden. Owing to the rapid increase
+of trade, the capacity of the canal was found inadequate within ten
+years after its opening, and in 1835 measures were taken to enlarge it
+to a width of 70 and 56 feet by a depth of seven feet, thus allowing the
+passage of boats of 240 tons. The total length of the canal was,
+however, subsequently shortened 12-1/2 miles, making its present length
+365-1/2 miles. This enlargement was completed in 1862, and cost the
+State over $7,000,000, making the total cost of the canal about
+$50,000,000. New York has, inclusive of branches, some ten other canals
+in operation, among them the Champlain Canal, extending from the head of
+Lake Champlain to its junction with the Erie Canal at Waterford; the
+Oswego Canal, from Lake Ontario at the city of Oswego to the Erie Canal
+at Syracuse; the Black River Canal, from Rome to Lyon Falls; the Cayuga
+and Seneca canals, extending from the Erie Canal to the Seneca and
+Cayuga lakes. The State has expended for the construction of canals not
+less than $70,000,000.
+
+Canal-building in the State of Pennsylvania commenced about the time
+that the original Erie Canal was completed in New York. In 1824 the
+legislature authorized the appointment of commissioners to explore canal
+routes from Philadelphia to Pittsburgh and the West. A year later
+surveys were authorized to be made from Philadelphia to Pittsburgh, from
+Allegheny to Erie, from Philadelphia to the northern boundary of the
+State, and also south to the Potomac River. The construction of the main
+lines of communication between the east and the west and the coal fields
+in the north was soon commenced. Large loans were repeatedly made, and
+the work was vigorously prosecuted. In 1834 Pennsylvania had 589 miles
+of State canals, among them the Central Division Canal, 172 miles long,
+and the Western Division Canal, 104 miles long. Public opinion strongly
+favored an extended system of internal improvements, and it was believed
+that these water-ways would soon become a source of revenue to the
+State. These expectations might have been realized had the State carried
+on enterprises on a less extensive and more economical basis. In 1840
+the financial condition of the State had become such that canal-building
+had to be abandoned. The amount expended by the State of Pennsylvania
+for canals, including the Columbia Railroad, was about $40,000,000,
+while the difference between net earnings and interest paid by the State
+up to that time is estimated at $30,000,000. In 1857 and 1858 these
+works were sold to the Pennsylvania Railroad Company and the Sunbury and
+Erie Railway Company for $11,375,000, or about one-sixth of their cost
+to the State.
+
+In Ohio the legislature authorized the survey of a canal from Lake Erie
+to the Ohio River. In 1825 an act was passed providing for the
+construction of the Ohio Canal and a number of feeders. In 1831 the
+canal was in operation from Cleveland to Newark, a distance of 176
+miles, and the whole system was finished in 1833.
+
+The State of Illinois completed in 1848 the Illinois and Michigan Canal,
+connecting Chicago with La Salle on the Illinois River. This canal is
+102 miles long, 60 feet wide and six feet deep. The construction by the
+general government of the Hennepin Ship Canal, connecting the
+Mississippi with Lake Michigan, has long been agitated in the Northwest.
+Such a canal would be one of the most important channels of commerce in
+the country, and it is to be hoped that this great project will be
+completed at no distant day.
+
+We have besides in the United States a large number of canals that were
+constructed, and are still operated, by private companies, as the
+Delaware and Hudson in New York and Pennsylvania, the Schuylkill, Lehigh
+and Union canals in Pennsylvania, the Morris Canal in New Jersey, the
+Chesapeake and Ohio and Maryland, etc. A large number of canals, some
+public and others private property, have since the construction of
+railroads been abandoned. Thus in New York 356 miles of canals, costing
+$10,235,000; in Pennsylvania 477 miles, costing $12,745,000; in Ohio 205
+miles, costing $3,000,000; in Indiana 379 miles, costing $6,325,000, are
+no longer in use. All the canals that were ever built in New England
+have likewise been abandoned for commercial purposes.
+
+Nor was Canada slow in realizing the advantages which a system of canals
+connecting the great lakes with the Atlantic Ocean promised to give her.
+The construction of the Welland and St. Lawrence canals made it possible
+for vessels to clear from Chicago direct for Liverpool, and this has to
+a considerable extent diverted grain shipments to Montreal, giving the
+Canadian dealers a decided advantage in this traffic.
+
+It is a strange fact that, at least in this country, the zenith of the
+canal-building era is found in the decade following the invention of the
+steam railroad. For many years it was not believed that under ordinary
+circumstances the iron horse could ever compete with the canal boat in
+rates. The most sagacious business men had unlimited faith in the
+destiny of the canal as a prime commercial factor and invested largely
+in canal stocks. To many these investments proved a disappointment. The
+marvelous improvements in locomotives and other rolling stock, the
+unprecedented reductions in the prices of iron and steel, and above all
+the fact that in our climate canal carriage is unavailable during five
+months of the year, gave the railroads a decided advantage in their
+competition with canal transportation. There can be no doubt, however,
+that the presence of this competition was one of the chief causes of the
+great reduction of railroad rates on through routes. In this respect
+alone the canals have accomplished a very important mission. In the
+transportation of many of the raw products of the soil and the mine
+canals still compete successfully with the railroads, and it is still an
+open question whether future inventions may not enable them to regain
+lost ground in the carriage of other goods. It would certainly be a
+short-sighted policy for our people to discourage the construction of
+new canals.
+
+For the improvement of navigable rivers, appropriations have been made
+by Congress ever since the establishment of our national government, and
+these appropriations now amount to millions of dollars annually. Since
+the introduction of railroads the usefulness of these national highways
+of commerce has ceased to depend upon the tonnage carried upon them, but
+the influence which they exert upon the cost of transportation is so
+great that it is not likely that the policy of making annual
+appropriations for the improvement of these water ways will be abandoned
+by the American people for many years to come.
+
+There has recently been a strong agitation in some portions of the
+United States in favor of extending government aid to the Nicaragua Ship
+Canal, and there seem to be indeed many arguments in favor of such a
+policy. President Harrison said in his annual message to Congress in
+December, 1891:
+
+      "The annual report of the Maritime Canal Company of
+      Nicaragua shows that much costly and necessary preparatory
+      work has been done during the past year in the construction
+      of shops, railroad tracks and harbor piers and breakwaters,
+      and that the work of canal construction has made some
+      progress. I deem it to be a matter of the highest concern to
+      the United States that this canal, connecting the waters of
+      the Atlantic and Pacific oceans, and giving to us a short
+      water communication between our ports upon those two great
+      seas, should be speedily constructed, and at the smallest
+      practical limit of cost. The gain in freights to the people
+      and the direct saving to the government of the United
+      States in the use of its naval vessels would pay the entire
+      cost of the work within a short series of years. The report
+      of the Secretary of the Navy shows the saving in our naval
+      expenditures which would result. The Senator from Alabama,
+      Mr. Morgan, in his argument upon this subject before the
+      Senate of the last session, did not overestimate the
+      importance of the work when he said that 'The canal is the
+      most important subject now connected with the commercial
+      growth and progress of the United States.'"
+
+And in his message of 1892 that:
+
+      "It is impossible to overestimate the value from every
+      standpoint of this great enterprise, and I hope that there
+      will be time, even in this Congress, to give it an impetus
+      that will insure the early completion of the canal and
+      secure to the United States its proper relation to it when
+      completed."
+
+It is sincerely to be hoped that the people of the United States can be
+convinced of the advisability of extending government aid to this
+enterprise. It must be admitted that the experience of our government
+with the Pacific railroads has created a strong prejudice among the
+masses against such subsidies as were granted to those corporations, but
+it is probable, with the people on the alert, that Congress would not
+again permit great impositions to be practiced against the government.
+When the great advantages to be derived by the people of the United
+States from the use of this canal and the small outlay required are
+considered, it would seem to be a wise policy for our government at once
+to take such steps as are necessary to secure the early completion and
+the future control of this great international highway.
+
+
+
+
+CHAPTER II.
+
+THE HISTORY OF RAILROADS.
+
+
+In making inquiry into those inventions and improvements which were the
+precursors of the modern railroad, we meet early the desire to render
+the movement of wagons easier by a smooth roadway. Traces of this may be
+found even in ancient times. The Romans constructed tracks consisting of
+two lines of cut stones, and in the older Italian cities stone tracks
+may still be seen in the streets, corresponding to wagon tracks, and
+evidently designed for the purpose of rendering the movement of the
+wheels easier.
+
+The first rail tracks of which we have any knowledge were constructed at
+the end of the sixteenth century. These rails, which were made of wood,
+appear to have been an invention of miners in the Hartz Mountains. They
+were the result of pressing necessity, for, as mines were usually so
+situated that roads could only with great difficulty and expense have
+been built to them, some cheaper sort of communication with the high
+road had to be contrived.
+
+After various experiments the wooden railway was adopted, and the
+product of the mine was carried upon them to the place of shipment by
+means of small cars. Queen Elizabeth had miners brought into England, to
+develop the English mines, and through them the rail track was
+introduced into Great Britain. Later the wooden rail was covered with an
+iron strap to prevent the rapid wear of the wood, and about the year
+1768 cast-iron rails commenced to be used. At the end of the last
+century wheels were constructed with flanges, to prevent derailing.
+More attention was also paid to the substructure, wood, iron and stone
+being used for this purpose. Wrought-iron rails were patented in 1820.
+
+The first authentic account of heat or steam engines is found in the
+"Pneumatica" of Hero of Alexandria, who lived in the second century
+before Christ. Hero describes a number of contrivances by which steam
+was utilized as a source of power. Although these contrivances were at
+the time of very little practical value, they are interesting as the
+prototypes of the modern steam engine. The attempts to move wheels by
+steam date back to the seventeenth century, when a number of experiments
+were made, but their exact nature is not known, because they were all
+soon abandoned, either on account of unsuccessful results or lack of
+means. At the beginning of the eighteenth century Denis Papin
+constructed a small steamboat, upon which he sailed in 1707 on the Fulda
+River from Cassel to Munden, a distance of about fifteen miles.
+
+The construction of locomotives engaged the attention of ingenious minds
+a century and a half ago. It is claimed that Newton experimented with a
+steam motor in 1680. Dr. Robinson described in 1759, in his "Mechanical
+Philosophy," a steam vehicle. The Glasgow engineer James Watt devoted
+himself from 1769 to 1785, with great energy, to the development of the
+steam engine, and succeeded in inventing the system which became the
+parent of the modern engine. An American, Oliver Evans, constructed at
+the beginning of the present century a carriage propelled by steam, and
+exhibited it, in 1804, in the streets of Philadelphia, before twenty
+thousand spectators. While Evans' invention was never put to any
+practical use, he prophesied that the time would come when steam cars
+would be considered the most perfect means of transportation. On
+Christmas eve, 1801, Richard Trevithick exhibited at Camborne, England,
+a steam coach, and soon afterwards he and his cousin, A. Vivian,
+obtained an English patent on a "steam engine for propelling carriages."
+Seven years later a Mr. Blinkensop, of Middleton Colliery, near Leeds,
+constructed another locomotive engine, upon which he obtained a patent
+in 1811. These and a number of other inventors of steam engines vainly
+expended great ingenuity in attempting to overcome a purely imaginary
+difficulty. They believed that the adhesion between the face of the
+wheel and the surface of the road was so slight that a considerable
+portion of the propelling power would be lost by the slipping of the
+wheels. It was not until about the year 1813 that the important fact was
+ascertained that the friction of the wheels with the rails was
+sufficient to propel the locomotive and even drag after it a load of
+considerable weight. On the other hand these inventors failed to provide
+in their engines adequate heating-power for the production of steam. In
+1814 George Stephenson commenced to apply himself to the construction of
+an improved locomotive. When, owing to his invention of the tubular
+boiler, he saw, after fifteen years of arduous toil, his labors crowned
+with success, the civilized world entered upon a new era of social,
+industrial and commercial life. The first line upon which Stephenson's
+invention was used was the Liverpool and Manchester Railway. In the year
+1821, a number of Liverpool merchants formulated a plan for the
+construction of a tramway between their city and Manchester. The
+question of motive power was left open as between horses and the steam
+engine, with which Mr. Stephenson was then experimenting. After much
+opposition on the part of Parliament and the public a charter was
+obtained in 1826. When the construction of the road was nearly
+completed, the directors of the company, after having determined upon
+the use of steam engines, offered a prize of £500 for the best
+locomotive engine to run at a public trial on the Liverpool and
+Manchester Railway. This proposal was announced in the spring of 1829,
+and the trial took place at Rainhill on the 6th of October of that year.
+The competing engines were the Rocket, constructed by Mr. Stephenson;
+the Sanspareil, by Hackworth; the Perseverance, by Burstall, and the
+Novelty, by Messrs. Braithwaite and Ericsson. Both Braithwaite and
+Ericsson became subsequently residents of the United States, and the
+latter achieved immortal fame as the inventor of the screw propeller and
+the builder of the Monitor. The Rocket was the only engine that
+performed the complete journey proposed, and obtained the prize. It is
+claimed by the biographers of John Ericsson that he had really built a
+much faster locomotive than Stephenson, and that, although it had to be
+constructed very hastily and therefore broke down during the trial, the
+superiority of the principle involved in it was universally recognized
+by the engineers of that time. The Stephenson engines became the motive
+power of the Liverpool and Manchester road, which was opened for public
+traffic on the 16th of September, 1830. This line was, however, neither
+the first public railway nor even the first steam railway. The first
+railway or tramway act was passed in England in 1758, and in 1824 no
+less than thirty-three private railway or tramway companies had been
+chartered. In 1824 a charter was granted by Parliament authorizing the
+construction of the Darlington and Stockton Railway, to be worked with
+"men and horses, or otherwise." By a subsequent act the company was
+empowered to work its railway with locomotive engines. The road was
+opened in September, 1825, and was practically the first public carrier
+of goods and passengers. The Monklands Railway in Scotland, opened in
+1826, and several other small lines soon followed the example of the
+Darlington and Stockton line and adopted steam traction, but the
+Liverpool and Manchester Railway was the first to convince the world
+that a revolution in traveling had taken place.
+
+The road was from the very first successful, its traffic and income
+greatly exceeding the expectations of its managers. It should also be
+noted here that the cost of construction fell largely below the
+elaborate estimates made by several distinguished engineers. The company
+had expected to earn about £10,000 a year from passenger traffic, and
+the very first year the receipts from that source were £101,829. The
+gross annual receipts from freight had been estimated at £50,000, but
+were £80,000 in 1833. From the first the stockholders obtained a
+dividend of eight per cent., which soon rose to nine and to ten per
+cent. It has since been demonstrated that the revenues of new roads
+almost always exceed expectations.
+
+The success of this railway stimulated railway enterprise throughout
+Europe and America. But while railroad projects created much enthusiasm
+on one side, they also met with bitter opposition on the other. The
+prejudice of the short-sighted and the avarice of those whose interests
+were threatened by a change in the mode of transportation used every
+weapon in their power against the proposed innovation. The arguments
+used were often most absurd. It was said that the smoke of the engine
+was injurious to both man and beast, and that the sparks escaping from
+it would set fire to the buildings along the line of road, the cows
+would be scared and would cease to give their milk, that horses would
+depreciate in value, and that their race would finally become extinct.
+Nor did many of the European governments favor the new system of
+transportation. Some openly opposed it as revolutionary and productive
+of infinitely more evil than good. The Austrian court and statesmen
+especially looked upon the new contrivance with undisguised distrust;
+and from their point of view this distrust was perhaps well founded. The
+rapid movement of the iron horse seemed to savor of dangerous
+radicalism, not to say revolution. When the Emperor finally, in 1836,
+concluded to sign a railroad charter, he based his action upon the
+dubious ground that "the thing cannot maintain itself, anyhow." It may
+be said that the history of the railroad is a conspicuous illustration
+of human short-sightedness. The Prussian Postmaster-General Von Nagler
+opposed the construction of a railroad between Berlin and Potsdam upon
+the ground that the passenger business between those two cities was not
+sufficient to keep even the stage-coach always full. It never occurred
+to the Postmaster-General, as it does not occur to many railroad men of
+to-day, that new and cheaper means of transportation increase the
+traffic. Even so wise a statesman as Thiers said when railroad
+construction was first agitated in France: "I do not see how railroads
+can compete with our stage-coaches." M. Thiers also opposed for years
+the building of a railroad between Paris and Versailles, declaring that
+on account of a railroad not one passenger more would make the journey
+between these two places.
+
+But railroads came whether monarchical governments liked them or not.
+The success of the Liverpool and Manchester Railroad stimulated railroad
+building in England to a marvelous extent. Between 1830 and 1843 no
+less than seventy-one different companies were organized, representing
+about 2,100 miles. During the next four years 637 more roads, with an
+authorized length of 9,400 miles, were chartered. The construction of
+each new road required a special act of Parliament. These early roads
+averaged only fifteen to thirty miles in length. The competition which
+ensued soon led to the consolidation of roads, which continued until now
+the 14,000 miles of railway in England and Wales are practically owned
+by only a dozen companies. The total number of miles of railroad in
+Great Britain and Ireland is at present over 20,000.
+
+The news of the opening of the first steam railway in England spread
+through Europe comparatively slowly. There were in those days but few
+newspapers printed on the continent, and these were read very sparingly.
+Railroad discussions were confined to merchants and manufacturers. Even
+after the success of the railroad was assured in England, a large number
+of people would not believe that, except between the largest cities,
+railroads on the continent could ever be profitable. But few railroads
+have ever been built which with honest, efficient and economical
+management would not pay a fair rate of interest on actual cost of
+construction. But in spite of this we have to this day a large number of
+otherwise well-informed people who question the financial success of
+every new railroad that is proposed.
+
+In those days it occurred only to the most sagacious minds that with
+increased facilities commerce would expand. The missionaries of railroad
+enterprise found it therefore a difficult matter to interest capital in
+their projects. Railroad committees were in time formed in all cities of
+any importance, but, with capital cowardly, as usual, and governments
+distrustful, their task was often a thankless one. Railroad projects
+matured very slowly, and, when matured, were often wrecked by jealous
+and short-sighted governments. After the formation of a company five and
+even ten years would often pass away before a charter could be secured
+and the work of construction commenced. It is true, there were some
+laudable exceptions to this rule. Thus the governments of France and
+Belgium led the people in railroad construction; but upon the whole it
+can be said that the railroad forced itself by its intrinsic merit upon
+monarchical governments. It soon became evident even to the most stupid
+of autocratic ministries that it was a choice between the new mode of
+transportation and national atrophy.
+
+The first German line was built between the cities of Nuremberg and
+Furth in 1835. It was only about four miles long, but the success of the
+experiment gave an impetus to railroad building in other parts of
+Germany. The Leipzig and Dresden line followed in 1837, and the
+Berlin-Potsdam and Brunswick-Wolfenbuttel lines in 1838. At the end of
+1840 Germany had 360 miles of railroad. In that year Frederick William
+IV. succeeded to the throne of Prussia and inaugurated a new and
+exceedingly liberal railroad policy in his realm. In 1843 the Prussian
+government concluded to guarantee certain railroad companies a dividend
+of 3-1/2 per cent. on the capital actually invested. The state also
+secured considerable influence in the administration of the roads as
+well as in the right to assume the management of the various lines under
+certain conditions. The governments of the states of Southern Germany
+now commenced to build state roads, and their example was, chiefly for
+strategic reasons, soon imitated by Prussia. The system has since grown
+to over 26,000 miles, and no less than eighty-seven per cent. of the
+mileage is under state control. In all the states and provinces of the
+empire, except Bavaria, the rates for transportation of passengers and
+freight on all lines are controlled absolutely by the government.
+
+In Austria, as has already been indicated, the building of railways was
+greatly discouraged by the government until 1836. In that year the
+Emperor rather reluctantly granted Baron Rothschild a charter for a
+railway from Vienna into the province of Galicia. Another charter was
+granted to a Baron Sina for a line from Vienna to Raab and Gloggnitz.
+The policy then adopted in Austria guaranteed to each railroad company a
+monopoly in its own district during the period for which the charter was
+granted. Soon after the state also commenced building lines, but the
+growth of the Austrian system was slow until after the war of 1866. An
+era of railroad speculation was then inaugurated, which ended with the
+crisis of 1873. The total length of the railroads of Austria-Hungary was
+10,790 miles in 1875. At present that monarchy has nearly 16,400 miles
+of railway, 8,600 of which are owned by private companies.
+
+It has been the policy of Austria to reduce rates, and several roads,
+especially those built in mountainous districts, have a certain revenue
+guaranteed to them by the government.
+
+The zone system recently adopted in Hungary reduced both the passenger
+and freight rates of the government roads at least one-third, and this
+reduction has, contrary to expectation, greatly increased their net
+revenues.
+
+In France railroad agitation commenced in 1832. A few short lines were
+opened, as those from Paris to St. Germain and to Versailles; but,
+owing to the conservatism of French capitalists, but little more was
+done until the state took the matter in hand. Thiers proposed a scheme
+by which the state was to furnish about half the cost while private
+companies were to build the lines and operate them. The Western
+Railroad, the first line of any great extent, was opened in 1837 between
+Paris and Rouen, and the Eastern Railroad was opened two years later.
+There were in 1859 six large companies operating their lines with
+profit, but, to induce them to build additional lines that were needed,
+the state guaranteed the interest on the capital required to make their
+improvements. In 1884 there were about 17,000 miles of railroad in
+operation. To bring about the construction of another 7,000 miles of
+road, and to thus complete the railroad system of the country, the
+government now guaranteed each company a dividend equal to the average
+of recent years, but not to exceed seven per cent. It is doubtful
+whether this system of monopoly has in all respects been favorable to
+the encouragement of enterprise in the railroad circles of France. In
+granting charters the state has, however, reserved valuable rights which
+at a future period it will have an opportunity to assert for the public
+benefit. The railroad companies have generally a lease for ninety-nine
+years, and their lines become the property of the state after the
+expiration of that period. To extinguish the bonded debt and stock, a
+sinking fund has been created, from which a certain portion of the
+shares and outstanding bonds is annually paid off and canceled. The
+government requires of the companies the free carriage of the mails and
+the transportation of military and other employes at very low rates.
+Besides this the state levies upon the traffic of the railroads a duty
+of ten per cent. of their gross earnings from passengers and from all
+goods carried by fast trains. These facts are usually overlooked by our
+railroad men when they indulge in making comparisons between the
+railroad rates of this country and those of France. The French Republic
+had 13,400 miles of road in 1875, and 22,600 in 1890. When all of the
+proposed lines are completed, the total mileage of that country will be
+over 25,000.
+
+Belgium has the best-developed track system on the continent. The state
+commenced the construction of railroads as early as 1834, and the first
+line (Brussels Malines) was opened May 5th, 1835. Four great state lines
+were constructed in different directions, and between these lines
+private roads were permitted to be built. Between 1850 and 1870 the
+private lines increased from 200 to 1,400 miles, and competition between
+them and the state lines became so active as to reduce rates to the
+lowest possible point. In 1870 the government decided to buy a large
+number of competing lines. In 1874 it had acquired more than half, and
+at present, with a few exceptions, they are all owned and controlled by
+the state. The exceptions to this are a few short lines that were built
+in the early days of railroad construction. The total mileage is now
+3,210. Rates have, however, not been increased since this consolidation,
+and they are still lower than any other country in Europe. The
+transportation of mails is free, and troops, military materials and
+prison vans are carried at reduced rates.
+
+Railroads were originally built in Switzerland merely for the
+accommodation of tourists and the local traffic. The first line, between
+Zurich and Aarau, was completed in 1847, but general railroad enterprise
+did not develop until after 1860. The St. Gothard route was then
+projected, which opened a direct through line between Italy and
+Germany. The roads are all owned by private companies, but are under
+strict government control. Great publicity of their affairs is required.
+The total mileage of Switzerland was 2,043 in 1891.
+
+In Italy railroad enterprises have received attention since 1853. The
+first roads were those of Lombardy, being commenced while that province
+was still under Austrian rule. The treaties of Zurich in 1859 and of
+Vienna in 1866 delivered these roads and the Venetian lines to the
+kingdom of Italy. Between 1860 and 1870 the systematic construction of a
+railroad net was commenced which connected the various lines with each
+other and with Rome. Nearly all the railroads of Italy fell into the
+hands of the government, but in 1885 they were leased for a term of
+sixty years to three companies, terminable at the end of twenty or forty
+years by either party upon two years' notice. Under the lease the state
+received two per cent. of the gross receipts. The tariffs are fixed by
+the state, are uniform and can be reduced by the state. A Council of
+Tariffs, composed of delegates for the government, for agriculture,
+commerce and industry, and for the railroad companies, all elected by
+their own boards, has been instituted to study the wants and best
+interests of the country. The total number of miles of railroad in Italy
+was 8,110 in 1889.
+
+The first road in Spain was opened in 1848 between Barcelona and Mataro.
+The government greatly encouraged railroad construction by subsidies,
+and during the decade following 1855 the development of the railway
+system of the country was rapid. More than thirty companies have been
+formed, which have built about twenty main lines, aggregating 6,200
+miles.
+
+In Portugal very little railroad building was done previous to 1863,
+when a little over three hundred miles of road was constructed. The
+government owns nearly half of the roads of the country, the remaining
+lines being the property of private companies. The total number of miles
+operated in the kingdom in 1889 was 1,280. The service and the financial
+condition of the roads of Portugal are far from being satisfactory.
+
+In Denmark the first railroad was built on the island of Seeland in
+1847. Previous to 1880 the larger part of the roads of the kingdom was
+owned by private companies. Since then several of the most important
+private roads have been purchased by the state, which in 1889 owned 963
+miles, while only 251 miles remained in private control. Only about
+thirty miles more have since been constructed. The roads are well
+managed, but their net earnings are less than two per cent. of the
+capital invested.
+
+On the Scandinavian Peninsula the railroad system has developed rather
+slowly. Norway built the first line from Christiana to Eidsvold in 1854,
+and Sweden commenced railroad building two years later. The narrow-gauge
+system is fully developed here. While in Norway the greater part of the
+lines is owned by the state, the roads of Sweden are chiefly in the
+hands of private companies which on an average control but little more
+than twenty-five miles each. The total mileage of Sweden is 5,970, and
+that of Norway 970.
+
+The first line of railroad in the Russian Empire was constructed from
+St. Petersburg, sixteen miles, to Tsarskoji-Sielo, in 1842. The St.
+Petersburg and Moscow line was opened in 1851. Railroad building then
+stagnated until after the Crimean War, when a large number of lines
+were constructed at once. The roads were surveyed by the government, but
+constructed and operated by private companies.
+
+State aid was, however, freely given. During the past ten years the
+Russian government has directed its attention to the development of the
+railroad system in its Asiatic possessions. A railway between the Black
+and Caspian seas was completed in 1883, and the Siberian railroad is
+extended as fast as the financial condition of the empire permits. There
+are now about 20,000 miles of road in the Russian Empire operated by
+private companies. The construction of a large number of the Russian
+railways was dictated by military rather than commercial considerations.
+Maximum rates are specified in charter, and every change of rates must
+be approved by the Minister of Finance.
+
+In the Balkan Peninsula railroad facilities are still ill provided for.
+A few lines have been built, but these are, as a rule, badly managed.
+Trains are slow, and rates often so high as to be prohibitory. Roumania
+has undoubtedly the best railroad system of any of the Balkan states,
+the government controlling 1,000 miles of road. Greece is also making
+some progress and has at the present time 610 miles of railway. There is
+reason to believe that through communication will soon be established in
+these countries on a larger scale.
+
+The introduction of the railway into Asia has been, except in the
+Russian and English possessions, a very difficult task. The conservatism
+or ignorance of the governments and the superstition of the people
+combined to throw numberless obstacles before those who proposed to pave
+the way for the iron horse. British India opened her first railway for
+public traffic between Bombay and Tannah on November 18, 1852. In 1855
+she had 841 miles of road, which increased to 6,515 miles in 1875 and to
+15,828 miles in 1889, of which 8,423 miles were owned and operated by
+the state. The total cost of these roads was $880,000,000.
+
+In Asiatic Turkey the first line was opened between Smyrna and Trianda
+on the 24th day of December, 1860. This line was in 1866 extended to
+Aiden, and in 1882 to Sarakio. There are at present five lines with a
+total extent of 446 miles, all owned by English companies. New lines,
+covering in all 3,952 miles, have recently been projected.
+
+The first line in Persia, only seven miles long, and extending from
+Teheran to Schah-Abdal-Azzim, was opened on the 25th day of June, 1888.
+Another line, from the Caspian Sea to Amol, is now in process of
+construction. A line was opened last September between Joppa and
+Jerusalem. It is 53 miles in length.
+
+Japan may be said to be already thoroughly familiar with the European
+system. The first and principal line was opened on the island of Napon,
+between Tokio and Yokohama, on the 14th of October, 1872. Two other
+short lines followed in 1874 and 1876, when the total extent of the
+Japanese roads was about 135 miles. In 1883 the construction of the
+Grand Trunk Railroad, from Tokio to Kioto, was commenced, which line has
+been in operation for the past five years. Other lines, aggregating over
+400 miles, will soon be opened for traffic. The total extent of road in
+operation in 1888 was 580 miles, 310 of which were controlled by the
+state, and the remainder by private companies. In 1890 the total number
+of miles exceeded 900. The total average cost per mile was $58,000.
+
+No nation has probably opposed the introduction of the railway as
+stubbornly as the Chinese. The first railroad, scarcely seven miles
+long, was built by an English company near Kaiping to facilitate the
+transportation of coal from the mines in that vicinity. In 1886 a
+Chinese company purchased this line and has since extended it to
+Tientsin, making its present length about eighty-four miles. The Chinese
+government has recently authorized the further extension of this line to
+Yangchou, a place but a few miles distant from Pekin.
+
+Of the Asiatic islands Java has the largest and oldest railroad system.
+On the 10th of August, 1867, the first line was opened between Samarang
+and Tangveng. Other coast lines have since been constructed, but
+communication is still sadly neglected in the interior. In 1889 there
+were operated on the island nearly 800 miles of road, the greater part
+being the property of private companies.
+
+A road was opened upon the island of Ceylon between Colombo and Kandy in
+1867, to which several branch lines and extensions have since been
+added. The total system comprises at present about 180 miles.
+
+Short lines have also been built in Burmah (1889); in the Malay
+Peninsula (1885), in Sumatra (1876), and in Cochin China (1885). A line
+from Bangkok to Bianghsen, in Siam, is being projected at the present
+time.
+
+In Africa, if we except its northern coast, the construction of
+railroads has only kept pace with the slow development of the resources
+of that continent. Its European colonies are still but thinly inhabited,
+and their industrial and commercial life still resembles much that of
+the American colonies of the seventeenth century. There can be little
+doubt, however, that with the increasing immigration the growing demand
+for better transportation facilities will speedily be met by European
+capital.
+
+The first railroad upon African soil was built by the Egyptian
+government from Alexandria to Cairo, and from there through the desert
+to Suez. A part of this line, 130 miles long, was opened to traffic in
+1856, and the remaining ninety miles the year following. Nothing further
+was done until after Ismail Pasha ascended the throne, in 1863. The
+railroad system of Lower Egypt, between Alexandria in the west, Cairo in
+the south, and Ismaila in the east, was then greatly extended and the
+service materially improved.
+
+After the opening of the Suez Canal the line through the desert to Suez
+was abandoned. The railroad system of Egypt comprises at present about
+1,250 miles, all of which belongs to the government except two short
+lines which are private property.
+
+The beginning of the railroad system of Algiers dates back to 1860, when
+the French government gave a charter to the Companie des Chemins de Fer
+Algérians, authorizing it to build a number of lines connecting the
+principal cities of the province with the Mediterranean. The line from
+Algiers to Blidah, thirty-two miles long, was opened on September 8,
+1862. Further construction was then delayed until 1863, when the charter
+of the original company was transferred to the Paris, Lyons and
+Mediterranean Railroad Company. The original plans were then in the main
+carried out, until the disturbances caused by the Franco-Prussian war
+again put an end to railroad enterprises. In 1874 three new companies
+were chartered and railroad building was resumed. In 1888 the Algerian
+railroad system comprised 1,350 miles.
+
+The first road in Tunis was built in 1872 from the city of Tunis to
+Bardo and Gouletta by English capitalists. It was, in 1880, sold to an
+Italian company to which the Italian government for political reasons
+had seen fit to guarantee certain dividends. Other small lines have
+since been constructed, and more important ones have been prospected.
+The number of miles at present in operation is 153.
+
+The French colony on the Senegal River has a number of short lines, of
+which the first was opened in July, 1883. These lines aggregate at
+present about 200 miles. It is now contemplated to extend this system to
+the upper Niger. This would necessitate the construction of 240
+additional miles of road.
+
+The Cape Colony has the largest mileage of any of the European colonies
+in Africa, the absence of navigable rivers rendering railroads here more
+necessary than elsewhere. The first line was opened on the 13th of
+February, 1862. It then extended from Cape Town to Earste River, but was
+extended to Wellington the following year. The number of miles of road
+in operation in 1875 was 906, and in 1891 it had increased to 2,067. All
+the roads of the colony, excepting a line of 93 miles belonging to the
+Cape Copper Mining Company, are operated by the colonial government.
+Their net revenue in 1886 was 2.84 per cent. of the capital actually
+invested.
+
+Port Natal built her first railroad in 1860. It was only two miles long
+and extended from the city of Durban to its harbor. Since then several
+inland lines, aggregating over four hundred miles, have been constructed
+at a cost of twenty-two million dollars. The roads are operated by the
+colonial government and yielded in 1891 a net revenue of 4.4 per cent.
+on the capital expended.
+
+Short lines have also been built on Mauritius and Reunion, and there is
+now every indication that Portuguese Africa and the Congo State will be
+provided with railroad facilities in the near future.
+
+The introduction of railroads into Australia dates back to the sixth
+decade of the present century. The total number of miles of road
+reported in 1889 by the several colonies was 8,883. If we estimate the
+population of the continent at 3,000,000 for that year it will be seen
+that Australia has more miles of road per capita than any other grand
+division of the globe, save North America.
+
+New South Wales, the mother colony of the Australian continent, opened
+its first road on September 26, 1855, between Sydney and Paramalta. This
+road was built by a private company, but was soon after its completion
+purchased by the colonial government, and was in 1869 extended to
+Goulbourn. In 1875 the colony had only 436 miles of road in operation.
+The mountains, however, which separated the wide plains of the interior
+from the coast had been surmounted, and the government commenced to push
+the construction of new roads with great vigor. At the end of the year
+1886 New South Wales had no less than 1,888 miles of road in operation,
+for which the colony had expended $113,000,000. The net revenue during
+that year was 2.9 per cent. on the capital invested. The total number of
+miles of railroad in this colony was 2,247 in 1889.
+
+Victoria, the smallest of the colonies, has made by far the greatest
+progress in railroad building. The first road in the colony, and, in
+fact, the first road upon the Australian continent, was built in 1854
+between the city of Melbourne and its port, a distance of two and
+one-half miles. Within the next five years four other lines were
+constructed, connecting Melbourne with Williamstown, St. Kilda,
+Brighton and Echuca, respectively. In 1870 there were in the colony 275
+miles of railroad, which had increased to 1,198 miles in 1880, and to
+2,283 miles in 1889. Several of the roads were originally owned by
+private companies, but all of them were in time acquired by the colonial
+government, the last one in 1878. The total capital invested in 1887 was
+$125,000,000, which yielded a net revenue of $5,800,000. All lines are
+under the control of a board so constituted as to be entirely removed
+from political influence.
+
+In South Australia a short line was built in 1856 from the city of
+Adelaide to Port Adelaide. Another line was constructed in 1857 from
+Adelaide to Salisbury, which three years later was extended to Kapunda.
+The colony had then forty miles of road. The increase during the next
+decade was only ninety-three miles. Since then the development has been
+much more rapid, the whole system of railroads comprising 1,752 miles in
+1889. All the roads save a few suburban lines are owned and operated by
+the colony. Their total cost is not far from $60,000,000, and their net
+annual revenue is about two and one-half per cent. of the capital
+invested.
+
+The colony of Queensland has only a system of narrow-gauge roads, with
+the construction of which it commenced in 1865. Up to September, 1887,
+the colonial government had constructed 1,641 miles of road at a total
+cost of $47,700,000. The total number of miles has since been increased
+to 2,058. The net revenue of the roads was a little over one million
+dollars in 1886.
+
+The transportation facilities of West Australia are still far behind
+those of her sister colonies. The first line was opened in 1873, and the
+total number of miles of road operated in the colony in 1889 was only
+496. The government controls nearly all the railroads of the colony.
+
+Of the islands of Australasia, Tasmania and New Zealand are as yet the
+only ones that have railroad communication. The former built its first
+road in 1870 and had at the end of the year 1890 about 1,900 miles in
+operation. New Zealand opened its first railroad between Christchurch
+and Lyttleton on December 1, 1863. The development of the system was
+slow at first, there being but 25 miles of road in operation in 1870. In
+1891 the number of miles of road had increased to 1,916, all but 92
+miles being operated by the colonial government. The total amount
+expended by the government for railroads is $55,000,000. The net revenue
+in 1887 was about 2-1/2 per cent of the amount invested.
+
+In South America railroad building is of comparatively recent date. The
+first road was built in 1851, but the line was short and remained the
+only one for several years. With thirty million people the South
+American states have at present but little more than 16,000 miles of
+railroad, a condition which must at least in part be ascribed to the
+peculiar conservatism of the Latin race.
+
+The United States of Colombia possesses less than 250 miles of road. Its
+first line was the Panama Railroad, from Colon to Aspinwall. It connects
+the Pacific with the Atlantic ocean, is 48 miles long and was
+constructed in 1855. This, as well as the several other roads of
+Colombia, is the property of private companies. A number of new roads
+have recently been surveyed.
+
+Venezuela opened in 1866 a road, 56 miles long, from Puerto Caballo to
+Palito, which in 1870 was extended to Aroa. A number of other short
+roads, aggregating about 350 miles, have since been constructed. The
+total extent of railroad in Venezuela was 432 miles in 1889, of which
+the greater part was operated by private companies. Several important
+lines are in the process of construction, and will connect Caracas with
+Carabobo, San Carlos and the port of La Guayra.
+
+The Republic of Ecuador constructed in 1876 a road from Jaguachi to
+Puente de Chimbo, a distance of 43 miles. This line was recently
+extended to Siambe, and has now a total length of 94 miles. In 1886 a
+charter was granted to a North American company, authorizing the
+construction of a road from San Lorenzo to Esmeraldas and guaranteeing
+certain dividends on the investment. At the close of the year 1889
+Ecuador had 167 miles of road.
+
+The first railroad in Peru was built in 1851, connecting the seaport
+Callao with the capital, Lima. After this but little was done for more
+than twenty years. At the beginning of the seventies an extensive
+railroad system was projected at the instigation of President Don Manuel
+Pardo, and the construction of the principal road of the system from
+Mollendo on the Pacific Ocean to Santa Rosa was at once entered upon.
+This road ascends the Western Cordillera, crosses a number of prodigious
+mountain passes, reaches Lake Titicaca, and then proceeds in a
+northwesterly direction to Santa Rosa. It is over 300 miles long, and
+reaches near Puna an altitude of 14,700 feet. An extension of this line
+from Santa Rosa to the old Inca city Cuzco was opened in 1875, but was
+subsequently destroyed in the war with Chile, and has not been reopened.
+Another road, extending from Callao to San Mateo, was opened in 1876. It
+is eighty-seven miles long, and reaches with its enormous grades a
+height of over 13,000 feet. It belongs, with the Santa Rosa road, to the
+boldest creations of railroad engineering. Since the war with Chile
+railroad enterprise has been checked. The number of miles of road in
+operation rose from 962 in 1875 to 1,615 in 1880, but was, owing to the
+abandonment of certain lines, diminished to 813 in 1884. Since that time
+about 400 miles of new road have been opened.
+
+In the Republic of Bolivia the first railroad was built about twenty
+years ago from Antofogasta to Solar. After the cession of the province
+of Antofogasta to Chile there remained but thirty-five miles of road in
+Bolivia. More than 200 miles have since been added by the construction
+of several short roads, chiefly the property of mining companies.
+
+The Republic of Chile was the first of the South American states to
+initiate the construction of railways. The building of a line from the
+seaport Caldera to Copiapo was commenced in May, 1850, and was completed
+on January 2, 1852. This line was constructed and operated by a private
+company. The first state road, extending from Valparaiso to Santiago,
+was opened on the 15th of September, 1865. To this road has since been
+added an extension to Talcahuana, as well as several branch lines. The
+total amount that has been expended by the Chilean government for the
+construction of railroads is $43,000,000. The total number of miles of
+road operated in Chile in 1887 was 1,674, of which 992 were the property
+of private companies and 682 miles were owned by the state. Two hundred
+and fifty miles of road have since been constructed, and the
+construction of 700 additional miles of railroad has been authorized by
+the government.
+
+The Argentine Republic opened its first road, extending from Buenos
+Ayres to Belgrano, in December, 1862. Several other lines soon
+followed, and in 1870 over 600 miles of road had been constructed. This
+number had increased to 1,440 in 1880 and to 5,100 in 1889. Since then
+several new lines have been completed, aggregating over 600 miles. Among
+the principal lines of the Argentine Republic is the transcontinental
+road which connects the Atlantic with the Pacific Ocean. The whole line
+is 880 miles long, of which 665 miles are in the Argentine Republic and
+the remaining 115 miles in Chile. Of the 3,705 miles of road which were
+in operation at the beginning of the year 1887 the republic owned 1,148,
+the province of Buenos Ayres 572, the province of Santa Fe 102, and
+private companies 1,888 miles. The total amount invested in railroads
+was $154,000,000 in 1887, which yielded an average dividend of 3.9 per
+cent.
+
+The oldest railroad in Brazil is the Petropolis road. It was built by a
+private company and opened on December 16, 1856. In 1881 the total
+number of miles in operation was 2,422, and in 1889 it had increased to
+5,766. Furthermore charters had been granted for the additional
+construction of 2,271 miles of road. Of the lines in operation about
+1,200 miles are the property of the state, yielding a revenue of nearly
+3 per cent. on the capital invested. The state gives aid, besides, to
+several private roads. The most important road of Brazil is the state
+road Dom Pedro I., which connects the three richest provinces of the
+country, Rio de Janeiro, Minas Gerals and Sao Paolo, with the national
+capital. It was opened in 1883, and has a total extent of 544 miles.
+
+The principal roads of Uruguay were built between 1865 and 1875. In the
+latter year the total number of miles in operation in Uruguay was 190,
+which in 1880 had increased to 230, and in 1889 to 469 miles.
+
+In the remaining political divisions of South America the railroad
+extended its dominion still more slowly. Paraguay opened as early as
+1863 a line 45 miles long from Asuncion to Itangua, and in 1892 her
+railroad system had increased to 159 miles in extent. British Guiana
+completed in 1866 a line from Georgetown to New Amsterdam, but not one
+mile of railroad has been built in that colony since. Of the islands of
+South America Trinidad is the only one into which the railroad has been
+introduced. The island has at present 50 miles of road, to 16 in 1878.
+
+Central America has less than 600 miles of railway. The causes which
+have retarded the development of the railroad system in South America
+are also operative here. Of the five republics of Central America Costa
+Rica has the largest number of miles of railroad, viz.: 161. It has
+three different lines, of which the Limon and Carillo line, seventy
+miles long, is the most important. This road, which connects with a New
+York line of steamers at Limon, has greatly furthered the cultivation of
+bananas in the Santa Clara valley.
+
+Nicaragua completed its first road in 1880 between Corinto and
+Chinandega, and has at present about 100 miles of railway in operation.
+The Nicaragua Canal Company is constructing a road from Juan del Norte
+to Ochoa, a distance of thirty-two miles, to be used in the construction
+of the canal.
+
+Honduras opened in 1871 its only line, thirty-seven miles long, between
+Puerto Caballo and San Jago. In recent years an extension of nine miles
+has been added to it.
+
+San Salvador has, besides a street-car line between the cities of San
+Salvador and Santa Tecla, only one line of railroad between Acajutla
+and Armea, which was constructed with public funds and opened for
+traffic on July 15, 1882.
+
+Guatemala was the last of the Central American States to introduce the
+railroad. Its first road, seventy-four miles long, and extending from
+San Jose on the Pacific Ocean to the capital, Guatemala, was built by a
+San Francisco company and opened on August 20, 1884. The state has at
+the present time about 100 miles of road, with several short but quite
+important lines under construction.
+
+The West Indies have between 1,200 and 1,400 miles of railway, of which
+more than 1,000 are in Cuba. The first road upon this island, 179 miles
+long and extending from Habana to Guanajay, was opened as early as 1837.
+The next ten years developed almost the whole of the railroad system of
+the western half of Cuba. A number of important roads have since been
+opened in the central and eastern portions of the island, whose railroad
+mileage is at present larger per capita than that of any other political
+division of the Western Hemisphere save that of Canada and the United
+States. The second of the West India islands to construct a railroad was
+Jamaica. A line connecting Kingston and Spanishtown was opened on the
+21st of November, 1845. Two branch lines have since been added, making
+the total number of miles of road on this island seventy-six at the
+present time. About twenty-five miles more are now in the process of
+construction. San Domingo and Hayti have also recently commenced to
+build railroads. In the former republic a line from Sanchez to LaVega,
+sixty-two and one-half miles long, is now open to traffic, and Hayti is
+constructing a line from Gonaives, on the western coast, to Porte de
+Paix, on the eastern coast of the island. The Spanish government in
+1888 also granted a charter for the construction of a railroad on the
+island of Porto Rica.
+
+Of our neighbors on the North American continent, Mexico and Canada, the
+former has been by far the slower to avail herself of the advantages of
+railroad communication. The slow growth of the railroad system of Mexico
+must be ascribed chiefly to the frequent political disturbances of the
+country as well as to the many topographical obstacles which presented
+themselves to the railroad engineer. The first Mexican railway,
+excepting tramways, was the one which connects the capital with the city
+of Vera Cruz. It was constructed by an English company and was opened on
+the first day of January, 1873. In 1875 the total number of miles of
+road in Mexico was 327, and five years later somewhat less than 700.
+Since then the development of the system has been much more rapid. In
+1880 several companies were formed for the purpose of building a system
+of roads which would connect the Mexican capital with the United States
+as well as with the most important harbors of the gulfs of Mexico and
+California. The projectors of these lines, who were citizens of the
+United States, received the hearty coöperation of the Mexican
+government, and the work was at once pushed very vigorously. At the end
+of the year 1885 more than 2,500 miles of new road were open for
+traffic, and a thousand miles more at the end of the following year. In
+1889 Mexico had 5,332 miles of road. The principal one of the newly
+constructed roads is the Mexican Central, which connects Paso del Norte
+with the City of Mexico. This line will also, when its branches are
+completed, form a through route between the Gulf of Mexico and the
+Pacific Ocean. Another scarcely less important through line north and
+south is the National Mexican Railway, which is 722 miles long and
+connects Laredo, on the Rio Grande, with the capital and the southern
+states. Another line has recently been opened from Torreon to Durango.
+The number of miles of road at present in operation in the Republic of
+Mexico is about 6,800, with a number of new lines rapidly nearing
+completion. The development of Mexico's resources has, during the past
+decade, kept pace with the rapid expansion of its railroad system.
+
+In the Dominion of Canada about fifteen miles of railroad line were
+built as early as 1837, but only forty-three miles was added during the
+next ten years. In 1852 there was still only 212 miles of railroad in
+all of the British possessions in North America. At that time the
+construction of the Grand Trunk system was commenced, the first section
+of the system, Portland-Montreal, being opened in 1853. After this
+railroads increased very rapidly in Canada, reaching an extent of 2,087
+miles in 1860, 4,826 miles in 1875, 6,891 miles in 1880, and 10,150
+miles in 1890. The majority of Canadian railroads are in the hands of
+private companies, some of which have been very materially aided by the
+government. One of the conditions upon which the union of the several
+British provinces, except Newfoundland and Prince Edward Island, was
+effected in 1867, was the construction of a railroad by the Dominion
+government connecting the provinces of Ontario, Quebec, Nova Scotia and
+New Brunswick. This road, the main line of which extends from Point
+Levis, opposite Quebec, to Halifax, was accordingly built, and is still
+operated by the Canadian government. Its cost was about 46,000,000.
+
+But the most important enterprise in which the government is interested
+is the Canadian Pacific Railway. Like the intercolonial railway, this
+line was a result of the political union of the colonies. Its
+construction was commenced by the government, but was subsequently
+assigned to a private corporation, the Canadian Pacific Railway Company,
+all that had been done by the government being turned over to the
+company as a gift. It is estimated that the direct gifts of money, the
+land grant and other privileges conferred by the Dominion government
+upon the Pacific Railway Company exceed $100,000,000 in value, and that,
+with the amount of bonds and stock guaranteed by the government, the par
+value of its various aids amounts to $215,000,000, or $48,000,000 more
+than the cost of the road, as will be shown by the following table,
+taken from the report of the Interstate Commerce Committee of the Senate
+of the Fifty-first Congress:
+
+  Subsidy granted by the act of Parliament of
+    February 13, 1881                                 $25,000,000
+  Seven hundred and fourteen miles of railroad
+    constructed by the Dominion Government, original
+    cost and interest                                  36,760,785
+  Capital stock guaranteed                             65,000,000
+  Loan to the company authorized by Parliament of
+    1884, in part                                      29,880,912
+  Balance of above loan                                15,000 000
+  Bonds, interest guaranteed by the Dominion for
+    50 years at 3-1/2 per cent                         15,000,000
+  Land grant bonds                                     25,000,000
+  Subsidy of $186,000 a year, for 20 years              3,720,000
+                                                     ------------
+  Total                                              $215,361,697
+
+  Total cost of road, according to the company's
+    balance sheet of December, 1888                  $131,350,019
+
+The Dominion Government owns and operates four railways, the cost of
+which up to June 30, 1890, was $52,800,000. It has also granted to
+railroad companies cash subsidies which to June 30, 1889, amounted to
+over $46,000,000. The total number of miles of railroad in Canada was
+14,004 in 1890. The people of Canada have, since the political union of
+the colonies, pursued an exceedingly liberal policy toward their
+railroads, but it appears that the great indulgence of the government
+only bred license in railroad circles. The evil increased from year to
+year, until the many complaints on the part of the public against
+railroad management caused Parliament in 1886 to appoint a commission to
+examine into the alleged abuses and to report as to the advisability of
+the adoption of a general railroad law, and the appointment of a Board
+of Railroad Commissioners. The committee reported to the
+Governor-General of Canada on the 14th of January, 1888, and, acting
+upon its recommendation, Parliament passed the Railway Act of May 22,
+1888. This act, containing 309 paragraphs, provides for the complete
+regulation of railroad affairs, and for this purpose creates a Board of
+Railroad Commissioners, consisting of the Minister for Railroads and
+Canals, the Minister of Justice and two or more members of the Privy
+Council. The act also repeals all former railroad laws. Though it has
+been in force less than five years, its beneficial effects are already
+extensively felt by the Canadian public.
+
+
+
+
+CHAPTER III.
+
+HISTORY OF RAILROADS IN THE UNITED STATES.
+
+
+In no country in the world has the growth of railroads been so rapid as
+in the United States. With a population less than one-fifth as large as
+that of Europe this country has a larger number of miles of railroad
+than that continent. While European countries generally opposed the
+introduction of the new system of transportation, our people extended to
+it a hearty welcome. This difference of sentiment can easily be
+accounted for. At the time of the invention of railroads Europe had a
+system of turnpikes and canals which, at least for the time being,
+answered every purpose. It became necessary for the railroads to enter
+into competition with these well-established agencies of transportation,
+which had the test of time, popular prejudice and governmental sanction
+in their favor. Moreover, the railroad as a new and unknown quantity
+caused a feeling of uneasiness in all conservative circles. It seemed to
+make war against time-honored principles of statecraft and society, and
+threatened to bring about a revolution the outcome of which no one could
+foresee.
+
+The condition of things was entirely different in the United States.
+There were but few good roads and still fewer turnpikes and canals. A
+vast territory in the interior awaited cultivation. Excepting the coast
+and a few cities situated on the large navigable rivers, the East and
+the West and the North and the South were practically without commercial
+relations, and were only held together by a community of political
+traditions and the artificial cement of a common constitution. Even had
+the country had a system of turnpikes and canals, the Mississippi River
+would still have been a forty days', and the extreme Northwest a three
+months' journey distant from New York. It seems extremely doubtful
+whether the different sections of so large a realm, having so little
+community of commercial interests, could long be kept together under a
+republican system of government. The settlement of the central portion
+of the country and the development of its resources seemed to be the
+task of future centuries. The railroad under these circumstances made
+its appearance at a most opportune time for America, and the American
+people were not slow to make the best of the opportunities presented to
+them.
+
+In the United States, as in England, the railroad was preceded by the
+tram-road. The first tram-road in this country was opened in 1826. It
+connected the granite quarries of Quincy with the Neponset River, and
+was operated by horsepower. The second road of this kind was the Mauch
+Chunk tramway, in Pennsylvania, opened in 1826, for the transportation
+of coal. The trains were drawn up an inclined plane by stationary
+engines and were moved down by their own weight. During the same year
+the Delaware and Hudson Canal Company opened the Carbondale and
+Homesdale tramway, connecting their mines with the Delaware and Hudson
+Canal. It appears that an English locomotive was imported for use on
+this line in 1828, but that it did not answer its purpose.
+
+During the same year was commenced the construction of the first line of
+importance in this country, the Baltimore and Ohio. The line was opened
+for traffic in 1830, having then an extent of fourteen miles. In 1831 it
+was extended sixty-one miles, and the year following sixty-seven miles.
+For a year the road was operated by horsepower, but in 1831 the company
+purchased for its road an American locomotive.
+
+The first road upon which a locomotive engine of American manufacture
+was used was the South Carolina Railroad, which was commenced in 1830.
+The engine was manufactured at West Point and was placed upon the road
+in December of the same year. The line had then an extent of ten miles.
+In 1832 it had increased to sixty-two miles, and in 1833 to 136 miles.
+The construction of the Mohawk and Hudson was commenced in August, 1830,
+and the road was opened in September of the following year. Its first
+locomotive engine was also imported from England, but, being found too
+heavy, was soon replaced by an American engine of half its weight. In
+1831 two other New York roads were commenced, the Saratoga and the New
+York and Harlem. A small portion of the latter was opened during the
+same year, and the former in July, 1832. The Camden and Amboy Railroad
+in New Jersey was likewise commenced in 1831, but its completion was not
+reached till 1834. The New Castle and Frenchtown Railroad was completed
+in 1832, the Philadelphia and Trenton in 1833, and the New Jersey in
+1834. In 1835 the Washington branch of the Baltimore and Ohio was
+opened, and the entire line had at the end of that year attained an
+extent of 115 miles. During the same year three Massachusetts roads,
+connecting Boston with Providence, Worcester and Lowell respectively,
+were opened. In 1836 the New York Central route was opened to Utica. In
+1837 the Richmond, Fredericksburg and Potomac Railroad was completed
+from Richmond to Fredericksburg. In 1838 the Richmond and Petersburg and
+the Philadelphia, Wilmington and Baltimore railroads were opened. The
+Wilmington and Weldon Railroad was completed in 1840, and the Petersburg
+and Roanoke three years later. There was now a continuous line of
+railway from the Potomac to Wilmington, North Carolina. In 1842 the
+whole line of the Boston and Albany road was completed, which thus
+became the first important through route in America.
+
+The construction of railroads in the United States was from the first
+carried on without a system. Railroads in an early day were purely local
+affairs. Each locality operated its own road in its own interest and
+without any supervision from the State which had granted its charter.
+Acts of incorporation or charters were granted as a matter of course.
+Railroads were looked upon as the natural feeders of canals, and their
+future importance was foreseen by very few men. The early roads were a
+heavy burden on the capital of the country. A number of small roads were
+built that proved unprofitable and had to be abandoned. After the
+financial panic of 1837 there was, except in New England, a very
+perceptible stagnation in railroad enterprise, which lasted until the
+discovery of gold in California, in 1848. The average number of miles of
+road constructed per annum during the ten years preceding 1848 was 380,
+while it was nearly 1,800 per annum during the seven years following.
+
+It may be said that with the discovery of gold in the West ends the
+first or formative period of railroad construction. From the first
+opening of the Baltimore and Ohio to the beginning of the year 1848, a
+period of eighteen years, there were constructed in the United States
+5,205 miles of railroad, or an average of 289 miles per annum. The
+discovery of gold on the Pacific gave a new impetus to railroad
+construction throughout the country. Railroads now ceased to be local
+works and became interstate or national thoroughfares. Extensive new
+lines were built and through routes were formed by the coalition of
+local roads. It was during this period that railroad companies first
+became conscious of the importance of their mission and that they
+commenced to compete with river and canal carriers. In 1848 a through
+route was completed between Cincinnati and Lake Erie. A more direct
+line, the Cleveland, Columbus and Cincinnati road, was opened in 1851.
+During the same year the Erie Railroad reached Lake Erie and connected
+the lake with the Hudson, and a year later Chicago received railroad
+connection with the East by the completion of the Michigan Central and
+Michigan Southern. In 1854 the Chicago and Rock Island reached the
+Mississippi River, and in 1855 the Chicago and Galena was opened. One
+year later the Illinois Central reached the Mississippi at Cairo, and
+the Chicago, Burlington and Quincy Railroad was opened to Quincy. The
+Ohio and Mississippi, between Cincinnati and St. Louis, was completed at
+about the same time. The Pittsburgh, Fort Wayne and Chicago, an
+extension of the Pennsylvania road, was completed to Chicago in 1858. At
+the beginning of 1859 the Hannibal and St. Joseph Railroad reached the
+Missouri River, and eight years later the Cedar Rapids and Missouri was
+completed to the Missouri at Council Bluffs.
+
+To encourage the extension of railroads into new and thinly settled
+territories, and to thus hasten their settlement and the development of
+their resources, the people of the United States began at the
+commencement of this period to favor the policy of land grants. Such
+grants had repeatedly been made to roads and canals prior to the crisis
+of 1837. The first railroad that received a land grant was the Illinois
+Central. The scheme was proposed as early as 1836, but the act making
+the grant was not passed until September 20, 1850. Other grants followed
+in 1852 in Missouri, in 1853 in Arkansas, in 1856 in Michigan,
+Wisconsin, Iowa, Florida and Louisiana. As a rule these lands were
+granted by the National Government to the States, and by them to the
+railroads. The land grants made during President Fillmore's
+administration amounted to eight million, and those made during Pierce's
+administration to nineteen million acres. The financial crisis of 1857
+and the War of the Rebellion again checked railroad building, but this
+period developed a new phase of railroad enterprise as well as of the
+land grant policy. In those times of national trial a railroad to the
+Pacific Coast seemed a political necessity. The project of connecting
+the Atlantic and Pacific oceans by a line of railroads was first brought
+prominently before the American people by Asa Whitney of New York. At a
+meeting held under his auspices in Philadelphia on the 23d day of
+December, 1846, a movement was inaugurated for the purpose of
+interesting the people in this enterprise and securing the aid of the
+government for its accomplishment. Various plans were urged, and earnest
+discussions followed, in which the ablest minds of the nation
+participated. The continual agitation of the subject finally led, on the
+1st of July, 1862, to the passage by Congress of an act incorporating
+the Union Pacific Railway Company and the adoption of the central route.
+The Union and the Central Pacific companies received a virtual money
+subsidy of $30,000,000 and a land grant aggregating nearly twenty-three
+million acres, a domain almost equal to the State of Indiana. Other
+direct grants of territorial lands soon followed. The Northern Pacific
+received, just before the close of the war, a grant of forty-seven
+million acres of land. In the Southwest public lands were also freely
+given to new Pacific lines. The various grants made to railroads
+comprise no less than 300,000 square miles, equal to four and a half
+times the area of New England, or six times that of the State of New
+York, or equal to the total area of Iowa, Wisconsin, Illinois, Indiana,
+Michigan and Ohio. Where these grants were not deemed sufficient
+inducement for the construction of roads, counties, cities and towns
+freely voted subsidies, while private citizens made donations to or
+subscribed for the securities of the new railroads.
+
+As has already been stated, the consolidation of connecting lines and
+their transformation into a few large through routes was one of the
+characteristic features of this period. As through traffic, and
+particularly through freight, grew in importance, it became more and
+more apparent that frequent transhipment was an expense to the railroads
+as well as a burden to the public. The system of railroad ownership and
+management soon adapted itself to the necessities of business. The
+change seems to have been inevitable, for it occurred in all parts of
+the world at about the same time. Sagacious men early recognized the
+importance of railroads as national lines of communication. This idea no
+doubt controlled the projectors of the Baltimore and Ohio, of the Erie,
+and of the Boston and Albany roads. The first consolidation of any
+importance took place in 1853, when eleven different roads between
+Albany and Buffalo were united to form the New York Central. Five branch
+roads were added to the system between 1855 and 1858. In 1864 Cornelius
+Vanderbilt secured control of the Hudson River road, and in 1867 of the
+New York Central, which lines he consolidated in 1869. By gaining soon
+afterward control of the Lake Shore and Michigan Central and Southern
+Canadian roads, he united under one management over 4,000 miles of
+railroad between New York and Chicago, and thus created the first
+through line between the East and the West.
+
+As has already been stated, the Pennsylvania road gained control of the
+Pittsburgh, Fort Wayne and Chicago in 1858 and thus extended its system
+as far as Chicago. Through the absorption of other lines it reached an
+extent of over 7,000 miles. The creation of this through route was
+chiefly the work of Thomas A. Scott, at that time vice-president, and
+later president, of the Pennsylvania railroad.
+
+In 1874 the Baltimore and Ohio, under the management of John W. Garrett,
+extended its system to Chicago, and became a competitor of the two older
+lines in the transportation of through freight. At about the same time
+two other parallel trunk lines were developed, the Grand Trunk on the
+north, and the Erie, between the Lake Shore and Pennsylvania lines.
+There were, therefore, in 1874 five rival trunk lines competing for the
+business between the West and the seaboard.
+
+During the same period large rival lines developed west of Chicago and
+St. Louis. From the former city radiate the St. Paul and Northwestern
+systems, each with from 6,000 to 8,000 miles; the Atchison, Topeka and
+Santa Fe with over 9,000 miles; then the Rock Island, the Chicago,
+Burlington and Quincy, the Illinois Central, the Chicago Great-Western,
+and the Chicago and Alton, their systems ranging from 1,000 to 6,000
+miles in extent. From St. Louis radiate the various branches of the
+Missouri Pacific and the closely allied Wabash system, controlling
+together some 10,000 miles of road.
+
+This process of consolidation also went on in the Southern States,
+though to a less extent. Their systems do not run parallel, like the
+trunk lines, nor do they radiate from a common center, like the roads of
+the Northwest, but they radiate from the principal ports of the Atlantic
+and the Gulf of Mexico toward the interior.
+
+We now enter upon the third period of the history of American railroads,
+the period of combinations. During the time of great activity in
+railroad construction following the War of the Rebellion many abuses in
+railroad management had been developed, which caused general complaint
+and led to what is known as the Granger movement. Laws were demanded,
+especially in the agricultural States of the West, which should regulate
+the rates, methods of operation, and the political relations of the
+railroads. The friends of this movement were successful in the political
+contests that followed, and Granger legislatures were elected in the
+States of Illinois, Wisconsin, Iowa and Minnesota. Laws were passed
+fixing the rates on different classes of roads and providing penalties
+for their violation. The companies contested these acts in the courts,
+but were defeated at every step, until in 1877 the Supreme Court of the
+United States sustained the constitutionality of the Granger laws. In
+the meantime railroad managers tried their utmost to render, by shrewd
+manipulation, these laws obnoxious, and they finally succeeded in having
+them repealed or so amended as to render them largely ineffectual.
+
+It was the principal object of the Granger movement to do away with the
+many discriminating tariffs which so injuriously affected local points.
+It is true, discriminations between individuals were practiced at
+business centers, but rates upon the whole were low at such points as
+compared with those which obtained at local stations. While the Granger
+contest was still going on in the West, a new evil developed in the
+East, which became characteristic of the period and finally grew into
+one of the most intolerable abuses of railroad management. Railroad men
+had gradually learned that it was in their power to maintain high rates
+at competitive as well as at non-competitive points, provided all the
+roads centering at such points could be induced to coöperate, or rather
+to conspire for that purpose. The final solution of the problem was,
+after some experimentation, found in the device to control the prices of
+transportation generally known as the pool. It is doubtful whether any
+contrivance connected with railroad management ever threatened to
+subvert long-established principles of the common law more completely
+than this. Within a few years it extended its dominion over the whole
+country, exacting a heavy tribute from its commerce, until the people's
+patience finally became exhausted and their determined demand for
+railroad reform led to the enactment of the Interstate Commerce Act in
+1887.
+
+When this act passed, dire results were predicted by nearly every
+railroad man in the country. Prophecies were freely made that it would
+ruin half of the roads and seriously cripple and sadly interfere with
+the usefulness of the other half, that it would derange the business of
+the country, greatly depreciate all railroad securities and put an end
+to railroad construction. Nearly seven years have passed since the
+adoption of the law, but not one of these prophecies has come to pass.
+There are at present probably less bankrupt roads in the United States
+than there have been at any time for twenty years, our business
+interests have been improved, the securities of honestly managed roads
+are in better repute than they were previous to the passage of the law,
+and the railroad mileage of the country is increasing at the rate of
+about 6,000 miles a year. If any branch of business has suffered in
+consequence of the enactment of the law, it is the branch monopolized by
+Wall Street. Since 1885, the time when the Interstate Commerce Bill was
+first seriously agitated, the aggregate of railroad securities has
+increased nearly $2,500,000,000, or about one-third. This certainly does
+not look as if capital had been seriously frightened by the Interstate
+Commerce Act. There are other proofs of railroad prosperity. In 1885 the
+gross earnings of the railroads of the United States were $772,568,833,
+or 9.9 per cent. on their reported capital. In 1886 their gross earnings
+were $829,940,836, or 10.2 per cent. on the reported railroad capital.
+In 1890 the gross earnings had increased to $1,097,847,428, and equaled
+10.8 per cent. on the reported capital. This includes even the
+capitalization of new lines and others not reporting operations. Mr.
+Poor gives the reported cost of the lines actually operated as
+$8,519,670,421, against $10,122,635,900 reported cost of all the
+railroads built. Omitting from the computation the lines not reporting
+operations, the gross earnings of the roads actually operated equaled
+12.7 per cent. and their net earnings 4 per cent. on the actual cost of
+the lines which reported. The gross earnings for 1891 were
+$1,138,024,459, and for the year ending June 30, 1892, $1,222,711,698.
+
+The gross earnings per mile have increased from $6,265 in 1885, and
+$6,570 in 1886, to $6,946 in 1890, and $7,409 in 1892. In 1885 the
+capitalization per mile of road was $55,059 and the net earnings per
+mile were $2,185. In 1890 the capitalization per mile had decreased to
+$53,783, while the net earnings per mile increased to $2,195. The
+railroad mileage of the country has grown from 128,361 in 1885 to
+166,817 in 1890, to 170,601 in 1891, and to 175,000 in 1892.
+
+The railroad system of the United States has had a phenomenal growth,
+especially since 1870, since which time nearly 120,000 miles of road, or
+more than two-thirds of the total mileage, have been constructed. The
+table below shows the number of miles of railroad constructed and in
+operation, by quinquennial periods from 1830 to the close of 1890,
+inclusive:
+
+  YEAR.      MILES IN OPERATION.      INCREASE.
+
+  1830                23
+  1835             1,098                1,075
+  1840             2,818                1,720
+  1845             4,633                1,815
+  1850             9,021                4,388
+  1855            18,374                9,353
+  1860            30,626               12,252
+  1865            35,085                4,459
+  1870            52,922               17,837
+  1875            74,096               21,174
+  1880            93,296               19,200
+  1885           128,361               35,065
+  1890           166,817               38,456
+
+It will be noticed that in the sixty years covered by the above table
+there are but two quinquennial periods which show a falling-off in the
+rate of growth, viz.: 1860-65 and 1875-80. During the former period
+railroad construction was partially checked by the War of the Rebellion,
+during the latter by the general financial depression following the
+panic of 1873.
+
+The length of railroads in the world has grown from 206 miles in 1830 to
+about 400,000 miles in 1892. The following table shows the growth of
+railroad mileage by quinquennial periods:
+
+  YEAR.           MILES.
+
+  1830               206
+  1835             1,502
+  1840             5,335
+  1845            10,825
+  1850            23,625
+  1855            42,340
+  1860            66,413
+  1865            90,280
+  1870           131,638
+  1875           182,927
+  1880           231,190
+  1885           303,172
+  1890           385,000
+
+From this table it is seen that the railroad mileage of the world has
+doubled during the past fifteen years, and that its average annual
+increase is at present not far from 17,000 miles. There is no doubt that
+the extent of railroad construction has everywhere exceeded all
+anticipations. So fast has the railroad system expanded in the most
+highly civilized countries that it soon outgrew in nearly all of them
+the laws originally adopted for railroad control. In time an almost
+universal demand arose for reform, and the most progressive governments
+were not slow in heeding it. For the past fifteen years there has been a
+decided drift on the European continent toward state ownership of
+railroads, or to such strict control of the transportation business as
+virtually deprives the operating companies of the power to do injustice
+to the public.
+
+The railroad is assuming more and more the character of an international
+highway. A movement is on foot to connect the railroad systems of the
+United States with those of South America by an intercontinental or
+"Pan-American" railroad. Appropriations have been made by the United
+States and several of the South American republics for a preliminary
+survey of the proposed line. Three different surveying parties are in
+the field, one in Central America and the other two in the United States
+of Colombia and Ecuador. The progress so far reported by them is
+encouraging, and there is now some hope that before the close of the
+nineteenth century one may be able to travel by railroad from New York
+to Valparaiso without even a change of cars.
+
+It has also been proposed to span Behring Strait and connect North
+America with Asia and Europe by an international railway. This line, if
+constructed, would be simply an extension of the proposed Pan-American
+railroad and would follow the western coast of the United States as far
+as Behring Strait, then cross over into Asia, traverse Siberia and
+finally reach London via St. Petersburg, Berlin and Paris. It is very
+questionable whether such a line is at present feasible either from a
+technical or financial point of view, but the time will probably come
+when the railroad track will connect New York and London.
+
+
+
+
+CHAPTER IV.
+
+MONOPOLY IN TRANSPORTATION.
+
+
+From time immemorial efforts have been made by designing men to control
+either commerce or its avenues, the highways on the land and on the sea,
+by a power which law, custom, ingenuity, artifice or some other agency
+had placed into their hands.
+
+The ancient Phoenicians early aimed at and finally obtained the empire
+of the sea by making themselves masters of the most commodious harbors
+of the Mediterranean Sea and the Arabian Gulf. They established a
+regular intercourse with the countries bordering on the Mediterranean as
+well as with India and the eastern coast of Africa. From these latter
+countries they imported many valuable commodities which were not known
+to the people of other parts of the world, and during a long period they
+held this lucrative branch of commerce without a rival. The character
+and the situation of the Phoenicians aided them greatly in acquiring
+this mastery of commerce. Neither their manners and customs nor their
+institutions showed any marked national peculiarity; they had no
+unsocial prejudices and they mingled with the people of other countries
+without the least scruple or repugnance. As their native country was
+small and quite barren, they early learned to rely upon commerce as the
+best source of riches and power. Like the other Semitic tribes, the
+Phoenicians were noted for their energy and acumen, and while they
+were not a literary people in the strict sense of the word, ancient
+civilization received probably a more powerful impetus through their
+commercial supremacy than through any other agency.
+
+During the reign of King Solomon the Jews made an attempt to wrest from
+the Phoenicians at least a part of the world's trade. Solomon built
+ships and imported Phoenician sailors for his fleet. For a time it
+seemed as if the Israelites might become the rivals of their teachers in
+the art of navigation and in the mysteries of trade; but their peculiar
+religious customs in that early day proved a serious impediment to
+commercial ascendancy, as it rendered them incapable of that unreserved
+intercourse with strangers so essential in commerce.
+
+The monopoly of the sea, at least of the Mediterranean, passed to the
+Carthaginians, their descendants. The latter extended their navigation
+toward the west and north. They planted colonies and opened new harbors,
+and up to the time of the Punic wars kept almost the entire trade of the
+countries bordering on the Mediterranean in their hands.
+
+After the downfall of Carthage the control of the commerce of Southern
+Europe and Northern Africa descended to the Romans. When Rome became the
+capital of the world, it gathered the wealth and valuable productions of
+all its provinces. Under the consuls and the earlier emperors the
+vigilance of the Roman magistrates and the spirit of the Roman
+government gave every possible security to commerce and prevented for a
+time the rise of monopoly. Nowhere was national union so complete or
+commercial intercourse so perfect as in the Roman empire. The
+intelligence and the power of Rome stimulated and regulated the industry
+of her people and permitted them to enjoy the fruits of their efforts
+without public or private restrictions.
+
+We have seen that the intercourse of Rome and her provinces was
+facilitated by the construction of roads and the establishment of
+imperial posts. During the decline of the empire the maintenance of
+these posts led, however, to a grave abuse. We are informed by Gibbon in
+his "Decline and Fall of the Roman Empire":
+
+"But these beneficial establishments were accidentally connected with a
+pernicious and intolerable abuse. Two or three hundred agents or
+messengers were employed, under the jurisdiction of the master of the
+offices, to announce the names of the annual consuls and the edicts or
+victories of the emperors. They insensibly assumed the license of
+reporting whatever they could observe of the conduct either of the
+magistrates or private citizens, and were soon considered as the eyes of
+the monarch and the scourge of the people. Under the warm influence of a
+feeble reign they multiplied to the incredible number of ten thousand,
+disdained the mild though frequent admonitions of the laws, and
+exercised in the profitable management of the posts a rapacious and
+insolent oppression. These official spies, who regularly corresponded
+with the palace, were encouraged by favor and reward anxiously to watch
+the progress of every treasonable design, from the faint and latent
+symptoms of disaffection to the actual preparation of an open revolt.
+Their careless or criminal violation of truth was covered by the
+consecrated mask of zeal; and they might securely aim their poisoned
+arrows at the breast either of the guilty or the innocent, who had
+provoked their resentment."
+
+After the downfall of the Romans, commerce remained paralyzed during the
+period of Gothic ignorance and barbarism. The crusades for the recovery
+of the Holy Land from the Saracens, in the eleventh and following
+centuries, opened again communication between the east and the west by
+leading multitudes from every European country into Asia; and though the
+object of these expeditions was conquest, and not commerce, their
+commercial effects were both beneficial and permanent. The crusades were
+especially favorable to the commercial pursuits of the Italian states.
+The vast armies which marched from all parts of Europe toward Asia gave
+encouragement to the shipping of Venice, Genoa, and Pisa, which
+sometimes transported them, and always supplied them with provisions and
+military stores. Besides the immense sums which these states received on
+this account, they obtained commercial privileges of great consequence
+in the settlements which the crusaders made in the East. All the
+commodities which they imported or exported were exempted from every
+imposition, the property of entire suburbs in some of the maritime
+towns, and of large streets in others, was vested in them, and all
+questions arising among persons residing within their precincts, or who
+traded under their protection, were decided by their own laws and by
+judges of their own appointment. When the crusaders took Constantinople,
+the Venetians did not neglect to secure to themselves many advantages
+from that event. Nearly all the branches of commerce were in time
+transferred from Constantinople to their city. At the end of the crusade
+period Venice had monopolized nearly all the foreign trade of Europe.
+She supplied the people of Italy, France and Germany with those
+commodities with which the crusaders by their intercourse with more
+refined nations had become acquainted. The possession of many Eastern
+ports and the maintenance of a powerful navy made it possible for the
+Venetians to retain their monopoly for several centuries.
+
+The growth of commerce in Central Europe was but slow, owing to the
+dangers to which it was exposed in those days of feudalism. The mountain
+fastnesses of robber knights, which controlled every road and navigable
+river, were so many toll-gates at which the wayfaring merchant was
+stopped to pay tribute. In time this system of plunder grew to such an
+extent that hundreds of feudal lords relied upon it for their support.
+Such a tax upon commerce greatly enhanced the value of all commodities,
+and this deplorable state of things lasted until the cities made their
+power felt by forming alliances for mutual protection. One of these
+alliances, the Rhenish League, comprised in time seventy towns, and the
+ruins of the strong castles destroyed by its forces still exist along
+the Rhine, picturesque memorials of these lawless times.
+
+Perhaps the most powerful commercial union of the middle ages was the
+Hanseatic League. To protect their commerce, the cities of Hamburg and
+Lubeck formed about the middle of the thirteenth century an alliance for
+mutual defense. The advantages derived from this union attracted other
+towns to the confederacy. In a short time about eighty of the largest
+cities lying between the Baltic and the Rhine joined this famous league,
+which in time became so formidable that its alliance was courted and its
+enmity was dreaded by the greatest monarchs. The League divided its
+territory into several districts. Its members, like railway associations
+of the present day, made their own laws, and met for this purpose at
+regular intervals in the city of Lubeck. The original object of the
+League, mutual assistance against outside attacks, was soon lost sight
+of, and its constantly growing power was used to obtain still greater
+commercial privileges in the adjoining countries, and even to force
+their rulers to concede to its members a commercial monopoly. In 1361 a
+controversy arose between the League and the King of Denmark, which led
+to a long and bitter war between them. This war was participated in by
+no less than seventy-seven cities on the part of the League. It
+terminated in 1370, leaving the Hansa master of the situation. For many
+years after this the League exerted its power in Denmark, Sweden and
+Norway, and the rulers of these countries were compelled to respect the
+wishes and even submit to the orders of these proud merchants. The
+countries bordering on the Baltic Sea remained the domain of the League
+for several centuries. They gathered there immense quantities of raw
+material, which they sold in the various ports of Europe. The influence
+of the League even reached as far as Novgorod in the east and London in
+the west. In both cities the League had its quarters, and within them it
+virtually exercised the right of sovereignty. Its main market was at
+Bruges in Flanders, which was then a bee-hive of industry and thrift.
+There the Italian traders came with the products of the east, such as
+spices, perfumes, oil, sugar, cotton and silk, to exchange them for the
+raw materials of the north. While taxes and imposts everywhere else
+harassed merchants, commerce was free in the cities of Flanders, owing
+to the liberality, or rather shrewdness, of her rulers. In Bruges the
+members of the Hansa met the merchants of Venice on equal terms, and the
+exchange of the products of the north for those of the east and south
+could be effected there to the greatest advantage of both.
+
+While it must be admitted that the Hanseatic League developed the
+resources of Northern Europe, and that, even at the time of its greatest
+power, there was always competition among its own members, the fact
+remains that it abused its power by the suppression of all outside
+competition, and that it usurped rights which belong only to the state,
+thus often producing abuses as great as those which it was organized to
+remedy. Its final downfall was caused by the development of national
+power in the northern kingdoms and the growth of commerce and
+navigation in Great Britain. A stubborn assertion of antiquated
+privileges on the part of the Hansa involved it in a feud with the
+illustrious and lion-hearted Queen Elizabeth of England. In 1589 the
+Queen caused sixty of their vessels to be captured on the Tagus, and
+later even took possession of their hall and wharves in London. After
+this the League's decline was very rapid, though its organization was
+kept up till 1669, when its delegates held their last session.
+
+Contemporary with the decline of the Hanseatic commerce in the north was
+that of the Italian cities, especially Venice, in the south. They had
+prospered by their commerce with the Levant until Vasco de Gama
+discovered the sea route to East India in 1497. His countrymen, the
+Portuguese, soon utilized this discovery. They took possession of the
+coast of India and of the islands to the south of it. They also
+succeeded in excluding the Arabs from the commerce with that country, of
+which up to that time they had had exclusive control. For this purpose
+they built fortresses and factories on the west coast of Hindostan, took
+possession of the island of Socotra in the Arabian, and of Ormus in the
+Persian Gulf, and forced the Indian princes to grant them the exclusive
+privilege of trading with their subjects. They also captured the city of
+Malacca, where the trade between China, Japan, the Philippine Islands,
+the Moluccas and India had concentrated itself. In this way they got in
+a comparatively short time control of the commerce of India, Arabia, and
+even Egypt. By forcing the Venetians and their commercial allies out of
+those markets, they secured for themselves a monopoly of the commerce
+between Europe and the east. The political ascendancy of the Turks in
+the islands situated in, and in the countries bordering on, the Eastern
+Mediterranean, caused the loss of Cyprus, Crete (Candia) and Morea to
+the Venetians and greatly aided the Portuguese in establishing their
+commercial supremacy. Less profitable for the latter was the possession
+of their American colonies. They, as well as the Spaniards, adopted here
+a policy which ultimately brought commercial and industrial ruin upon
+both. Entirely neglecting agriculture and relying on the mineral
+resources of their transatlantic colonies, which were believed to be
+inexhaustible, they strove to amass riches by reserving for themselves
+the exclusive privilege of supplying them with the manufactures of
+Europe in exchange for American gold. Neglecting home industries, they
+bought their supplies as well as those of their colonies in France,
+Holland and England. A spirit of speculation and adventure enervated
+their people, and led in time to commercial bankruptcy and political
+disaster.
+
+Spain also drained her treasury by her wars with her Dutch dependencies,
+and the loss of her northern provinces was a serious blow to her
+commerce. Antwerp, which had become the successor of Bruges as the
+commercial emporium of the north, began to decline, and Amsterdam, the
+metropolis of the new Dutch republic, became heir to its glory and its
+riches. The young republic at once commenced to compete in the carrying
+trade with Spain and Portugal, and to make inroads into the eastern
+commerce of the latter.
+
+The Dutch East India Company, which was organized in 1602, sent a fleet
+of fourteen vessels into the Indian Archipelago to found colonies in
+Java, Sumatra and the Moluccas. In a short time they had monopolized the
+entire spice trade, which immediately became a source of great wealth.
+A cargo of five vessels, which returned to Amsterdam in 1603, consisted
+of over two million pounds of spices. This cargo was purchased for
+588,874 florins and was sold for 2,000,000 florins. It is under these
+circumstances not surprising that the dividends of the company's
+stockholders often amounted to 75 per cent., and never went below 12-1/2
+per cent. previous to 1720. Holland's colonial trade made Amsterdam the
+commercial metropolis of Europe. It became the grain market from which
+Spain, Italy and other countries drew their supplies. All the products
+of the world found purchasers here, and a well-developed banking system
+greatly facilitated the exchange. The rapid accumulation of fortunes by
+the Dutch merchants and bankers was without precedent in Europe. Besides
+this, the progress which Holland made in ship-building and navigation
+and the advantages which she derived from her colonial trade placed her
+in a position to outstrip all other nations in the carrying trade of
+Europe. During the first half of the seventeenth century the Dutch were
+justly called the freighters of Europe. But the injury which their
+policy did to the commercial and manufacturing interests of other
+European nations led both England and France to adopt measures well
+calculated to accomplish, in a short time, their commercial
+emancipation. Louis XIV., in order to build up French shipping,
+collected a tonnage from every foreign ship which entered a French
+harbor. England went still further. In 1651 Oliver Cromwell promulgated
+the Navigation Act, by which foreign ships were prohibited from
+importing into England any goods except such as were produced or
+manufactured in their own countries. This was a heavy blow at the Dutch,
+who were thus deprived of the privilege of effecting the exchange of
+commercial commodities between England and her colonies as well as the
+continent. The war which the Dutch Republic waged against England, to
+force her to revoke this act, resulted in favor of the latter and ended
+the commercial supremacy of the Dutch in Europe.
+
+England, which before this time had played but a secondary role as a
+commercial power, rose fast to prominence after her successful struggle
+with the Dutch. She commenced to strengthen her industries by the
+adoption of a high tariff policy, and her merchants were encouraged to
+enter into commercial relations with colonists and foreigners. The
+privileges which had been given to foreign tradesmen were revoked, while
+ship-building and navigation were greatly favored by the government. As
+England gained greater strength as a naval power, her foreign policy
+became more aggressive.
+
+In 1600 the "Company of Merchants of London Trading to the East Indies"
+obtained a charter, and, in spite of Dutch and Portuguese opposition,
+soon gained a foothold on the Moluccas and the coast of Malabar, whence
+it extended in time its dominion to Surat, Bombay, Madras and Calcutta.
+Here they built forts and established their commerce. From these places
+the company pushed into the interior, until finally, after repeated
+struggles with the natives and European rivals, the whole of Hindostan
+came under English dominion. As its power increased, the company
+commenced to abuse shamefully the monopoly which it had been granted, by
+inaugurating a system of plunder and oppression which is perhaps without
+its equal in the annals of history. These growing abuses led to frequent
+revolts and seriously imperiled England's dominion in these territories.
+
+To remedy these evils, Parliament at the close of the seventeenth
+century annulled the charter of the company and declared the commerce
+with the East Indies open to all of the King's subjects. A number of
+small companies were formed, but in 1702 they all combined and organized
+the East India Company. Monopoly was again established, but the patience
+of the natives was exhausted, and England's interests in Hindostan were
+in a critical condition. At this juncture the East India Company adopted
+a policy of moderation, and this, together with the aid which the
+government gave to the company, enabled it to strengthen again its
+weakened commercial relations and to further enlarge its territory. But
+the temptation to abuse its power was too great for this strong
+corporation to be long resisted. Abuses again crept into its management
+and continued to grow until its charter was finally repealed.
+
+The policy adopted by Great Britain for the government of her American
+colonies during the eighteenth century was less rapacious, but scarcely
+more just than that pursued in her eastern possessions. To retain those
+colonies as commercial no less than as political dependencies,
+Parliament enacted laws compelling their people to trade with the mother
+country exclusively and laying restraint on their manufactures. But the
+American pioneers felt that they had brought with them across the ocean
+the rights of Englishmen; they objected to taxation without
+representation, and the men who for opinion's sake had left comfortable
+homes to brave upon a distant shore the dangers of frontier life were
+prepared, if necessary, to emphasize their objection by armed
+resistance. England, intent upon maintaining her barbaric system of
+discriminative duties and commercial monopolies, blindly attempted
+coercion, but the war which resulted wrested from the English crown its
+brightest jewel, and the War of 1812 established upon American soil the
+principle of industrial and commercial liberty.
+
+It must not be supposed, however, that America and the United States in
+particular have been free from monopolies growing out of the
+transportation business. Nothing would be farther from the truth. There
+is no law so stringent but that it will be violated; there is no
+government so vigilant but that it will at times be imposed upon. It is
+true, our government sanctions no monopoly, but the very liberty of
+action which exists here among corporations as well as individuals
+offers to organized wealth and power a wide field for abuses.
+
+We have seen in the foregoing that almost from time immemorial efforts
+have been made to monopolize transportation and trade, and that these
+efforts were successful whenever either from ignorance or weakness the
+masses fell into political apathy. There is a natural tendency among men
+to utilize commercial advantages to the detriment of others. In modern
+times the opportunities for building up large monopolies have greatly
+increased and have been turned to the most profitable account by
+designing men. Great and even unbearable abuses have always followed
+where the greed and ambition of such men have not been checked by
+governmental agencies. In this respect the people of the United States
+have had about the same experience as the rest of mankind. Ever since
+the introduction of railroads into this country there has been a
+well-marked drift toward monopolizing the transportation business.
+
+As long as the dangers of monopoly remained unknown to the American
+people, legislation for the control of railroads and other public
+carriers was both scarce and crude, and shrewd railroad men were not
+slow in taking advantage of the situation. It is foreign to the design
+of this treatise to give a complete history of railroad monopoly in the
+United States. The author will therefore confine himself to showing that
+transportation companies will, like the great commercial organizations
+of the past, when left to follow their instincts, invariably use their
+power to oppress the public by exacting excessive charges for their
+services, or to discriminate against the many by extending special
+privileges to the few. Hundreds of cases might be given to illustrate
+the above rule, but a history of two of these corporations will suffice
+to show to what extent corporate abuses can be carried, and to serve as
+a warning against the adoption of any "_laissez faire_" policy in the
+railroad legislation of the future. The corporations selected for this
+purpose are the Camden and Amboy Railroad and the Standard Oil
+Companies, both typical representatives of the Rob Roy policy which
+organized wealth has pursued since the dawn of civilization, when not
+prevented by the wisdom and strength of a good government.
+
+
+THE CAMDEN AND AMBOY RAILROAD COMPANY.
+
+For almost forty years the Camden and Amboy Railroad was the only direct
+route between the cities of New York and Philadelphia. It is doubtful
+whether previous to the war a more important or a more remunerative road
+existed in the United States, for, besides connecting the two largest
+cities in the Union, it formed part of the direct land route from the
+East to the South.
+
+The efforts to open a direct through route between New York and
+Philadelphia date back to the year 1812, when the construction of a
+canal between the Hudson and the Delaware was proposed, but an
+ill-advised jealousy of the State of Pennsylvania delayed for many years
+the realization of the project. When this obstacle was finally overcome,
+a change of sentiment had taken place in New Jersey. Railroads had just
+made their appearance in the United States, and a large number of the
+people of New Jersey preferred a railroad to a canal.
+
+The matter was finally compromised in the legislature of New Jersey,
+which on the 4th of February, 1830, simultaneously granted charters to
+the Delaware and Raritan Canal Company and the Camden and Amboy
+Transportation Company, fixing the capital stock of each company at
+$1,000,000, with the right to increase it to $1,500,000. The charter
+further stipulated what taxes should be paid to the State, and also
+contained the provision that within five miles of the starting-point and
+within three miles of the terminus of each line no other railroad or
+canal should be built. It was believed the existence of both a water and
+a land route would be sufficient to maintain competition on this
+important thoroughfare of interstate traffic. The construction of the
+railroad, which had been surveyed in almost a straight line between its
+termini, was at once commenced. A number of well-to-do and practical men
+took hold of the enterprise, among them one John Stevens, who together
+with his three sons took one-half of the capital stock. The canal
+project did not do so well at first. At the middle of the year 1830 only
+about one-twelfth of its capital stock had been sold, and there was
+great danger that the company might forfeit its charter, as the time
+allowed for the subscription of its stock was nearing its end. At this
+juncture Robert Field Stockton, a young man of ability, enthusiasm and
+wealth, came to the rescue of the canal company. He not only bought for
+himself a goodly share of the canal stock, but also prevailed on his
+rich father-in-law, Mr. John Porter, to invest $400,000 in the
+enterprise. The financial difficulties of the company were thus removed.
+At the next session of the legislature Mr. Stockton secured an amendment
+to their charter which apparently only authorized the enlargement of the
+canal, but in reality empowered the canal company to construct a second
+railway.
+
+It was from the beginning Mr. Stockton's object to share with the
+railroad company the advantages which their line promised to give them.
+The enlargement of his company's franchise placed him in a position to
+dictate terms to the Camden and Amboy Transportation Company. The latter
+was given the choice, to prepare for competition with a rival railroad
+line, or to consolidate with the Delaware and Raritan Canal Company. It
+chose the latter alternative, and on the 15th day of February, 1831, the
+two companies became one. The consolidation still required the sanction
+of the legislature. This was obtained in consideration of the transfer
+of 2,000 shares of the capital stock of the company to the State. It was
+further stipulated that the new company should pay to the State a tax of
+10 cents for each passenger and of 15 cents for each ton of freight
+carried over its line through the State, as well as an annual tax of
+$30,000, and that the State in return should protect the company against
+any and all competition in the direct passenger and freight traffic
+between the cities of New York and Philadelphia. Serious doubts were at
+the time entertained by many, whether the State of New Jersey under the
+Federal Constitution possessed the right to thus create a monopoly in
+transportation facilities, and to regulate arbitrarily the commerce
+between sister States.
+
+Five days after it had granted this charter to the Camden and Amboy
+Company, the legislature granted another charter authorizing the
+construction of a railroad from Jersey City to New Brunswick on the
+Raritan River. On the 23d of February of the same year a charter had
+been granted by the legislature of the State of Pennsylvania to a
+company which had been formed for the purpose of constructing a railroad
+from Philadelphia to Trenton. This company had likewise been authorized
+by its charter to buy the right of way for a railroad from Trenton to
+New York, which it proceeded at once to do. It was evident that as soon
+as the two new roads would meet at New Brunswick, an understanding would
+be reached between them, by which another through line would be created
+between New York and Philadelphia, which would have the advantage over
+the Camden and Amboy road that it touched the capital of New Jersey and
+could thus make itself serviceable to members of the legislature,
+officers of State and influential politicians.
+
+The Camden and Amboy Freight Company soon arrived at the conclusion that
+it could not permit such rivalry. It appealed to the legislature for
+protection. Resolutions were passed in its favor, but the Philadelphia
+and Trenton Railroad Company paid no attention to those resolutions, but
+quietly continued to lay its track. Mr. Stockton and his friends did not
+dare to invoke the aid of the courts, because a judicial investigation
+might have resulted in the destruction of their own charter. The
+situation was critical, but Mr. Stockton was equal to the occasion. He
+bought quietly a sufficient number of shares to control the management
+of the Philadelphia and Trenton road, and, in April, 1836, secured the
+consolidation of the Philadelphia and Trenton and the Camden and Amboy
+railroad companies.
+
+The canal of the company was not completed until 1838. It had consumed a
+sum of money largely in excess of the original estimate. To connect the
+two lines of the consolidated company, a branch road was constructed
+from Trenton to Bordentown. Later the road from Trenton to Brunswick was
+completed and an agreement entered into with the Jersey City company for
+a division of the traffic of the two roads. The large cost of these
+improvements suggested to the company the advisability of increasing its
+revenues and of decreasing its expenditures. Its charter provided for a
+payment to the State of 10 cents for each through passenger. By an
+artifice the company avoided the payment of this tax. It compelled its
+through passengers to walk over the bridge at Trenton and then continue
+their journey by rail via Bordentown to Jersey City.
+
+The company's charter also stipulated, that the fare between New York
+and Philadelphia should not exceed $3 per passenger. Its officers
+interpreted this stipulation to apply only to the intermediate traffic
+and proceeded to collect $2.50 for the trip from New York to Trenton,
+and $1.50 from there to Philadelphia, thus increasing the fare for the
+entire journey to $4.00, one dollar above the maximum allowed by law.
+One Jacob Ridgway, who was the owner of a ferry-boat at Camden, saw here
+an opportunity for starting a lucrative business. He bought a steamer
+and carried passengers from Philadelphia to Trenton for one-third of the
+fare demanded by the railroad. After the Camden and Amboy Company had
+made several unsuccessful attempts to intimidate Mr. Ridgway and his
+force, one of which even brought Mr. Stockton in contact with the
+criminal courts, it purchased the boat with all terminal facilities at
+Philadelphia and Trenton. The attention of the legislature of New
+Jersey was repeatedly called to the company's failure to comply with the
+provisions of its charter, but these appeals were on the whole of no
+avail. In 1842, after a long discussion, a resolution was carried
+declaring the charge of $4 for the through journey illegal, but the
+company entirely ignored this legislative reminder and continued its old
+tariff.
+
+The company's charter also reserved for the State the right to acquire
+the Camden and Amboy road under certain conditions upon the payment of a
+reasonable compensation. In 1844, through Mr. Stockton's engineering,
+the constitution of New Jersey was so amended as to practically deprive
+the State of the power to acquire the company's property.
+
+During the first few years of the existence of the Camden and Amboy
+Transportation Company its business was managed in the interest of its
+owners, but soon a few of its leading stockholders managed to turn its
+enormous profits into their own pockets. The Stevens and Stockton
+families, together with two other directors of the Camden and Amboy
+Company, had come into possession of a line of steamers that plied on
+the Raritan, between New Brunswick and New York. The enterprise, in
+spite of its largely watered capital, had been made to pay dividends
+ranging from 30 to 40 per cent. Its owners saw an opportunity for a
+larger field of usefulness and larger dividends. In 1834 a majority of
+the board of directors of the Camden and Amboy Company proposed that the
+company rid itself of the responsibility connected with the
+transportation business and lease its railroad and canal. Mr. Stevens,
+as representative of the Camden and Amboy Company, then negotiated with
+Mr. Stevens, the representative of the Napoleon Steamer Company, and the
+negotiations soon resulted in an agreement between the two companies by
+which the latter leased the railroad and canal lines of the former and
+agreed to pay it a fixed toll of $7.64 per ton upon all freights carried
+by rail, and one-quarter of all its revenues derived from the canal.
+Soon afterward the Napoleon Company entered into a similar contract with
+the Camden Ferry Company and now had a complete monopoly of the
+transportation business between New York and Philadelphia. It at once
+commenced to develop a system of organized plunder. Instead of the
+maximum charter tariff of 8 cents per ton per mile, it charged 10, 12,
+and even 15 cents. The through rates charged were several times as high
+as those fixed by the charter. Canal rates were raised to such an extent
+as to make them prohibitory and to compel the public to ship by rail. It
+is difficult even to estimate the total annual profits of the
+directorial syndicate. Their accounts, if any were kept, were not
+accessible, and surmises can only be based upon such data as
+occasionally found their way to the public. In 1845 the share of the
+canal tolls paid to the company's stockholders was $359,000. The
+directors' share under the terms of their lease is thus found not to
+have been less than $1,077,000. Another item of $170,000, tolls
+collected for the transportation of 27,000 tons of freight, was so
+divided that the Camden Ferry Company, or its other self, the
+directorial syndicate, received $32,000 for one mile, while the Camden
+and Amboy Railroad Company received $63,000, or less than twice as much,
+for ninety-two miles. The directors under their lease were entitled to
+the remaining $75,000.
+
+The service of the company was as bad as it was expensive; its trains
+were slow and irregular, and its employes arrogant. The syndicate which
+controlled the company defied its stockholders, the public and the
+courts alike. When one of the stockholders, a Trenton merchant by the
+name of Hagar, applied to the courts for an order to compel the
+directors to produce their books and render an account, the syndicate
+bought Mr. Hagar's shares, for which he had paid $125 a share, at the
+price of $1,456 a share. The suit was then withdrawn and the matter
+hushed up.
+
+In 1848 a number of articles appeared in a paper published at
+Burlington, Pa., which were signed by "A Citizen of Burlington" and
+contained much surprising information concerning the Camden and Amboy
+Transportation Company. It was charged that the directors had defrauded
+both the State and the company's stockholders of large sums of money,
+that they had grossly violated their charter by charging illegal and
+extortionate rates, oppressive to both commerce and travel. It was shown
+that while the average rate per ton per mile of thirty-five neighboring
+roads was 2.85 cents, that of the Camden and Amboy Company was 4.54
+cents. It was also shown that neither the stockholders nor the State had
+received the share of the company's revenues to which they were
+entitled. These articles were extensively reprinted and caused a great
+commotion wherever they appeared. After the first storm had subsided the
+directors issued an address to the people of New Jersey, in which they
+bitterly complained of the people's loss of confidence in their
+integrity, and declared that the charges preferred against them were
+founded on falsehoods.
+
+The "Citizen of Burlington" replied by accusing the directors of
+defalcation and falsifying their books. He charged that from 1840 to
+1847 no account had been rendered of the receipt of no less than
+$5,266,431, on which $493,066 was due to the State. As soon as the
+legislature convened, a resolution was introduced that a commission be
+appointed to investigate the charges preferred against the Camden and
+Amboy Transportation Company. The resolution was adopted, but it was
+virtually left to the accused to select the members of the commission.
+That the directors had a guilty conscience appeared from the fact that
+the last annual report of the company, which had just been printed, was
+withdrawn and destroyed. To silence their unknown accuser, they
+threatened him with criminal prosecution. He now gave his name. It was
+Henry C. Carey, the noted writer and authority on political economy. Mr.
+Carey did not give up the contest. He proceeded to show how the policy
+of the managers of the Camden and Amboy Transportation Company depressed
+commerce, manufactures and agriculture alike. He showed how the company
+as a public carrier discriminated in favor of industries which they
+carried on as private individuals. He claimed that the company had
+forfeited its charter, and that it was the duty of the State to
+authorize the construction of another road. In the meantime, early in
+1849, the legislative investigation committee submitted its report. It
+was perhaps as shameless a document as was ever placed before a
+legislative assembly. It lauded the directors, to whose influence the
+members of the commission owed their selection, and whitewashed their
+past management of the company's affairs.
+
+But the people of New Jersey were far from being satisfied with this
+report and demanded the appointment of another committee. Another
+investigation was ordered, and this time the company, or rather its
+directors, found it impossible to control the selection of its members.
+Soon after their appointment the committee asked Mr. Carey to lend them
+his assistance in their labors, and he readily consented. During the
+summer of 1849 the members of the committee had occasion to go to
+Bordentown, to inspect the company's books. From that time on a
+wonderful change seemed to have come over the committee. They found they
+could dispense with Mr. Carey's further services. What had previously
+appeared to them a ring of rapacious monopolists seemed now an
+association of worthy philanthropical gentlemen. In their report to the
+legislature they completely exonerated the company's managers. They
+admitted that the State had not been paid all that was due to it, but
+they asserted that this difference in the company's accounts was due
+solely to clerical errors, for which the management were in no wise
+responsible. The report was accepted, although not even the annexed
+testimony supported it, and thus the matter was dropped.
+
+This was a great victory for Mr. Stockton and his friends. It
+demonstrated the success of their methods of dealing with public
+servants. Mr. Carey repeated his charges, but the directors failed to
+prosecute him for libel as they had threatened. He asked that he be
+permitted to inspect the company's books, but was met with a peremptory
+refusal. Public opinion was defied, and the old methods were continued.
+
+The extortionate and discriminating tariff of the only through route of
+New Jersey affected seriously the agricultural as well as the commercial
+interests of that State. The Camden and Amboy monopoly kept the State of
+New Jersey for many years far behind the New England States in railroad
+facilities. In 1860 New Jersey had only one mile of railroad for every
+17.6 square miles of territory, while the proportion of miles of
+railroad to square miles of territory for the same year was 1 to 7.9 in
+Connecticut, 1 to 7.6 in Rhode Island, and 1 to 6 in Massachusetts. At
+present New Jersey has one mile of railroad to every 3.79 square miles,
+and therefore leads all the States in the Union in density of railroad
+track.
+
+The question may be asked how the Camden and Amboy Transportation
+Company, or rather the syndicate which controlled it, contrived to
+maintain its power for so many years, to the great detriment of industry
+and commerce. The only answer that can be given is that the men for whom
+the maintenance of the monopoly was a source of great wealth were
+constantly using a part of this wealth for the corruption of those who
+were in a position to influence public opinion or to direct the policy
+of the State. Prominent politicians were favored with passes, attorneys
+were retained by the company as local solicitors, corrupt and servile
+legislators were bribed by money or the promise of lucrative positions,
+and newspapers were given large subsidies. In addition to this public
+men were constantly made to realize the political power of the company,
+whose many employes had always been trained to do the bidding of their
+masters. If the opposition, in spite of this, was ever successful at
+legislative elections, the company's managers found it less expensive to
+gain the good will of a few members of the legislature after election
+than it would have been to gain the good will of their constituents
+before election. Dissatisfied stockholders who threatened with judicial
+investigation were quietly bought out or impressed with the danger of
+inviting public discussion in regard to the validity of the company's
+charter, as it might lead to its annihilation. The good people of New
+Jersey made several attempts to rid the State of the despotism of the
+company by making the question a political issue, but they were each
+time defeated through the lavish and scandalous expenditure of the
+company's money.
+
+The original charter of the Camden and Amboy Railroad Company was
+granted for a period of twenty years, and should have expired in 1853,
+but its managers succeeded in having it extended to January 1, 1859. In
+1854 another extension was asked for, and after a long and bitter debate
+the company was again triumphant. An act was passed on the 16th of
+March, 1854, making it illegal to build previous to the first day of
+January, 1869, without the consent of the Camden and Amboy
+Transportation Company, a railroad in the State of New Jersey for the
+transportation of passengers and freight between New York and
+Philadelphia. At the end of this period even a third extension was
+granted, and the company, though after January 1, 1867, under a new
+name, maintained its monopoly until it consolidated, in 1871, with the
+Pennsylvania Railroad Company.
+
+That the spirit of the past is still at work was shown by the recent act
+of the legislature of New Jersey legalizing the consolidation of the
+coal roads. The coal barons found the legislature as servile as the
+managers of the Camden and Amboy Railroad Company had found them of
+yore, and their well-planned scheme would probably have been successful
+had it not been for Governor Abbot's courageous veto of the disgraceful
+act, and it is more than probable that they will yet succeed. They have,
+in fact, during the last year advanced the price of coal about one
+dollar per ton.
+
+
+THE STANDARD OIL MONOPOLY.
+
+The Standard Oil monopoly may be said to be the crowning monument of
+corporation conspiracy. It is, indeed, doubtful whether the combined
+brotherhoods of mediæval knights ever were guilty of such acts of
+plunder and oppression as the Standard Oil Company and its railroad
+allies stand convicted of before the American people. The facts that
+have been unearthed by official investigations show a frightful
+prevalence of corporate lawlessness and official corruption, and there
+can be no doubt that, could certain high railroad dignitaries have been
+compelled to testify, and could the truth have been fathomed, it would
+have been found that not only the public, but railroad stockholders as
+well, were victimized by those transactions.
+
+The founder of the Standard Oil monopoly was some twenty years ago part
+owner of a petroleum refinery at Cleveland, Ohio. His fertile brain
+conceived the thought that with the coöperation of the railroad
+companies a few men of means could control the petroleum business of the
+United States. With this end in view he approached the managers of the
+New York Central, the Erie and the Pennsylvania Central railroad
+companies, and on January 18, 1872, entered with them into a secret
+compact by which they agreed to coöperate with the South Improvement
+Company (an organization formed by that gentleman to aid in the
+accomplishment of his designs) to grant to said companies certain
+rebates and to secure it against loss or injury by competition. The
+South Improvement Company, in consideration of these favors, guaranteed
+to the railroad companies a fair division of its freights. The existence
+of this contract soon became known and caused a violent protest among
+the oil-producers. An indignation meeting was held and a committee was
+appointed to wait on the railroad managers and demand fair treatment for
+all.
+
+The railroad companies yielded and promised to give equal rates to all
+shippers and to grant to no person either rebates or any other advantage
+whatever. New rates were fixed for the transportation of both crude and
+refined oil, and it was agreed on the part of the railroad companies
+that at least ninety days' notice should be given of any change that
+might be made in the rates. Steps were also taken to have the charter of
+the South Improvement Company canceled because it had been found that it
+was neither the owner of a refinery nor of an oil well, and could
+therefore not comply with the legal requirements concerning the
+organization of stock companies. While the South Improvement Company
+thus came to a sudden and rather inglorious end, its founders soon
+contrived other means to carry out their ingenious plans. They bought a
+refinery, reorganized by taking the prepossessing title of Standard Oil
+Company, and were now prepared to resume their operations under the
+guise of legal authority.
+
+The railroad companies seemed to have relished their novel business
+connections, for, without paying the least attention to the agreement
+into which they had entered with the other producers and refiners of
+oil, they extended the privileges of the defunct South Improvement
+Company to its successors. The new company received secret rebates
+ranging from 50 cents to $1.32 per barrel. The agreement also contained
+the stipulation that if lower rates should ever be granted to their
+competitors, an additional rebate should be given to the Standard Oil
+Company. Endowed with these privileges, the favored company proceeded to
+unite under its banner, by consolidation, purchase or lease, the
+leading refineries of Cleveland.
+
+The effect of the discriminations practiced against independent
+refineries soon became apparent. In less than two years there were
+closed in Pittsburgh twenty-one refineries, that represented an
+aggregate capital of $2,000,000 and had given employment to over 3,000
+people. A large number of the remaining refineries were forced to
+consolidate with the Standard Oil Company.
+
+The next step toward the entire suppression of competition was an attack
+planned against the independent pipe lines. The Standard had early
+secured control of the United Pipe Line. To exterminate competing lines,
+they again appealed to the railroad companies, and on the 9th day of
+September, 1874, J. H. Rutter, general freight agent of the New York
+Central, issued a new oil tariff which discriminated greatly in favor of
+the oil brought by the United Pipe Line to the refineries. Up to that
+time this company had done from 25 to 30 per cent. of the total business
+of the various pipe lines. Within one year after the adoption of the new
+tariff it did fully 80 per cent. of the entire business. This forced the
+independent lines either to sell out to the Standard or to suspend
+business, for the latter's rebate was larger than their toll. The oil
+tariff of the Pennsylvania Central compelled the independent Pittsburgh
+refiners to ship their refined oil over that company's line, if they
+would avail themselves of the rebate which it granted on the rates for
+the transportation of crude oil to Pittsburgh. The evident purpose and
+the effect of such a tariff was to prohibit oil shipments over the
+Baltimore and Ohio. Had this road made ever so reasonable a tariff, the
+combined charges for the transportation of the crude petroleum from the
+oil regions to Pittsburgh by the Pennsylvania Central, and for that of
+the refined oil to the sea coast by the Baltimore and Ohio, would still
+have been prohibitive in competition with the special transit rates
+granted to the Standard Oil Company. As a remedy it was proposed to
+organize a new pipe line, it being believed that the crude oil could be
+brought to Pittsburgh by that line, refined there, shipped to the
+seaboard by the Baltimore and Ohio, and sold there at as good or even a
+better profit than the product of the Standard, notwithstanding the
+favors received by the latter from the allied trunk lines. This movement
+resulted in the creation of the Columbia Conduit Company, which at once
+proceeded to lay its pipes from the oil wells to Pittsburgh. Under the
+laws of the State of Pennsylvania it became necessary for this company
+to obtain the permission of property-holders to lay the pipes through
+their lands. Consent was everywhere readily given, and the pipes were
+laid without hindrance until the track of the Pennsylvania Railroad was
+reached, within a few miles of the Pittsburgh refineries. This company
+peremptorily refused to let the pipes be laid under its track. The pipe
+line company after some delay contrived a way to obviate the difficulty.
+It laid its pipes on each side of the road as close to the track as it
+could without trespassing against the legal rights of the Pennsylvania
+Central, and then conveyed the oil from one side of the track to the
+other by means of large oil tanks on wheels, which could not be
+prevented from passing over the railroad track at the public crossing.
+After several months the railroad company allowed the pipes to be laid
+under its track, but it soon appeared that another combination had been
+effected to destroy the value of this concession. A railroad war had
+given the three trunk lines an opportunity to force the Baltimore and
+Ohio into the pool. A uniform rate of $1.15 was established for
+shipments of refined petroleum from any point to the seaboard. While
+this was in itself an unjust discrimination against Pittsburgh, which is
+250 miles nearer tidewater than Cleveland, the railroads in addition
+granted the Standard secret rebates which enabled it to sell its oil on
+the coast for less than the sum of its first cost at the refineries and
+the open rate of transportation to the points of export. The independent
+refiners of Pittsburgh found themselves again cut off from the market,
+but necessity soon made them discover another outlet. Shipping their oil
+down the Ohio River to Huntington, W. Va., they had it taken by the
+Chesapeake and Ohio Railroad to Richmond. In spite of the fact that this
+route was more than twice as long as the direct line from Pittsburgh to
+the seaboard, and in spite of the further fact that it necessitated an
+expensive transfer, a rate equal to about two-thirds of the trunk line
+rate for the direct shipment proved remunerative to the Chesapeake and
+Ohio. The independent refiners kept up their competition for some time,
+but the great disadvantage of river travel and the insufficient export
+facilities of Richmond finally forced them to give up the contest.
+
+Until the year 1877 the Standard Oil Company had worked hand in hand
+with the railroads. It had obtained all its privileges by asking for
+them and by holding out inducements to railroad managers to grant them.
+It now commenced to dictate terms to refractory railroad companies.
+
+The Pennsylvania road ventured to carry oil not the property of the
+Standard on terms which that company did not approve. The latter ordered
+the road to refuse to carry the product of their competitors. This the
+railroad company declined to do, and the Standard at once withdrew its
+custom. The Pennsylvania retaliated by carrying the oil of the
+independent refineries at merely nominal rates and even went so far as
+to make its rates dependent upon the profits realized by the shippers. A
+fierce freight war was thus precipitated, in which the Erie and New York
+Central supported the Standard Company. The Pennsylvania road was soon
+forced to surrender and sign an ignominious treaty.
+
+The Baltimore and Ohio, which had again commenced to carry the product
+of those Pittsburgh refineries which received their crude oil through
+the Columbia Conduit Company, was in a similar manner forced to reject
+their freights. The pipe line, whose value was thus almost entirely
+destroyed, was soon after sold to the Standard Oil Company. This company
+had now an almost complete monopoly of the oil business of the United
+States, and still it was not satisfied. It appears that some of the
+producers of crude oil had been in the habit of shipping a part of their
+product in spite of the advantages which the Standard had through its
+rebates. To prevent even these shipments, or rather to exact another
+tribute from railroad stockholders, the American Transfer Company, one
+of the auxiliaries of the Standard Oil Trust, in 1878, demanded and
+received from the Pennsylvania road a "commission" of 20 cents a barrel
+on all shipments of petroleum _made by any_ shipper. It had been shown
+to the satisfaction of the Pennsylvania Railroad Company that similar
+commissions, ranging from 20 to 35 cents a barrel, were being paid by
+the New York Central and Erie roads.
+
+When, in 1879, an effort was made to establish a pipe line from the oil
+regions to the seaboard, nothing was left undone by the trunk lines to
+thwart the enterprise. The new company finally succeeded in making
+connection with a railway which had no part in the pool, and there was
+some hope that under this arrangement competition might at least be
+maintained at some points. The Standard Company again appealed to the
+trunk lines to protect it against injury by competition and obtained
+from them a special rate of 20 cents per barrel, which rate was even
+reduced to 15 cents per barrel two months later. Against such a rate it
+was impossible to compete, and after a short struggle the new line found
+itself compelled to sell its works to the Standard.
+
+To crown its monopoly, the Standard Oil Company finally bought of the
+New York Central and Erie roads their terminal facilities for the
+transportation of oil, and thereby made it virtually impossible for them
+to transport oil for any of its few remaining competitors. Mr. Josiah
+Lombard, part owner of the New York refinery, stated in 1879 before the
+investigating committee of the legislature of New York that in 1878 he
+had requested the Erie Company to transport for him 100 cars of crude
+oil from Carrollton to New York; that he had called upon Mr. Vilas, the
+general freight agent of the company, in person, but had never been able
+to obtain the cars, though the oil had been held in Carrollton three or
+four months ready to be loaded. This gentleman also testified that he
+had found it impossible to obtain cars from the New York Central, and
+that the company's general freight agent had informed him that the road
+did not own and could not furnish any oil cars.
+
+After the Standard Oil Company had secured control of the various pipe
+lines of the oil regions, it frequently lowered the price of crude oil
+to such an extent as to make its production unprofitable. It even
+refused to buy oil, basing its refusal upon the ground that the railroad
+companies failed to furnish cars for its transportation. When the
+well-owners had their tanks filled, they had the choice to let the oil
+run away or to be at the expense of closing up their wells. In one
+instance, however, when their ruse threatened to cause a riot, several
+hundred cars were brought to the wells within a few hours.
+
+The Standard Oil Trust, not satisfied with the monopoly of the wholesale
+trade, even tried in places to control the retail trade by peddling oil
+at private houses. This method of destroying competition was chiefly
+resorted to where independent dealers obtained their supply by a water
+route.
+
+That many of the deeds of the Standard are dark is evident from the fact
+that its members, when summoned by the Hepburn committee, declined to
+testify, lest their testimony be used to convict them of crime.
+Officials of the trust have bribed or attempted to bribe employes of
+rival firms, for the purpose of ruining their business. By its peculiar
+methods the company has been successful in courts of justice and
+legislative halls, and has enjoyed an impunity for its conspiracy
+against the public that is without precedent in America. It has
+accumulated a capital of more than $100,000,000, and it is even claimed
+that for years its annual dividends have exceeded in amount the capital
+actually invested. This is not at all strange when it is considered that
+they have levied upon the producers, consumers and transporters alike.
+Mr. Cassat testified before the New York investigating committee that in
+eighteen months the railroads had paid the Standard in rebates no less
+than $10,000,000. And the very payment of these enormous rebates
+enabled the Standard to decrease the price of oil to the producer and to
+increase it to the consumer.
+
+It is claimed by the defenders of the Standard monopoly that under the
+trust the price of petroleum has been constantly decreased to the
+consumer. That the price of kerosene is lower now than it was fifteen
+years ago is undoubtedly true, but the reductions were brought about not
+by the trust, but in spite of the trust. The price now maintained is an
+unnatural one. The Standard Oil Company never lowered the price of its
+oil except when compelled to do so by competition. The largely increased
+output of crude oil, the improved methods of refining, the greatly
+lowered cost of transportation would have lowered the price of coal oil
+without the philanthropy of the Standard Oil Company. Iron, steel,
+calico, woolen goods and a thousand other commodities have within almost
+the same period suffered much larger reductions than coal oil. But even
+if the Standard monopoly had voluntarily lowered the price of its
+products, the American people could never approve of its methods. They
+can never be made to believe that the end sanctifies the means,
+especially when those means are railroad favors, secret combinations,
+bribery, intimidation and lawless arrogance.
+
+Many other interesting cases might be given. The Southern Pacific
+Railway Company, for instance, owns nearly all of the railways of
+California, and enjoys at the present time almost a complete monopoly of
+the transportation business of that State and much more of the Pacific
+Coast. Perhaps no set of managers would be more considerate of the
+people's rights in the absence of legal restraint than those in charge
+of this company, yet there is not a business man on the Pacific Coast
+who comes in contact with this company who does not realize and feel
+the power of its iron hand, unless it be those who for various reasons
+are recipients of its special favors. It has become notorious that the
+legislature, Board of Railroad Commissioners and some of the judges of
+the courts of that State are as servile to the demands of this railway
+company as are its own employes.
+
+The railway company is a closely organized body of shrewd, active men,
+while those who furnish business for it are not organized, and they will
+never be able to properly protect their own interests until they control
+the machinery of their State government.
+
+
+
+
+CHAPTER V.
+
+RAILROAD ABUSES.
+
+
+As has already been shown, railroad enterprise met with comparatively
+little opposition in the United States, for, as compared with the
+interests certain to be benefited by the introduction of the new mode of
+transportation, those likely to be injured by it were insignificant. It
+is true, the innate conservatism of man even here recorded its
+objections to the innovation. It viewed with distrust the new power
+which threatened to revolutionize well-established systems of
+transportation and time-honored customs and to force upon the people
+economic factors the exact nature and value of which could only be
+ascertained by practical tests. But the progressive portion of the
+community was so decidedly predominant that these protests were soon
+drowned in the general demand for improved facilities of transportation.
+The farmer who had to haul his produce a great distance to reach a
+market appreciated the advantages to be derived from the location of a
+railroad station nearer home. The manufacturer who heretofore had, had a
+very limited territory for the sale of his products well realized that
+he could with the aid of a railroad enlarge his territory and increase
+his output, and with it his profits. The pioneer merchant found that he
+could no longer compete with former rivals in adjoining towns, since the
+iron horse had reached them and lowered their freights, and he also
+became a convert to the new order of things and clamored loud for
+railroad facilities. Railroads seemed the panacea for industrial and
+commercial ills, and every inducement was held out and every sacrifice
+made by communities to become participants of their blessings. So great
+was the estimate of the conveniences afforded by them and so strongly
+was public opinion prejudiced in their favor that it is no exaggeration
+to say that railroad companies as a rule were permitted to prepare their
+own charters, and that these charters almost invariably received
+legislative sanction.
+
+To such an extent was the public mind prepossessed in favor of railroads
+that any legislator who would have been instrumental in delaying the
+granting of a railroad charter for the purpose of perfecting it, to
+protect the people against possible abuses, would have been denounced as
+a short-sighted stickler and obstructor of public improvements. Anxious
+for railroad facilities, the people were deaf to the warnings of
+history. Their liberality knew no bounds. National, State and county aid
+was freely extended to new railroad enterprises. Communities taxed
+themselves heavily for their benefit, and municipalities and individuals
+vied with each other in donating money, rights of way and station
+buildings. This was especially true of the West, whose undeveloped
+resources had most to gain by railroad extension. So large were the
+public and private donations in several of the Western States that their
+value was equal to one-fifth of the total cost of all the roads
+constructed. To still more encourage promoters of railroad enterprises,
+general incorporation laws were passed which permitted companies to be
+formed and roads to be built practically without State supervision. In
+their admiration for the bright side of the picture, the people entirely
+overlooked the shady side.
+
+Besides this, there was virtually an absence of all law regulating the
+operation of railroads. It was, under these circumstances, not strange
+that abuses early crept into railroad management which, long tolerated
+by the people and unchecked and even encouraged by public officers,
+finally assumed such proportions as to threaten the very foundation of
+free government. Great discoveries that add rapidly to the wealth of a
+country tend to overthrow a settled condition of things, and organized
+capital and power, if not restrained by wholesome laws and public
+watchfulness, will ever take advantage of the unorganized masses. The
+people of those regions which the railroad stimulus had caused to be
+settled thrived for years so well upon a virgin soil that they gladly
+divided their surplus with the railroad companies. They looked upon the
+railroads as the source of their prosperity and upon railroad managers
+as high-minded philanthropists and public benefactors, with whom to
+quarrel would be an act of sordid ingratitude, and they paid but little
+attention to the means employed by them to exact an undue share of their
+earnings. Railroad men did whatever they could to foster through their
+emissaries this misplaced adoration. They posed before the public as the
+rightful heirs of the laurels of Watt and Stephenson, insisting that
+their genius, capital and enterprise had built up vast cities and opened
+for settlement and civilization the boundless prairies of the West.
+These claims have been persistently repeated by railroad men, though
+they are so preposterous that they scarcely deserve refutation. The
+railroad, gradually developed by active minds of the past, and greatly
+improved by the inventions of hundreds of men in the humbler walks of
+life, is the common inheritance of all mankind, though no class of
+people have derived greater benefits from it than railroad constructors,
+managers and manipulators. Railroad managers are no more entitled to
+the special gratitude of the public for dispensing railroad
+transportation at much more than remunerative rates than is the Western
+Union monopoly for maintaining among us an expensive and inefficient
+telegraph service. No one believes that the disbanding of the Western
+Union would leave us long without telegraphic communication. In like
+manner railroads will be built whenever and wherever they promise to be
+profitable. If one company does not take advantage of the opportunities
+offered, another will. That large cities have been built up by the
+railroads is true, but it is equally true that these cities by their
+commerce and manufactures administer to the prosperity of the railroads
+as much as the railroads administer to theirs. Commercial centers in
+days gone by existed without railroads, but railroads could not long
+exist without the stimulating influence of these busy marts of trade.
+The same argument applies with still greater force to the agricultural
+sections of our country, especially the great Northwest. The dry-goods
+merchant might as well boast of having clad the public as the railroad
+manager of having built up farming communities by selling to them
+transportation.
+
+And yet the American people have never ceased to be mindful of the
+conveniences afforded to them by this modern mode of transportation. On
+the contrary, they have been but too prone to credit railroad men with
+being benefactors, when they were but beneficiaries, and this liberality
+of spirit made them overlook, or at least tolerate, the abuses which
+grew proportionately with the wealth and power of the companies.
+
+The first railroad acts of England had contemplated to make the roads
+highways, like turnpikes and canals. These roads were established by the
+power of eminent domain. Companies were empowered to build and maintain
+them and to reimburse themselves by the collection of fixed tolls. Had
+the owners of the roads from the beginning been deprived of the
+privilege of becoming carriers over their own lines, the system might
+have so adjusted itself as to become entirely practicable; but as they
+were allowed to compete with other carriers in the transportation of
+passengers and merchandise, they were soon able to demonstrate, at least
+to the satisfaction of Parliament, that the use of the track by
+different carriers was impracticable and unsafe. A number of
+circumstances combined to aid the railroad companies in their efforts to
+monopolize the trade on their lines. In the first place, when the early
+railroad charters were granted, but few persons had any conception of
+the enormous growth of commerce which was destined to follow everywhere
+the introduction of railways. The tolls as fixed in the charters soon
+yielded an income out of proportion to the cost of the construction and
+maintenance of the roads. Their large margins of profit enabled the
+owners of the roads to transport goods at lower rates than other
+carriers and to thus compel the latter to abandon their business.
+Another defect of the original charters worked greatly to the
+disadvantage of independent carriers. They contained no provision as to
+the use of terminal facilities. The railroad companies claimed that
+these facilities were not affected by the public franchise and were
+therefore their personal property. This placed independent carriers at a
+great disadvantage and made in itself competition on a large scale
+impossible. These carriers were thus at the mercy of the railroad
+companies for the transportation of their cars, and the companies never
+permitted their business to become lucrative enough to induce many to
+engage in it. It soon became apparent that under the charters granted
+to the railroad companies such competition as existed on turnpikes and
+canals was out of the question on their roads. In England the great
+abundance of water-ways exercised for many years a wholesome control
+over the rates of railway companies, until these companies, greatly
+annoyed by such restraint, absorbed many of the larger canals by
+purchase and made them tributary to their systems. These companies have
+also acquired complete control over many important harbors.
+
+In the United States the people depended from the beginning of the
+railroad era on free competition for the regulation of railroad charges.
+This desire to maintain free competition led to the adoption of general
+incorporation acts, it being quite generally believed that such
+competition as obtains between merchants, manufacturers and mechanics
+was possible among railroads and would, when allowed to be operative,
+regulate prices and prevent abuses. The remedy was applied freely
+throughout the country, but for once it did not prove successful.
+Stephenson's saying, that where combination was possible competition was
+impossible, was here fully verified. The great ingenuity of the class of
+men usually engaged in railroad enterprises succeeded in thwarting this
+policy of commercial freedom. The opportunities for those in control of
+railroads to operate them in their own interest, regardless of the
+interests of their patrons or stockholders, were so great that men of a
+speculative turn of mind were attracted to this business, which indeed
+soon proved a most productive field for them. One road after another
+fell into the control of men who had learned rapidly the methods
+employed to make large fortunes in a short time.
+
+As the roads multiplied, transportation abuses increased. A considerable
+number of people early favored State control of railroads as the best
+means of regulating transportation, but a majority looked upon the
+existing abuses as being merely incidental to the formative period, and
+hoped that with a greater expansion of the railroad system they would
+correct themselves. And this doctrine was industriously disseminated by
+railroad managers and their allies. They lost no opportunity to impress
+upon the people that State regulation was an undue interference with
+private business and that such a policy would soon react against those
+who hoped to profit by it, inasmuch as it would prevent the building of
+new roads and would thus hinder, rather than aid, in bringing about the
+right solution of the railway question, viz., regulation by competition.
+They contended, in short, that State regulation would be destructive to
+railroads as well as to every other class of property.
+
+Railroad sophistry for many years succeeded in preventing the masses
+from realizing that an increased supply of transportation does not
+necessarily lower its price, or, in other words, that railroad abuses do
+not necessarily correct themselves through the influence of competition.
+A large capital is required to build and maintain a railroad, which must
+necessarily be managed by a few persons. Besides this, the construction
+of a railroad practically banishes at once from its field all other
+means of land transportation. The railroad has thus a practical monopoly
+within its territory, and its managers, if left to follow their
+instinct, will despotically control all the business tributary to it,
+with unlimited power to build up and tear down, to punish its enemies
+and to reward its friends.
+
+It is not true that State control checks railroad building. While it may
+prevent the construction of useless lines and discourage speculation, it
+will encourage the building of roads for which there is a legitimate
+demand. Stockholders as a whole do not participate in the management of
+the roads and do not profit by railroad abuses, the origin of which may
+almost invariably be traced to selfish designs on the part of a few
+entrusted with the management of the property. Where through wise
+legislation these abuses are prevented, the roads are managed in the
+interest of all the stockholders, develop business and enjoy lasting
+prosperity.
+
+It may be laid down as a general rule that the policy which best
+subserves the interests of the patrons of a road is always the best
+policy for its owners. Injustice to a railroad will interfere with its
+usefulness; injustice to shippers depresses production and consumption;
+and in either case both the road and its patrons will suffer. State
+control is therefore as much needed in the interest of the owners of
+railroads as in the interest of their patrons. What should be the nature
+of such control will be discussed hereafter. A full understanding of the
+question at issue, however, makes necessary an inquiry into the various
+abuses which unrestrained railroad management of the past has developed.
+Perhaps no better presentation of the evils and abuses of railroads and
+their consequences can be found than that contained in the report of the
+Senate Committee on Interstate Commerce, submitted by Senator Cullom, in
+1886. This report charges:
+
+1. That local rates are unreasonably high, as compared with through
+rates.
+
+2. That local and through rates are unreasonably high at non-competing
+points, either from the absence of competition or in consequence of
+pooling agreements that restrict its operation.
+
+3. That rates are established without apparent regard to the actual cost
+of the service performed, and are based largely on "what the traffic
+will bear."
+
+4. That unjustifiable discriminations are constantly made between
+individuals in the rates charged for like service under similar
+circumstances.
+
+5. That improper discriminations are constantly made between articles of
+freight and branches of business of a like character, and between
+different quantities of the same class of freight.
+
+6. That unreasonable discriminations are made between localities
+similarly situated.
+
+7. That the effect of the prevailing policy of railroad management is,
+by an elaborate system of secret special rates, rebates, drawbacks and
+concessions, to foster monopoly, to enrich favored shippers, and to
+prevent free competition in many lines of trade in which the item of
+transportation is an important factor.
+
+8. That such favoritism and secrecy introduce an element of uncertainty
+into legitimate business that greatly retards the development of our
+industries and commerce.
+
+9. That the secret cutting of rates and the sudden fluctuations that
+constantly take place are demoralizing to all business except that of a
+purely speculative character, and frequently occasion great injustice
+and heavy losses.
+
+10. That, in the absence of national and uniform legislation, the
+railroads are able by various devices to avoid their responsibility as
+carriers, especially on shipments over more than one road, or from one
+State to another, and that shippers find great difficulty in recovering
+damages for the loss of property or for injury therefor.
+
+11. That railroads refuse to be bound by their own contracts, and
+arbitrarily collect large sums in the shape of overcharges in addition
+to the rates agreed upon at the time of shipment.
+
+12. That railroads often refuse to recognize or to be responsible for
+the acts of dishonest agents acting under their authority.
+
+13. That the common law fails to afford a remedy for such grievances,
+and that in cases of dispute the shipper is compelled to submit to the
+decision of the railroad manager or pool commissioner, or run the risk
+of incurring further losses by greater discriminations.
+
+14. That the differences, in the classifications in use in various parts
+of the country, and sometimes for shipments over the same roads in
+different directions, are a fruitful source of misunderstandings, and
+are often made a means of extortion.
+
+15. That a privileged class is created by the granting of passes, and
+that the cost of the passenger service is largely increased by the
+extent of this abuse.
+
+16. That the capitalization and bonded indebtedness of the roads largely
+exceed the actual cost of their construction or their present value, and
+that unreasonable rates are charged in the effort to pay dividends on
+watered stock and interest on bonds improperly issued.
+
+17. That railroad corporations have improperly engaged in lines of
+business entirely distinct from that of transportation, and that undue
+advantages have been afforded to business enterprises where railroad
+officials were interested.
+
+18. That the management of the railroad business is extravagant and
+wasteful, and that a needless tax is imposed upon the shipping and
+traveling public by the necessary expenditure of large sums in the
+maintenance of a costly force of agents engaged in a reckless strife for
+competitive business.
+
+Under the operation of the Interstate Commerce Law some of these evils
+have, so far at least as interstate commerce is concerned, disappeared,
+and others have been considerably mitigated. It cannot be expected,
+however, that a bad system of railroad management, to the development of
+which the ingenuity of railroad managers has contributed for two
+generations, could be entirely reformed in a few years. It is a
+comparatively easy task for shrewd and unscrupulous men, assisted by
+able counsel and unlimited wealth, to evade the spirit of the law and to
+obey its letter, or to violate even both its letter and spirit, and
+escape punishment by making it impossible for the State to obtain proof
+of their guilt.
+
+It is a humiliating spectacle to see the self-debased railroad officials
+confessing their own guilt by refusing to testify before the Interstate
+Commerce Commission on the ground that they would thereby criminate
+themselves. Congress should have sufficient respect for this commission
+and for itself to provide a way to punish such recusant witnesses who
+are willing to degrade themselves in so base a manner. Whether the law
+will eventually be respected by all depends upon the vigilance and
+courage of the people.
+
+That our railroad legislation is not yet perfect even its friends will
+admit; and as under a free government the demand of an enlightened
+public opinion is the first step toward the enactment of a law, it
+behooves the intelligent citizen to study the various railroad problems
+and to then exert his influence toward bringing about such a solution of
+them as justice and wisdom demand.
+
+In discussing the various evils of railroad management, the author will
+commence with and dwell more particularly upon those abuses which maybe
+said to be the cardinal ones, viz., discrimination, extortion,
+combinations and stock and bond inflation. When these are once
+effectually eradicated, other abuses of railroad management which have
+been the subject of public complaint will not long survive them.
+
+One of the strongest arguments that could be adduced by the founders of
+the American Constitution in favor of the establishment of a more
+perfect union was that the inequality of taxes placed upon commerce by
+the various States was a serious obstacle to its free development. Much
+as the individual States dislike to give up a part of their sovereignty
+to a central or national power, the demand for a common and uniform
+system of commercial taxation was so great that they were forced to
+yield and ratify the new Constitution. Our forefathers thus considered
+it a dangerous policy to permit a single State to lay any imposts upon
+the commercial commodities which passed over its borders. They were
+rightly of the opinion that industrial and commercial liberty was as
+essential to the welfare of the nation as political freedom and that
+therefore interstate commerce should not be hemmed in or controlled
+within State lines, but that the power to regulate it should be lodged
+in the supreme legislative authority of the nation, the Congress of the
+United States. For over half a century Congress alone exercised the
+power thus conferred upon it by the people. After the introduction of
+railroads, however, their managers gradually assumed the right to
+regulate the commerce of the country in their own interest through the
+adoption of arbitrary freight tariffs. Freight charges are practically a
+tax which follows the commodity from the producer to the consumer. An
+arbitrary and unjust charge is therefore an arbitrary and unjust tax
+imposed upon the public without its consent. It is a well-established
+rule of society that laws should be equitable and just to all citizens.
+Congress never assumed the role of Providence by attempting to equalize
+those differences among individuals which superior intellect, greater
+industry and a thousand other uncontrollable forces have ever created
+and will ever create. It has been reserved to railroad managers to
+demonstrate to the public that a power has been allowed to grow up which
+has assumed the right to counteract the dispensations of Providence, to
+enrich the slothful, to impoverish the industrious, to curtail the
+profits of remunerative industries and revive by bounties those
+languishing for want of vitality, to humble proud and self-reliant marts
+of trade and to build up cities in the desert. It will scarcely be
+claimed even by railroad managers that their policy of thus arbitrarily
+regulating commerce originated in philanthropic motives. They are forced
+to admit that it grew out of an attempt to increase the income of
+railroads by the extension of favors to naturally weak enterprises and
+to recoup by overtaxing stronger ones.
+
+The practical operation of this system soon showed to railroad managers
+their power and to the patrons of railroads their dependence upon those
+who dispensed railroad favors. The former soon discovered that their
+power might be used to further their private interests as well as those
+of the roads, and unscrupulous patrons were not slow to offer
+considerations for favors which they coveted. When such favors were once
+granted by the officials of one road, rival roads would grant similar
+ones in self-protection. Thus this vicious system grew until the payment
+of a regular tariff rate was rather the exception than the rule, and
+special rates became an indispensable condition of success in business.
+
+We may distinguish three classes of railroad discriminations, viz.:
+
+1. Those which affect certain individuals.
+
+2. Those which affect certain localities.
+
+3. Those which affect certain branches of business.
+
+Discrimination between individuals is the most objectionable, because it
+is the most demoralizing of all. Where such discrimination obtains,
+every shipper is in the power of the railroad corporation. It makes of
+independent citizens of a free country fawning parasites and obsequious
+sycophants who accept favors from railroad managers and in return do
+their bidding, however humiliating this may be. The shipper, realizing
+that the manager's displeasure or good will toward him finds practical
+expression in his daily freight bills, finally loses, like the serf, all
+self-esteem in his efforts to propitiate an overbearing master. He is
+intimidated to such an extent that he never speaks openly of existing
+abuses, lest he lose the special rates which have been given him, or, if
+he is not a participant of such privileges, lest additional favors be
+given to his rivals and they be thus enabled to crush him. Intimidation
+of shippers prevailed to such an extent previous to the enactment of the
+Interstate Commerce Law that when, in 1879, the special committee on
+railroads appointed by the legislature of New York invited all persons
+having grievances against railroads to come before them to testify, not
+one shipper testified voluntarily. On the contrary, they all insisted
+upon being subpoenaed, hoping that the railroad managers would not
+hold them responsible for any statement which they might be compelled to
+make under such circumstances. The report of that committee stated that
+the number of special contracts in force within the period of one year
+on the New York Central and Hudson River Railroad alone was estimated
+by the railroad people at 6,000. Mr. Depew, when he made the statement:
+"In territories comparatively new, and with little responsibility on the
+part of the managers to distant owners, they became in many cases very
+arbitrary and exercised favoritism and discriminations, which led to
+popular indignation and legislation," had probably not heard of this.
+The committee's report further stated that these special rates conformed
+to no system and varied without rule, that every application for a
+special rate was judged by itself and with reference to its own peculiar
+circumstances, and that it depended upon the judgment, or rather
+caprice, of the officer to whom the application was made, whether and to
+what extent a special rate should be granted. The reductions made to
+privileged merchants often amounted to more than what would be a fair
+profit to the dealer on the commodities shipped. The privileged dealer
+was thus enabled to undersell his rivals and eventually force them out
+of business or into bankruptcy. It was not at all uncommon for railroad
+companies to allow discounts amounting to 50, 60, 70 and even 80 per
+cent. of the regular rates. The New York Central gave a Utica dry-goods
+merchant a special rate of 9 cents while the regular rate was 33 cents
+on first-class freights. The lowest special rate granted at Syracuse was
+as low as 20 per cent. of the regular tariff rate on first-class goods.
+David Dows & Company and Jesse Hoyt & Company, by means of a grain rate
+from 2-1/2 to 5 cents lower than those given to other firms, were
+enabled to control in the winter of 1877 the grain trade of New York.
+The railroad even extended its fostering aid to A. T. Stewart & Co.,
+giving them a special rate "to build up and develop their business." The
+testimony given by Mr. Goodman, assistant general freight agent of the
+New York Central, in reference to the principle by which he was guided
+in granting special rates, is of sufficient interest to be given a place
+here:
+
+Question. You made the rate for A. T. Stewart & Company? Answer. Yes,
+sir.
+
+Q. Was that to build up and develop their business? A. Yes, sir.
+
+Q. That was the object? A. That was one of the objects.
+
+Q. January 11th, 1879? A. Yes, sir.
+
+Q. You thought that business was not yet sufficiently built up and
+developed? A. No, sir; not the manufacturing part of it.
+
+Q. How long had the factories of A. T. Stewart & Company been in
+existence? A. The one at Duchess Junction about three years, I think; it
+isn't completed yet.
+
+Q. And they were languishing and suffering? A. To a great extent; yes,
+sir.
+
+Q. And you acted as a fostering mother to A. T. Stewart & Company to
+build it up? A. Yes, sir; I added my mite to develop their traffic; we
+wanted to carry the freight; boats might have carried it in the summer.
+
+Q. Do you know anything of G. C. Buell & Company? A. Yes, sir.
+
+Q. You wanted to develop their business? A. Yes, sir; they are at
+Rochester--wholesale dealers.
+
+Q. Do you know H. S. Ballou, of Rochester? A. I do not.
+
+Q. He seems to be a grocer there? A. A small concern, perhaps.
+
+Q. Small concerns are not worth developing, according to your opinion?
+A. Our tariff rates are low enough for them at Rochester.
+
+Q. That is to say, a small concern ought to pay 40, 30, 25 and 20, as
+against a large concern, 13; that is your rule? A. Well, if he is a
+grocer, most of his business is fourth-class freight.
+
+Q. And he ought to pay 20, as against 13? A. Yes, sir.
+
+Q. That small man has no right to develop? A. He has the same chance
+that the other man has.
+
+Q. At 20 against 13? A. Oh, yes.
+
+Q. Do you call that the same chance? A. About the same chance, yes, sir.
+
+Q. You consider it the same chance? A. Yes, sir.
+
+Many reasons were assigned by railroad men in justification of their
+practices. It was claimed that special rates were given to regular
+shippers, but it has been proved that not all regular shippers had
+special rates, and that persons who made only single shipments were
+often fortunate enough to obtain special favors. It was further claimed
+that special rates were given to those who, starting out new in business
+or developing new enterprises, needed aid and encouragement. But it was
+shown on the other hand that the aid and encouragement thus given to
+some bankrupted others, and in the end deprived the companies of more
+business than their policy of discrimination brought them. Railroad
+managers also argued that they could afford to make lower rates on large
+shipments than on small ones for the same reasons that the wholesale
+merchant can sell his goods for less than the retailer. But while this
+may be a good reason why rates on car-load shipments should be lower
+than rates on shipments in less than car-load lots, it is certainly no
+good reason why five car-loads belonging to one shipper should be
+transported the same distance for less than five carloads belonging to
+five shippers. In the case of local shipments the car is scarcely ever
+loaded to its full capacity; one shipment after another is taken from it
+as the train moves along, and the car perhaps reaches its final
+destination nearly, if not entirely, empty. The terminal charges are
+here also largely increased, and it is but just that the shipper should
+pay the additional cost of carrying and handling the goods. The case is
+entirely different when the railroad company carries five full carloads
+from one station of its line to another. Whether they have been loaded
+by one or five persons, whether they are consigned to one or five
+persons, matters little to the railroad company. It merely transports
+the cars, and in either case its responsibility and its services are the
+same. The car-load must therefore be accepted and is now generally
+accepted by the best railroad men as the unit of wholesale shipments,
+and any discrimination made in favor of large wholesale shippers is
+arbitrary and unjust. In the shipment of some commodities, such as
+wheat, flour and coal, a small advantage in rates is sufficient to
+enable the favored shipper to "freeze out" all competitors. It is
+certainly not to the interest of any railroad company to pursue such a
+policy; for by driving small establishments out of the business it
+encourages monopoly, which almost invariably enhances prices and
+decreases consumption. The railroad thus suffers in common with the
+public the consequences of its short-sighted policy. That even railroad
+managers realize that these practices cannot be defended upon any
+principle of justice or equity is apparent from the fact that one of the
+never-varying conditions of special rates is that they be kept secret. A
+specimen of a special rate agreement which was placed before the New
+York investigating committee is here presented to the reader:
+
+      "This agreement, made and entered into this eighteenth day of
+      March, 1878, by and between the New York Central and Hudson
+      River Railroad Company, party of the first part, and
+      Schoellkopf & Mathews, of the city of Buffalo, N.Y., party of
+      the second part:
+
+      "Witnesseth, That said party of the first part hath promised
+      and agreed, and by these presents does promise and agree to
+      transport wheat from the elevator in Buffalo, reached directly
+      by said first party's tracks, except at such mills as time
+      said tracks may be obstructed by snow or ice, to the which
+      said second party may erect or operate at Niagara Falls, N. Y.,
+      at and for the rate of one and a quarter cents per bushel.
+
+      "And further, that said first party shall and will at all
+      times give, grant and allow to said second parties as low
+      rate of transportation on all property shipped by them from
+      their said mills at Niagara Falls, and as favorable facilities
+      and accommodation in all respects as are afforded by the party
+      of the first part to the millers of Buffalo and Black Rock.
+      And also that the said party of the first part will transport
+      for said second party all of their east-bound New York freight
+      at and for the price or rate of forty-seven per cent. of the
+      current all-rail through rates, via the route of party of the
+      first part, from Chicago to New York, at the times of shipment,
+      adding thereto three cents per barrel for flour and one and
+      one-half cents per hundred pounds for mill feed or grain, as
+      a terminal charge, to provide for the incidental expenses
+      attending local transportation.
+
+      "And will transport their freight to Boston and all points in
+      New England, taking Boston rates at the same rate as to New
+      York, with ten cents per barrel added for flour and five cents
+      per hundred pounds added for mill feed or grain.
+
+      "Provided, however, and this agreement is made upon the express
+      understanding and consideration, that said second party shall
+      regard and treat this agreement as confidential, and will use
+      all reasonable precaution to keep the same secret.
+
+      "And upon condition also that said second party shall ship
+      by the first party's road all the product from their mill at
+      Niagara Falls destined to all points in New York, Pennsylvania
+      and New England, reached by said first party, directly or by
+      connections with other routes.
+
+      "And this agreement shall be and remain in force for the term
+      of five years from and following the first day of September,
+      1878, after which period it may be terminated by sixty days'
+      written notice from either party.
+
+      "In witness whereof, the parties hereto have signed these
+      presents the day and year first above written.
+
+      "N. Y. C. & H. R. R. R. Co.,
+      By J. H. RUTLER,
+      General Traffic Manager.
+      SCHOELLKOPF & MATHEWS."
+
+It will be noticed that this agreement was based upon the expressed
+condition that Schoellkopf & Mathews treat it as "confidential," and use
+all reasonable precaution to keep it secret. It is difficult to account
+for this strong injunction of secrecy except upon the assumption that
+the managers of the road, conscious of the great wrong which they
+inflicted upon the body of the people by their discriminations, hoped to
+escape public criticism by adopting a policy of secret dealing. Much as
+special rates were sought after, but few shippers to whom they had been
+granted were contented with their lot, for none was confident that his
+rivals did not have better rates than himself.
+
+Discriminations between localities had their origin in the natural
+desire of competing roads to increase their business at the expense of
+their rivals. When two or more railroads touched the same point each
+would attempt to secure the largest possible share of the through
+business by holding out every possible inducement in rates to the
+shippers of that place. Indeed, the freight rates at competitive points
+were often so low that railroad managers found themselves placed in a
+rather unpleasant dilemma. They either had to admit that the rates
+charged by them at non-competitive places were exorbitant or that they
+were carrying the freights of competitive points at a loss and were thus
+squandering the money of their stockholders. They preferred as a rule
+to admit that they were doing competitive business at a loss, but
+asserted that, inasmuch as they were compelled to run their trains, they
+could better afford to do competitive business temporarily at a loss
+than not to do it at all. The same logic might with equal propriety be
+employed by the grocer. To draw to him distant customers, he might offer
+to sell to them at cost or even at a loss; and then, to recuperate, he
+might advance the prices of his goods for his regular customers. If
+there is any difference between the grocer and the railroad company, it
+lies in the fact that the former's old customers would soon find relief
+at a rival store, while the patrons of the railroad at non-competitive
+points are like the traveler in the hands of a highwayman, without
+immediate redress. The railway company which discriminates between
+competitive and non-competitive points forgets that its line is a common
+highway for all points tributary to it; that all have equal rights, and
+that the only differences in tariff which the principles of the common
+law permit are those which arise from a difference of service and cost.
+All other differences that railroad companies may make are unjust
+discriminations in violation of their charter and expose them to a
+forfeiture of the franchises conferred upon them.
+
+The nature and extent of the discrimination practiced between different
+places are often such that no interest of the company can possibly be
+subserved by them, and the conclusion is forced upon us that the
+advantages granted by railroad managers to certain places are designed
+to serve chiefly personal and selfish interests. The great fortunes
+amassed in a brief period of time by railroad managers can in almost
+every case be traced to stock, real estate, commercial and other
+speculations directly or indirectly connected with railroad
+construction or management. And where other than personal interest
+cannot be shown, this is the only basis upon which the many apparent
+absurdities of railroad discrimination can be harmonized.
+
+It is claimed by railroad men that transportation by water is a
+regulator of railway rates which they must respect. It is contended, for
+instance, that, although the cities situated on our large lakes enjoy
+superior commercial advantages which are mainly due to their having at
+their disposal water communication with the Atlantic Ocean, inland towns
+have no cause to complain against the railroads for not equalizing those
+differences which nature has largely created. It might be more difficult
+to meet this argument if, owing to peculiar combinations, these water
+rates were not made to extend their influence to almost every inland
+city north, east and south in the Union, and if those cities were not
+given much lower rates than hundreds of places much nearer the lakes.
+The teamster who, half a century ago, found it impossible to compete
+with the canal, river or lake boats, simply surrendered the field to
+them and confined his operations to such a territory as could give him
+assurance of a profitable business. Let the railroads do likewise. No
+company has a right to destroy a rival route, water or rail, by adopting
+special tariffs for competing points. There are at points accessible to
+water transportation certain freights requiring speedy carriage which
+will go to the railroads at profitable rates, but the heavier freights,
+as coal, lumber and even certain kinds of grain, should go to the
+carrier by water if he can afford to transport them at lower cost.
+
+There have been but few legislative investigations of railroad abuses in
+this country, but the disclosures which they have made to the public
+are astounding. The most noteworthy of these were made by the Hepburn
+committee, of New York, to which reference has already been made. It is
+difficult to understand how a free and enlightened community could so
+long and so patiently bear railroad despotism. Individual discrimination
+might, under the veil of secrecy, long escape notice, but that a system
+of open and widespread discrimination affecting every non-competitive
+and even many a competitive point in the State, doing visible and
+irreparable injury to thousands of shippers, and infringing upon the
+rights of millions, should long be borne by a free and enlightened
+people, is a strange phenomenon of democratic endurance.
+
+It would lead us too far from our subject to review in detail the many
+and glaring instances of local discrimination which the report
+enumerates. A few will suffice to show their scope and nature.
+
+William W. Mack, of Rochester, a manufacturer of edged tools, testified
+that, in order to save fourteen cents per hundredweight on his freights
+to Cincinnati, he shipped his goods to New York and had them shipped
+from there to their destination, via Rochester; and that he availed
+himself of the same roundabout route for his St. Louis shipments, and
+saved thereby eighteen cents per hundredweight. In both of these cases
+the railroad company carried the goods 700 miles farther than the direct
+distance for a less charge.
+
+Port Jervis millers had their grain shipped from the West to Newburgh, a
+point fifty miles to the east of them, and then had it returned to Port
+Jervis on the same line, at a less rate than that charged for a direct
+shipment.
+
+The grain rates from Chicago to Pittsburgh were 25 cents per hundred in
+March, 1878, and only 15 cents from Chicago to New York.
+
+Flour was carried from Milwaukee to New York for 20 cents, while the
+rate from Rochester to New York was 30 cents at the same time. It was
+also carried from East St. Louis to Troy at the same rate as from
+Rochester to Troy. The rate on butter from St. Lawrence County, N.Y., to
+Boston, over the Ogdensburg and Lake Champlain and Vermont Central, was
+60 cents per hundred; from the nearer county of Franklin, 70 cents; it
+then continued to increase as the distance decreased, until it reached
+90 cents at St. Albans, Vermont.
+
+Soap shipped by Babbit & Co., of New York, to Crouse & Co., of Syracuse,
+paid 8 cents per box when the freight was paid in Syracuse, but 12 cents
+per box when paid by the shipper in New York.
+
+It cannot even be said that New York fared worse than any of her sister
+States. There is hardly a business man in any community in the United
+States who cannot cite many cases of similar discrimination. Hundreds of
+well authenticated cases have been reported from every part of the
+country. A few striking ones may be given space here:
+
+The Illinois Central Company hauled cotton from Memphis to New Orleans,
+a distance of 450 miles, at $1.00 a bale, while the rate from Winona,
+Miss., to New Orleans, about two-thirds of the distance, was $3.25 a
+bale. The same company charged for fourth-class freight from Chicago to
+Kankakee, a distance of 56 miles, 16 cents per hundred, and only 10
+cents to Mattoon, 116 miles farther. The rate from New York to Ogden was
+$4.65 per hundred, and only $2.25 per hundred from New York to San
+Francisco. The car-load rate on the Northern Pacific was $200 from New
+York to Portland and just twice as much to a number of points from 100
+to 125 miles east of Portland. The Chicago, Burlington and Quincy hauled
+stock from points beyond the Missouri River to Chicago for $30 per
+car-load, while it exacted $70 per car in Southwestern Iowa for a much
+shorter haul.
+
+To what extent local discrimination has been carried by railroad
+companies is well illustrated by the following incident: A nurseryman
+residing at Atlantic, Iowa, a station on the Chicago, Rock Island and
+Pacific Railroad, 60 miles east of Council Bluffs, bought a car-load of
+grapevines at Fredonia, New York. Finding that the through rate from
+Fredonia to Council Bluffs, plus the local rate from the latter place to
+Atlantic, was less than the rate for the direct shipment from Fredonia
+to Atlantic, he caused the car to be consigned to Council Bluffs,
+intending to have it thence hauled back to Atlantic. Being short of
+stock at the time the train containing his car passed through his town
+on its way to Council Bluffs, the consignee prevailed upon the station
+agent to set out his car. In due time he received a request from the
+general office of the railroad to pay an amount equal to the rate per
+car-load from Council Bluffs to Atlantic. The request was promptly
+complied with by the appreciative nurseryman, who after all had been
+saved an annoying delay by the courtesy of the company's agent.
+
+An infinite number of similar discriminations might be cited. They all
+show the same violation of the fundamental principles of justice and
+equity, the same despotical assertion of the power of the railroads to
+regulate the commerce of the country as the caprice or selfish interests
+of their managers might direct.
+
+Discriminations between commodities, or, as they might also be called,
+discriminations in classification, are probably the most common of
+unjust railroad practices. For the purpose of establishing as near as
+may be uniform rules in all matters pertaining to rates, the various
+roads operating in a certain territory usually form traffic
+associations. The general freight agents of the roads that are members
+of the association in turn form a select body known as the rate
+committee. These committees of freight agents have for more than twenty
+years constituted the supreme authority in all matters pertaining to
+freight classification. The trunk line classification recognizes six
+regular and two special classes, and every article known to commerce is
+placed in one of these classes. One whom Providence has not favored with
+the mysterious wisdom of a general freight agent might suppose that
+considerations of bulk, weight, insurance and similar factors formed a
+basis of railroad classification. Nothing, however, is farther from the
+truth. Freight charges, when permitted to be fixed by railroad
+companies, are invariably such as the traffic will bear, and freight
+classifications are arranged on this principle, provided competition by
+water, rail or other land transportation does not demand a modification.
+It is, as a rule, not to the advantage of a railroad to entirely starve
+out any commercial or industrial concern along its line. Hence tariffs
+are scarcely ever made entirely prohibitory. Railroads proceed here upon
+the principle of the robber knight of mediæval times, who simply
+plundered the wayfaring trader to such an extent as to reduce his
+profits to a minimum. He never stripped him, for by doing so he would
+have prevented his return and would have destroyed his own source of
+revenue. In like manner a railroad will never annihilate any weak branch
+of business along its line, nor will it, if it is in its power, permit
+any business to prosper without paying to it heavy tributes out of its
+profits. Every commodity is therefore made to pay a transportation tax
+based chiefly on its value and the profit which it yields, and all
+classifications are prepared with this object in view.
+
+The protection which, through exceptionally low rates, is extended by
+the railroad companies to certain industries, may not be objectionable
+_per se_, but the question arises whether the railroad companies or the
+people should exercise the right to determine when and where such
+protection is necessary. Moreover, to tax one branch of commerce for the
+benefits bestowed upon another is a practice of extremely doubtful
+propriety, and the power to do so should certainly never be conferred
+upon a private corporation. When customs laws are proposed in Congress
+ample opportunity is given to the representatives of the various
+industries of the country to be heard upon the subject. No hasty step is
+taken. Members of Congress have every opportunity to ascertain the
+sentiment of their constituents, through the public press, petitions and
+private correspondence. The subject is discussed in all its phases, both
+in the committee-rooms and upon the floors of both houses of Congress.
+Every detail is fully considered, and many compromises are often
+necessary to secure for a bill the support of the majority. When it
+finally passes it represents the will of the people, or at least the
+will of their legal representatives, who may be expected to know their
+wants and are accountable to them for their acts. Freight
+classifications, however, while they are fully as far-reaching as
+customs laws, are made by a few freight agents meeting in secret
+session, listening to no advice and acknowledging no higher authority.
+
+It is claimed by the railroad men that it is to the interest of railroad
+companies to do justice to all, and that the best classification for
+the largest number of people is also the best for the roads. If this be
+true, it is difficult to see why railroads should fail to consult their
+patrons in the arrangement of their freight classifications. Intelligent
+shippers may certainly be supposed to know as well as the railroad
+companies what classification is to their common interest. Railroad
+managers are naturally despotical. They do not wish and do not tolerate
+any outside interference with what they obstinately term their private
+business. Even if the general policy of the companies designed the
+greatest good to the greatest number, the opportunities and temptations
+of their agents to pursue selfish ends or take advantage of individuals
+in the preparation or application of their tariffs are such that in the
+practical execution the evil will always outweigh the good.
+
+It is not within the scope of the present inquiry to review in detail
+the various classifications in force, or to point out the unjust
+features. The author will confine himself to showing by a few
+characteristic examples that the power now in the hands of the railroad
+companies to classify the various commodities of commerce for the
+purpose of rating is greatly abused and is a potent means of railroad
+extortion. And that it may not be charged that abuses have been cited
+which are a thing of the past, the examples will chiefly be taken from
+cases which have come before the Interstate Commission for adjudication.
+
+A complaint was filed with the commission in 1887 by T. J. Reynolds
+against the Western New York and Pennsylvania Railroad Company, from
+which it appeared that that company charged a greater price for the
+transportation of railroad ties from points in the State of Pennsylvania
+to points in the State of New York than was charged at the same time
+for the transportation of lumber between the same points. The commission
+held that this was a case of unjustifiable discrimination and ordered
+the company to place railroad ties in the same class with other rough
+lumber. Many Western roads for years have been guilty of the same
+discrimination. The reasons for such a policy are obvious. A high tariff
+on railroad ties prevents their being shipped, depreciates their market
+price at home, to the sole benefit of the discriminating company, which
+is thus enabled to buy ties at a low price. Prohibitory rates on ties
+and rails are also often maintained by railroad companies to either
+delay or render more costly the construction of new lines which threaten
+to become their competitors. The Union Pacific Railroad Company several
+years ago even went so far as to make prohibitory rates on steel rails
+intended for the construction of a road which promised to become a
+competitor of one of its connecting lines.
+
+From another case decided by the Interstate Commerce Commission it
+appeared that the Lake Shore and Michigan Southern Railway Company
+charged for blocks intended for wagon-hubs, and upon which only so much
+labor had been expended as was necessary to put them in condition, a
+higher rate than for lumber, claiming that such blocks were unfinished
+wagon material and were therefore, as articles of manufacture, subject
+to higher charges than raw material. The commission justly held that
+these blocks were as much to be regarded as raw material as the boards
+from which wagon-boxes are made.
+
+In the classification of the Southern Railway and Steamship Association
+pearline was placed in the fourth class, with a rate of 73 cents per
+hundred pounds, and common soap in the sixth class, with a rate of 49
+cents per hundred pounds. This latter article, when shipped by large
+manufacturers, enjoyed besides a special rate of 33 cents per
+hundredweight. Pearline and soap are competitive; there is no
+appreciable difference between them as regards the cost of
+transportation; but one commands a higher price in the market than the
+other, and upon this fact solely did the railroad company base its
+alleged right to levy upon pearline a transportation tax 120 per cent.
+in excess of that levied upon soap, though the service rendered by the
+company was the same in either case. The commission held that the
+discrimination made by the "special rate" of the Southern Railway and
+Steamship Association between pearline and common soap was unjust, and
+ordered that it be discontinued and that, with common soap in the sixth
+class, pearline be placed in the fifth.
+
+For years the rate from Indianapolis to New York was the same for corn
+as for its direct products, such as ground corn, cracked corn, corn
+meal, hominy and corn feed. Such a tariff made it possible for Western
+mills to compete with similar mills that had been established in the
+East, since a discrimination of 5 per cent. was sufficient to absorb
+three or four times the profits of any Western mill. It was shown by the
+evidence produced that the actual cost of transportation was
+substantially the same for direct corn products as for the raw corn. The
+only defense which the railroad company could make for this
+discrimination was that in the carriage of raw corn they had to meet
+lake competition. The weakness of this argument will be perceived when
+it is remembered that Indianapolis is 154 miles from the nearest
+lake-shipping point. There is but little doubt that this discrimination
+was made by the railroad company because it was to its interest to haul
+the raw corn from the West to the East and to return it in altered
+form. Railroads care, as a rule, little for a waste of force, if such
+waste is to their own advantage.
+
+In another case brought before the commission in 1889 it was shown that
+the "Official Classification" placed common soap in carload lots in
+Class V, while such articles as coffee, pickles, salted and smoked fish
+in boxes or packages, rice, starch in barrels or boxes, sugar, cereal
+line and cracked wheat are placed in Class VI. The chief reply of the
+railroad companies to this complaint was that soap was justly placed in
+Class V because the components from which it is in part made stood in
+Class V.
+
+In another case it was shown that one kind of soap was burdened with a
+higher transportation tax than another, irrespective even of cost,
+because one had been advertised as toilet and the other as laundry soap.
+
+The principle of charging what the traffic will bear is well illustrated
+by the relative rates on patent medicines and ale and beer, as
+maintained by the Official Classification.
+
+In a complaint made by a prominent manufacturer of proprietary medicines
+against the New York Central and other roads, it was shown that the
+complainant's products were shipped at owner's risk, and that they were
+in bulk and intrinsic value similar to ale and beer, but that in spite
+of these analogies the former were rated as first-class and the latter
+as third-class goods, simply because they retailed at a higher price.
+
+Another unwarrantable discrimination is that in favor of live stock and
+against dressed beef. While Mr. Fink, the commissioner of the Trunk Line
+Pool, himself admitted that the cost of carrying dressed beef from
+Chicago to New York was only 6-1/4 cents per 100 pounds in excess of
+the cost of hauling live stock, the trunk lines maintained on dressed
+beef a rate 75 per cent. higher than that on live cattle. The railroad
+companies asserted that this was due to those people in the East whose
+living depended on the live-stock interest. The railroads have in this
+assumed a paternalism which would not be tolerated even in the
+Government. To protect the East, railroads will not permit the West to
+engage in new industries.
+
+The position which the Interstate Commerce Commission has assumed in
+interpreting the rights of shippers under the law which railroad
+companies are bound to respect in the preparation of their tariff sheets
+and classifications cannot but be most gratifying to the people. In a
+decision relating to the classification and rates for car-loads and less
+than car-loads, filed March 14, 1890, the commission laid down the
+following rules for the guidance of railroad companies:
+
+      "1. Classification of freight for transportation purposes is
+      in terms recognized by the act to regulate commerce, and is
+      therefore lawful. It is also a valuable convenience both to
+      shippers and carriers.
+
+      "2. A classification of freight designating different
+      classes for car-load quantities and for less than car-load
+      quantities for transportation at a lower rate in car-loads
+      than in less than car-loads is not in contravention of the
+      act to regulate commerce. The circumstances and conditions
+      of the transportation in respect to the work done by the
+      carrier and the revenue earned are dissimilar, and may
+      justify a reasonable difference in rate. The public
+      interests are subserved by car-load classification of
+      property that, on account of the volume transported to reach
+      markets or supply the demands of trade throughout the
+      country, legitimately or usually moves in such quantities.
+
+      "3. Carriers are not at liberty to classify property as a
+      basis of transportation rates and impose charges for its
+      carriage with exclusive regard to their own interests, but
+      they must respect the interests of those who may have
+      occasion to employ their services, and conform their charges
+      to the rules of relative equality and justice which the act
+      prescribes.
+
+      "4. Cost of service is an important element in fixing
+      transportation charges and entitled to fair consideration,
+      but is not alone controlling nor so applied in practice by
+      carriers, and the value of the service to the property
+      carried is an essential factor to be recognized in
+      connection with other considerations. The public interests
+      are not to be subordinated to those of carriers, and require
+      proper regard for the value of the service in the
+      apportionment of all charges upon traffic.
+
+      "5. A difference in rates upon car-loads and less than
+      car-loads of the same merchandise, between the same points
+      of carriage, so wide as to be destructive to competition
+      between large and small dealers, especially upon articles of
+      general and necessary use, and which, under existing
+      conditions of trade furnish a large volume of business to
+      carriers, is unjust and violates the provisions and
+      principles of the act.
+
+      "6. A difference in rate for a solid car-load of one kind of
+      freight from one consignor to one consignee, and a carload
+      quantity from the same point of shipment to the same
+      destination, consisting of like freight or freight of like
+      character, from more than one consignor to one consignee or
+      from one consignor to more than one consignee, is not
+      justified by the difference in cost of handling.
+
+      "7. Under the official classification the articles known in
+      trade as grocery articles are so classified as to
+      discriminate unjustly in rates between car-loads and less
+      than car-loads upon many articles, and a revision of the
+      classification and rates to correct unjust differences and
+      give these respective modes of shipment more relatively
+      reasonable rates is necessary and is so ordered."
+
+The efforts which the commission has made to bring about a uniform
+classification throughout the country are in the right direction, while
+the results of its labor are not yet satisfactory.
+
+In their fifth annual report, the Commissioners, after giving an account
+of their efforts and the shuffling and double-dealing of the railroad
+companies with them upon this matter of uniform classification, said:
+
+      "Its conviction remains unchanged that the necessities of
+      commerce require that the existing classifications be
+      consolidated, and that this result should be accomplished as
+      speedily as may be found practicable; and it does not feel
+      justified in asking for the further efforts of the carriers
+      the same measure of indulgence which from time to time it
+      has heretofore suggested should be extended to them, and
+      which was thought to be required in the public interest.
+
+      "The commission can not but think that if legislation to
+      that end be enacted by Congress the carriers will speedily
+      consummate the reform already begun in this direction. It is
+      therefore recommended that an act be passed requiring the
+      adoption within one year from the date of its passage of a
+      uniform classification of freight by all the carriers,
+      subject to the act to regulate commerce, and providing that
+      if the same be not adopted within the time limited, either
+      this commission or some other public authority be required
+      to adopt and enforce a uniform classification."
+
+The present confusion which exists in the classification and rates of
+the seventeen hundred railroad organizations of the country makes it
+difficult for the commission to do justice to all interests and
+localities. With the adoption of a uniform classification it is to be
+hoped that in time many of the present inequalities will be adjusted,
+especially if an intelligent public sentiment upon the subject of
+railroad regulation is maintained. A prominent railroad manager in the
+East, whose devotion to corporate interest is only equaled by his
+political ambition, has recently made repeated efforts to convince the
+people that railroad abuses are things of the past and that, if any such
+abuses still linger in isolated districts, they are simply unavoidable
+exceptions to the rule which will soon have to yield to the general
+spirit of fairness and amity for which, in his opinion, the railroads
+have of late been distinguished. He reasons that the law has fulfilled
+its mission, that the railroads have reformed, and that it now behooves
+the people to relent and to extend to the much persecuted corporations
+the hand of friendship and good will. The postprandial eloquence of this
+gentleman has often suavely intimated that the repeal of the Interstate
+Commerce Act would be the most opportune recognition of restored
+confidence.
+
+Still bolder champions of the railroad cause do not hesitate to demand
+the repeal of the law. It is not likely that the sophistry of railroad
+hirelings will triumph over the practical logic of an intelligent
+public. No law, be it ever so wise, can in the space of a few years
+correct all the abuses which half a century of unbridled railroad
+domination has developed. Yet, since both the friends and the enemies of
+the law agree that it has been partially successful in its operation, it
+should be continued and improved to keep it in harmony with new
+conditions and a progressive public sentiment. It is claimed by railroad
+managers that the adoption of a uniform classification will remove the
+only vestige of discrimination still left. This is not true, for by far
+the largest number of complaints that have recently been brought before
+the Interstate Commerce Commission charged personal and local
+discrimination independent of any question of classification.
+
+It is shown by the reports of the commission that discriminations are
+still practiced by various companies, that annual passes are still
+illegally issued to bribe or appease men of influence, that discounts
+are still given to favor shippers under various pretexts, that some
+large railroad centers still enjoy more favorable rates than smaller
+towns, and that the long and short haul clause of the Interstate
+Commerce Act is still violated by railroad companies. There are besides
+these scores of other devices in vogue among railroad managers to
+subvert the principles of the common law. No doubt discriminations are
+now much less frequent, and are possibly the exception where but a few
+years ago they were the rule, but the fact that such abuses still exist
+is a strong argument for the retention of the law as well as for the
+necessity of continued vigilance on the part of the people and those
+especially charged with the execution of the laws. The railroad acts of
+Congress and the various States ask nothing of common carriers but just
+and equitable treatment for all their patrons. If this is freely
+accorded, these laws are no burden to the railroads. If, on the other
+hand, there is a tendency on the part of the railroads to resort to
+subterfuges and evasions, the wholesome restraint of the statute is
+absolutely necessary for the protection of the shipper.
+
+The repeal of the Interstate Commerce Law, or the adoption of such
+amendments as are demanded by railroad men, would be interpreted by them
+as an abandonment of all its principles and would inaugurate an era of
+unprecedented railroad oppression. History ever repeats itself.
+Unchecked license will always lead to arrogance and despotism, and any
+power which is long permitted to defy the state will in time control it.
+It is not likely that the people of the United States can be induced to
+demonstrate to the world that democratic government is incapable of
+profiting in the dear school of experience.
+
+Our railroad legislation contains no principle that is not found in the
+common law. Its maxims are our birthright and will be the birthright of
+our children and children's children, and while railroad companies may
+be able in the future, as they have been in the past, to violate the law
+temporarily with impunity, they will never be able to prevail upon the
+American people to abandon the policy of railroad reform which the
+passage of the Interstate Commerce Law inaugurated.
+
+The Interstate Commerce Commissioners say in their sixth annual report:
+
+      "Whoever will read the report of the special committee of
+      the United States Senate, commonly called the 'Cullom
+      Committee,' will be astounded at the magnitude and extent of
+      railroad abuses brought to light by their investigation.
+      Those unfamiliar with the facts made public at that time can
+      hardly believe the outrages which were proven to exist and
+      the manifold devices by which the most flagrant injustice
+      was perpetrated. A single illustration will furnish a better
+      reminder than extended comment.
+
+      "It appears from that report that the Standard Oil Company,
+      in one instance at least, boldly demanded from a certain
+      railroad that its shipments should be carried for 10 cents a
+      barrel; that all other shippers should be charged 35 cents a
+      barrel on the same article, and that 25 cents of the 35 paid
+      by such other shippers should be handed over by the railroad
+      to the Standard Oil Company, and the penalty threatened for
+      non-compliance with this impudent extortion was a withdrawal
+      of its entire business.
+
+      "The foregoing statements but imperfectly describe the
+      situation which existed when the Interstate Commerce Law was
+      enacted. In any reasonable view of the case it was too much
+      to expect that the common and long continued abuses of
+      railroad management could be corrected in less than half a
+      dozen years, or that the first scheme of legislative
+      regulation would prove adequate to that end. It would be
+      contrary to all experience if so great and radical a reform
+      could be thus speedily accomplished, or if the initial
+      statute should be found sufficient to bring it about. The
+      law was the outgrowth of an aroused and determined public
+      sentiment, which, while united in demanding Government
+      interference, was divided and uncertain as to the best
+      methods of affording relief. Like all attempts in a new
+      field of legislation, the statute was a compromise between
+      divergent theories and conflicting interests. It was
+      scarcely possible that it should be so complete and
+      comprehensive at the outset as to require no alteration or
+      amendment. Those who are familiar with the practices which
+      obtained prior to the passage of this law and contrast them
+      with the methods and conditions now existing will accord to
+      the present statute great influence in the direction of
+      necessary reforms and a high degree of usefulness in
+      promoting the public interest.
+
+      "Whoever will candidly examine the reports of the commission
+      from year to year, and thus become acquainted with the work
+      which has been done and is now going on, will have no doubt
+      of the potential value of this enactment in correcting
+      public sentiment, restraining injustice and enforcing the
+      principle of reasonable charges and equal treatment.
+      Imperfections and weaknesses which could not be anticipated
+      at the time of its passage have since been disclosed by the
+      effort to give it effective administration. The test of
+      experience, so far from condemning the policy of public
+      regulation, has established its importance and intensified
+      its necessity. The very respects in which the existing law
+      has failed to meet public expectation point out the
+      advantages and demonstrate the utility of Government
+      supervision.
+
+      "Moreover, it may be fairly claimed that much greater
+      benefits would have been realized had the statute as enacted
+      expressed the evident purpose of those who framed it, and
+      received a construction according to its apparent import. It
+      is not too much to say that judicial interpretation has
+      limited its scope and ascribed to it an intent not
+      contemplated when it was passed. If its supposed meaning, as
+      understood at the time of its passage, had been upheld by
+      the courts, it is believed that its operation would have
+      been much more effective and its usefulness greatly
+      increased. So far as failure has attended the efforts to
+      give it proper administration, that failure can be mainly
+      attributed to differences between its apparent meaning and
+      the judicial interpretation which some of its provisions
+      have received; and the commission is of the opinion that if
+      the present law could be so altered as to express clearly
+      and beyond doubt what it was evidently intended to express
+      at the time of its enactment, it would prove, even without
+      other amendment, an instrumentality of the highest value in
+      removing the evils against which it is aimed.
+
+      "The specific instances in which the statute has received
+      judicial construction, and the limitations upon its scope
+      and meaning which the courts have imposed, will be alluded
+      to at greater length in another part of this report.
+
+      "It seems proper, however, to observe in this connection
+      that the effect of these decisions in weakening the law and
+      preventing its enforcement has been greatly exaggerated. The
+      impression has been created in many directions that judicial
+      construction has invalidated the essential feature of the
+      statute and condemned the general principle which lies at
+      its foundation. That impression cannot be too speedily
+      corrected, for nothing has been decided which permits such
+      an inference. On the contrary, neither the power of the
+      national legislature to regulate the transportation of
+      interstate commerce nor the general policy of the existing
+      law has been questioned by any tribunal."
+
+Probably no law in the United States has ever before been so fiercely
+attacked at all of its vital points as has this law. It is not strange
+that among the great number of National and State courts the railroad
+companies have found occasionally a judge ready and willing to assist
+them in breaking it down, but upon the whole the judiciary has been
+disposed to co-operate with other departments of the Government in their
+efforts to secure effective regulation of the transportation business.
+
+
+
+
+CHAPTER VI.
+
+STOCK AND BOND INFLATION.
+
+
+The complaint is frequently heard from railroad men that our freight
+rates are too low, and in support of it the statement is usually made
+that the greater part of the railroad stocks of the United States pays
+dividends considerably smaller than the average interest realized by
+capitalists on money loaned or invested in other enterprises.
+
+This statement may be true, and yet it is valueless as an argument for
+higher rates. It may be admitted that the dividends declared upon the
+face values of railroad stocks are quite moderate, but it is a fact too
+well authenticated to be contradicted that railroad securities represent
+to a considerable extent only fictitious capital. The public concedes
+that liberal returns should be allowed to railroad companies on money
+actually invested, but it naturally objects to being taxed for the
+purpose of making dividends on watered stock. The evil referred to is a
+serious one, and has contributed much to the general demand for railroad
+reform. Most of the early roads of this country were built for the
+accommodation of local traffic. They were constructed and managed by
+business men upon business principles. The stock issued by the companies
+was in most cases paid for in full and was not unfrequently sufficient
+for the completion of the entire road, and no incumbrance was permitted
+by the owners to be placed upon the property. These enterprises as a
+rule proved very profitable. One of the first roads running west of
+Chicago will serve as an illustration. The Galena and Chicago Union
+Railroad Company paid a 10 per cent. dividend within a year after being
+opened to traffic, and gradually increased its dividends to 15, 20 and
+22 per cent. During the first two years of the road's operation its
+expenses were only 38-1/2 per cent. of its earnings. During the second
+year the company, after paying a 15 per cent. dividend, diminished its
+debt nearly $60,000 and increased its surplus $11,700. In 1856 the road
+had a length of 232 miles, on which the gross earnings amounted to
+$2,315,787. This revenue exceeded the estimate made by the company's
+officers the year previous by $300,000. In his annual report for 1856
+the president of the company said: "This result shows an _increased
+surplus_ of $65,000, after paying 22 per cent. in dividends and all
+expenses and interests chargeable to income account." The report also
+shows that expensive improvements, such as large permanent bridges and
+stone culverts, displacing as a rule wooden ones, were charged to
+current expenses.
+
+The financial success of railroads soon attracted the cupidity of
+financial adventurers--men of great energy, but small means--whose aim
+was to secure the greatest possible returns with the least possible
+outlay of money. With the introduction of these elements into railroad
+circles the era of speculation commenced. Take the line just referred
+to. In 1852 the average number of miles operated was 62, and the year
+following, 90. But while the number of miles operated increased less
+than 50 per cent., the capital stock of the company grew from $444,193
+to $1,362,559, and its debt from $60,145 to $542,287. The capitalization
+of the road was thereby increased from $8,000 to $21,000 per mile, and
+this was done for the purpose of making the capital appear adequate to
+its earnings. Nearly all railroads became in time the foot-balls of
+shrewd manipulators. They were bonded before they were constructed, and
+often for more than the value of the completed road. Stocks at the best
+only represented nominal values and were given as premiums to the
+bondholders or promoters of the road.
+
+But the science of stock-watering did not reach its fullest development
+until during the period of railroad consolidation. Fictitious values
+were now created as often as a new consolidation took place. Watered
+stocks and bonds were watered again and again, until they represented
+little more than a purely imaginary capital upon the basis of which
+dividends might be declared. Take the case of the New York Central and
+Hudson River Railroad companies, which consolidated in 1869 with a
+capital of $103,110,137.31. The former of these roads was organized in
+1853 by the consolidation of ten smaller roads connecting the cities of
+Albany and Buffalo. The capital stock of these companies amounted to
+$20,799,800, of which $16,852,870 was claimed to have been paid in.
+Their funded debt was $2,497,526. It is impossible at this day to
+ascertain the original cost of all these roads, but it is certain that
+the above sums represent about three times the amount actually expended
+for their construction.
+
+One of the roads entering into the consolidation was the Utica and
+Schenectady. It was 78 miles long and formed about one-fourth of the
+consolidated line. It had the heaviest grading and rock-cutting, was the
+best-equipped and undoubtedly the most expensive, in proportion to its
+extent, of the ten roads out of which the New York Central was created.
+The original cost of this line was $2,000,000. Bonds were never issued
+by the company. The line was profitable from the very beginning, paid
+regularly ten per cent. dividends,--the limit to which railroad
+companies were then restricted,--and had a large surplus, which it
+expended mainly for improvements. No assessment was ever made on the
+stock beyond the $1,500,000 which was originally paid in by the
+shareholders and upon which they had drawn regular and liberal
+dividends. Taking the original cost of this line as a basis, it is but
+fair to presume that the entire line from Albany to Buffalo, covering a
+distance of 297 miles, did not cost to exceed $6,000,000. These roads,
+however, entered into the consolidation with a capital stock of
+$15,274,800 and a bonded indebtedness of $1,696,326.
+
+Estimating the cost of the branches upon the same basis upon which we
+have estimated that of the main line, we shall find that the total
+original cost of the consolidated lines cannot have exceeded $8,000,000.
+The Mohawk Valley road was put in at $2,000,000 and the Syracuse and
+Utica direct at $600,000, though the roads only existed on paper and did
+not represent any value whatever. The Schenectady and Troy road, which
+went into the consolidation with $650,000 stock and $90,000 bonds, had
+been bought for less than $100,000 two months previous to the
+consolidation.
+
+It will thus be seen that already nearly one-third of the stocks and
+bonds of the consolidated companies was water. The consolidation
+agreement fixed the capital stock of the New York Central at $23,085,600
+and its funded debt at $11,564,033.62, increasing the stock over
+$2,000,000, and the bonded debt over $9,000,000. The latter was more
+than quadrupled, and $8,000,000 worth of bonds were, under the name of
+consolidation certificates, given as a present to the stockholders of
+the new road. The capital stock of the New York Central grew steadily up
+to the time of its consolidation with the Hudson River road, when it was
+$28,795,000. All improvements made during this time were paid for out of
+its surplus earnings, with the single exception of the Athens branch,
+for which the company issued $2,000,000 of its stock.
+
+The gross earnings of the New York Central in 1854 were $5,000,000, and
+its net earnings $2,830,000. In 1863 its gross earnings were in round
+numbers $10,000,000, and in 1869 they reached $15,000,000. The dividends
+paid during that year amounted to $4,300,000, and the interest to
+$894,000. In view of the fact that the bonded indebtedness of the road
+was from two to three million dollars more than the original cost, this
+dividend of 15 per cent. upon a wholly fictitious capital must be
+regarded as an unwarranted tribute levied upon the commerce of the
+country. But we shall soon see that in railroad hydraulics, as well as
+in other branches of human industry, success stimulates to still greater
+energy.
+
+The Hudson River Railroad Company was organized in 1847. It extended
+from New York City to East Albany and was 144 miles long. There are no
+data extant upon which could be based a reliable estimate of its
+original cost. Estimating it upon the basis of that of the Utica and
+Schenectady, we should have to place it somewhat below $3,000,000. While
+such an estimate may be too low, the amount of its funded indebtedness
+in 1851, which was $5,640,000, probably more than covers the amount
+actually expended in the construction of the road. In 1851 the capital
+stock of the Hudson River road was $4,000,000. In 1853 the funded debt
+had increased to $7,000,000, and in 1862 to $9,000,000. In 1869 the
+bonded indebtedness had decreased to $4,309,000, but the capital stock
+had grown to over $16,000,000. Between 1853 and 1869 the company
+increased its stock and bonded indebtedness nearly $11,000,000, while
+the assessments paid by its stock and bondholders during this time did
+not exceed $1,000,000. Improvements were made, but these were chiefly
+paid for out of the surplus earnings of the road. It has been shown by
+experts that $6,640,000 is a high estimate of the actual original cost
+of the Hudson River road to its stock-and bondholders, and that
+securities to the amount of more than $13,000,000 represented surplus
+earnings and water. At the time of the consolidation of the Hudson River
+and New York Central railroads the capital stock of the two roads had
+grown to $44,800,000. Under the consolidation agreement the stock was
+fixed at $45,000,000. The new company also assumed all the bonded and
+other indebtedness of both roads. If the consolidation manipulators had
+paused here, the capital of the new company would have been somewhat
+less than $60,000,000, or more than three times the cost of the
+property. But the road was, under existing rates, capable of earning
+dividends on a much larger capital, and this emergency was met by the
+issuance of consolidation certificates to the amount of $45,000,000. The
+total capital of the road was thus increased to and made to pay
+dividends on over $103,000,000, while the total cost of the road and its
+equipment, as claimed by the company in 1870, was less than $60,000,000,
+their estimate being based upon assumed consolidation values and the
+expenditures made from surplus earnings. During the same year the gross
+earnings of the company were $22,363,320, and their net earnings
+$8,295,240. In 1880 the gross earnings had increased to $33,175,913,
+and the net earnings to $15,326,019. The company was able to declare in
+that year 11.82 per cent. dividend on its $89,500,000 of fictitious
+stock. In 1890 its gross earnings were $37,008,403, or $26,050 per mile,
+while its total net earnings were $12,516,273. The gross earnings have
+largely increased during the years 1891 and 1892. It is safe to say that
+$2,000,000 per annum would pay very liberal interest and dividends on
+the amount of money expended upon the construction of the New York
+Central and Hudson River Railroad from the proceeds of its bonds and
+stocks. By the creation of fictitious values the managers of the company
+have attempted to impose an exorbitant tax upon the commerce and travel
+of the country for all time to come. The Government guarantees an
+inventor a monopoly only for a limited space of time, upon the
+expiration of which his invention becomes the common property of the
+people; but railroad managers endeavor to collect, under the protection
+of our laws, an exorbitant royalty from our people forever.
+
+The case of the New York Central and Hudson River Railroad Company is
+only one of the innumerable instances of stock watering in the history
+of American railroads. Indeed, it can be shown that stock-watering
+reached a still higher degree of development in the case of the Erie
+road. It has been demonstrated that the actual original cost to the
+stock-and bondholders of the New York Central Railroad Company, which
+was, with its branch lines, 593 miles long, did not, including the
+Athens branch, exceed $10,000,000. Its cost to its owners, in 1869,
+including the bonuses, premiums, commissions and fictitious equalization
+values of several transfers, was reported by them to be only
+$37,600,000, or about $63,400 per mile. At about the same time the main
+stem of the Erie Railway, extending from New York to Dunkirk, a distance
+of 459 miles, was represented by a capital of $108,807,687, or $237,000
+per mile. Considering the inferiority of this road to the New York
+Central, we are forced to the conclusion that nearly 85 per cent. of the
+capital of the road represented water, or, in other words, that the
+commerce of the United States was taxed to pay dividends on about
+$90,000,000 of watered securities. In 1863 the Erie Railroad had
+outstanding $11,437,500 of common stock. In 1864 this had been increased
+to $15,693,000, in 1868 to $37,765,000, and in 1869 to $70,000,000. Not
+one-tenth of this enormous increase of capital was ever expended on the
+property of the road. The stock was sold at from 20 to 40 cents on the
+dollar, and the proceeds disappeared in the hands of its managers. To
+what extent this freebootery was carried will probably never be known.
+An idea of the rottenness of the Erie management may be had from the
+fact that the courts at one time ordered its president to restore to the
+company $9,000,000 of diverted securities, which order was complied
+with. Vast private fortunes were amassed by nearly all the men who
+directed the affairs of the road, and the mismanagement became in time
+so notorious that the legislature of the State of New York was appealed
+to, to remove the directors of the road for the protection of its
+stockholders, and to reduce the capital stock of the company to the
+amount actually paid for it. This movement failed, however, because it
+was opposed by the very stockholders whose interests were supposed to
+have suffered by directorial mismanagement. They preferred to continue
+to draw dividends on the face value of stocks which they had purchased
+at 20 cents on the dollar. The capitalization of the company has since
+been increased to $163,679,825, and it is by no means a secret among
+those familiar with railroad values that the bonded indebtedness of the
+Erie road represents alone many millions more than the total amount that
+was ever invested in the property.
+
+The principal competitor for through traffic of the two companies whose
+financial operations we have just reviewed is the Pennsylvania Central
+Company. It has often been asserted by the managers and friends of this
+company that its capital is free from water; but this is not true. In
+1864 a dividend of $4,130,760 was made out of the surplus earnings of
+the road. This dividend was payable in capital stock and was equal to 30
+per cent. of the then outstanding capital. Similar surplus dividends,
+each equal to 5 per cent. of the company's outstanding stock, were
+declared in 1867 and 1868. The people were thus taxed to pay dividends
+on a capitalized surplus which had been derived from excessive charges
+previously imposed on them. I shall not attempt here to determine
+whether the capital represented by the Pennsylvania Railroad Company has
+been honestly invested. A committee of Congress has expressed the
+opinion that the capitalization of its main line exceeds the amount of
+the actual cost of the property by more than eleven million dollars.
+There is, however, a system of inflation practiced by the Pennsylvania
+Railroad Company which is simply a new form of bond and stock watering.
+More than one-half of the capital of this company has been invested in
+the stocks and bonds of other corporations. In 1891 the amount so
+invested was $154,319,240, and the income derived from it $4,852,181.
+This does not only cause the stocks and bonds of certain companies to be
+counted twice, but exacts a double tax from the commerce of the
+country, interests and dividends upon the same capital being paid both
+to the bond- and stockholders of the Pennsylvania Central and to the
+bond-and stockholders of the roads in whose securities it has made
+investments. The income of the company is thus swelled far beyond the
+amount which the traffic reports indicate. It will be seen that, to
+perpetuate extortionate rates, this process of manifolding securities
+might be continued indefinitely.
+
+The cost to its stock-and bondholders of the Baltimore and Chicago line
+of the Baltimore and Ohio Railroad, which has a length of 795 miles, was
+estimated by the company's officers at about $57,000,000. The actual
+cost of this road, owing to its expensive mountain grades, was probably
+greater than that of any of the other through lines between the
+sea-coast and Chicago, but there can be no doubt that the capitalization
+of this road represents from one-half to one-third pure water. At the
+time of the completion of this road to Chicago the surplus earnings of
+the company, after the payment of interest and dividends, amounted to
+over $29,000,000. This had been charged to "profit and loss" and used in
+the construction of branch lines. Thus an amount equal to more than half
+of the reported cost of this line had at the time of its completion been
+returned to its owners in other railroad values.
+
+The Select Senate Committee on Transportation Routes to the Seaboard in
+1874 estimated the excess of the capital over actual cost of the Erie
+road, from New York to Dunkirk, at $68,807,000; that of the New York,
+Lake Shore and Michigan Southern line to Chicago at $115,188,137, and
+that of the Pennsylvania and Fort Wayne line to Chicago at $11,290,374.
+If this estimate was correct the entire over-capitalization of these
+lines, on which the commerce between the West and the East was forced to
+pay a dividend of 8 and 10 per cent. per annum, was no less than
+$195,000,000. The committee assumed the actual cost of these roads to be
+$182,000,000, or about $78,000 per mile. They based their estimate upon
+the cost of the main branch of the Baltimore and Ohio, as reported by
+their officers, supposing it to represent the actual outlay made by its
+stock-and bondholders. Various revelations which have since been made to
+the public, as to the real cost of railway construction, justify the
+belief that the estimated cost of $78,000 per mile for those roads is
+far too high. Mr. Henry Poor, several years ago, estimated the average
+cost of the roads of the United States at $30,000 a mile. Making
+allowance on one hand for Mr. Poor's tendency to favor the railroad side
+of the question, and on the other hand for the more expensive grades,
+double tracks and better terminal facilities of these trunk lines,
+$50,000 per mile may be considered a fair estimate of their average
+cost. Upon this basis the total cost of the three lines in question
+would amount to $116,450,000, and the excess of their capital over
+actual cost would be the enormous sum of $261,000,000, or 325 per cent.
+of their actual cost, and probably not less than 400 per cent. of the
+original cost to their stock-and bondholders. The capital of these
+companies has since been considerably increased, to enable their
+managers to increase their dividends, and with it the tax levied upon
+the commerce of the country.
+
+These are only a few of the many instances of stock watering that might
+be mentioned. In fact, there are to-day very few railroads in the United
+States that are entirely free from it. It is a notorious fact that the
+stock of a large number of railroad companies represents little or no
+value, having either been sold at a mere nominal price or been donated
+as a premium or bonus to those who purchased a large amount of the
+company's bonds. In recommending, in his December, 1891, annual message,
+Government aid for the Nicaragua Canal, President Harrison said: "But if
+its bonds are to be marketed at heavy discounts and every bond sold is
+to be accompanied by a gift of stock, as has come to be expected by
+investors in such enterprises, the traffic will be seriously burdened to
+pay interest and dividends." It is not difficult to surmise to what
+enterprises the President referred. It has for many years been a
+well-settled principle among railroad incorporators that no larger
+assessments should be made upon the stockholders than is necessary to
+float the company's bonds. A company, for instance, is organized with a
+capital stock of, say, $1,000,000. Five per cent. of this sum, or
+$50,000, is paid into defray preliminary expenses. The road is then
+bonded for perhaps $2,000,000, but as the bonds are sold for only 80 per
+cent. of their face value and as the incorporators allow themselves 5
+per cent. for the negotiation of the bonds, only $1,500,000 is realized
+for the construction of the road. The incorporators now vote to
+themselves a contract to construct the road for $1,500,000 and at once
+sublet it to a contractor who is ready and anxious to build the road for
+$1,200,000. The incorporators thus realize $1,000,000 worth of stock, a
+portion of which is unloaded upon unsophisticated investors, and
+$300,000 in cash, at an outlay of $50,000; and the road, which cost
+$1,200,000, is made to pay interest and dividends on a total capital of
+$3,000,000, and this is subsequently watered indefinitely if the road
+proves profitable or a consolidation with some other road justifies the
+belief that its earning capacity might be increased. Nor is this an
+overdrawn picture. On the contrary, instances might be cited where only
+one-half of one per cent. of the company's stock was paid in by the
+shareholders.
+
+In the days of inflation such transactions did not seem to seriously
+affect railroad securities. Even when they were no longer a secret to
+the public, stocks and bonds sold readily, because, owing to the large
+earnings of the roads, this class of investments was unusually
+productive.
+
+In 1868 the earnings of the railroads of Massachusetts averaged $15,400
+a mile, and were equal to 38 per cent. of the total reported cost of all
+the lines of the State. The Chicago, Burlington and Quincy earned
+$15,386 per mile in 1867, and paid a 15 per cent. dividend. Its stocks
+were quoted 100 per cent. above par. In 1867 the Lake Shore Railroad
+earned more than 50 per cent., and the Terre Haute and Indianapolis even
+as much as 57.2 per cent. of the amount of its cost. Previous to the war
+the inflation of railroad securities was, as a rule, confined to the
+stock. Where roads were bonded for more than the cost of construction it
+was, with but very few exceptions, done to make their capital to
+correspond with their earning capacity, or rather to divert public
+attention from the fact that the rates in force had outlived their
+reasonableness. It was reserved to the Union Pacific and the Central
+Pacific companies to bond their roads from the beginning to an amount
+equal to twice their actual cost, or, in other words, to virtually
+receive them as a present from the Federal Government, bond them for all
+they were worth, and, in addition, issue stock to an amount largely in
+excess of the cost of construction, and then try to earn interest and
+dividends on the whole amount of securities issued. The history of
+these companies forms so interesting and instructive a chapter in the
+railroad annals of America that a short synopsis of it may not seem out
+of place here.
+
+The charter of the Union Pacific Railroad Company was granted by
+Congress on the first day of July, 1862. Shortly after the beginning of
+the War of the Rebellion it was made to appear to the country that a
+transcontinental road was a national necessity; that without it we could
+not hope to retain long the Pacific Coast. It was also very plausibly
+argued that the political benefits to be derived by the country from the
+construction of such a road, as well as its great length and
+extraordinary cost, made it the duty of the nation to aid liberally its
+enterprising and patriotic promoters in the prosecution of their
+gigantic task. In those stirring times few people were inclined to
+question the motives of those who advocated what appeared to be
+patriotic measures, or to be penurious in the expenditure of public
+funds when the public weal seemed to demand such expenditure.
+
+The Union Pacific Railroad charter, which in substance was passed by
+Congress as it had been drafted by the promoters of the enterprise, gave
+to the new company the right of way through the public lands, and
+authorized it to take, from the lands adjacent to the line of its road,
+earth, stone, timber and other materials for its construction. It
+further granted to the company every alternate section of land to the
+amount of five alternate sections per mile on each side of its line,
+excepting only those lands to which preëmption or homestead claims
+attached at the time when the line of the road should be definitely
+fixed. In addition to these donations the United States issued to the
+company subsidy bonds in an amount equal to $16,000 per mile for the
+distance from the Missouri River to the eastern line of the Rocky
+Mountains, $48,000 per mile for a distance of 150 miles through the
+Rocky Mountains, and $32,000 per mile from the western base of the Rocky
+Mountains to the terminus of the road. Similar franchises were at the
+same time given to the Central Pacific Railroad Company, a corporation
+which had previously been chartered by the State of California. Besides
+its grant of right of way, land, timber, etc., this company received
+subsidy bonds at the rate of $16,000 a mile for a distance of 7.18 miles
+east of Sacramento, of $48,000 a mile for 150 miles through the Sierra
+Nevada, and of $32,000 a mile for the distance from the eastern base of
+that mountain range to its junction with the Union Pacific. The charters
+of the two companies provided that, to secure the repayment to the
+United States of the amount of those bonds, they should _ipso facto_
+constitute a first mortgage on the entire lines of the road, together
+with their rolling stock, fixtures and other property. The franchises
+and donations thus granted by Congress were most valuable; in fact, the
+latter were alone sufficient to build and equip the roads. In spite,
+however, of the liberal grants and in spite of the urgent necessity of
+the roads in those years of national trial, both of these enterprises
+made very slow progress. Their promoters were men of small means, and
+the capitalists to whom they appealed for help failed to realize the
+value of the franchises. No doubt when these men first engaged in their
+cause they expected to encounter serious obstacles in Congress,
+supposing that that august body would consider the proposed measure with
+much deliberation and to act upon it with still more circumspection.
+Their success greatly surprised them. They made the discovery that
+members of Congress could be imposed upon as easily as private
+citizens, and when they fully realized how readily their demands had
+been granted, they were greatly provoked at themselves because they had
+not asked for more.
+
+According to a story told by my old friend Mr. J. O. Crosby, an
+experienced member of the brotherhood of tramps late one afternoon
+chanced to stroll into the city of Alton. Having no visible means of
+support, he was picked up by the police and brought before the Mayor to
+give an account of himself and to be dealt with as that dignitary might
+see fit. The tramp, a printer by profession, and by no means a tyro in
+meeting such emergencies, so managed to impress the Mayor with his
+superior accomplishments that the latter concluded it would be a good
+investment, both for himself and the city over which he presided, to
+offer the genial stranger a contribution to his traveling fund, upon the
+condition that he would no longer than absolutely necessary molest the
+city with his presence. He accordingly told the intercepted tourist that
+while it had been for years the policy of the city and its officials to
+entertain all tramps found within the limits of Alton for thirty days at
+the city jail in exchange for a fair amount of labor, he would, in
+consideration of the apparent fact that he was of better metal than the
+average tramp, make an exception in his case, and would, even at the
+risk of being censured for it by his constituents, hand over to him five
+dollars from the municipal funds if he would agree to leave the city
+early next morning. The tramp gladly accepted the proposition,
+replenished his empty purse with the proffered bounty and withdrew from
+the City Hall, to take a stroll through Main Street. The city seemed to
+him as prosperous as the Mayor had shown himself liberal. It occurred to
+the itinerant typographer that its treasury would not have been the
+worse off for a ten-dollar levy, and he hastily returned to the Mayor's
+office to plead for a larger donation. The Mayor, not disposed to argue
+the question, handed him another five-dollar bill and improved the
+opportunity to remind him of his previous promise and to give expression
+to the hope that as a gentleman of honor he would now discharge his
+obligation. The tramp fairly overwhelmed His Honor with assurances of
+good faith and bade him an affectionate good-by. The next rising sun
+found him on his onward journey. His route led through Alton on the
+Hill, a portion of the city which he had not seen before. He viewed with
+surprise the many fine residences and other evidences of opulence which
+this part of the city contained. He passed on in a pensive mood until he
+reached the summit of the hill, which commanded a fine view of the
+entire city. Here he turned to cast a farewell glance over the town
+ruled over by the most generous mayor that it had ever been his
+privilege to meet. As he beheld before him the fine homes and beautiful
+yards, and below in the valley the lofty church-steeples, the many
+school-houses, the massive business blocks, the long and well-paved
+streets and the spacious and shady parks, an expression of mingled
+surprise and disappointment stole over his face. He thrice slapped his
+wrinkled brow and then hurriedly retraced his steps down the hill. When
+the chief magistrate of Alton came to his office that morning, he met
+the irrepressible tramp anxiously waiting for him at the door. "Mr.
+Mayor," said the wily extortioner, "I acted very hastily yesterday when
+I accepted your second proposition. You have here a much larger town
+than I ever supposed. I have been constrained to take our last agreement
+into reconsideration, and I shall not leave this point until you add
+another five dollars to your consideration. You can certainly better
+afford to do that than to throw away thirty days' board and the ten
+dollars which you have already paid me besides."
+
+The diplomacy of the Union Pacific and Central Pacific railway companies
+was the same as that of the Alton tramp. They had found Congress as
+generous as the tramp had found the Mayor of Alton, and now reproached
+themselves for their modesty and resolved to bring the pliability of
+Congress to a severer test. They again appeared before that body in 1864
+and asked that their charter be so amended as to grant to them ten
+alternate sections instead of five on each side of the road, and also
+all the iron and coal found within ten miles of their track, which had
+previously been reserved by Congress. And in addition to this they asked
+that they be authorized to issue their own mortgage bonds on their
+respective roads to an amount equal to the bonds of the United States,
+and that the lien of the United States bonds be made subordinate to the
+lien created by the companies' bonds. By the act of Congress, July 2,
+1864, all these demands were granted, and the two companies were thus
+virtually presented with their roads and were at the same time given
+permission to mortgage this gift of the people and divide the proceeds
+among their shareholders, many of whom had received their stock chiefly
+in consideration of their influence in and out of Congress. The
+contribution of the United States to these companies on account of their
+main lines has not been far from $80,000,000, of which over $52,000,000
+was paid in bonds, and the remainder in lands, which aggregated about
+23,000,000 acres. The whole line from Council Bluffs to Sacramento is
+1,780 miles long. It will thus be seen that the national contribution
+was about $45,000 per mile, besides the right of way and all timber,
+iron and coal found within ten miles of the road. There is no doubt that
+this contribution was equal to, if it did not exceed, the actual cost of
+the road. There has been an erroneous impression abroad which has
+likened the Pacific road to those wonderful and very expensive lines
+which cross the Andes and the Alps. Those who have not crossed the
+continent can hardly believe that the construction of this line was
+neither more difficult nor more expensive than that of any of the
+numerous railroads crossing the mountain ranges of the East, but such is
+the fact.
+
+Starting from Omaha, the Union Pacific follows for nearly 500 miles, or
+almost half of its entire length, the valley of the Platte River. A
+better route for a railroad cannot be found upon the western continent.
+There are between Omaha and Cheyenne but three bridges worthy of the
+name. The Platte Valley is almost straight, rising toward the west at a
+nearly uniform rate of about 10 feet to the mile. Grading was
+practically unnecessary, and the work of construction consisted of
+little more than the laying of the ties and track. From the base of the
+mountains at Cheyenne to their summit is a distance of about thirty-two
+miles, the difference in altitude between the two points being less than
+2,200 feet. The average grade is therefore about 68 feet to the mile,
+and nowhere are the grades heavier than 80 feet to the mile. There are
+heavier grades than these in the prairie State of Iowa, and the mountain
+grades of a number of Eastern roads exceed those of the Union Pacific by
+from 30 to 40 feet to the mile. The rise is, if not uniform, at least
+gradual, and the construction of even this portion of the road required,
+therefore, neither great engineering skill nor any unusual expenditure
+of money. The road now crosses a plateau which extends almost to the
+terminus of the Union Pacific at Ogden, and a very large portion of this
+is as favorable for a roadbed as the average railroad territory of the
+country.
+
+The route of the Central Pacific presented to the engineer no great
+obstacles between Ogden and the State line of California, the only
+elevation of any note to be surmounted being the Humboldt Mountains in
+Nevada. Their highest point, Humboldt Wells, is 221 miles west of Ogden,
+and has an elevation of 5,650 feet above the level of the sea, while
+that of Ogden is 4,320 feet. Upon an average the grades of this portion
+of the road do not differ from those found in the Mississippi Valley.
+The portion of the Central Pacific Railroad which traverses the Sierra
+Nevada is the most expensive of the whole line, but the cost of
+construction did not, even on this division, exceed the amount
+contributed for it by the Federal Government; for the statement is made
+upon good authority that a few of the leading promoters of the road
+built the first western section of twenty miles with their own capital,
+of less than $200,000, and a loan from the city of Sacramento and Placer
+County, amounting to $550,000, and then drew $848,000 Government
+subsidy, or more than enough to build the second section and draw
+another installment of the subsidy; and that they repeated the operation
+until the whole line was completed. These men were in such haste to
+realize the profits which their undertaking promised them that they did
+not even take sufficient time to make a proper survey of their line. Had
+they done so, a great saving, both in the construction and in the
+subsequent operation of the road, might have been effected. It is now
+well known that a route could have been found through the Sierra Nevada
+Mountains, not far distant from the route chosen, which would have saved
+800 feet in elevation and at least 25 per cent. in the expense of
+grading.
+
+It is certainly safe to say that if less than forty thousand dollars a
+mile was sufficient to construct the road through the Sierra Nevadas the
+Federal contribution of $50,000,000 for the entire line, from Omaha to
+San Francisco, left, after the completion, a respectable surplus, either
+to the companies or those of their members who had the construction
+contract, and that the $75,000,000 of capital stock and the $55,000,000
+of first mortgage bonds which the two companies issued were a gigantic
+dividend to the stockholders, for which, practically, no consideration
+was given.
+
+The companies might well have been satisfied with the Government's
+generosity, but their success in imposing upon Congress stimulated their
+greed. The act of 1864 provided that the charge for Government
+transportation over these roads should be applied to the liquidation of
+its bonds, and that after the completion of the lines five per cent. of
+their net earnings should likewise be so applied. When the Secretary of
+the Treasury, under the law, refused to pay them the amount earned by
+Government transportation, and in addition to this demanded the five per
+cent. of their net earnings in liquidation of their debt, the companies
+applied to Congress to again amend their charters so as to relieve them
+for the time being from any direct payment of either principal or
+interest of the Government bonds, and to make it the duty of the
+Secretary of the Treasury to pay to the companies in money one-half of
+the compensation allowed to them by law for services performed for the
+Government. And again Congress responded to their demands, granting
+them, by a rider to the army appropriation bill, passed March 3, 1871,
+all the relief asked for. Owing to the policy of the managers of the
+Pacific line to pay as little of the interest on the Government subsidy
+debt as is absolutely necessary to prevent foreclosure proceedings, the
+unpaid interest has accumulated until it now almost equals the amount of
+the original indebtedness. The last report of the Commissioner of
+Railroads shows that the total indebtedness, principal and interest, to
+the United States of the Pacific railroad companies, was $114,490,000 on
+July 1, 1892. The Commissioner seems to be of the opinion that the Union
+Pacific Company will not be able to pay the subsidy bonds at maturity,
+and he urges that some step be taken in the matter by Congress, whether
+it be to extend the loan, which will mature within the next six years,
+or to sell the road. The managers of the Pacific roads and their friends
+ask an extension of the Government subsidy bonds for fifty years, and a
+reduction of interest from 6 to 2 per cent. If Congress continues to be
+servile to these interests, the Pacific railroad lobby will secure just
+such legislation as they demand.
+
+At the time the Pacific roads were built the people of the United States
+had no adequate knowledge of the topography of the Territories, and the
+promoters of the road for a while found it a difficult task to convince
+capitalists that the investment would be a safe one. That they knew the
+value of the projected road was shown by the contest between the Central
+Pacific and the Union Pacific for mileage. For a distance of over 200
+miles the two companies graded roads side by side in contest for the
+Government subsidy.
+
+The promoters were even disappointed in the cost of the roads, as Mr.
+Sidney Dillon states in an article published in the August number of
+_Scribner's Magazine_, 1892, in which he says:
+
+      "At the end of 1867 the road was completed to the top of the
+      mountains and nearly half way to Salt Lake City. The cost of
+      building over the mountains was so much less than we had
+      expected that the construction company found itself with a
+      surplus from the proceeds of the subsidy bonds. This was
+      imprudently distributed in dividends."
+
+The United States Government could parallel to-day the line of either
+road for less than the amount of its first mortgage bonds, and its
+subsidy bonds are therefore nearly worthless.
+
+Mr. Clews, in his "Twenty-Eight Years in Wall Street," says:
+
+      "After the Thurman bill had been sustained by the Supreme
+      Court Mr. Gould had a plan to build a road from Omaha to
+      Ogden, just outside the right of way of the Union Pacific,
+      and give that road back to the Government. It would give
+      others 'a chance to walk.' The Government tried to squeeze
+      more out of the turnip than was in it. For $15,000,000 a
+      road could be built where it had cost the Union Pacific
+      $75,000,000."
+
+It may be admitted that the Pacific roads, even at an extravagant cost,
+have proved a good investment for the country, yet their history
+reflects severely on the statesmanship of those members of Congress
+whose duty it was to properly protect the interests of the nation at
+that time. They were unequal to their task.
+
+The Great Northern Railway Company has just completed its road to the
+Pacific Coast. Its line is very direct, and it has unusually light
+curvature and low grades, which will enable it to be operated more
+cheaply than any Pacific line yet constructed. Much of its route is
+through a rich and productive country, insuring to it a heavy local
+business.
+
+The following statistics concerning it are given in the _Railway Age_:
+
+  Total mileage, December 18, 1890          2,850
+  Average bonded debt per mile            $18,636 75
+  Average stock per mile                    7,015 67
+  Total                                    25,652 42
+  Interest charges per mile                 1,005 76
+  Dividend charges per mile                   420 94
+
+A comparison of these figures with those corresponding of other
+transcontinental lines is instructive, and is commended to Congressmen
+who have to deal with the Union Pacific and Central Pacific questions.
+
+Stock and bond inflation, it may confidently be asserted, has created
+from five to six thousand millions of dollars of fictitious railroad
+capital. In 1890 the average liabilities of the railroads in the United
+States, including the capital stock and the funded and unfunded debt,
+were $63,600 per mile. According to Mr. Poor's estimate of the average
+cost of American railroads per mile, more than 50 per cent. of this vast
+sum is pure water. But, as has been stated before, Mr. Poor is partial
+to the railroad interest, and his estimate of $30,000 a mile is too high
+for the time at which it was made. Furthermore, railroad building has
+since then been materially cheapened. Tens of thousands of miles of road
+have been built in recent years that did not cost to exceed $10,000 a
+mile. Very recently the Union Pacific Railroad Company proved, before
+the Board of Equalization at Salt Lake City, by the testimony of
+engineers, that the average cost per mile of the Utah Central line was
+only $7,298.20, itemized as follows:
+
+  Engineering                         $  300 00
+  Grading 5-ft. fill, 18,480 yds.      2,310 00
+  Ties, 2,640, at 30 cts.                792 00
+  Rails, 82 tons                       1,845 00
+  Splices                                 12 00
+  Bolts                                   24 00
+  Spikes                                 142 20
+  Track-laying                           600 00
+  Bridges                                200 00
+  Station-building                       100 00
+  Fences                                 150 00
+  Right of way                           720 00
+                                      ---------
+                                      $7,298 20
+
+In a recent article Mr. C. Wood Davis states that "many auxiliary lines
+have been built at costs ranging from $8,000 to $15,000 per mile, and
+capitalized at two, three, four, and even five times their cost, as in
+the case of the 107 miles of the Kansas Midland, costing, including a
+small equipment, but $10,200 per mile, of which 30 per cent. was
+furnished by the municipalities along its line. Yet, with construction
+profits and other devices, this road shows a capitalization of $53,000
+per mile."
+
+And that "the Missouri Pacific line from Eldora to McPherson, Kansas, a
+comparatively expensive prairie road, being located across the line of
+drainage, cost much less than $10,000 per mile, as have thousands of
+miles of other prairie roads."
+
+It is safe to say that $25,000 is a liberal estimate of the average cost
+per mile of American roads to the stock-and bondholders, and that their
+capitalization represents $38,000 of water per mile. The total net
+earnings of the railroads of the country were $341,666,639 in 1890, and
+$356,227,883 in 1891, upon an actual investment of only about
+$4,250,000,000. This is a return of about 8-1/2 per cent. and shows the
+force of Mr. Poor's statement that, if the water were squeezed out of
+railroad securities, no better-paying investment could be found in the
+country.
+
+We often see references to the fact that no dividends are paid upon a
+large portion of railroad stocks, but there is no reason why dividends
+should be paid upon many of them, as they represent no capital whatever
+that has gone into the road. It is probable that not to exceed ten cents
+on the dollar upon an average was originally paid for these stocks, and
+the $80,000,000 distributed annually as dividends upon them does not
+vary much from fifteen to twenty-five per cent. upon the amount actually
+invested in them.
+
+
+
+
+CHAPTER VII.
+
+COMBINATIONS.
+
+
+It is the favorite argument of railroad men, and the writer must confess
+that he himself formerly believed, that if all legal restraints were
+removed from railroad business, the laws of trade would regulate it more
+successfully and more satisfactorily, both to the railroad companies and
+their patrons, than the wisest statutes could ever regulate it. To give
+force to their argument, they cite the old Democratic maxim that that
+State is governed best which is ruled the least. They also assert that
+it is the province of the State to guarantee to each of its citizens
+industrial freedom; to permit him to transact any legitimate business
+according to his best judgment; to buy and to sell where and at what
+price he pleases; in short, to earn without restriction the reward of
+his intelligence and his industry. They further contend that under a
+free government the law of supply and demand should be allowed free
+sway, and that he who buys or sells transportation should not be
+hampered in his transactions any more than the grocer and his customer.
+
+The reply to this is that, while the grocer is a natural person, the
+railroad company is an artificial person, and that, while the business
+of the former is purely private, that of the latter is quasi-public. The
+grocer must rely solely upon his personal rights and private resources,
+but the railroad company accepts from the State the franchises which
+enable it to do business. And yet, if the public had any assurance that
+the laws of trade would regulate both kinds of business alike, it is
+not likely that the State would distinguish between the two. They claim
+that their business is like other private business, and therefore they
+should be let alone; that competition can be relied upon to correct
+abuses; and where competition does actually exist they forget, and then
+claim that their business is not like other private business, and they
+should be allowed to make pools and combinations, because in their
+business competition is ruinous. Experience has certainly demonstrated
+that competition is only possible where combination is impossible. Where
+the same commodity is supplied by a large number of individuals, there
+is but little danger for the public from those who supply it, for an
+agreement among many cannot easily be effected; and even if an
+understanding could be reached, it would not long be satisfactory to all
+parties. Disagreements would arise which would end in the dissolution of
+the combination. Where, however, the number of competitors is small,
+agreements can be easily effected and successfully maintained.
+
+It is doubtful whether there is at present any interest in the
+commercial world which has a greater tendency to monopoly and
+combination than the railroad interest. There are in the United States
+some 40,000 railroad stations. Not more than 4,000 of these are
+junctions of two or more roads. At 90 per cent. of these stations
+shippers are therefore confined to one line of railroad, and are, in
+absence of State regulation, compelled to pay for transportation
+whatever price the companies may be disposed to charge, subject only to
+such restrictions as the proximity of competing points may impose. If
+competition obtained at all points where two or more roads meet, many
+railroad companies could not afford to charge excessive rates at
+non-competitive points along their lines of road, for such a policy
+would slowly but surely drive a large volume of their legitimate
+business to rival roads, to whose interest it would be to encourage by
+every means in their power such diversion of traffic. Railroads early
+recognized this fact and took steps to enable each line to control its
+local business. The first combinations among railroad companies to
+control prices at competitive points were rather crude; in fact, much
+cruder than the first Granger legislation. They were simple agreements
+among the various roads touching a common point to maintain certain
+fixed rates. But while each road was anxious to have the rates agreed
+upon maintained by all of its rivals, it cared but little about
+maintaining its own good faith, and it improved every opportunity to get
+business at reduced rates so long as it could reasonably hope to escape
+detection. As soon as any of the competing roads, through the
+falling-off of its business, became convinced that it was the victim of
+overreaching rivals, it retaliated by offering still lower rates to
+close-tongued shippers. This tricky rivalry would be continued until the
+animosity engendered by it would lead to an open rupture, and what
+railroad men are pleased to term a rate war would follow. As the
+schedule rates had before been unreasonably high, so they became now
+unreasonably low. Hostilities would be continued until all belligerents
+became exhausted and manifested a disposition to negotiate a treaty of
+peace. The former high rates would then be restored; the compact was
+carried out for a short time, to be again violated and finally annulled.
+These rate agreements were in vogue in New England before the War of the
+Rebellion and gradually found their way to the Middle States and the
+West. Wherever they were tried they were violated, until even among the
+most unsophisticated of freight agents a rate agreement was looked upon
+as a farce.
+
+The statement is often made by railroad managers that excesses in
+railroad competition are the result of the peculiar conditions of their
+business, which has heavy fixed charges on one hand and a fickle
+patronage on the other; that the uncertainty of through business compels
+them to rely upon the local business for such revenue as is necessary to
+meet these fixed charges; and that, inasmuch as their trains _must_ run,
+and any through freight hauled by them is so much business taken from
+the enemy, they can better afford to take it at any price than to have
+one of their competitors take it.
+
+It is difficult to see why this reasoning should not be applied to other
+branches of business; for instance, to milling. The mill-owner, like the
+railroad company, has heavy fixed charges. He has to earn the interest
+on his capital, he has to keep his mill in repair, he now and then has
+to meet the demands of the times and purchase improved appliances, and
+he has to keep a certain number of employes, whether business is brisk
+or slack. He might, therefore, if he saw fit to employ the logic of
+railroad managers, earn revenue enough to meet his fixed charges from
+the business which his regular customers give him, and then do any
+business coming from beyond this circle at any price rather than
+surrender it to a rival.
+
+It will readily be conceded that any enterprise conducted on such
+principles could, at the best, flourish only temporarily, for it would
+soon encounter difficulties from two sources. Its local customers, thus
+discriminated against, would withdraw their patronage, while its
+competitors, finding their territory encroached upon, would, in
+self-defense, offer still better terms to the public to regain their
+lost customers. Such ruinous competition, if long persisted in, must
+necessarily cripple, if it does not bankrupt, a majority of those who
+engage in it. It is fortunately as rare in industrial and commercial
+circles as it is common among public carriers.
+
+This difference can easily be accounted for. Where there are a large
+number of competitors the prices of the commodities supplied by them are
+leveled down until they reach a point where they will afford only a
+reasonable margin of profit, and beyond which they will cease to be
+profitable, and will therefore cease to be supplied until the
+equilibrium is again established. Where, however, the number of
+competitors is small, the price of the commodities supplied by them
+will, by agreement, for a time at least, be maintained at a point where
+it affords considerable more than a reasonable profit. Here the large
+gain presents to the various competitors such a temptation to outstrip
+their rivals and increase their business at the expense of good faith,
+that but few, if any, of them will, in the long run, resist it. The
+tendency to underbid rivals will always be strong where profits are
+large, and it may safely be asserted that efforts to maintain, through
+combinations, excessive rates are the most fruitful source of ruinous
+competition.
+
+In time railroad managers became convinced that, unless it was possible
+to radically reform railroad ethics, rate agreements could never be
+relied upon for the maintenance of excessive rates at competing points.
+The combined roads found it an easy matter to agree upon excessive
+rates, but were powerless to enforce them. Experience convinced their
+managers that to make their tariffs effective it was necessary to
+deprive individual roads of the power or the inducement to cut below the
+agreed rates. Their ingenuity in time developed a system which promised
+to remove from individual roads every temptation to take business at
+less than schedule prices. This device consists in a division of
+railroad business and is commonly called a pool. There are various ways
+in which such a division is made. Either the traffic is divided among
+the various companies meeting at a common point, or each road is allowed
+to carry all freights that it may receive, and then the earnings of the
+different roads are divided, each road being paid the actual cost of
+such service as it has performed. There is still a third pooling
+arrangement, consisting in a division of territory, but this has been
+found less satisfactory and is now but rarely resorted to.
+
+It is said that the first regular pool organized in the United States
+was the Chicago-Omaha pool, formed in 1870 by the Chicago, Burlington
+and Quincy, the Chicago, Rock Island and Pacific, and the Chicago and
+Northwestern railroad companies, then the only three lines connecting
+the cities of Chicago and Omaha. This pool, which was subsequently
+joined by other lines, made an equal division of the traffic, and was so
+well organized that it lasted fourteen years "without a break." The
+abuses practiced by the companies belonging to this pool were one of the
+chief causes of the Granger movement in Iowa. It is indeed doubtful
+whether any other railroad combination ever maintained itself longer or
+pursued its ends with greater pertinacity than this pool. Another pool
+of national notoriety was the Southern Railway and Steamship
+Association, which was organized, though at first under a different
+name, in the State of Georgia, in 1875. It was probably the first money
+pool formed in the United States. Each member was awarded a certain
+percentage of the total business between the various competitive points
+along its line. If a company carried more than its share, it was
+compelled to turn over the receipts from such additional traffic to its
+rivals, which paid it a nominal price for carriage. This allowance was
+always made so low that there was no inducement for any company to seek
+to carry more than its allotment. The pool had its own executive,
+legislative and judicial departments, and it enforced its decrees with
+an iron hand. It maintained a strong centralized government, and
+rebellious members had but little mercy to expect from it. It provided
+that if any officer or representative of any company should authorize or
+promise, directly or indirectly, any variation from established tariffs,
+he should be discharged from the service, with the reason stated. The
+strong sentiment which we to-day find in the South in favor of State
+control of railways is the direct result of the many evils which this
+powerful pool introduced into the railway business of that section of
+the country.
+
+Other pools followed, as the Southwestern Association, organized in
+1876, to control the traffic between Chicago and St. Louis, and the
+Minnesota and the Colorado pools. Within a few years railroad pools
+covered the whole country. All pursued the same object, viz., the
+control of rates at competitive points, which enabled the companies to
+maintain excessive schedule rates at local points.
+
+Between 1875 and 1880 the pooling system rapidly spread all over the
+Union. Wherever competition promised to regulate rates by the
+application of the law of supply and demand, the pool was resorted to as
+the never-failing remedy to preserve dividends on watered stock. As long
+as lake and canal navigation controlled the carriage of heavy freights
+between Chicago and New York by means of rates so low that railroads
+found it, or at least thought it, impossible to compete with them in the
+transportation of agricultural products during the greater part of the
+year, railroad pools between Chicago and New York could not be
+successfully maintained. In 1873 the railroads transported only about 30
+per cent. of this kind of freight from the West to Eastern ports.
+
+Owing, however, to the rapid decrease of the cost of transportation,
+railroad companies from this time on were enabled to encroach rapidly
+upon the business of water routes, so that in 1876 they carried over 52
+per cent. of the entire volume of agricultural products that were moved
+from the West to the East. As long as these products were carried almost
+entirely by water from lake ports to the East, New York, as the terminus
+of this route, enjoyed decided advantages over the other Atlantic ports.
+When, however, the railroads commenced to successfully compete with the
+water routes in the transportation of these commodities, a considerable
+share of this business was diverted to Boston, Philadelphia and
+Baltimore, and it soon became apparent that these ports, in some
+respects, enjoyed advantages for the export trade not possessed by New
+York. It was, therefore, not surprising that the business men of these
+cities, together with the railroads terminating in them, made every
+effort to come in for their share of the traffic which was drifting away
+from New York.
+
+Competition between the New York Central and the Pennsylvania Railroad
+for the Western through traffic dated back as far as 1869, the year in
+which both systems secured, through consolidation with connecting roads,
+through lines to Chicago. Rates fell in one year from $1.80 to 25 cents
+per hundred pounds. After a time the managers of the two companies met,
+and schedule rates were restored. Rates were, at least outwardly,
+maintained until the Baltimore and Ohio and the Erie system entered
+Chicago, and the Grand Trunk made connections with Milwaukee and other
+lake points, and thus disturbed through rates. All efforts to maintain
+the level of the old tariffs, through agreements, proved now fruitless,
+for both the Baltimore and Ohio and the Grand Trunk found it to their
+interest to pursue independent policies, and refused to have their hands
+tied by an agreement with roads that were interested in continuing, if
+possible, the commercial supremacy of New York.
+
+Rate skirmishing finally developed into open war in 1876, when
+fourth-class rates between Chicago and the Atlantic fell as low as 16
+cents per hundred. This rate, however, was eclipsed in July, 1878, when
+wheat was carried from Chicago to New York for 10 cents per hundred. The
+existing conditions left no doubt in the minds of those familiar with
+railroad tactics that this war was simply the precursor of a gigantic
+combination between the trunk lines. An unsuccessful attempt to effect
+such a combination had been made before. In 1874 the managers of the
+Erie, Pennsylvania and New York Central met at Saratoga for the purpose
+of devising means for the suppression of competition in the trunk line
+traffic. This meeting, however, known in railroad history as the
+Saratoga Conference, was the first step toward the organization of a
+trunk line pool, although the conference did not lead to any immediate
+results, the Grand Trunk and the Baltimore and Ohio refusing to be bound
+by its decision. It was certainly no easy task to devise means to bring
+about an effective and permanent combination among five large through
+lines with greatly conflicting interests.
+
+So far pools had never failed to suppress competition wherever they were
+organized. But in the past pools had, almost without exception, only
+attempted to control rates between common points. They accomplished
+their object by a division of the entire traffic or earnings from the
+traffic between common points. The schedule rates remained the same for
+all. But the traffic of the trunk lines brought a new factor into the
+problem. Here the rival routes did not terminate at the same points. It
+was contended by the Baltimore and Ohio that, whatever might be the
+facilities of Baltimore for exporting agricultural products, that port
+was at a disadvantage as compared with the more northern ports on
+account of the longer voyage and higher ocean rates to Liverpool, and
+that it could therefore not enter into a combination with the roads
+leading directly to New York and Philadelphia upon equal terms, since
+this would divert its legitimate share of the through business to those
+ports. The Grand Trunk, on the other hand, refused to enter the
+combination because, not having any direct Chicago connection, it feared
+that the enforcement of pool rates would materially diminish the volume
+of its business. As yet the railroad wiseacres did not seem to be equal
+to the emergency, and matters drifted along in the old channel. The rate
+war of 1876 gradually brought about an understanding among the
+belligerents. The competing roads accepted the terms offered, and with
+this a new principle entered into the science of pooling. Rates between
+Chicago and Baltimore were fixed somewhat lower than those between
+Chicago and Philadelphia, and in turn Philadelphia was allowed a small
+advantage over New York. This concession was made to equalize the
+difference in the ocean rates of the competing ports. These equalizing
+or--to use railroad nomenclature--differential rates were subsequently
+granted by pools to such roads as, on account of some disadvantage,
+could not compete with other members of the pool on equal terms. Thus
+the longest route was usually permitted to charge the lowest, and the
+shortest route the highest rate. This practice is in conformity with the
+principle of charging whatever the traffic will bear, but it is
+certainly devoid of every consideration of justice and equity. If the
+longer line can afford to carry freight at rates lower than schedule
+prices, no further proof is needed under ordinary circumstances that the
+regular schedule rates of the shorter line are exorbitant.
+
+The concession of differential rates settled, at least temporarily, the
+difficulties that had arisen out of the east-bound traffic of the trunk
+lines. This arrangement did not, however, in any way affect the traffic
+moving in the opposite direction. The volume of west-bound freight is
+very much larger at New York than at any other of the Atlantic ports. In
+order to get its share of the business, each trunk line maintained an
+office in New York. These offices eagerly solicited business for their
+respective roads, and the freights which they received for
+transportation to the West would be forwarded either directly or by a
+circuitous route; but, the longer the route, the lower as a rule was the
+compensation asked for the service. Under these circumstances
+competition was brisk, and the profits realized were far from satisfying
+the cupidity of the competing lines. It was apparent to their managers
+that the competition in the west-bound traffic was similar to that
+formerly existing between Chicago and Mississippi and Missouri River
+points, which had promptly yielded to pools. The temporary adjustment of
+the more perplexing questions which had arisen out of the east-bound
+traffic now paved the way for a pooling arrangement for the west-bound
+freight. The Southern Pool, under the management of Albert Fink, had
+long attracted the attention of the trunk line managers. Its system of
+dividing the traffic, of reporting to a central office and of hearing
+and deciding complaints had enabled it to exert an almost absolute
+control over its members, to compel them to make honest returns and to
+prevent rupture and rebellion. It was believed that a pool of the trunk
+lines could not be effective or permanent unless organized upon the
+Southern basis and presided over by a trunk expert. Accordingly, when in
+1877 an agreement for the pooling of the west-bound traffic was reached
+by the trunk lines, Mr. Fink was tendered the position of pool
+commissioner. Under the agreement reached the total tonnage of the
+west-bound business was divided in such a way that the Erie and New York
+Central roads each received 33 per cent., the Pennsylvania 25 per cent.,
+and the Baltimore and Ohio 9 per cent. of it. If any road received more
+freight than was allotted to it by the pool, it delivered such surplus
+to the pool, or rather to such a road as the pool commissioner
+designated as not having received its allotment. The success of this
+pool from a railroad point of view made the trunk lines anxious to
+organize a similar pool for the whole east-bound traffic. It was
+proposed to control by such a combination the rates on all the
+east-bound traffic of the Northwest, by making Chicago the pooling
+center, fixing for it a schedule of rates and making the rates of all
+the railroad centers in the West and Northwest dependent upon it. The
+combination was to comprise more than forty companies, controlling over
+25,000 miles of road. The scheme was tried for three months in 1878,
+but proved a failure, owing to the fact that nearly all of the many
+diverging interests sought their own advantage. The Eastern and Western
+trunk line pools were, through the efforts of their commissioner,
+successfully maintained, though even their harmony was occasionally
+marred by a short war precipitated by such members as would think
+themselves entitled to larger shares of the spoils. But a readjustment
+would invariably follow, and the expenditures of the war would be taxed
+up to the public.
+
+After the failure of the gigantic Western pool which had been organized
+under the protectorate of the trunk lines, the companies which had
+composed it formed such local combinations as their individual interests
+dictated. It is doubtful whether during the five years immediately
+preceding the passage of the Interstate Commerce Law there was any
+junction of two or more roads in the United States which, except during
+the period of an occasional railroad war, had any competition in the
+transportation business. As has been shown before, discriminations
+without number were practiced between places and persons; goods were not
+unfrequently carried at a loss; but the general public was, as a rule,
+compelled to pay what the traffic would bear, or rather what the pooling
+roads thought it could bear.
+
+It is claimed by railroad managers that pools are the only effective
+contrivances for checking ruinous competition among railroad carriers,
+and that they are therefore justifiable as a means of self-protection.
+This might perhaps be a valid argument if any attack were made upon the
+railroads which encroached upon their rights or endangered their
+existence, but if railroad companies are disposed to cut each other's
+throats, the public should not be made to pay the penalty of their
+depravity. As long as schedule rates are unreasonably high, railroads
+will be tempted to offer to certain shippers low secret rates; but as
+soon as all rates have been leveled down to a point where they will
+yield only a fair profit with good management, the inducement to cut
+below them is largely taken away. Pools, far from being a remedy for the
+evils of excessive competition, will in the end only aggravate the
+disease which they attempt to cure. The high rates which they maintain
+attract the attention of speculative men and lead to the construction of
+rival roads. While the traffic remains the same, the proceeds must then
+be divided among a larger number of carriers. Thus the construction of
+unnecessary roads, which has often been the subject of bitter complaint
+on the part of the older roads, is chargeable directly to their wrong
+policies.
+
+One of the principal objections to industrial and commercial
+combinations is that they paralyze trade. Competition stimulates every
+competitor to offer the best at the lowest possible price. This
+increases the demand for the commodity, and both the producer and the
+consumer are in the end benefited by the operation of this law. On the
+other hand, combinations, or, what is the same, monopolies, increase the
+price, remove the stimulus to excellence, and reduce the demand, and
+thereby affect injuriously the producer and consumer alike. Competition
+in the railway service would mean an improved service and lower rates
+and would speedily be followed by a large increase of business.
+
+Another serious objection to pooling is that it invariably leads to
+periodic wars, which unsettle all business, and but too often introduce
+into legitimate trade the element of chance. These wars give, moreover,
+to designing railroad managers an opportunity to enrich themselves by
+stock speculations at the expense of the stockholders, whose interests
+they use as a football for the accomplishment of their selfish ends.
+When rates are reduced to a right level, and are properly adjusted, and
+are equal to all, even railroad men will find no necessity for pools.
+The desire for such a combination is a desire to impose upon somebody,
+or some locality, or the public at large. The proposition to give legal
+sanction to pools, made by railroad managers, is preposterous; and even
+a pool to be approved by the Interstate Commerce Commission is out of
+the question, as it would cause the railroads to increase their efforts
+to control the appointment of the commission. However honest it may look
+on its face, however plausible may be the arguments produced in its
+favor, it should not be permitted.
+
+There is no doubt but under the proposed pooling arrangement railroad
+interests, watered stocks and all, would be cared for, but there is
+every reason to believe that public interests would not be properly
+protected.
+
+So long as servility by a member of the Interstate Commerce Commission
+to railroad influences serves as a stepping-stone to a high position in
+the employ of railroad combinations, with a salary of three or four
+times that of an Interstate Commerce Commissioner, so long will it be
+unsafe to permit such powers to be vested in that commission.
+
+Pooling by railroads should not be permitted, if permitted at all, so
+long as representatives of speculative interests have a voice in their
+management, and not until all fictitious valuations are altogether
+banished from the equation, and until the roads are brought under
+complete Government control. There is no more necessity for pools among
+railroads than there is among merchants and manufacturers. The capital
+actually invested in railroads is now receiving larger returns than
+investments in other lines of business, and their incomes are increasing
+from year to year.
+
+Every pooling combination of railroad companies for the maintenance of
+rates is a violation of common law. From time immemorial the law has
+stamped as a conspiracy any agreement between individuals to support
+each other in an undertaking to injure public trade. The Interstate
+Commerce Act reasserts this principle, and provides penalties for the
+maintenance of such combinations among railroad companies. If, in spite
+of this act, the evil still exists, it is no argument against the merits
+of the law, but it does prove that the machinery provided for its
+enforcement is insufficient. That railroad companies can be made to
+respect the law there can be no doubt; but much cannot be accomplished
+unless the people fully realize the magnitude of the undertaking and
+vest the Government with sufficient power to cope with an organized
+force whose total annual revenue is nearly three times as large as that
+of the United States. The discussion of the question how this may be
+done will be reserved for a subsequent chapter.
+
+
+
+
+CHAPTER VIII.
+
+RAILROADS IN POLITICS.
+
+
+The question might be asked how the railroad companies for many years in
+succession have been able to prevent State control and pursue a policy
+so detrimental to the best interests of the public. One might think that
+in a republic where the people are the source of all power, and where
+all officers are directly or indirectly selected by the people to carry
+out their wishes and to administer the government in their interest, a
+coterie of men bent on pecuniary gain would not be permitted to subvert
+those principles of the common law and public economy which from time
+immemorial have been the recognized anchors of the liberty of the
+Anglo-Saxon race.
+
+The statement that under a free government it is possible for a few to
+suppress the many might almost sound absurd to a monarchist, and yet is
+it true that for the past twenty-five years the public affairs of this
+country have been unduly controlled by a few hundred railroad managers.
+
+To perpetuate without molestation their unjust practices and prevent any
+approach to an assertion of the principle of State control of railroad
+transportation, railroad managers have secured, wherever possible, the
+co-operation of public officials, and, in fact, of every semi-public and
+private agency capable of affecting public opinion. Their great wealth
+and power has made it possible for them to influence to a greater or
+less extent every department of the National and State governments.
+Their influence extends from the township assessor's office to the
+national capital, from the publisher of the small cross-roads paper to
+the editorial staff of the metropolitan daily. It is felt in every
+caucus, in every nominating convention and at every election. Typical
+railroad men draw no party lines, advocate no principles, and take
+little interest in any but their own cause; they are, as Mr. Gould
+expressed it, Democrats in Democratic and Republicans in Republican
+districts. The large means at the command of railroad companies, their
+favors, their vast armies of employes and attorneys and their almost
+equally large force of special retainers are freely employed to carry
+into execution their political designs, and the standard of ethics
+recognized by railroad managers in these exploits is an exceedingly low
+one.
+
+It is a settled principle of these men that, if they can prevent it, no
+person not known to be friendly to their cause must be placed into any
+public office where he might have an opportunity to aid or injure their
+interests. The records of the various candidates of the principal
+parties for city, county, State and national offices are therefore
+carefully canvassed previous to the primaries, the most acceptable among
+the candidates of each party are selected as the railroad candidates,
+and the local representatives of the railroad interest in each party are
+instructed to use all means in their power to secure their nomination.
+
+If none but candidates who are servile to the railroad interest are
+nominated by the principal parties, the election is permitted to take
+its own course, for, whichever side is successful, the railroad interest
+is safe. If, however, there is reason to believe that a nominee is not
+as devoted to their interests as the nominee of an opposing party, the
+latter is sure to receive at the polls whatever support railroad
+influence can give him. That a public official elected by the grace of a
+railroad manager is but too apt to become a tool in his hands needs no
+proof. Both gratitude and fear tie the average politician to the
+powerful forces which can control his political destiny.
+
+The railroad manager, on the other hand, always kindly remembers his
+officeholding friends as long as they are loyal and in a position to
+serve him. Before the enactment of the Interstate Commerce Act there was
+every year a wholesale distribution of railroad passes among public
+officeholders and other prominent politicians. The pass was the token of
+the continued good will of the railroad dignitaries as the withholding
+of the "courtesy" was a certain indication of their displeasure. If the
+officeholder had personal or political friends whom he desired to have
+recognized, an intimation of this desire was generally sufficient to
+have the pass privilege even extended to them. And yet these favors were
+not bestowed indiscriminately. Thus the pass credit of a county official
+was more limited than that of an officer of the State, and the latter
+class were again rated according to their influence and rank.
+Furthermore, while annual passes were thus freely distributed among one
+class of officials, others could obtain them only by making special
+application for them. Members of the legislature would not unfrequently
+receive their supply of railroad passes before their certificates of
+election were issued, but legislative committee clerks and employes in
+the various departments of the State government were required to satisfy
+the railroad authorities that they were in a position to aid or to
+injure the railroad cause before their names were placed on the list of
+persons "entitled to the courtesy".
+
+Of course the judiciary, as a coördinate branch of the government, could
+not well be slighted. Indeed, previous to the enactment of the
+Interstate Commerce Law, a judge would have regarded it an affront if he
+had not been furnished with passes by the various companies operating
+railroads in his district. It appears that the law has not entirely
+corrected this abuse, for only about two years ago the Chicago _News_
+made the discovery that nearly every judge in the city of Chicago
+traveled on passes. It is strange to what extent the pass often debased
+the judiciary. It was not unfrequent for judges to solicit passes for
+family and friends, and instances might be named where they demanded
+them in a wholesale way.
+
+The impudent demands were usually honored by the railroad authorities,
+who reasoned that they could better afford to bear the shameless
+effrontery of the ermined extortioner than the damage which might result
+to them from adverse decisions.
+
+A railroad pass, when presented by a public official or even by any
+public man, is now, in nine cases out of ten, a certificate of dishonor
+and a token of servility, and is so recognized by railroad officials.
+What equivalent railroad companies expect for the pass "courtesy" is
+well illustrated by the experience of an Iowa judge. This gentleman, who
+had been on the bench for years and always had been favored with passes
+by the various companies operating lines in his district, at the
+beginning of a new year failed to receive the customary pass from a
+leading road. Meeting its chief attorney, he took occasion to call his
+attention to what he supposed to have been an oversight on the part of
+the officer charged with the distribution of the passes. The attorney
+seemed to take in the situation at once. "Judge," said he, "did you not
+recently decide an important case against our company?" "And was my
+decision," replied the Judge, "not in accordance with law as well as
+with justice?" The attorney did not answer this question, but in the
+course of a few days the Judge received the desired pass. A few months
+later it again became the Judge's unpleasant duty to render a decision
+adverse to the same company. This second act of judicial independence
+was not forgiven, and the next time he presented his pass it was
+unceremoniously taken up by the conductor in the presence of a large
+number of passengers, and he was required to pay his fare.
+
+Employes, while engaged in the legitimate business of their companies,
+should, of course, be transported free, but a great many persons receive
+passes and are classed as employes who never render any legitimate
+service for the company giving the pass, and by far the greater portion
+of passes are not granted from pure motives, but are given for the
+purpose of corrupting their holders. It arouses antagonism, because as a
+rule passes are given to people who are fully able to pay their fare and
+are denied to those who are least able to pay it. The passenger who pays
+his fare and then finds that a large number of his fellow-passengers
+travel on passes realizes that he is compelled to pay a higher fare that
+others may be carried free. He feels that he is unjustly discriminated
+against, and wonders why such discrimination is tolerated in a country
+whose institutions are founded upon the very principle of equal rights
+to all. A good anecdote is related which well illustrates this feeling.
+A farmer and a lawyer occupied the same seat in a railroad car. When the
+conductor came the farmer presented his ticket, and the lawyer a pass.
+The farmer's features did not conceal his disgust when he discovered
+that his seat-mate was a deadhead. The lawyer, trying to assuage the
+indignation of the observing granger, said to him: "My friend, you
+travel very cheaply on this road." "I think so myself," replied the
+farmer, "considering the fact that I have to pay fare for both of us."
+
+But what must be a passenger's surprise when he finds that the judge who
+to-morrow is to preside at the trial of a case in which the railroad
+company is a party to-day accepts free transportation at its hands. A
+judge may scorn the charge that he is influenced by a railroad pass, but
+his fellow-passenger who has paid his fare cannot understand why the
+railroad company should give passes to one class of people and refuse
+them to others, if it does not consider one more than others to be in a
+position to reciprocate its favors.
+
+In their endeavor to win over the courts, however, the railroads do by
+no means confine their attention to the judges. They are well aware that
+a biased jury is often more useful to them than a biased judge, and
+efforts are made by them to contaminate juries, or at least prejudice
+them in their favor. A prominent Iowa attorney, the legal and political
+factotum of a large railroad corporation, for years made it a practice
+to supply jurors with passes. In one instance, when it was shown in
+court by the opposing counsel that all jurors in the case on trial had
+accepted passes from the railroad company which was the defendant in the
+case, the judge found himself compelled to discharge the whole jury. The
+argument made by this counsel, in support of his motion that the jury be
+discharged, was certainly to the point. He showed that in order to have
+an equal chance for justice it would be necessary for his client to give
+each juror at least fifty dollars to offset the bribes given to them by
+the railroad company.
+
+That it has always been the policy of railroad managers to propitiate
+the judiciary is a fact too generally known among public men to admit of
+contradiction. If a judge owes his nomination or election to railroad
+influences, railroad managers feel that they have in this a guarantee of
+loyalty. If, however, he acquires the ermine in spite of railroad
+opposition, every effort is made to conciliate the new dispenser of the
+laws. The bestowal of unusual favors, flattery, simulated friendship and
+a thousand other strategies are brought into requisition to capture the
+wayward jurist. If he proves docile, if his decisions improve with time
+and show a gradual appreciation of the particular sacredness of
+corporate rights, the railroad manager will even forgive him his former
+heresy and rally to his support in the future. But if he asserts his
+convictions, if he attempts to discharge the duties of his responsible
+office without fear or favor, if he can neither be corrupted nor
+intimidated, all available railroad forces will be marshaled against him
+in the future.
+
+It cannot be surprising that, under such circumstances, there always has
+been a tendency among judges to be conservative and to give the
+railroads the benefit of the doubt in their decisions. Judges well know
+that railroad companies appeal almost invariably when the decision of a
+lower court is adverse to them, but private citizens only in exceptional
+cases. They also know that railroads never forgive adverse decisions,
+whether right or wrong, while private citizens, as a rule, accept the
+decision of the court as justice, and do not hold the judge responsible
+for its being adverse to them. Our judiciary is, and probably always has
+been, as incorruptible as the judiciary of any country in the world; but
+our judges are made of no better material than our legislative or
+executive officers. Weak men, in all stations, are influenced by wealth
+and power, and weak judges can always be found who will be led or forced
+from the path of duty so long as corrupt men are permitted to manage
+railroads and to remain in possession of a power only inferior to that
+of an autocratic ruler.
+
+The influence which railroads exert extends from the lowest to the
+highest court of the land. Federal courts have more than once been
+successfully appealed to to give legal sanction to the perpetuation of
+gigantic frauds, or to frustrate attempts made by the individual States
+to place restrictions upon roads operated within their respective
+borders. Twenty years ago a Federal judge aided Mr. Gould in his
+notorious Erie transactions, and in more recent years a Federal circuit
+judge in the West threw the property of the Wabash Railroad Company,
+upon the application of its own directors, into the hands of receivers
+selected by its former managers without the knowledge or notice of its
+creditors, and issued orders for the management of the property which
+greatly discriminated in favor of certain bondholders and were so
+manifestly unjust that Judge Gresham, before whom the case was
+subsequently brought, did not hesitate to say to them that "the boldness
+of this scheme to aid the purchasing committee, by denying equal right
+to all bondholders secured by the same mortgages, is equaled only by its
+injustice." At the same time one of the counsel for the dissenting
+bondholders characterized these strange orders as "the highwayman's
+clutch on our throat, the robber's demand, 'Your money or your life.'"
+
+The decision which the Supreme Court of the United States rendered in
+the Granger cases in 1876, affirming the right of a State to control
+railroad charges for the transportation of passengers and freight wholly
+within the State, was a serious disappointment to railroad men, for it
+was the first step toward wresting from them the power to arbitrarily
+control the commerce of the country. Ever since that time it has been
+their determined purpose to bring about, if possible, a reconstruction
+of the Federal Supreme Court, in order to secure a reversal or
+modification of the Granger decision. In the case of Peik vs. Chicago,
+94th U. S., 176, the Supreme Court laid down the following broad
+principle of law: "Where property has been clothed with the public
+interest, the legislature may fix a limit to that which shall in law be
+reasonable for its use. This limit binds the courts as well as the
+people. If it has been improperly fixed, the legislature, not the
+courts, must be appealed to for a change." In one of the Granger cases
+the same court used the following language: "We know that this is a
+power which may be abused, but that is no argument against its
+existence. For protection against abuses by legislatures, the people
+must resort to the polls."
+
+Fourteen years later, in the case of C. M. & St. P. R. Co. vs. Minn.,
+decided in October, 1890, the same court rendered a decision so
+indefinite that the lawyers differed much in their opinions as to its
+meaning, and it appears that the members of the court who made the
+decision also differed in their opinions as to the meaning of the
+decision; for Justice Bradley said in his dissenting opinion, in which
+Justice Gray and Justice Lamar concurred, that the decision practically
+overruled Munn vs. Illinois; but the same court, in a case entitled Budd
+vs. New York, submitted in October, 1891, and decision rendered February
+29, 1892, and opinion delivered by Justice Blatchford, in referring to
+the Minnesota case, after quoting the above statement from Justice
+Bradley, said: "But the opinion of the court did not say so, nor did it
+refer to Munn vs. Illinois, and we are of opinion that the decision in
+that case is, as will be hereafter shown, quite distinguishable from the
+present case."
+
+It is thus apparent that this court has adhered to the decision in Munn
+vs. Illinois, and to the doctrines announced in the opinion of the court
+in that case, and those doctrines have since been repeatedly enforced in
+the decisions of the courts of the States.
+
+Judge Brewer, whose zeal for the defense of corporate interests seems to
+amount almost to a craze, dissented. He said: "I dissent from the
+opinion and judgment in these cases. The main proposition upon which
+they rest is, in my judgment, radically unsound. It is the doctrine of
+Munn vs. Illinois reaffirmed. The paternal theory of government is to me
+odious. Justice Field and Justice Brown concur with me in this dissent."
+
+It should be remembered that Justices Brewer and Brown were both
+appointed to the Supreme bench by President Harrison.
+
+We have every reason to believe that, unless the people of the United
+States are on the alert, as railroad managers always are, there is, with
+further changes in the personnel of the court, danger of its deviating
+from the sound principles of law laid down in its decision in the
+Granger cases. Railroad attorneys have repeatedly been raised to seats
+in the highest tribunal in the land. So great is the power of the
+railroad interests, and so persistent are they in their demands, that,
+unless a strong public sentiment records its protest, their candidates
+for appointive offices are but too apt to be successful. Representatives
+of the railroads sit in the Congress of the United States, others are
+members of the national campaign committees of both of the great
+political parties, others control the politics of the States, and their
+influence reaches to the White House, whether its occupant is aware of
+it or not. Other interests in the past have succeeded in securing the
+appointment of biased men as judges of the Supreme Court who afterwards
+could always be relied upon to render decisions in their favor. Will the
+people profit by their experience, or will they be indifferent to the
+danger which surrounds them, until nothing short of a political upheaval
+can restore to them these rights of sovereignty, of which they have so
+insidiously been deprived?
+
+Human gratitude is such that even high-minded men who, through the
+influence of the railroad interest, have been placed upon the Federal
+bench, find it impossible to divest themselves of all bias when called
+upon to decide a case in which their benefactors are interested. Such is
+the human mind that, when clouded by prejudice, it will forever be blind
+to its own fault. Even the members of so high a tribunal as the
+Electoral Commission which decided the presidential contest between
+Hayes and Tilden could not divest themselves of their prejudices; each
+one, Republican or Democrat, voted for the candidate of the party with
+which he had cast his political fortune.
+
+Last January, in an address delivered before the New York State Bar
+Association at Albany, Mr. Justice Brewer reminded his hearers that the
+rights of the railroads "stand as secure in the eye and in the custody
+of the law as the purposes of justice in the thought of God." And
+further on they were told that "there are to-day $11,000,000,000
+invested in railroad property, whose owners in this country number less
+than two million persons. Can it be that whether that immense sum shall
+earn a dollar or bring the slightest recompense to those who have
+invested perhaps their all in that business, and are thus aiding in the
+development of the country, depends wholly upon the whim and greed of
+that great majority of sixty millions who do not own a dollar? It may be
+said that that majority will not be so foolish, selfish and cruel as to
+strip that property of its earning capacity. I say that so long as
+constitutional guarantees lift on American soil their buttresses and
+bulwarks against wrong, and so long as the American judiciary breathes
+the free air of courage, it cannot."
+
+Unfortunately judicial buttresses and bulwarks have not always been
+lifted against wrong. Judge Taney, like Brewer, supposed that it was
+left at his time for his court to preserve the peace and provide for the
+safety of the nation; but history has shown that we cannot depend upon
+that high tribunal for safety when it is controlled by weak or
+inefficient men.
+
+When we consider what "that great majority" has done for this country in
+the past, and is doing for it at the present time, and especially when
+we contrast its sense of justice and right with the weakness and
+inability of some of its public servants, does it not seem to be a
+little presumptuous for them to assume that "the danger is from the
+multitudes--the majority, with whom is the power," and that, were it not
+for their superior wisdom and patriotic action, this great government of
+the people, by the people and for the people would be a failure?
+
+Mr. Lincoln never feared "the whim and greed" of "that great majority,"
+but he had at all times implicit confidence in the great mass of the
+people, and they in return had full confidence that no temptation of
+wealth or power was sufficient to seduce his integrity.
+
+We cannot dismiss this subject without referring to a stratagem which
+railroads have in the past repeatedly resorted to for the purpose of
+removing from the bench judges of independent minds whom they found it
+impossible to control. This stratagem consists of a well-disguised
+bribe, by which a Federal judge is changed into a railroad attorney with
+a princely salary. The railroad thus gets rid of an undesirable judge
+and gains a desirable solicitor at a price at which they could well have
+afforded to pension the judge.
+
+The following is a copy of a broker's circular letter sent to prominent
+bankers of Iowa, and shows that even the Clerk of the United States
+Court is not overlooked:
+
+      "----, June 30th, 1892.
+
+      "Mr. ----,
+
+      "We offer, subject to sale at par and interest, note $2,500.
+      Date, July 5th, 1892. Time, six months; rate, 6 per cent.
+      Payable where desired. Maker, ---- Endorser, Judge ---- Mr.
+      ----, the maker, is clerk of the United States Circuit Court
+      at ---- Judge ---- the well known attorney of the ---- and
+      ---- Railway Co., of ----, stated to us to be worth $150,000
+      to $200,000. Can you use it?"
+
+While railroad managers rely upon servile courts as a last resort to
+defeat the will of the sovereign people, they are far from losing sight
+of the importance of controlling the legislative branch of the
+government. By preventing what they are pleased to call unfriendly
+legislation they are more likely to prevent friction with public
+opinion, and they avoid at the same time the risk of permanently
+prejudicing their cause by an adverse opinion upon a constitutional
+question which they may find it necessary to raise in order to nullify a
+legislative act. There are three distinct means employed by them to
+control legislative action. First, the election to legislative offices
+of men who are, for some personal reason, adherents to the railroad
+cause. Second, the delusion, or even corruption, of weak or unscrupulous
+members of legislative bodies. Third, the employment of professional and
+incidental lobbyists and the subsidizing of newspapers, or their
+representatives, for the purpose of influencing members of legislative
+bodies and their constituencies.
+
+There are probably in every legislative body a number of members who are
+in some way or other connected with railroad corporations. No doubt, a
+majority of these are personally irreproachable and even so high-minded
+as to always postpone private for public interest; yet there are also
+those whose political advancement was brought about by railroad managers
+for the very purpose of having in the legislative body servile members
+who could always be relied upon to serve their corporate masters.
+Nevertheless, were railroad interests restricted to the votes of these
+men for their support, the public would probably have no cause for alarm
+on account of the presence of railroad representatives in legislative
+bodies, but, as many other interests seek favorable legislation,
+railroad men are often enabled to gain support for their cause by a
+corrupt bargain for votes, and it is thus possible for them to double,
+triple, and even quadruple, their original strength, by a policy of
+reciprocity.
+
+As in Congress and State legislatures, so these representatives of the
+railroads may be found in our city councils. The leaders of the
+railroads in Congress and in the legislatures of the various States
+usually rely upon discretion for obtaining their end, but railroad
+aldermen with but few exceptions seek to demonstrate their loyalty to
+the cause to which they are committed by a zealous advocacy of extreme
+measures, and will not unfrequently even gain their end through the most
+unscrupulous combinations. If their votes, together with such support as
+they obtain by making trades, are not sufficient to carry out or defeat
+a measure which the railroad interests may favor or oppose, even more
+questionable means are employed to gain a sufficient number of votes to
+command a majority.
+
+Outright bribery is probably the means least often employed by
+corporations to carry their measures. While it may be true that the vote
+of every weak and unscrupulous legislator is a subject of barter, money
+is not often the compensation for which it is obtained. It is the policy
+of the political corruption committees of corporations to ascertain the
+weakness and wants of every man whose services they are likely to need,
+and to attack him, if his surrender should be essential to their
+victory, at his weakest point. Men with political ambition are
+encouraged to aspire to preferment and are assured of corporate support
+to bring it about. Briefless lawyers are promised corporate business or
+salaried attorneyships. Those in financial straits are accommodated with
+loans. Vain men are flattered and given newspaper notoriety. Others are
+given passes for their families and their friends. Shippers are given
+advantages in rates over their competitors; in fact, every legislator
+disposed to barter his vote away receives for it compensation which
+combines the maximum of desirability with the minimum of violence to his
+self-respect.
+
+Those who attempt to influence or control legislative bodies in behalf
+of interested parties are collectively called the lobby. As a rule, the
+lobby consists of prominent politicians likely to have influence with
+members of their own party; of men of good address and easy conscience,
+familiar alike with the subject under consideration and legislative
+procedure, and last, but not least, of confidential agents authorized
+and prepared to enter into secret negotiations with venal members. The
+lobby which represents the railroad companies at legislative sessions is
+usually the largest, the most sagacious and the most unscrupulous of
+all. Its work is systematic and thorough, its methods are unscrupulous
+and its resources great. Yet all the members of a legislative body
+cannot be bribed, either by money, or position, or favors. Some of them
+will not vote for any proposed measure unless they can be convinced that
+it is for the public welfare. These legislators, if their votes are
+needed, are turned over to the persuasive eloquence of those members of
+the lobby who, apparently, have come to the capital moved by a patriotic
+impulse to set erring legislators right on public questions. Their
+familiarity with public matters, their success in public life, their
+high standing in political circles, their apparent disinterestedness and
+their plausible arguments all combine to give them great influence over
+new and inexperienced members. In extreme cases influential constituents
+of doubtful members are sent for at the last moment to labor with their
+representatives, and to assure them that the sentiment of their
+districts is in favor of the measure advocated by the railroads.
+Telegrams pour in upon the unsuspecting members. Petitions in favor of
+the proposed measure are also hastily circulated among the more
+unsophisticated constituents of members sensitive to public opinion, and
+are then presented to them as an unmistakable indication of the popular
+will, although the total number of signers forms a very small percentage
+of the total number of voters of the districts in which these petitions
+were circulated. A common method employed by the railroad lobby in Iowa
+has been to arouse, by ingenious arguments, the prejudices of the people
+of one part of the State against those of another, or of one class
+against those of another class; for instance, the East against the West,
+or that portion of the State the least supplied with railroad facilities
+against that which is best supplied; or the river cities against the
+interior cities; or the country people against the city people; or the
+farmer against the merchant, and always artfully keeping in view the
+opportunity to utilize one side or the other in their own interest.
+
+Another powerful reinforcement of the railroad lobby is not unfrequently
+a subsidized press and its correspondents. The party organs at the
+capital are especially selected to defend as sound measures, either from
+a partisan or non-partisan standpoint, legislation of questionable
+propriety desired by the railroads. When such measures are advocated by
+party organs, partisan members, either from fear or prejudice, are apt
+to "fall into line," and then to rely upon these organs to defend their
+action. Editors, reporters and correspondents are even retained as
+active lobbyists and give the railroad managers' cause the benefit of
+their prestige. To such an extent has the abuse of the press been
+carried that a considerable number of its unworthy representatives look
+upon railroad subsidies as legitimate perquisites which they will exact
+through blackmailing and other means of compulsion if they are not
+offered. A case may be cited here to illustrate their mode of operation,
+as well as the ethics of railroad lobbies. During one of the sessions of
+the Iowa legislature a newspaper correspondent came in possession of
+some information which reflected severely on the railroad lobby. He made
+his information the subject of a spicy article and showed it to a
+friend who stood close to the gentleman chiefly implicated, with the
+remark that nothing but a hundred dollar bill would prevent the
+transmission of the article by the evening mail to the paper which he
+represented. Before sundown the stipulated price for the correspondent's
+silence was paid, and an enemy was turned into a friend.
+
+Professor Bryce says of the American lobby system: "All legislative
+bodies which control important pecuniary interests are as sure to have a
+lobby as an army to have its camp followers. Where the body is, there
+will the vultures be gathered together." To such an extent is the lobby
+abuse carried that some large corporations select their regular
+solicitors more for their qualifications as lobbyists than for their
+legal lore. It is a common remark among lawyers that a great company in
+Chicago pays a third-class lawyer, who has the reputation of being a
+first-class lobbyist, an extravagant salary and calls him general
+solicitor, while it relies upon other lawyers to attend to its important
+legal business. The readiness of members of the bar to serve wealthy
+corporations is fast bringing the legal profession of America into
+disrepute abroad. The author just quoted, in speaking of its moral
+standard, says: "But I am bound to add that some judicious American
+observers hold that the last thirty years have witnessed a certain
+decadence in the bar of the great cities. They say that the growth of
+enormously rich and powerful corporations, willing to pay vast sums for
+questionable services, has seduced the virtue of some counsel whose
+eminence makes their example important, and that in a few States the
+degradation of the bench has led to secret understandings between judges
+and counsel for the perversion of justice."
+
+There are, of course, able and honorable attorneys employed by railroad
+companies, but often railroad lawyers are selected more for their
+political influence, tact and ingenuity than for legal ability, and, as
+a rule, the political lawyer receives much better compensation for his
+services than does the lawyer who attends strictly to legitimate legal
+work.
+
+The danger from railroad corporations lies in their great wealth,
+controlled by so few persons, and the want of publicity in their
+business. Were they required to render accounts of their expenditures to
+the public, legislative corruption funds would soon be numbered with the
+defunct abuses of railroad corporations, and, with bribes wanting in the
+balance of legislative equivalents, the representatives of the people
+could be trusted to enact laws just alike to the corporations and the
+public, while asserting the right of the people to control the public
+highway and to make it subservient to the welfare of the many instead of
+the enrichment of the few. A wise law regulating lobbies exists in
+Massachusetts. Every lobbyist is required to register, as soon as he
+appears at the Capitol, to state in whose interest and in what capacity
+he attends the legislative session, to keep a faithful account of his
+expenses and to file a copy of the same with the Secretary of State.
+Were a similar law enacted and enforced by every State legislature, as
+well as by Congress, the power of railroad lobbies would be curtailed.
+
+Railroad managers never do things by halves. Well realizing that it is
+in the power of a fearless executive, by his veto, to render futile the
+achievements of a costly lobby and to injure or benefit their interests
+by pursuing an aggressive or conservative policy in the enforcement of
+the laws, they never fail to make their influence felt in the selection
+of a chief magistrate, either of the Nation or of an individual State.
+No delegate, with their permission, ever attends a national convention,
+Republican or Democratic, if he is not known to favor the selection of a
+man as the presidential candidate of his party whose conservatism in all
+matters pertaining to railroad interests is well established. At these
+conventions the railroad companies are always represented, and their
+representatives do not hesitate to inform the delegates that this or
+that candidate is not acceptable to their corporations and cannot
+receive their support at the polls. During the Chicago convention of
+1888 the statement was openly made that two of the Western candidates
+lost Eastern support because they were not acceptable to a prominent New
+York delegate who had come to Chicago in a threefold capacity--that of a
+delegate, a presidential possibility, and special representative of one
+of the most powerful railroad interests in the country. This same man
+appeared again last year at the Minneapolis convention as chief
+organizer of the forces of a leading candidate. His counterpart was in
+attendance at the Chicago convention looking after the same interests
+there.
+
+It is the boast of prominent railroad men that their influence elected
+President Garfield, and the statement has been made upon good authority
+that "not until a few days before the election did the Garfield managers
+feel secure," and that "when the secret history of that campaign comes
+to be written it will be seen that Jay Gould had more influence upon the
+election than Grant and Conkling." It cannot be said that railroad
+managers, as a class, have often openly supported a presidential
+candidate. This may be due to the fact that with the uncertainty which
+has for years attended national politics they deem it the part of
+discretion to pretend friendship for either party and then shout with
+the victor. In conformity with this policy, a well-known New York
+railroad millionaire has for years made large and secret contributions
+to the campaign funds of both political parties. He thereby places both
+parties under political obligations, and believes his interests safe,
+whichever turn the political wheel may take. After the contest he is
+usually the first to congratulate the successful candidate. In the
+national campaign of 1884 this railroad king completely outwitted a
+prominent Western politician and member of the Republican national
+campaign committee who has always prided himself on his political
+sagacity. This gentleman had taken it upon himself to enlist the rich
+and powerful New Yorker in the Republican cause, and to obtain from him,
+as a token of his sincerity, a large contribution to the Blaine campaign
+fund. He succeeded, at least so far as the contribution was concerned;
+but when the struggle was over and the opposition, in the exuberance of
+joy over their victory, told tales out of school, he was not a little
+chagrined to find that the managers of the Cleveland campaign had
+received from the astute railroad millionaire a campaign contribution
+twice as large as that which he had obtained from him. The diatribes
+which for weeks after the election filled the columns of his paper
+reflected in every line the injured pride of the outwitted general.
+
+Judging from the laxity with which the railroad laws have been enforced
+in a considerable number of States, their executive departments are as
+much under the influence of railroad managers as are the legislative
+departments of others. This cannot be surprising to those who know how
+often governors of States are nominated and elected through railroad
+influences, and what efforts are made by corporations to humor servile
+and to propitiate independent executives. The time is not far remote
+when nearly every delegate to a State convention had free transportation
+for the round trip. This transportation was furnished to delegates by
+railroad managers through their local attorneys, or through favored
+candidates and their confidants. It was only offered to those who were
+supposed to be friendly to candidates approved by the railroad managers;
+and as free passage was looked upon as the legitimate perquisite of a
+delegate, but few persons could be induced to attend a State convention
+and pay their fare. As a consequence, the railroad managers found it too
+often an easy matter to dictate the nomination of candidates.
+
+Since the adoption of the Interstate Commerce Law convention passes, as
+such, have largely disappeared; but many a prominent politician in going
+to and returning from political conventions travels as a railroad
+employe, though the only service which he renders to the railroad
+companies consists in manipulating conventions in their favor. If all
+the railroad candidates--and the companies usually take the precaution
+to support more than one candidate--are defeated in the convention of
+one party, and a railroad candidate is nominated by the other party, the
+latter is certain to receive at the polls every vote which railroad and
+allied corporate influence can command.
+
+One might suppose that an attempt would at least be made to hide from
+the general public the interference of such a power with the politics of
+a State; but railroad managers seem to rely for success as much upon
+intimidating political parties as upon gaining the good will of
+individual citizens. To influence party action, the boast has in recent
+years repeatedly and boldly been made in Iowa that 30,000 railroad
+employes would vote as a unit against any party or individual daring to
+legislate or otherwise take official action against their demands, and
+forgetting that, with the same means used in opposition to them, a few
+hundred thousand farmers and business men could be easily organized to
+oppose them. Unscrupulous employers often endeavor to control the votes
+of their employes. This is particularly true of railroad companies, and
+they use many ingenious plans to accomplish it. In the Northwest, and
+especially in Iowa, they have for several years organized their employes
+as a political force for the purpose of defeating such candidates for
+State offices as were known to favor State control of the transportation
+business. They have even paid the expenses of the organization, although
+they have made every effort to make it appear as if the movement was a
+voluntary one on the part of their employes. They are employing this
+method in Texas and other States at the present time, in opposition to
+the effort that is being made by the people to secure just and
+reasonable treatment from the railroads.
+
+That the chief executive of a State should be influenced in the
+discharge of his official duties by such favors as passes, the freedom
+of the dining- and sleeping-car, by the free use of a special car, or
+even a special train, one is loath to believe; yet it is a fact, and
+especially during political campaigns, that such favors are frequently
+offered to, and accepted by, the highest executive officers, and it is
+equally true that many of these officers often connive at the continued
+and defiant violations of law by railroad officials. While the men who
+manage large railroad interests do not always possess that wisdom which
+popular reverence attributes to them, they certainly possess great
+cunning, and expend much of their artfulness in efforts to win over
+scrupulous, and to render still more servile unscrupulous executives.
+The general railroad diplomate never omits to pay homage to the man in
+power, to flatter him, to impress him with the political influence of
+his company, to intimate plainly that, as it has been in the past, so it
+will be in the future its determined policy to reward its friends and to
+punish its enemies. If the executive proves intractable, if he can
+neither be flattered, nor coaxed, nor bribed into submission, he does
+not hesitate to resort to intimidation to accomplish his purpose. This
+is by no means a rare occurrence. There are few public men who, if
+determined to do their duty, have not been subjected to railroad insult
+and intimidation. The author may be permitted to give an instance from
+his personal experience. Soon after his inauguration as Governor of Iowa
+a general officer of one of the oldest and strongest Western railroads
+called at his office and importuned him with unreasonable requests. When
+he found that he had utterly failed to impress the author with his
+arguments, he left abruptly, with the curt remark that these matters
+could be settled on election day, and he emphasized his statement by
+slamming the door behind him.
+
+A servile railroad press has always been ready to misrepresent and
+malign executive officers who have refused to acknowledge any higher
+authority than the law, the expressed public will and their own
+conception of duty. This abuse has even been carried so far that the
+editorial columns of leading dailies have been prostituted by the
+insertion of malicious tirades written by railroad managers and railroad
+attorneys; and the fact that public opinion has not been more seriously
+influenced by these venal sheets must be solely attributed to the good
+judgment and safe instinct of the masses of the people.
+
+However persistently railway organs deny it, it is a matter of general
+notoriety that railway officials take an active part in political
+campaigns. Hundreds of communications might be produced to show their
+work in Iowa, but the following two letters, written by a prominent
+railroad manager to an associate, will suffice for the purpose. It will
+be noticed that one was written before and the other after election.
+Comments upon their contents are unnecessary:
+
+      "----, Iowa, Nov. 2nd, 1888.
+
+      "DEAR SIR: I have just discovered this P. M. that the
+      Central Committee have sent electrotypes to all the
+      printing offices in the State of the State ticket, with
+      the names of the Railway Commissioners and Supreme Judge
+      in so small a space as to make it very difficult, if not
+      impossible, to write in the names. I am having slips made
+      with Commissioners' names and Judge written on them, and
+      they will be sent to all agents, not later than to-morrow,
+      to paste over the printed names on the ticket, and thus
+      beat this scheme. Have you seen any tickets yet? And what
+      do you think of this plan?
+
+      "Yours truly, "----"
+
+      "----, Iowa, Nov. 11, 1888.
+
+      "DEAR SIR: Repeating the old and time-honored saying:
+      'We have met the enemy and we are theirs.' The Democratic
+      Granger and the largely increased Republican vote was too
+      much for us. Many friends voted with the railway men, but
+      to no purpose. The comparison between Granger and Smyth
+      will tell more than anything else the strength of the
+      railway vote. But we are badly used up, and may as well
+      take our dose.
+
+      "Yours truly, "----"
+
+While the result of this election was indeed a bad dose for speculating
+railway managers, it is the opinion of the masses and of railway
+stockholders, who are more interested in the general welfare of the
+roads than in speculation in their stocks, that the dose was well
+administered, and should be repeated whenever the necessity for it may
+again arise.
+
+It is probably true that railroad managers have lost much of their
+former influence in politics. As their means of corruption have become
+generally known they have become less effective. The public is more on
+the alert, and corrupt politicians often find themselves unable to carry
+out their discreditable compacts.
+
+But it is unreasonable to expect the evil to cease until the cause is
+removed. The trouble is inherent in the system, and the fault is there
+more than in the men who manage the business, and not till the great
+power exercised by them is restrained within proper limits will the evil
+disappear. All this can be accomplished when there shall be established
+a most thorough and efficient system of State and National control over
+the railroad business of the whole country.
+
+
+
+
+CHAPTER X.
+
+RAILROAD LITERATURE.
+
+
+The cause of the railroad manager has never been without time-servers.
+Not to speak of those newspaper editors who, for some consideration or
+another, defend every policy and every practice inaugurated or approved
+by railroad authorities, there has always been a school of literati who
+felt it their duty to enlighten, from a railroad standpoint, their
+fellow-men by book or pamphlet upon the transportation question, to
+correct what they supposed to be false impressions, and to round up with
+an apology or defense for the railroad manager, who is invariably
+represented by them as the most abused and at the same time most
+patriotic and most progressive man of the age.
+
+The benefits derived from the railroad are great. It has been an
+important factor in the development of our country's resources and the
+advancement of our civilization. Its value is fully appreciated, but
+there is no reason why the men who have utilized the inventions of
+Stephenson and others, and have grown rich by doing so, should be
+eulogized any more than those who are ministering to the wants of the
+public by the use of the Hoe printing press, McCormick's reaper,
+Whitney's cotton gin, or any of the thousands of other modern
+inventions.
+
+These authors doubtless are prompted by various motives. Some have been
+educated in the railroad school and are therefore blind to railroad
+evils. Others naturally worship plutocrats, because they hold the
+opinion that capital is entitled to a larger reward than brains and
+muscle, for the reason that the latter is more plentiful than the
+former.
+
+But there is a third class of railroad authors, who, there is reason to
+believe, enter the literary arena in defense of railroad evils not
+solely for the love they bear the cause, but as the paid advocates of a
+class of men who feel that their cause is in need of a strong defense at
+the bar of public sentiment. It would be difficult to account in any
+other way for the extravagant statements and one-sided arguments made by
+this class of writers. Yet railroad literature has not confined itself
+to the retrospective field. Its scope has grown with the significance of
+its contributors. In more than one instance have men at the head of
+large railroad corporations, influenced by temporary interest, become
+the authors of documents containing assertions and prophecies highly
+pathetic at the time, but subsequently shown to be so replete with
+falsehoods and absurdities that few railroad managers would to-day be
+willing to father them. Thus Alexander Mitchell, the late president of
+the Chicago, Milwaukee and St. Paul Railroad Company, addressed on the
+28th of April, 1874, shortly after the passage of the Wisconsin Granger
+Law, a letter to Governor Taylor, containing the following passages:
+
+      "That it [the Wisconsin law] has effectually destroyed all
+      future railroad enterprises, no one who is acquainted with
+      its effect in money centers will for a moment doubt.... The
+      whole amount received on the investment [Chicago, Milwaukee
+      and St. Paul Railroad] for interest and cash and stock
+      dividends, amounts to only six per cent. per annum of the
+      actual cost of the property. I submit to your Excellency,
+      and through you to the people of the State, whether this is
+      more than a fair and reasonable return for the capital
+      invested in these improvements. Is it not far below such
+      reasonable amount? The best and most careful economists
+      admit that no less than ten per cent. per annum should be
+      allowed on such investments.... The directors of this
+      company have at all times had a due regard to the interests
+      of the public, and a desire to furnish transportation at the
+      lowest possible figures, and, although not receiving a fair
+      and reasonable return on their investments, they have for
+      the last four years prior to 1873 steadily reduced their
+      rates of freight and passengers from year to year, as will
+      be seen from the following tables, showing the charge for
+      freight per mile, and the average per mile for passengers
+      for each year, from 1868 to 1873 inclusive:
+
+           Charges per ton    Average passenger rate
+           per mile--cents.      per mile--cents.
+
+  1864                            .04
+  1868     .03      40-100        .03      86-100
+  1869     .03      10-100        .03      92-100
+  1870     .02      82-109        .03      85-100
+  1871     .02      54-100        .03      75-100
+  1872     .02      43-100        .03      54-100
+  1873     .02      50-100        .03      42-100
+
+      "The law in question proposes to reduce our passenger rates
+      twenty-five per cent. and our freight rates about the same,
+      thus deducting from our present tariff about twenty-five per
+      cent. of our gross earnings.... This act, as we have seen,
+      proposes to take from us twenty-five per cent. of our
+      passenger and freight earnings, and the additional tax of
+      one per cent. of our gross earnings, all of which is
+      equivalent to taking from us twenty-six per cent. of our
+      gross earnings. Therefore, deducting this amount, equal to
+      twenty-six per cent. of our entire gross earnings, from
+      thirty-three per cent., our average net earnings on
+      business, would leave us only seven per cent. of our gross
+      earnings as the entire net earnings of the road, out of
+      which must be paid the interest on the bonds and the
+      dividends to our stockholders. It is therefore manifest that
+      this law will take from us over three-fourths of the net
+      income received under our present tariff.... The board of
+      directors have caused this act to be carefully examined and
+      considered by their own counsel, and by some of the most
+      eminent jurists in the land, and after such examination they
+      are unanimous in their opinion that it is unconstitutional
+      and void.... The board of directors are trustees of this
+      property, and are bound faithfully to discharge their trust,
+      and to the best of their ability to protect it from
+      spoliation and ruin. They have sought the advice of able
+      counsel, and, after mature consideration, believe it their
+      duty to disregard so much of said law as attempts
+      arbitrarily to fix rates of compensation for freight and
+      passengers.... Being fully conscious that the enforcement of
+      this law will ruin the property of the company, and feeling
+      assured of the correctness of the opinions of the eminent
+      counsel who have examined the question, the directors feel
+      compelled to disregard the provisions of the law so far as
+      it fixes a tariff of rates for the company, until the courts
+      have finally passed upon the question of its validity."
+
+The letter was at the time regarded by railroad men as a very strong
+document, and the railroad journals were filled with lengthy editorials
+in praise of the soundness of the doctrines and arguments which it
+contained. The disinterested of the enlightened portion of the community
+even then realized that the "eminent jurists" whom the company had
+consulted were hired attorneys and greatly biased in their views as to
+the constitutional rights of corporations, and that President Mitchell
+on his part had painted by far too dark a picture of the situation. It
+is now quite generally admitted that many of Mr. Mitchell's statements
+were as false as his counsel's interpretation of the Constitution and
+the law was erroneous. From the assertions made in this letter one is
+led to infer that the then stock-and bondholders of the Milwaukee road
+had paid in full every dollar of the capitalized value of the road, and
+that they derived from their investment an income of only about six per
+cent. on the money actually invested by them. The cost of the entire
+Chicago and Milwaukee system in Wisconsin was stated in the letter as
+being $38,000 per mile. It is not likely that this line of road ever
+cost to exceed $25,000 a mile, or that those who then owned the road
+paid much more than two-thirds of its actual cost for it. The road, as
+the letter itself admits, was bought at sheriff's sale, and no mercy
+whatever was shown to the farmers who had mortgaged their farms to aid
+the railroad company in raising funds for the construction of its line.
+
+The letter contains other misstatements equally grave. Mr. A. B.
+Stickney, the president of the Chicago, St. Paul and Kansas City
+Railroad, in his recent excellent work, "The Railway Problem," reviews
+Mr. Mitchell's letter as follows:
+
+      "Mr. Mitchell states the average rate per mile in 1873 for
+      passengers at 3.42 cents. It was well understood that this
+      was an average rate received from those passengers who paid
+      anything, and that, had the average rate been obtained by
+      using as a divisor the total number of paying passengers
+      plus the number of those who rode free the average would
+      have been much below three cents, the price fixed by the
+      law, and consequently, if the company would collect the
+      legal rate from all alike and abolish the free list, its
+      revenues from the passenger business would be increased
+      rather than decreased. If the same test is applied to the
+      freight rates it becomes equally evident that this statute
+      did not reduce the rates in Wisconsin below the average rate
+      of 2.50 cents per ton per mile, which, according to Mr.
+      Mitchell's statement, was the average for the year 1873. For
+      proof, it may be stated that the law classified freight into
+      four general classes, to be designated as first, second,
+      third and fourth classes, and into seven special classes, to
+      be designated as D, E, F, G, H, I and J. The rates on the
+      four general classes were made the same as were 'charged
+      for carrying freights in said four general classes on said
+      railroads on the first day of June, 1873,' and the rate per
+      ton per mile was fixed at certain rates for the first
+      twenty-five miles, a less for the second twenty-five miles,
+      and a fixed rate per mile after, as follows:
+
+             1st 25 Miles    2nd 25 Miles.   All Over 50 Miles.
+
+         D   4-4/5 cents      3-1/5 cents       1 3/5 cents.
+         E   Same as class above.
+         F   4     cents      2     cents       1     cent.
+         G   3-1/5 cents      2     cents       1     cent.
+         H   4     cents      2-4/5 cents       1-3/5 cents.
+         I   4-2/5 cents      2-2/5 cents       1-1/5 cents.
+         J   3-1/5 cents      2-2/5 cents       1     cent.
+
+      "When it is considered, in connection with these figures,
+      that the four general classes were left by the legislature
+      under the same tariffs as had been enforced by the
+      companies, and, as a rule, first class is three times the
+      rate of class D, and third and fourth class materially
+      higher, the evidence seems conclusive that the rates fixed
+      by law would produce an average materially higher than the
+      average of the whole year, stated by Mr. Mitchell at 2-1/2
+      cents. It seems also probable that, had the rates fixed by
+      this law been applied to the whole business of the line, the
+      interstate as well as the State traffic, it would still have
+      produced a larger average. The latter of course is the
+      proper test. There are little inaccuracies in the material
+      facts as stated by Mr. Mitchell which were pointed out at
+      once. For example: In his tabulated statement of passenger
+      earnings per mile, averaging the gross earnings from
+      transportation of passengers who paid any fare, and omitting
+      the large number who went free, the rate is stated at 3
+      42-100 cents per mile; then he says: 'The law in question
+      proposes to reduce our passenger rate twenty-five per
+      cent.,' which would have reduced the rate to 2.57 cents per
+      mile, while, the rate fixed by the law complained of was
+      three cents per mile. Then Mr. Mitchell proceeds: 'And our
+      freight rates about the same; thus deducting from our
+      present tariff about twenty-five per cent. of our gross
+      earnings.' It was immediately pointed out that the law only
+      applied to strictly State business; that is, to traffic
+      that originated and ended in the State of Wisconsin. All
+      other traffic was interstate commerce, and could not be
+      controlled by State legislation. The volume of business
+      which would be affected by the law would therefore be
+      comparatively small--estimated at not over ten per cent., of
+      the total traffic of the line. Hence, if the rates fixed by
+      the law were twenty-five per cent. less than the rates the
+      company had been in the habit of collecting (which was
+      denied), it could not possibly have 'deducted from its
+      present tariff' more than two and one-half per cent.,
+      instead of twenty-five per cent. as stated by Mr. Mitchell.
+
+      "It was claimed that the facts were, that the Chicago,
+      Milwaukee and St. Paul Company, in its efforts to bankrupt
+      the Lake Superior and Mississippi Company, had many of its
+      interstate rates so low that it had resulted in loss, and
+      that its other rates had been made unreasonably high in
+      order to recoup this loss, and that the State of Wisconsin
+      was compelled to pay a part of the expense of the
+      transportation of favored sections of the State of
+      Minnesota."
+
+All through the Granger contests the railways have weakened the force of
+their arguments by their misrepresentation of facts and by their
+extravagant predictions of ruin. The companies were continually
+proclaiming: 'If this or that is done, it will ruin us; it will ruin the
+State,' when, in fact, a road cannot be mentioned that has suffered from
+State legislation. Nineteen years ago no railroad manager could have
+written what Mr. Stickney writes to-day, and few railroad managers would
+write to-day what Mr. Mitchell wrote then. And yet, such is the change
+which public sentiment is undergoing upon these questions, that the
+utterances of many of our present railroad authors will appear as absurd
+a few years hence as Mr. Mitchell's letter of nineteen years ago appears
+to us now.
+
+Many railroad attorneys have since been guilty of resorting to the
+sophistry employed by President Mitchell in that strange letter which he
+addressed to the Governor of Wisconsin. Even so distinguished a
+gentleman as Hon. James W. McDill, now a member of the Interstate
+Commerce Commission, made in 1888, as a member of a railroad lobby, the
+following remarkable statements before the Railroad Committee of the
+General Assembly of Iowa, in a speech opposing a proposed reduction of
+the passenger rate of first-class roads from three to two cents per
+mile:
+
+      "The proposition, if confined to the first-class roads of
+      Iowa, proposes a one-third reduction of their revenues from
+      passenger business.... We have earned in Iowa by first-class
+      roads annually about $13,000,000, and a reduction of one
+      cent, or from a rate of three cents to two, will reduce
+      their revenues about $5,000,000 a year.... Thus it is seen
+      that it is proposed to take from the revenues of a part of
+      the railroads of Iowa, annually, almost as much as all the
+      railroads of Iowa have paid for taxes in nine years
+      ($6,549,505.84)."
+
+Mr. McDill was a member of the Iowa Railroad Commission for several
+years. He may, therefore, be presumed to have known that the State of
+Iowa could not, and did not propose to, regulate interstate traffic, and
+that the thirteen million dollars railroad revenue to which he referred
+was derived both from interstate and State traffic; that the latter was
+only about one-fourth of the former, and that therefore the proposed
+reduction on the basis of schedule rates would have cut down the net
+revenue of the roads only about one million instead of five million
+dollars. But Mr. McDill himself states that the average rate earned by
+all the railroads of the United States was, for the year 1886, only
+2.181 cents per passenger per mile. It certainly was not over 2-1/2
+cents per mile for the first-class roads of Iowa. Thus the proposed
+reduction, instead of being one cent per mile, as stated by Mr. McDill,
+was only one-half cent per mile; and it only applied to the local
+business of the first-class roads. In other words, the bill under
+consideration, had it been enacted into law, would have caused a
+reduction of 20 per cent. on about 25 per cent. of the total revenue
+from passenger business of the first-class roads, or of five per cent.
+on their total income from passenger traffic in the State of Iowa. It
+will be noticed that Mr. McDill in his calculation made no allowance
+whatever for the increase of business which would have followed such a
+reduction. The gain from this source would probably have greatly
+exceeded the loss due to this small reduction in the fare. In the same
+address Mr. McDill made many other equally fallacious statements.
+
+One of the most devoted advocates of the interests of railroad managers
+is Marshall M. Kirkman. He is the author of a number of books and
+pamphlets upon railway subjects, among them a pamphlet entitled "The
+Relation of the Railroads of the United States to the People and the
+Commercial and Financial Interests of the Country."
+
+Mr. Kirkman introduces his subject with the following rather remarkable
+statement:
+
+      "I shall show that while the railways of the United States
+      are designated as monopolies, they are not so in fact.
+      Accused of disregarding the interests of the community, I
+      will show that they are abnormally sensitive to their
+      obligations in this direction. While legislatures claim the
+      right to fix rates, I shall show that the abnormal
+      conditions under which the railway system has grown up and
+      its chaotic nature render the exercise of such a privilege
+      impossible. I will show that while it is assumed that rates
+      may be fixed arbitrarily, they must, on the contrary, be
+      based on natural causes, the competition of carriers, their
+      necessities and the rivalries of conflicting markets and
+      trade centers; conditions manifestly impossible to determine
+      or regulate in advance, and therefore beyond the control of
+      legislation.... While a division of business (by pooling) is
+      thought to be contrary to the interests of the people, I
+      shall show that it is the legitimate fruit of indiscriminate
+      railway building and offers the only escape from the
+      conditions such practice engenders. I shall show that, while
+      it is assumed that rates may be based progressively or
+      otherwise on distance, the enforcement of such a principle
+      would restrict the source of supply, and, in so far as this
+      was the case, render great markets or centers of industry
+      impossible."
+
+Speaking of the importance of the railroad, Mr. Kirkman says:
+"Superseding every other form of inland conveyance, it determines the
+location of business centers, and vitalizes by its presence, or blasts
+by its absence." He contends that rigid and scrutinizing supervision
+should be exercised by the Government over the location of railroads,
+and that only such lines should be permitted to be built as afford
+reasonable grounds for profitable enterprise. "It should be," he says,
+"an axiom in our day that a government that permits or encourages the
+construction of two railways where one would suffice is, to the extent
+that it does this, a public nuisance." Mr. Kirkman here makes it the
+duty of the Government to arbitrarily meddle with railroad affairs. He
+would give the Government the power to determine when and where an
+additional railroad is needed, and to prohibit the construction of any
+new road that has not the Government sanction. The interests of a
+thousand towns might suffer for want of adequate transportation
+facilities, individuals and communities might be anxious to build their
+own lines for the development of local resources, but all railroad
+enterprise is doomed to a standstill until a conservative governmental
+commission has been entirely satisfied that a prospected road will pay
+and not deprive existing roads of any part of their revenue. There can
+be no doubt that if such a policy were ever adopted in America, few
+roads would be built without having first passed the ordeal of a legal
+injunction, and many a prospected road, though greatly needed, would
+remain unbuilt because its promoters would be discouraged by the delay
+and cost of litigation.
+
+But while this author is perfectly willing to trust the Government with
+the great responsibility of prohibiting the construction of proposed
+roads, he is not willing to have it exercise the power to determine what
+are reasonable rates. He tries to sustain his objection by the following
+argument: "The fixing of rates upon a railroad is as delicate a process
+as that of determining the pulse of a sick man. They cannot be
+determined abstractly, or in advance of the wants of business, but must
+be adjusted from hour to hour to conform to its fluctuations. Five
+thousand men find active employment in the United States in connection
+with the important duty of making rates. Each case requires particular
+investigation and involves, in many instances, prolonged study and
+research. The duty requires men of marked experience and capacity. They
+and men like them are the silent, unseen power that moves great
+enterprises of every nation. In the case of railroads we may enumerate
+those having official positions, but the experts from whom the official
+heads derive information and assistance cannot be classified. They
+comprise a vast army of experienced and able men familiar with railway
+traffic and quick to respond to its requirements. Such a body of men
+could not be organized by a government, or, if organized, would rapidly
+deteriorate under conditions so unfavorable for their support and
+development. Whatever authority exercises the duty of fixing rates must
+take up the subject in the same methodical way and, acting through
+skilled agents, pursue its inquiries and determine its results with the
+same experience, minute care and _conscientious regard_ for the
+technical requirements of business that the railway companies observe.
+No government can possess the facilities for perfecting so vast and
+intricate an organization and at the same time render it responsive to
+the public good. The labor is too great and the responsibility too
+remote. It could not move with sufficient quickness to respond to the
+actual requirements of trade, and too many restrictions would
+necessarily govern its actions. For these and other equally important
+reasons governments must always be satisfied to restrict their offices
+in this direction."
+
+Speaking of the men who are commonly termed railroad magnates, Mr.
+Kirkman says: "They alone possess the needed administrative ability that
+the situation demands. They not only provide largely the capital, but
+they discover the fields wherein it may be used most advantageously.
+They are the advance guard of all great enterprises, the natural leaders
+of men. They are an integral part of the country, a necessary and
+valuable element, without which its natural resources would avail
+little." This is a very strong statement in the face of the fact that
+but very few of the class of men to whom Mr. Kirkman refers ever built a
+line of road. They have usually found it more profitable to "gobble"
+roads already built than to construct new lines.
+
+According to this author the public have no reason to complain of
+railroads; on the contrary, the latter have always been the victims of
+public persecution, and "every species of folly, every conceivable
+device of malice, the impossible requirements of ignorance, the selfish
+cunning of personal interests, the ravings of demagogues, the
+disappointments, envies, prejudices and jealousies of mankind have each
+in turn and in unison sought to injure the railway interest."
+
+But probably the most extravagant passage in the whole treatise is the
+one referring to special rates, which he calls "the foundation and
+buttress of business," without which it could not be carried on. He
+expresses the opinion that without the continued and intelligent use of
+such rates "our cities would soon be as destitute of manufactories as
+one of the bridle paths of Afghanistan," and then continues: "The
+special rate of carriers is like the delicate fluid that anoints and
+lubricates the joints of the human body. It is an essential oil. Without
+it the wheels of commerce would cease and we should quickly revert to
+the period when the stage-coach and the overland teamster fixed the
+limits of commerce and the stature of cities."
+
+The most recent and probably the most radical of Mr. Kirkman's books is
+"Railway Rates and Government Control." It would lead us too far from
+our subject to enter into a discussion of Mr. Kirkman's errors; in fact,
+it might prove an endless task. Suffice it to say that in discussing his
+subject he revels in such phrases as: "Subject too vast to be
+comprehended." "Acts of agrarian legislation and foolish manifestations
+of disappointment and hate." "The rabble will avail itself of every
+excuse to pass laws that would, under other circumstances, be called
+robberies." "Ignorance and demagogism." "Government interference, the
+panacea of cranks and schemers." "Only understood by the few." "These
+people are as sincere as they are ignorant." "Governments have no
+commercial sense." "Those who condemn them are not so dishonest as
+ignorant, and not so malicious as foolish." "Silly people." "Justice and
+common honesty are systematically denied [the railroads]." "Legal means
+of plundering them." "The intelligence and facilities of Government are
+but one step above the barbarian." "Those who use railroads should pay
+for them," etc., etc.
+
+Mr. Kirkman's argument is in substance: Rate-making is a difficult
+subject. The people are too ignorant to understand it. Those who carry
+on the Government are for the most part fools and demagogues, and are
+utterly unfit to do justice to such a task. Railroad men are wise and
+just, and neither the people nor the Government should meddle with the
+railroad business. In order to place a true estimate upon Mr. Kirkman's
+utterances, one should remember that he is a railroad employe as well as
+the patentee and vendor of a number of railroad account forms which are
+extensively used by railroad companies.
+
+The Chicago _Tribune_, in reviewing this last literary production of Mr.
+Kirkman, says:
+
+      "The great fault of Mr. Kirkman's statements is that they
+      are often so general in character as to be both true and
+      false at the same time.... He does not seem to comprehend
+      the nature of the railroad, or to perceive the danger of
+      allowing a railroad to exercise its powers uncontrolled. He
+      denies the State's right to interfere with any
+      discriminations which a railway corporation chooses to
+      adopt. He would allow railways to fix whatever charges they
+      please for long hauls and short hauls.... Mr. Kirkman does
+      not adduce a single fact in support of these remarkable
+      views. He simply says: 'Railroads cannot, if they would,
+      maintain any inequitable local tariff.' This is not
+      argument, it is simply assertion. Every one who has learned
+      the alphabet of this question knows that railways have been
+      exceedingly unjust wherever competition or the law did not
+      restrict their powers. If this were the proper place for it
+      we would give the author instances of this injustice by the
+      hundred, and almost any book on the subject refers to such
+      cases by the thousand.... When confronted with the facts
+      substantiating such charges the author answers the argument
+      by exclaiming: 'But how absurd! But how untrue! Our
+      commercial morals are equal to the highest in the world....'
+      Scarcely an assertion can be taken without qualification.
+      The author fairly revels in half-truths.... The book may
+      have its merits, but they are too modest to reveal
+      themselves."
+
+It is a failing of mankind to take for truth without further
+investigation any assertion that has often been reiterated. Most people
+are prone to believe that an assertion made by a thousand hearsay
+witnesses is true, overlooking the possibility of their drawing from a
+common false source. But it is surprising that an author like Prof.
+Arthur T. Hadley should fall into such an error. In his otherwise
+excellent work, "Railroad Transportation, Its History and Its Laws," Mr.
+Hadley bases a number of his deductions upon false premises advanced by
+railroad managers, and arrives at conclusions which appear strange when
+their source is considered. In the chapter on railroad legislation
+Professor Hadley says: "But a more powerful force than the authority of
+the courts was working against the Granger system of regulation. The
+laws of trade could not be violated with impunity. The effects were most
+sharply felt in Wisconsin. The law reducing railroad rates to the basis
+which competitive points enjoyed left nothing to pay fixed charges. In
+the second year of its operation, no Wisconsin road paid a dividend;
+only four paid interest on their bonds. Railroad construction had come
+to a standstill. Even the facilities of existing roads could not be kept
+up. Foreign capital refused to invest in Wisconsin; the development of
+the State was sharply checked; the very men who had most favored the law
+found themselves heavy losers.... By the time the Supreme Court
+published the Granger decisions, the fight had been settled, not by
+constitutional limitations, but by industrial ones."
+
+These statements are either utterly untrue or greatly misleading. Mr.
+Hadley ought to know that the railroad companies in the Granger States
+never complied with the letter, much less with the spirit of the law.
+Whenever they made an apparent effort to live up to it they only did so
+to make it odious. Rates were never reduced by the legislature to the
+basis previously enjoyed by competitive points, but merely to the
+average charge which had obtained before the passage of the law. As a
+rule the railroad revenues increased. If any companies failed to earn
+enough to pay fixed charges it was simply because they were determined
+not to do so. A non-payment of dividends did not injure the managers,
+but simply other stockholders of the road. A permanent establishment of
+the principle of non-discrimination, on the other hand, would have
+benefited stockholders, while prejudicing the speculative interest which
+managers had in the roads. Railroad construction came, after the
+financial panic of 1873, to a practical standstill throughout the United
+States; and if the Granger States did not get their share of the very
+small total increase during the five years following the panic, it was
+due solely to a conspiracy on the part of the railroad managers to
+misrepresent and pervert the legislation of these States. The laws, as
+has already been stated, were finally repealed, not because the people
+had tired of them or regarded them unwise or unjust, but because it was
+hoped that the commissioner system would prove more efficient. It was
+offered as a compromise measure and was accepted as such by the railroad
+managers, who, in their eagerness to rid themselves of the restrictions
+imposed by the Granger laws, gave every assurance of complete submission
+to the requirements of the proposed legislation.
+
+Mr. Hadley even goes so far as to defend railroad pools. "Unluckily," he
+says, "we place these combinations outside of the protection of the law,
+and by giving them this precarious and almost illegal character we tempt
+them to seek present gain, even at the sacrifice of their own future
+interests. We regard them, and we let them regard themselves, as a means
+of momentary profit and speculation, instead of recognizing them as
+responsible public agencies of lasting influence and importance." We can
+partially account for this author's defense of pooling when we are
+informed that he accepts it as an axiom that "combination does not
+produce arbitrary results any more than competition produces beneficent
+ones." Referring to railroad profits, Mr. Hadley says: "The statement
+that corporations make too much money is scarcely borne out by the
+facts. The average return of the railroads of this country is only four
+per cent., the bondholders receiving an average of four and a half per
+cent., the stockholders of two and a half per cent. True, much of the
+stock is water, not representing any capital actually expended; but,
+even making allowance for this, it is hardly probable that the roads are
+earning more than five per cent. on the total investment. This assumes
+an average cost of $45,000 per mile, implying that about half of the
+stock and one-sixth of the bonds are water." Mr. Hadley would probably
+have come much nearer the truth if he had assumed three-fourths of the
+stock and one-fourth of the bonds to be water. Even Mr. Poor, who
+certainly cannot be accused by railroad men of being inimical to their
+interests, places the average cost of the railroads of this country no
+higher than at $30,000 per mile; and this estimate, it should be
+remembered, includes the value of the large donations made to railroad
+companies by the public. With a full understanding of all the
+circumstances, Mr. Poor said of railroad investments several years ago
+that if the water were taken out of them no class of investments in this
+country would pay as well. In the face of this statement Mr. Hadley
+would do well to revise his figures.
+
+We find, however, in Prof. Hadley's book also eminently sound views,
+like the following: "If the object of a railroad manager is simply to
+pay as large a dividend as possible for the current year, he can best do
+it by squeezing his local tariff, of which he is sure, and securing
+through traffic at the expense of other roads by specially low rates;
+that is, by a policy of heavy discrimination. But the permanent effect
+of such a policy is to destroy the local trade, which gives a road its
+best and surest custom, and to build up a trade which can go by another
+route whenever it pleases. The permanent effect of such a policy is
+ruinous to the railroad as well as the local shipper." And he continues:
+"By securing publicity of management you do much to prevent the
+permanent interests of the railroads from being sacrificed to temporary
+ones. By protecting the permanent interests of the public you enlist the
+stockholders and the best class of railroad managers on the side of
+sound policy."
+
+Edward Atkinson, in an essay entitled "The Railway, the Farmer and the
+Public," endeavors to prove that the farmers have no cause for
+complaining against the railroad, because rates of transportation have
+been greatly reduced during the past twenty years. Speaking of the
+reductions made in freight rates in the State of New York, he says: "Had
+the rate of 1870 been charged on the tariff of 1883 the sum would have
+been at 1.7016 cents on 9,286,216,628 tons, carried one mile,
+$158,014,262; the actual charge was $83,464,919, making a difference of
+$74,549,343 saved on one year's traffic on the lines reported in New
+York." It either did not occur to Mr. Atkinson, or, if it did occur to
+him, he failed to mention it, that these freight reductions were forced
+upon the railroads chiefly by water competition, and that if the
+railroad companies had not saved these seventy-four million dollars for
+the people, the canal lines, always subject to competition, would have
+saved a large part of it. With equal propriety might it be said that the
+railroads, by meeting canal competition, saved for themselves in the
+year mentioned a goodly share of their gross earnings. Such reasoning is
+absurd, and it is high time that the bubble of an argument so often used
+by railroad advocates be pricked. As Mr. Atkinson has introduced the
+farmer, let us apply his rule to him. There was a time when the farmer
+sold his corn for a dollar a bushel. To-day he sells it for thirty
+cents. He therefore saves to the people of this country, on
+2,000,000,000 bushels, the enormous sum of $1,400,000,000. There is
+scarcely an industry in existence to which this argument does not apply
+with equal force. Mr. Atkinson virtually admits that railroads charge
+all the traffic will bear when he says: "The charge which can be put
+upon the wheat of Dakota or Iowa for moving it to market is fixed by the
+price at which East Indian wheat can be sold in Market Lane." He is
+opposed to the Interstate Commerce Law, which he regards as "obnoxious
+measures of national interference and futile attempts to control this
+great work." He would rely chiefly upon the publicity of accounts made
+by railway officers, as secured by the private publication of Poor's
+Railway Manual, for all needed regulation, but concedes the
+establishment of a figurehead commission, concluding his remarks upon
+the subject as follows: "A commission which may bring public opinion to
+bear upon railway corporations may well be established, and there the
+work of the legislator may well cease." When we consider the powerful
+agencies employed by railroads to create public sentiment in their favor
+we can well understand the inefficiency of such a milk-and-water method
+of control.
+
+One of the most radical books ever published at the instigation of
+railroad managers appeared in 1888, under the title "The People and the
+Railways." Its author is Appleton Morgan, who attempts to "allay the
+animosity towards the railway interests" as shown in Mr. James F.
+Hudson's book, "The Railways and the Republic." The means which Mr.
+Morgan chooses are not well calculated to accomplish his purpose, for
+the masses of the people prefer in such a controversy arguments to
+ridicule and sarcasm, weapons of literary warfare to which this author
+resorts altogether too freely. Mr. Morgan's opinion as to the benefits
+of centralized wealth and trade combinations differs greatly from that
+held by the great majority of the American people. He says: "The fact,
+the truth is, that (however it may be in other countries) the
+accumulation of wealth and centralization of commerce in great
+combinations has never, in the United States, been a source of
+oppression or of poverty to the non-capitalist or wage-worker." There is
+scarcely an evil in railroad management which Mr. Morgan does not
+defend. Pools, construction companies, rebates, discriminations and
+over-capitalization all find favor in Mr. Morgan's eye. "Rebates and
+discriminations," he says, "are neither peculiar to railways nor
+dangerous to the 'Republic.' They are as necessary and as harmless to
+the farmer as is the chromo which the seamstress or the shop girl gets
+with her quarter-pound of tea from the small tea merchant, and no more
+dangerous to the latter than are the aforesaid chromos to the small
+recipients." Pools and combinations receive an unusually large share of
+Mr. Morgan's attention. A few selections from his effusions in their
+favor may be given here, viz.:
+
+"These pools are the legitimate and necessary results of the
+rechartering over and over again of railway companies to transact
+business between the same points by paralleling each other. So long as
+the people in their legislatures will thus charter parallel lines
+serving identical points--thus dividing territory they once granted
+entire--it is not exactly clear how they can complain if the lines built
+(by money invested, if not on the good faith of the people, at least in
+reliance upon an undivided business) combine to save themselves from
+bankruptcy." And again: "Against the inequality of their own rates and
+the hardship of the long and short haul (in other words, against the
+discrimination of nature and of physical laws) no less than against the
+peril of bankruptcy and the consequent speculative tendency of their
+stocks (after which may come the wrecking, the watering, and the vast
+individual fortunes), the railways of this republic have endeavored, by
+establishment of pool commissions, to defend both the public and
+themselves.... The honest administration of railways for all interests,
+the payment of their fixed charges, the solvency of their securities,
+the faithful and valuable performance of their duties as carriers, can
+be conserved in but one way--by living tariffs, such as the pools once
+guaranteed."
+
+In the following passage this author denies to the State the right to
+regulate rates: "Granting that they [the railroads] must carry freights
+for the public in such a way as not to injure either the public or the
+freight in the carrying, most emphatically (it seems to me) it does not
+follow that they must add to the value of the freights they carry by
+charging only such rates as the public or the owners of the freight
+insist on."
+
+But Mr. Morgan's indignation rises to the highest pitch in his
+discussion of the Interstate Commerce Act. He fears that it will cause
+the downfall of our liberties and sees in the background the Venetian
+Bridge of Sighs and the French Bastille. He asks: "Why should for any
+public reasons--for any reason of public safety--the Interstate Commerce
+Law have come to stay?" He then berates the act as follows: "To begin
+with, the present act abounds in punishments for and prohibitions
+against an industry chartered by the people, but nowhere extends to that
+industry a morsel of approval or protection. It bristles with penalties,
+legal, equitable, penal, and as for contempt, against railway companies,
+but nowhere alludes to any possible case in which a railway company
+might, by accident, be in the right, and the patron, customer, passenger
+or shipper in the wrong.... The constitutions of civilized nations, for
+the last few centuries at least, have provided that not even guilt
+should be punished except by due process of law, and have uniformly
+refused to set even that due process in motion except upon a complaint
+of grievance. But the Interstate Commerce Law denies the one and does
+away with the necessity for the other. That statute provides that the
+commission it creates shall proceed 'in such manner and by such means as
+it shall deem proper,' or 'on its own motion,' and that 'no complaint
+shall at any time be dismissed because of the absence of direct damage
+to the complainant.' Even the Venetian council often provided for a
+certain and described hole in the wall through which the anonymous
+bringers of charges should thrust their accusations. Even the court of
+star chamber was known to dismiss inquisitions when it found that no
+wrong had been done. But the statute of interstate commerce appears to
+issue _lettres de cachet_ against anything in the shape of a railway
+company--to scatter them broadcast, and to invite any one who happens to
+have leisure to fill them out, by inserting the name of a railway
+company. It says to the bystander: 'Drop us a postal card, or mention to
+any of our commissioners, or to a mutual friend, the name of any railway
+company of which you may have heard, and so give us jurisdiction to
+inquire if that company may have by chance omitted to dot an i or cross
+a t in its ledgers, or whether any one of its hundreds of thousands of
+agents--in the rush of a day's business, or in a shipper's hurry to
+catch a train--may have named a rate not on the schedule then being
+prepared at headquarters, or charged a sixpence less than some other
+agent 250 miles down the line may have accepted a week ago for what
+might turn out to be a fraction more mileage service in the same general
+direction. No particular form is necessary. Drop in to luncheon with our
+commission any day between twelve and one, and mention the name of a
+railway company. The railway company may have done you no damage, nor
+grieved you in any way; just mention the railroad, and we will take
+jurisdiction of its private (or quasi-public) affairs. Or, if you don't
+happen to have time to mention it, we will take jurisdiction anyhow, 'of
+our own motion,' of any railway company whose name we find in the
+Official Gazette. It really does not matter which; any one will do."
+This is a fair example of the literature on the Interstate Commerce Law
+paid for by railroad men.
+
+Mr. Stickney, although a railroad president, takes an entirely different
+view of the situation. He considers the law inadequate to bring about
+the reforms needed. He says: "This enormous business is now in the
+control of several hundred petty chieftains, who are practically
+independent sovereigns, exercising functions and prerogatives in
+defiance of the laws, and practically denying their amenability to the
+laws of the country. If the Government would seek to bring them to terms
+and compel them to recognize and obey the laws, it must use the means
+necessary to accomplish the end. It must have executive officers
+sufficient in number as well as armed with an adequate power and dignity
+to command their respect.... The power conferred upon them [the
+Interstate Commerce Commission] to enforce their judicial orders is the
+power 'to scold.' The penalties of the law which the courts are in power
+to impose are certainly severe, but the law has been operated for about
+four years without any convictions, and yet no well-informed person is
+ignorant of the fact that the law has not been obeyed. The president of
+a large system is said to have remarked that 'if all who had offended
+against the law were convicted there would not be jails enough in the
+United States to hold them.' It is evident that the Government has not
+provided adequate machinery for enforcing the law."
+
+Mr. Stickney is correct in his statement that adequate machinery for
+enforcement of the law has not been provided, but he does not give
+sufficient credit to the law or the commission. While much work remains
+to be done, much progress has been made.
+
+He is of the opinion that the public welfare would be furthered if the
+National Government assumed the sole control of railroads. He gives his
+reasons for the change which he proposes, as follows:
+
+      "There are many reasons besides these in the interest of
+      uniformity which make it desirable to transfer the entire
+      control of this important matter to the regulation of the
+      Nation. First, because of its constitution and more extended
+      sessions, Congress is able to consider the subject with
+      greater deliberation, and therefore with more intelligence,
+      than can a legislature composed of members who, as a rule,
+      hold their office for but one short session of about sixty
+      days' duration. There would also be removed from local
+      legislation a fruitful source of corruption, which is
+      gradually sapping the foundations of public morality.... In
+      the second place, the problem of regulating railway tolls
+      and managing railways is essentially and practically
+      indivisible, by State lines or otherwise, and therefore it
+      is not clear but that whenever the question may come before
+      the courts it may be held that the authority of Congress to
+      deal with interstate traffic carries with it, as a necessary
+      and inseparable part of the subject, to regulate the traffic
+      which is now assumed to be controlled by the several States.
+      The courts have held that the States have authority to
+      regulate strictly State traffic in the absence of
+      Congressional action, but their decisions do not preclude
+      the doctrine that Congress may have exclusive jurisdiction
+      whenever it may choose to exercise the authority. There is a
+      line of reasoning which would lead to that conclusion. It
+      may be that many will not care to follow the lead of the
+      writer as to the measure of aggregate net revenue which
+      railway companies are entitled to collect in tolls, but it
+      is evident that before the tolls can be intelligently
+      determined some measure of such aggregate revenue must be
+      ascertained. The question would then arise, what proportion
+      must be levied upon State and interstate traffic
+      respectively? If the State should refuse to levy its share
+      (and how could such share be ascertained?), then more than
+      its share would have to be levied on interstate traffic, and
+      thus the State by indirection would be able to do what the
+      Constitution prohibits. Of course, when the Constitution was
+      adopted railways and railway traffic were unknown. But it
+      was a similar question which brought the thirteen original
+      States together into one nation, under the present
+      Constitution. At least the first movement toward amending
+      the original Articles of Confederation was to give Congress
+      enlarged power over the subject of commerce."
+
+In reply to this it may be said that it will be an unfortunate day for
+the States when they surrender the power to control their home affairs.
+Differences between State and interstate rates could easily be adjusted
+by the National and State commissions and by the courts. It certainly
+ought not to be difficult for such tribunals to see that a rate which is
+made higher or lower, as it may be for State or interstate traffic, is
+wrong.
+
+Mr. Stickney has fallen into the error common to railroad men in
+believing that lower rates of transportation will not prevail in the
+future. There are many reasons why it is probable that they will be
+lower. Present rates are highly profitable on well located lines.
+Labor-saving inventions will increase, and roads will be built and
+operated more cheaply. Lines will be located with lower grades, lighter
+curvature and more directness. Business will increase largely, and the
+ratio of expenses will decrease. Steel will be improved in quality and
+will be substituted for iron. A heavier rail and more permanent roadway
+will be used. Rates of interest will rule lower, and there will be much
+more economy in superintending. Extravagant salaries to favorites will
+be reduced, and sinecures and parasites will be cut off from the
+payrolls. Lower wages are inevitable as our population becomes more
+dense.
+
+A very interesting and instructive author upon railroad subjects is
+Charles Francis Adams, Jr., ex-president of the Union Pacific Railroad
+and formerly a member of the Board of Railroad Commissioners of the
+State of Massachusetts. After twenty years' constant association with
+railroad men, Mr. Adams should certainly know the character of his
+quondam colleagues. In his book, "Railroads, Their Origin and Problems,"
+he says of them: "Lawlessness and violence among themselves [_i. e._,
+the various railroad systems], the continual effort of each member to
+protect itself and to secure the advantage over others, have, as they
+usually do, bred a general spirit of distrust, bad faith and cunning,
+until railroad officials have become hardly better than a race of
+horse-jockeys on a large scale. There are notable exceptions to this
+statement, but, taken as a whole, the tone among them is indisputably
+low. There is none of that steady confidence in each other, that easy
+good faith, that _esprit du corps_, upon which alone system and order
+can rest. On the contrary, the leading idea in the mind of the active
+railroad agent is that some one is always cheating him, or that he is
+never getting his share in something. If he enters into an agreement,
+his life is passed in watching the other parties to it, lest by some
+cunning device they keep it in form and break it in spirit. Peace is
+with him always a condition of semi-warfare, while honor for its own
+sake and good faith apart from self-interest are, in a business point of
+view, symptoms of youth and a defective education." And again, in an
+address delivered before the Commercial Club of Boston in December,
+1888, Mr. Adams expressed his opinion concerning the average railroad
+manager of to-day as follows: "That the general railroad situation of
+the country is at present unsatisfactory is apparent. Stockholders are
+complaining; directors are bewildered; bankers are frightened. Yet that
+the Interstate Commerce Act is in the main responsible for all these
+results, remains to be proved. In my opinion, the difficulty is far more
+deep-seated and radical. In plain words, it does not lie in any act of
+legislation, State or National; and it does lie in the covetousness,
+want of good faith and low moral tone of those in whose hands the
+management of the railroad system now is; in a word, in the absence
+among men of any high standard of commercial honor. These are strong
+words, and yet, as the result of a personal experience stretching over
+nearly twenty years, I make bold to say they are not so strong as the
+occasion would justify. The railroad system of this country, especially
+of the regions west of Chicago, is to-day managed on principles
+which--unless a change of heart occurs, and that soon--must inevitably
+lead to financial disaster of the most serious kind. There is among the
+lines composing that system an utter disregard of those fundamental
+ideas of truth, fair play and fair dealing which lies at the foundation,
+not only of the Christian faith, but of civilization itself. With them
+there is but one rule--that, many years ago, put by Wordsworth into the
+mouth of Rob Roy:
+
+    "'The simple rule, the good old plan,
+    That he shall take who has the power,
+    And he shall keep who can.'"
+
+As regards the causes of the Granger movement, Mr. Adams says, in the
+work above mentioned: "That it [the Granger episode] did not originate
+without cause has already been pointed out. It is quite safe to go
+further, and to say that the movement was a necessary one, and through
+its results has made a solution of the railroad problem possible in this
+country. At the time that movement took shape the railroad corporations
+were in fact rapidly assuming a position which could not be tolerated.
+Corporations, owning and operating the highways of commerce, claimed for
+themselves a species of immunity from the control of the law-making
+power. When laws were passed with a view to their regulation they
+received them in a way which was at once arrogant and singularly
+injudicious. The officers entrusted with the execution of those laws
+they contemptuously ignored. Sheltering themselves behind the Dartmouth
+College decision, they practically undertook to set even public opinion
+at defiance. Indeed, there can be no doubt that those representing these
+corporations had at this juncture not only become fully educated up to
+the idea that the gross inequalities and ruinous discriminations to
+which in their business they were accustomed were necessary incidents to
+it which afforded no just ground of complaint to any one, but they also
+thought that any attempt to rectify them was a gross outrage on the
+elementary principles both of common sense and of constitutional law. In
+other words, they had thoroughly got it into their heads that they, as
+common carriers, were in no way bound to afford equal facilities to all,
+and, indeed, that it was in the last degree absurd and unreasonable to
+expect them to do so. The Granger method was probably as good a method
+of approaching men in this frame of mind as could have been devised."
+
+Speaking of the educational value of railroad competition, Mr. Adams
+says: "Undoubtedly the fierce struggles between rival corporations
+which marked the history of railroad development, both here and in
+England, were very prominent factors in the work of forcing the systems
+of the two countries up to their present degree of efficiency. Railroad
+competition has been a great educator for railroad men. It has not only
+taught them how much they could do, but also how very cheaply they could
+do it. Under the strong stimulus of rivalry they have done not only what
+they declared were impossibilities, but what they really believed to be
+such."
+
+Mr. Adams has, from his long association with railroad managers, imbibed
+one heresy which is in strange discord with the general soundness of his
+opinions. He holds that the railroad system was left to develop upon a
+false basis, inasmuch as the American people relied for protecting the
+community from abuses upon general laws authorizing the freest possible
+railroad construction everywhere and by any one. It can therefore not be
+surprising that Mr. Adams is an advocate of the legalized pool. He is of
+the opinion that secret combinations among railroads, inasmuch as they
+always have existed, always will exist as long as the railroad system
+continues as it now is. Hence he proposes to legalize a practice which
+the law cannot prevent, and by so doing to enable the railroads to
+confederate themselves in a manner which shall be at once both public
+and responsible. The reply might be made that there are many other
+conspiracies which the law cannot always prevent, but that this is no
+reason why conspiracies should be legalized. If pools and other railroad
+abuses had, since the beginning of the railroad era, been treated as
+crimes and misdemeanors, and punished as such by the imposition of heavy
+fines, few people would to-day be ready to offer apologies for them. If
+the time shall ever come when pools must be legalized it will be time
+for railroad control equivalent to Government ownership.
+
+Among the more recent writers upon railroad subjects is W. D. Dabney,
+late chairman of the Committee on Railways and Internal Navigation in
+the Legislature of Virginia. Mr. Dabney favors State control, and is, on
+the whole, friendly to the Interstate Commerce Act. He sees danger in
+the pool, but inclines to the belief that the public benefit derived
+from the pooling system outweighs the danger of public detriment from
+its existence. The following is his chief argument for a legalized pool:
+"Perhaps, so long as railroad companies continue to enjoy an absolute
+monopoly of transportation over their own lines, so that free
+competition is restricted in its operation to a comparatively few
+favored points, it may be worthy of serious consideration whether it
+would not be better to legalize than to prohibit pooling, taking care to
+put the whole matter under strict public supervision and control. The
+companies would then be left comparatively free to bring their local
+rates into something like harmony with the long-distance rates, and
+should they fail to do so where the needs of the local community and
+their revenues make it proper to be done, then it is the function of
+public regulation to compel it to be done."
+
+Of the Interstate Commerce Act Mr. Dabney says: "The legislation
+recently enacted by Congress for the regulation of commerce by railway
+is the result of more careful and intelligent deliberation perhaps than
+any other measure of similar character, and it is not unlikely that the
+legislation of many of the States will sooner or later be conformed to
+it."
+
+He speaks at some length of the drift toward railroad centralization. A
+few extracts from this passage may be here given: "That the tendency
+towards the unification and consolidation of different and competitive
+lines has been decidedly increased by the anti-pooling and the long and
+short haul sections of the Interstate Commerce Law can hardly be
+doubted.... The modern device of the 'trust' as a means of unifying
+industrial interests and eliminating competition had not yet been
+applied in the field of railroad transportation.... The scheme of trust
+here briefly outlined would probably require for its successful
+operation the concurrence of the entire stockholding interest of each
+company embraced in it; and herein, it seems likely, will be found the
+chief difficulty in perfecting such a scheme. Should it ever be
+perfected, a far more stringent public supervision and control of the
+railroad transportation of the country will be demanded."
+
+Another author, Charles Whitney Baker, associate editor of the
+_Engineering News_, suggests in his book, "Monopolies and the People," a
+plan for the reorganization of our railroad system, to remedy the evils
+of monopoly which are at present connected with railroad management. The
+following quotation from his work outlines the system proposed: "Let the
+Government acquire the title of the franchise, permanent way and real
+estate of all the railway lines in the country. Let a few corporations
+be organized under Government auspices, and let each, by the terms of
+its charter, receive a perpetual lease of all the railway lines built,
+or to be built, within a given territory. Let the territory of each of
+these corporations be so large, and so planned with regard to its
+neighbors, that there shall be, so far as possible, no competition
+between them. For instance, one corporation would operate all the lines
+south of the Ohio and east of the Mississippi River; another all lines
+east of the Hudson and of Lake Champlain, etc. Let the terms of rental
+of these lines be about 3-1/4 per cent. on the road's actual 'present
+cost' (the sum of money it would cost to rebuild it entirely at present
+prices of material and labor), less a due allowance for depreciation.
+The corporations would be obliged to keep the property in as good
+condition as when received, and would own absolutely all their
+rolling-stock, machinery, etc." The proposed reform measures, it must be
+admitted, are very good in theory, but their practical application is
+unfortunately entirely out of the question under our system of
+government.
+
+Mr. John M. Bonham is the author of a recent work entitled "Railway
+Secrecy and Trusts." This writer, upon the whole, takes advanced ground
+in dealing with the question of railroad reform. He deems the present
+interstate legislation inadequate to correct all the graver railroad
+evils, expressing his views upon this subject as follows:
+
+      "Railway construction continues to increase in the United
+      States with immense rapidity. Concurrent with this increase,
+      and notwithstanding all the efforts that have been made at
+      restraint, the aggressions upon political and industrial
+      rights increase also. Nor is it likely that without more
+      rigorous control than is now exercised these aggressions
+      will be any less active than they are to-day. It is coming
+      to be pretty generally realized that the Interstate Commerce
+      legislation has not fulfilled the expectation of its
+      friends. But this is a frequent trait of tentative
+      legislation. It is not reasonable to expect that the first
+      efforts to solve a problem the factors of which are so
+      hidden and complex will be followed by complete success."
+
+Concerning the changes needed to make Government regulation in the
+United States more effective, he says:
+
+      "A reform which would deal with an elaborate system of evil
+      cannot, therefore, be confined to treating consequences,
+      the separate instances of the system. There must be a power
+      which can go behind these and grapple with causes. There
+      must, therefore, be something more than a court. There must
+      be a commission, a department of government which will
+      provide organized supervision and inspection against which
+      the quasi-public corporation can claim no privacy as
+      inviolable. Such a department must be clothed with the power
+      to ascertain precisely where and how the evils of the
+      present methods originate, and when these are ascertained it
+      must be able to apply the remedy at the source of evil. The
+      remedial force must be of a preventive kind."
+
+A few grave misstatements of historical facts greatly mar Mr. Bonham's
+book. He makes, for instance, the following statement:
+
+      "Following this came restrictive legislation, which, in some
+      instances, was so unreasonable as to make any railway
+      management impossible. Some of the Granger legislation, and
+      especially that of Iowa, was of this character, as were also
+      some of the earlier efforts to secure Congressional
+      legislation."
+
+It was left to Mr. Bonham to discover that legislation ever made
+railroad management impossible in Iowa. The General Assembly of Iowa
+passed at two different times railroad laws that were greatly obnoxious
+to railroad managers. In 1874 it passed a maximum tariff act which, at
+the urgent solicitation of the railroad forces, was repealed four years
+later; and in 1888 it passed an act containing the principles of the
+Interstate Commerce Act and in addition authorizing the Board of
+Railroad Commissioners to fix _prima facie_ rates. Strange as it may
+seem to Mr. Bonham and other people inclined to believe without
+investigation the statements of railroad men, the earnings of the Iowa
+roads greatly increased immediately after the enactment of the so-called
+Granger laws in 1874, as the following table will show:
+
+  Year.  Miles of Railroad.  Gross Receipts.
+
+  1871          2,850          $12,395,826
+  1872          3,642           14,534,408
+  1873          3,728           15,430,619
+  1874          3,765           15,568,907
+  1875          3,823           18,422,587
+  1876          3,938           17,221,032
+  1877          4,075           20,714,496
+  1878          4,157           21,294,275
+
+When the Granger law was repealed in 1878, the railroads were earning
+$1,000 per mile more than they were earning when the law was enacted.
+The present railroad law, which was passed in 1888, and has also been
+the subject of extreme criticism on the part of railroad organs, has had
+the same beneficial effect. The law, owing to the obstacles thrown in
+its way by the railroad managers, did not become operative until 1889.
+From July 1st, 1889, to June 30th, 1892, the gross railroad earnings of
+the Iowa roads, which for three years had been at a standstill,
+increased and were over $7,000,000 more in 1892 than they had been any
+year previous to 1889, as will be seen from the table below:
+
+  Gross Railroad Earnings in Iowa.
+
+   1886-87          $37,539,730
+   1887-88           37,295,586
+   1888-89           37,469,276
+   1889-90           41,318,133
+   1890-91           43,102,399
+   1891-92           44,540,000
+
+The net earnings per mile of the Iowa roads were $1,421.91 in the year
+1888-89, and $1,821.37 the year following. The total net earnings of all
+Iowa roads during the year ending June 30th, 1891, were $14,463,106,
+against $11,861,310 during the year ending June 30th, 1889, and were
+still greater for the year ending June 30, 1892. No further vindication
+of the Iowa law is necessary. These figures show plainly that the
+lowering and equalizing of the rates not only increased the roads'
+business and income, but also their net earnings. And it must be
+remembered that the reports showing these facts were made by the
+railroad companies and were certainly not made with any intention of
+prejudicing the cause of the railroad manager.
+
+James F. Hudson, the author of "The Railways and the Republic," is a
+very exhaustive and instructive writer upon the subject of railroad
+abuses. His material is well selected, and the subject ably presented.
+To the assertion of railroad managers, that railroad regulation
+injuriously affects the value of railroad property, he makes the
+following reply:
+
+      "Suppose that it were true, as these jurists and writers
+      claim, that by the assertion of the public right to regulate
+      the railways the value of their property is decreased, are
+      there no other property rights involved? Do railway
+      investments form the only property in the land which
+      requires the protection of the law? Are we to understand
+      these judgments and their indorsers to mean that because
+      railroad property will depreciate if certain principles of
+      justice prevail, therefore justice is to be set aside for
+      the benefit of railway property? If the magnitude of
+      interests involved is to be of weight in deciding such
+      questions, let us put against 'the hundreds of millions' of
+      railway property on the one side the thousands of millions
+      of private property on the other. Railway regulation,
+      according to a writer in the _Princeton Review_, is
+      'confiscation of railroad property;' but this puts wholly
+      out of the question the idea of private property which is
+      rendered possible by leaving unchecked the power of the
+      railways over commerce and manufactures through the
+      manipulation of freight rates. Of the two parties in
+      interest the shippers represent far greater property
+      interests than the carriers, although the latter, by their
+      organization, are more powerful. I have yet to hear of a
+      single case where restrictive railway legislation has
+      seriously damaged the honest valuation of any railway. I
+      have yet to learn of any seriously proposed scheme of
+      regulation that has proposed to cut down railway profits
+      below a fair dividend on capital actually invested. But the
+      entire Nation knows of one notorious case in which the
+      discriminating policy of the leading railways of the country
+      has resulted in the wholesale confiscation of private
+      property for the benefit of a favored corporation."
+
+Concerning the inconsistency presented by the plea of railroad managers
+for a legalized pool, Mr. Hudson says:
+
+      "It has been argued for years that the subject is so
+      delicate and vast that it must not be touched by legislation
+      in the public interest. To protect the rights of the
+      ordinary shipper against the favorite of the railway would
+      so hamper the operations of trade, it has been repeated
+      times without number, as to take away the independence of
+      the railways and destroy the freedom of competition. Yet,
+      after years of argument that Government has no
+      constitutional power to interfere with the railways, and of
+      demonstration that all such interference must be ill-advised
+      and injurious, the railway logic comes to the surprising
+      climax of appealing to legislation for the aid of the law in
+      upholding their efforts to prevent competition."
+
+Mr. Hudson maintains that if the pool were legalized it would only be a
+means of swelling railroad earnings. He says:
+
+      "If the pool would maintain equitable rates its success
+      might be desired, but what guarantee is there that the
+      complete establishment of its power would make such rates?
+      Its very character, the functions of the men who control its
+      policy, and its avowed object of swelling the earnings of
+      railways by artificial methods, forbid such an expectation.
+      Make the success of the pool absolute, so that it can work
+      without fear of competition, and its rates will be uniform,
+      but of such a character that their uniformity will be a
+      public grievance and burden.... A grave effect of this
+      policy, though not easily calculable, is the ability it
+      gives to railway officials to control the prices of stocks,
+      and the temptation to enhance their fortunes by so doing....
+      It is a heavy indictment against the pooling system that it
+      gives power to avaricious and unscrupulous men in railway
+      management to enrich themselves at the cost of shareholders
+      and investors, both by forming combinations and by exciting
+      disputes or ruptures in them."
+
+The question whether the common law does not protect the public
+sufficiently is well answered by Mr. Hudson as follows:
+
+      "The common law is sufficient in theory, but it has failed
+      in practice.... In practice, legal remedies against railway
+      injustice can be applied to the courts only by fighting the
+      railways at such disadvantages that the ordinary business
+      man will never undertake it except in desperate cases. Every
+      advantage of strength and position is with the railways....
+      This [the railroad] power has kept courts in its pay; it
+      defies the principles of common law and nullifies the
+      constitutional provisions of a dozen States; it has many
+      representatives in Congress and unnumbered seats in the
+      State legislatures. No ordinary body of men can permanently
+      resist it."
+
+But the remedy which Mr. Hudson proposes for the correction of railroad
+evils is one of doubtful efficacy. It is this:
+
+      "Legislation should restore the character of public highways
+      to the railways by securing to all persons the right to run
+      trains over their track under proper regulations, and by
+      defining the distinction between the proprietorship and
+      maintenance of the railway and the business of common
+      carriers."
+
+While it is admitted that the opening of the railroads to the free use
+of competing carriers is not necessarily impractical from a technical
+point of view, it cannot be admitted that the proposed remedy would cure
+the evil. There would certainly be nothing to hinder carrying companies
+forming a trust which might prove more dangerous to the interests of
+shippers than are to-day the combinations of the railroad companies.
+
+Mr. Hudson devotes a chapter to the railroad power in politics, and
+shows how corporations, through their wealth, have secured the greatest
+and most responsible offices in the executive, legislative and judiciary
+departments of the Government. Speaking of their influence in the
+Supreme Court of the United States, he says:
+
+      "The assertion that Jay Gould paid $100,000 to the
+      Republican campaign fund in 1880, in return for which Judge
+      Stanley Mathews was nominated to the Supreme Bench, is
+      denied as a political slander; but the fact remains that
+      this brilliant advocate of the railway theories of law has
+      been placed in the high tribunal, and that his presence
+      there together with Justice Field, long a judicial advocate
+      of the corporations, is expected to protect the railways in
+      future against such constructions of law as the Granger
+      decisions."
+
+An English writer, Mr. J.S. Jeans, presents, in his "Railway Problems,"
+a great deal that is of interest to American readers. The statistical
+data of his work are especially interesting. We learn that the United
+Kingdom has nearly twenty railroad employes per mile of road operated,
+to less than five in the United States, and that the average number of
+employes per £1,000 ($4,850) of gross earnings is on the railroads of
+the United Kingdom 5.4 to only about half as many in the United States.
+We further learn that the average earnings per train mile in America are
+over 25 per cent. higher than they are in the United Kingdom, and exceed
+those of most European countries.
+
+Of the remarkable increase in number and the profitableness of the
+third-class passenger traffic in England Mr. Jeans says:
+
+      "There has hitherto been a great lack of knowledge in this
+      country as to the extent to which the different classes of
+      passenger traffic yield adequate profit to the railroad
+      companies. English passenger traffic differs from that of
+      most other countries in this respect, that the chief
+      companies attach third-class carriages to almost every
+      train. The accommodation provided for third-class passengers
+      in England is also much superior to what is found in other
+      countries where there is the same distinction of classes.
+      The effect of those two distinguishing features of the
+      English railway system is that third-class carriages are
+      much more and first-class carriages much less utilized than
+      in other countries. The tendency appears to be towards an
+      increasing use of third-class, and a decreasing use of
+      first-class vehicles. But, all the same, the leading English
+      lines continue to provide a large proportion of first-class
+      accommodation in every train, and it is no unusual thing to
+      find the third-class carriages of express trains absolutely
+      full, while first-class carriages are almost empty. The
+      natural result is that third-class travel is a source of
+      profit, while first-class travel is not.... So far as
+      passenger traffic is a source of net profit, that profit is
+      contributed by the third-class. The total receipts from
+      passenger traffic in England and Wales amounted in 1885 to
+      £21,968,000. But if the average receipts per carriage over
+      the whole had been the same as in the case of the Midland
+      first-class vehicles, namely, £330, the total receipts from
+      passenger traffic would only have been about nine millions.
+      It is not necessary to be an expert in order to see that
+      traffic so conducted must be attended with a very serious
+      loss."
+
+Of the stock-watering of American railroad companies Mr. Jeans says:
+
+      "It seldom happens that in the United States the cost of a
+      railway and its equivalent corresponds, as it ought to, to
+      the total capital expenditure. There is no country in the
+      world where the business of watering stocks is better
+      understood or carried out more systematically and on so
+      large a scale. For this reason there is liable to be a great
+      deal of error entertained in reference to the natural cost
+      of American lines."
+
+There are many financial journals that are so closely identified with
+the speculative interests of the country, and many railway papers that
+depend so largely upon railway men for support, that railway managers
+are never without a medium through which they can present their views to
+the public. A systematic and concerted effort is also constantly made by
+the railroads to pervert the press of the country at large. The great
+city papers generally yield to their influences and enlist in their
+service, and yet there are notable exceptions to this.
+
+In speaking of the extravagant sums which the railroads paid to the
+great dailies, ostensibly for advertising, but in fact for their good
+will and other services, a railroad superintendent recently said that it
+was an infamous outrage, and yet it was the best investment of money
+that his company could make. The country papers have shown more
+integrity in maintaining their independence, but the railroads are not
+without their organs among them. It is not unfrequent to find some of
+them defending railroad abuses with all the apparent zeal of a Wall
+Street organ, and a glance at their columns often reminds one of Mr.
+Lincoln's story of the Irishman and the pig. Mr. Lincoln defended an
+Irishman against the charge of stealing a pig. After the testimony was
+taken in court, Mr. Lincoln called his client aside and told him that
+the testimony was so strong against him, and that the case was so clear,
+that it was impossible for him to escape conviction, and he advised him
+to plead guilty and throw himself on the mercy of the court. "No, Mr.
+Lincoln," said Patrick, "you go back and make one of your great speeches
+and swing your long arms and talk loud to the jury, and you will win
+the case." Mr. Lincoln, in accordance with that disposition to
+accommodate so strongly characteristic of him, did as he was directed by
+his client, and to his great surprise the jury promptly brought in a
+verdict of not guilty. After it was all over, Mr. Lincoln said: "Now,
+Patrick, tell me why that jury acquitted you. I know that you stole the
+pig, and my speech had nothing to do in securing your acquittal."
+Patrick replied: "And sure, Mr. Lincoln, every one of those jurymen ate
+a piece of the pig."
+
+
+
+
+CHAPTER X.
+
+RAILROAD LITERATURE--CONTINUED.
+
+
+Railroad questions have become of such general interest that their
+discussion has become a prominent factor of magazine literature. It is a
+significant fact that these contributors are usually railroad men, and
+under these circumstances an unbiased discussion of the questions at
+issue is indeed a rare occurrence. It is but too frequently the sole
+object of the contributor, and not unfrequently even of the publisher,
+to create a public sentiment in favor of the unjust demands of railroad
+managers.
+
+During the last few years systematic efforts have been made by the
+railroad interests to influence public opinion against the Interstate
+Commerce Law and restrictive State legislation through the leading
+magazines of the country. Mr. Sidney Dillon, president of the Union
+Pacific Railroad, in an article which appeared in the April (1891)
+number of the _North American Review_, under the title "The West and the
+Railroads," endeavors to show that the West is indebted to the railroad
+managers for nearly all of the blessings which its people enjoy, and
+that therefore railroad legislation in the West is a symptom of rank
+ingratitude. He prefaces his argument with the remark that the elder
+portions of our commonwealth have already forgotten, and the younger
+portions do not comprehend or appreciate, that but for the railroads
+what we now style the Great West would be, except in the valley of the
+Mississippi, an unknown and unproductive wilderness. He then argues
+that, inasmuch as the railroads carry the wheat of Dakota and Minnesota
+to the sea-coast, and bring those sections of our community into direct
+relation with hungry and opulent Liverpool, the world should "thank the
+railway for the opportunity to buy wheat, but none the less should the
+West thank the railway for the opportunity to sell wheat." It does not
+seem to occur to Mr. Dillon that the railway might, with equal
+propriety, thank the world in general, and the Great West in particular,
+for its opportunity to carry wheat.
+
+We are also told that the railway has reclaimed from nature immense
+tracts of land that were worthless except as to their possibilities,
+which once seemed too vague and remote to be considered and are to-day
+valuable; that it has changed the character of the soil as well as the
+climate of the West, and we are almost given to understand that in many
+respects it has assumed the functions of Providence. Mr. Dillon
+generously admits, however, that railways have not been built from
+philanthropic motives and that we find among railroad promoters and
+contractors men of large fortunes. He then proceeds to reprimand the
+States west of the Mississippi for their "ungrateful" legislation,
+which, he says, interferes with the business of the railway, even to the
+minutest detail, and always to its detriment. Such legislation
+exasperates Mr. Dillon the more because it originated in States "which
+happened to be the communities that owe their birth, existence and
+prosperity to these very railways." Mr. Dillon then gives vent to his
+wrath by the use of such terms as impertinence, ignorance and
+demagogism. He holds that legislative enactments as to the rights and
+liabilities of railway corporations are useless, "because the common law
+has long since established these as pertaining to common carriers, and
+the courts are open to redress all real grievances of the citizen." Upon
+this theory we might as well dispense with the legislative department of
+the Government, for there is no relation in the community to which the
+principles of the common law can not be applied. Besides this, Mr.
+Dillon entirely ignores the fact that the railway company is not only a
+common carrier, but the keeper of the highway, and as such is subject to
+Government control as much as the turnpike tollgate keeper or the
+collector of customs. "Then as to prices." Mr. Dillon continues: "These
+will always be taken care of by the great law of competition, which
+obtains wherever any human service is to be performed for a pecuniary
+consideration. That any railway, anywhere in a republic, should be a
+monopoly, is not a supposable case."
+
+Like the rest of railway men, Mr. Dillon excels in painting dark
+pictures of railroad catastrophes. A sample production of his art is
+here presented:
+
+      "One of the greatest dangers to the community in a republic
+      is this: that it is in the power of reckless, misguided or
+      designing men to procure the passage of statutes that are
+      ostensibly for the public interest and that may lead to
+      enormous injuries. Let us imagine for a moment that all
+      railways in the United States were at once annihilated. Such
+      a catastrophe is not, in itself, inconceivable; the
+      imagination can grasp it, but no imagination can picture the
+      infinite sufferings that would at once result to every man,
+      woman and child in the entire country. Now, every step taken
+      to impede or cripple the business and progress of our
+      railways is a step towards just such a catastrophe, and
+      therefore a destructive tendency."
+
+Mr. Dillon, losing sight of all other interests, did not think that his
+nonsensical mode of reasoning would apply equally well to them. Let us,
+for instance, imagine for a moment that all of the farms of the United
+States were at once annihilated. Can the imagination picture the
+infinite sufferings that would at once result to every man, woman and
+child in the whole country? Now, is not any step taken to impede or
+cripple the business of farming a step towards just such a catastrophe,
+and therefore of a destructive tendency? Mr. Dillon then avails himself
+of an opportunity to give the people of the United States some
+gratuitous advice when he says:
+
+      "We do not arrogate superior wisdom or intelligence to
+      ourselves when we suggest to the people of the United
+      States, and especially that portion of the country where
+      railroads have been the subject of what we consider to be
+      excessive legislation, that the rational mode of treating
+      any form of human industry that has for its object the
+      performance of desired and lawful service is to let it
+      alone, and that the railway is no exception to this
+      principle."
+
+This is the very plea that Jefferson Davis made when he kindled the
+flame of treason.
+
+       *       *       *       *       *
+
+In the March, 1891, number of the _Forum_, Mr. W. M. Acworth discusses,
+under the title "Railways under Government Control," the working of the
+railway systems of the different nations. He holds that the management
+of railroads which are the property of the State is, as a rule, greatly
+inferior to the management of those roads which are the property of
+private trading corporations; he assigns to the railway experts of
+England and America the first places among the railway experts of the
+world, and appears to attribute all the good in the railroad management
+of these countries to the absence of State interference, and all the
+evil in the management of the railroads of other countries to the fact
+that such interference exists. He says of the railroads of England and
+the United States:
+
+      "In speed and accommodation, in the energy which pushes
+      railways into remote districts, and in the skill which
+      creates a traffic where no traffic existed before, they
+      stand to-day in the front rank, as they have stood for the
+      last half century. To say that they are very far from
+      perfect is nothing; it is only to say that they are worked
+      by human agency. Their worst enemies will scarcely deny that
+      they are at least alive; so long as there is life there may
+      be growth, and we may hope to see them outgrow the faults of
+      their youth. The charge made against State railway systems
+      is that they are incapable of vigorous life. The old adage
+      which proclaimed that 'necessity is the mother of invention'
+      has been re-stated of late years as the law of the survival
+      of the fittest in the struggle for existence. If the
+      doctrine is true, the State railway system, relieved from
+      the necessity of struggle, must cease to be fit and will
+      fail to survive."
+
+While it is not intended to enter here into a defense of a State railway
+system, it may justly be questioned whether "the State railway system,
+relieved from the necessity of struggle, must cease to be fit and will
+fail to survive." The growth of the State system in Europe is in itself
+a sufficient refutation of Mr. Acworth's theory. The mail service has
+for several hundred years been a monopoly of the government; but, while
+it is far from being perfect, it remains to be demonstrated that private
+enterprise could give to the public a better service in the long run.
+
+Mr. Acworth is an Englishman who in former years wrote many bitter
+things concerning the abuses which he then thought he saw in the
+management of the railroads of his native country, which, according to
+his own statement, are, besides those of the United States, the only
+roads in the world for whose regulation competition has been relied upon
+in the past. Mr. Acworth has become a convert to the _laissez faire_
+theory of dealing with railroads and now evinces an unusual, but perhaps
+pardonable, zeal in the defense of his new position. In the preface to
+his book, "The Railways of England," he says upon the subject:
+
+      "I have published before now not a few criticisms (which
+      were meant to be scathing) on English railways anonymously.
+      I find myself using, under my own name, the language of
+      almost unvarying panegyric. This is partly to be explained
+      by the plan of the book, which professes to set before the
+      reader those points on each line which best merit
+      description--its excellencies, therefore, rather than its
+      defects. Much more, however, is it due to a change of
+      opinion in the writer.... I have found in so many cases that
+      a satisfactory reply existed to my former criticisms, that I
+      have perhaps assumed that such an answer would be
+      forthcoming in all; and if I have taken up too much the
+      position of an apologist, where I should have been content
+      to be merely an observer, let me plead as my excuse that I
+      am only displaying the traditional zeal of the new-made
+      convert."
+
+Prof. Hadley, of whose work, "Railroad Transportation, its History and
+its Law," mention has been made above, contributed an article to the
+April, 1891, number of the _Forum_, under the title "Railway Passenger
+Rates." He endeavors to show that the high passenger rates of American
+railroads are due solely to superior service. He says:
+
+      "Continental Europe pays two-thirds as much as America or
+      England and gets an inferior article. India pays still less
+      and gets still less. The difference is seen both in quality
+      and quantity of service. In India express trains rarely run
+      at a greater speed than 25 miles an hour. In Germany and
+      France their speed ranges from 25 to 35 miles an hour, and
+      only in exceptional instances is more than 40 miles an hour.
+      In the United States and in England the maximum speed rises
+      as high as 50, or, in exceptional instances, 60 miles an
+      hour. With regard to the comfort of the cars in different
+      countries, there is more room for difference of opinion;
+      but there can be no doubt that the average traveler in the
+      United States, or even in the English third-class car, fares
+      better than he would in the corresponding class on
+      continental railroads, and infinitely better than the bulk
+      of travelers in British India."
+
+It may be admitted that upon the whole the speed of American and English
+railroads is greater than that of continental roads, yet the difference
+is much less than Mr. Hadley would make us believe. The fast trains of
+the Berlin and Hamburg Railroad, according to Röll's "Railroad
+Encyclopedia," make the distance of 179 miles in three hours and
+forty-four minutes. The average speed is therefore 48 miles an hour.
+There are but few lines in the United States whose regular express
+trains run at a greater speed. The express trains of the Berlin and
+Brunswick line make 45-1/2 miles an hour. Trains are run on the Vienna
+and Buda-Pesth Railway at the rate of 42 miles an hour and on the Paris
+and Calais Railway at a rate of over 40 miles an hour. Official reports
+give the average speed of express trains in Northern Germany as 32.2
+miles per hour, which is considerably more than the average speed of our
+Western trains, upon which the rates charged are twice as high as those
+charged by German roads. The average speed of the express trains in
+England was 35.7 miles per hour in 1890, in the Netherlands 30.7 miles,
+in France 30 miles, in Denmark and Southern Germany 28.8 miles and in
+Austria 27.8 miles per hour. Accurate statistics showing the average
+speed in America are not in existence, but it may well be questioned
+whether the difference between the speed of American and European trains
+is sufficient to justify upon that score any essential difference in the
+rates. Mr. Hadley's statement that the average traveler in the United
+States, or even in the English third class, fares better than he would
+in the corresponding class on continental railroads, is far too sweeping
+to be true. It is certain that the Belgian, German, Austrian or French
+second-class coupes are much to be preferred to the smoking and emigrant
+cars which in America are made to take their places.
+
+To prove that much more work is demanded of American railroads than of
+European railroads, Mr. Hadley presents the following table:
+
+                                                        Annual Train
+                                           Miles run     Service per
+                                           by Trains       head of
+    Countries.             Population.     annually.     Population.
+
+  United States (1889)      61,000,000    724,000.000      12
+  Great Britain (1889)      38,000,000    303,000,000       8
+  Germany (1889)            48,000,000    181,000,000       3-3/4
+  France (1888)             38,000,000    145,000,000       3-3/4
+  Austria-Hungary (1887)    40,000,000     66,000,000       1-2/3
+  India (1889)             200,000,000     51,000,000       0-1/4
+
+And he adds: "These figures are for passenger trains and freight trains
+together, as some countries do not give statistics of the two
+separately; but the general results would be nearly the same if
+passenger trains alone could be considered. The figures show that, for
+every man, woman and child, a train is run twelve miles annually in the
+United States, in Great Britain eight miles, in Germany or France a
+little less than four miles, in Austria not much more than a mile and a
+half, and in British India less than a quarter of a mile."
+
+This statement, even if correct, is certainly misleading. No allowance
+is made for the greater distances and the greater average haul in
+America, and none for our bulky raw products, which require more car
+room than the manufactured goods predominating as freight in Europe.
+
+If Mr. Hadley's statement of miles run by trains annually is used in
+connection with Mr. Poor's statement showing the length, for 1889, of
+the railroads of the countries given in the above table, it can be shown
+that the average number of trains run annually per mile is considerably
+less here than in Europe:
+
+                    Length of                   Average Number
+                    Railroad      Miles run        of Trains
+                    in miles      by Trains      per mile per
+    Countries.       (1889).     annually.          annum.
+
+  United States      161,396     724,000,000         4,485
+  Great Britain       19,930     303,000,000        15,203
+  Germany             25,360     181,000,000         7,137
+  France              21,910     145,000,000         6,618
+  Austria-Hungary     15,990      66,000,000         4,127
+
+It is seen that while the average number of trains run per mile per
+annum is only 4,485 in the United States, it is 6,618 in France, 7,137
+in Germany, and 15,203 in Great Britain. In Austria-Hungary it is
+somewhat less than here. It is not claimed that this is in every respect
+a fair argument; but it is at least as fair as Mr. Hadley's. As has been
+stated before, the average earnings per train mile are larger in the
+United States than in most nations, and, excepting Sweden, railway
+capital has the highest gross earnings of any nation in the world; and
+when Mr. Hadley bases his argument in favor of higher rates for American
+railroads than for those of Europe upon the claim that the latter secure
+larger train loads, he simply reasons from false premises.
+
+Mr. Hadley then continues:
+
+      "But why cannot our railroad men, with our present train
+      service, secure larger loads by making lower rates, and give
+      us cheap service as well as plenty of it? Why cannot we
+      secure two good things instead of one? For two reasons:
+      First, because it is not certain that low rates will be
+      followed by greatly increased travel; second, because such
+      increased travel would not be so economical to handle in
+      America as it is in Europe. It is wrong to assume that,
+      because reductions of charges in Europe have increased travel
+      enormously, they would have a proportionate effect in America
+      and a corresponding advantage in American railroad economy.
+      It is a somewhat significant fact that second-class trains at
+      reduced rates have been extremely successful in Europe and
+      not at all so in America. Other things being equal, the
+      American public would be glad to have its travel at lower
+      fares; but it cares more for comfort and speed, and for being
+      able to travel at its own times, than for a slight difference
+      in charge. The assumption so frequently made, that a
+      reduction in fares would cause an enormous increase in travel
+      in this country, is for the most part a pure assumption, not
+      borne out by the facts."
+
+The great increase in business which has everywhere followed reductions
+in postage rates, telegraph rates and street-car fares, as well as
+railroad rates, sufficiently refutes the assertion that it is not
+certain that low rates would be followed by greatly increased travel. If
+the second class has not been as successful here as in Europe this is
+solely due to the fact that the American railroad companies have
+systematically discouraged second-class travel by forcing passengers
+into filthy and over-crowded cars. The statement that increased travel
+would not be so economical to handle in America as in Europe scarcely
+needs a reply. If, as Prof. Hadley says, the American public demand more
+frequent trains than the people of Europe, and if these frequent trains
+are not at present profitable to our railroad companies, it would seem
+to be plainly to their interest to hold out every inducement to the
+public to increase travel and thus fill their trains.
+
+Mr. Hadley does not aid his argument when, referring to the Hungarian
+zone system, he says: "The importance of the zone system in Austria and
+in Hungary lies in the fact that its adoption was accompanied by a great
+reduction in rates. The unit rate for slow, third-class trains, which
+had previously been nearly a cent and a half a mile, was reduced to less
+than one cent.... The use of railroads under the new system, though
+vastly greater than it was before, is vastly less than that of a
+well-managed American road at American rates." Mr. Hadley inadvertently
+presents here one of the very best reasons why our passenger rates
+should be reduced.
+
+The fact is, railroad men are opposed, and always have been opposed, to
+reduction of rates, and to all progressive movements that require
+increased expenditures or threaten to temporarily reduce their revenues.
+When the introduction of the zone system was first advocated in Hungary
+it was opposed by just such men and just such arguments.
+
+No one can contradict the following facts, viz.: That the average cost
+of European roads is much greater than that of American roads; that the
+number of railroad employes per mile is much greater there than here;
+that much larger sums are expended for repairing and improving the
+roads, and that therefore the lives of passengers are much safer in
+Europe than in America; and that the average speed and corresponding
+accommodations of European trains, and especially those of England,
+Germany, France and Austria-Hungary, compare quite favorably with the
+average speed and corresponding accommodations of our roads. It is,
+under these circumstances, absurd to claim that the higher prices
+charged by American roads are due to the greater cost of service.
+
+Mr. Hadley's labors as a railroad author have, it seems, greatly
+increased his corporation bias. In an address which he delivered before
+the American Bankers' Association at New Orleans in November, 1891, upon
+the subject of "Recent Railroad Legislation and its Effects upon the
+Finances of the Country," he made a number of assertions which ill
+comport with the fairness of a public statistician or the wisdom of a
+Yale professor. After a few introductory remarks, Prof. Hadley made the
+following statement:
+
+"Every one knows that railroad property has fallen in value since the
+passage of the Interstate Commerce Act four years and a half ago; few
+have made any accurate estimate of the amount of that fall. Let us take
+the stock of the leading railroad systems centering in Chicago as a
+type. Here we find an aggregate shrinkage of over $60,000,000, or more
+than one-quarter of the par value of the stocks.
+
+                           Par Value.       Price.         Shrinkage.
+                                        Apr. 4,  Nov. 4,
+                                         1887.    1891.
+  C., M. & St. P.          $30,904,261      93       75    $5,560,000
+      "    "    Preferred   21,555,900     122      119       647,000
+  C. & N. W.                31,365,900     121      116     1,568,000
+      "    "    Preferred   22,325,454     148      139     2,009,000
+  C., R. I. & P.            41,960,000     126       82    18,462,000
+  C., B. & Q.               77,540,500     140       98    32,567,000
+                           -----------                     ----------
+              Total.      $225,651,000                    $60,815,000"
+
+The table shows that fifty-one million of these sixty million dollars
+are the shrinkage of the Chicago, Rock Island and Pacific and the
+Chicago, Burlington and Quincy stocks. It is surprising that Prof.
+Hadley should be ignorant of the real causes of this depreciation, which
+are known to nearly every Granger in the West. In 1887 the Chicago, Rock
+Island and Pacific Railroad Company owned 1,121 miles of road, only 172
+of which were outside of the States of Illinois and Iowa. In 1891 the
+same company owned 2,725 miles of road, with 1,776 miles outside of
+Illinois and Iowa and scattered through Missouri, Kansas, Nebraska,
+Colorado, Indian Territory and Oklahoma. In Kansas alone the Rock Island
+system grew from two miles in 1887 to 1,059 miles in 1891. In other
+words, to a little over a thousand miles of _good_ road the company's
+managers added nearly 2,000 miles of poor road and a proportionate
+amount of new stock, and the depreciation in the company's stock which
+followed was no greater than one should have expected under such
+circumstances. The managers of the Rock Island and the promoters of
+these new lines found the transactions to their advantage, while the
+original stockholders of the company had to bear the imposition, as
+hundreds of thousands of railroad stockholders had done before them. But
+neither the law of Congress nor that of any State was to blame for this
+depreciation of the Rock Island stock.
+
+Since 1891, railroad stocks have advanced on an average at least twenty
+per cent., and during the last sixty days have declined about
+twenty-five per cent., although there has been no essential change in
+interstate or State legislation. It is certainly as fair to call the
+advance the ultimate result of restrictive railroad legislation as to
+attribute to that legislation the shrinkage above referred to. Extensive
+speculations similar to those just mentioned were, during the same
+period, indulged in by the managers of the C., B. & Q. Railroad Company
+and its protegé, the C., B. & N., who, in addition to this, greatly
+injured their road in 1888 by the unjust provocation of the engineers'
+strike. So destructive were this strike and its consequences to the
+company's business that it is difficult to account for the motives of
+those who provoked and stubbornly prolonged it except upon the theory
+that it played an important role in their stock manipulations.
+
+But the recent legislation of a considerable number of States has, in
+Prof. Hadley's opinion, been still more detrimental to railroad
+interests than that of Congress. He says;
+
+      "In the second place, the legislatures of several States,
+      stimulated by the example of Congress, hastened to pass in
+      imitation, of the Interstate Commerce Act, laws which, in
+      many instances, went far beyond their model in point of
+      stringency. Examples are furnished by the statutes of Iowa,
+      Maryland, Minnesota and South Carolina in 1887-88; of
+      Florida in 1888-89, and of no less than thirteen States in
+      1889-90, viz.: Georgia, Iowa, Kentucky, Massachusetts,
+      Mississippi, New Hampshire, New Jersey, North Dakota, Ohio,
+      Rhode Island, South Dakota, Virginia, Wyoming; as well as by
+      the recently adopted Constitution of Kentucky. The
+      legislation of 1890-91 shows a slight reaction against the
+      movement of the three years previous.
+
+      "In two respects the State legislatures went quite beyond
+      the scope of the Interstate Commerce Act. They tried to
+      prescribe safety appliances to the operating department, and
+      rates to the traffic department. Of the first of these
+      groups little need be said, except that as a rule they have
+      failed to accomplish any great progress toward the result in
+      view, and have in some instances actually hindered such
+      progress. The attempt at prescribing rates was more serious.
+      It involved a return to the methods of the Granger
+      legislation, fifteen years earlier, which had operated so
+      disastrously upon the railroads and the public alike. The
+      system of commissioners with powers to make schedules which
+      should be at least _prima facie_ evidence of reasonable
+      rates had, during the intervening period, never been wholly
+      abandoned; but the powers thus conferred had been sparingly
+      exercised. It was either left unused, as was generally the
+      case in the North from 1877 to 1887, or the schedule rates
+      were put so high as not to interfere with good railroad
+      economy, of which examples are seen in Georgia and other
+      parts of the South. But from the year 1887 onward there was
+      a pressure upon the Commissioners to make schedules, and to
+      make them low; and lest these boards should not be able to
+      reflect the popular feeling directly enough, they were, in
+      some instances, no longer to be appointed by the Governor,
+      but elected by popular vote. The law which was most severely
+      applied and attracted most public attention was that of
+      Iowa.... The agitation against the railroads has many points
+      in common with the land agitation in Ireland. Absentee
+      ownership is at the bottom of the trouble in either case.
+      Property is owned in one place and used in another, and the
+      users, not satisfied with the conditions of use, insist on
+      taking the business direction into their own hands. They
+      claim the right to fix rates in Iowa for the same general
+      reasons by which they claim the right to fix rents in
+      Ireland."
+
+It must be presumed that Mr. Hadley is ignorant of the fact that under
+the Iowa Commissioners' tariff the gross earnings of the Iowa railroads
+increased $7,000,000, or more than 17 per cent., in about three years,
+and their net revenue increased in proportion. Never have the railroads
+or the people of Iowa enjoyed a healthier prosperity than they do at
+present. It is true that the State of Iowa denies to the railroad
+companies the right to charge what they please; but this claim does not
+prevent them from doing justice to the absentee owner of railroad
+property. That absentee owners of property are disposed to take undue
+advantage of those who use it is illustrated in the very case which Mr.
+Hadley cites. So flagrant was the injustice done by the English landlord
+to the Irish tenant that the English Parliament was constrained to
+interfere and correct it.
+
+Mr. Hadley says further:
+
+      "It is seen in Iowa to-day, where, as a result of radical
+      legislation with regard to rates, railroad construction has
+      almost entirely ceased, the average for the years 1888-90
+      being less than fifty miles."
+
+Now Professor Hadley hails from the State of Connecticut, where
+railroads are permitted to make their own tariffs and where legislators
+are supposed not to be hostile to them. According to Poor's Manual, that
+State had 1,004.02 miles of railroad in 1888, and just 2.52 miles more
+in 1891, while Iowa had 8,364 miles in 1888, 8,436 in 1891, and 8,505
+miles on January 1, 1893. Will Mr. Hadley please explain why railroad
+construction has ceased in Connecticut? Iowa has one mile of railroad
+for every 227 inhabitants, and Connecticut has one for every 741
+inhabitants, although the per capita valuation is $473 in the latter,
+and only $273 in the former State. Nor have other Eastern States done
+much better than Connecticut. During the three years 1888-1891 there
+were built 74 miles of railroad in New Hampshire, 50 in Vermont, 23 in
+Massachusetts and 9 in Rhode Island. Iowa has an area of 56,000 square
+miles and a population of 1,911,896, an assessed valuation of
+$520,000,000; New England has an area of 66,400 square miles, a
+population of 4,700,745, and an assessed valuation of $3,500,000,000.
+Yet Iowa has 1,576 miles of railroad more than all the New England
+States together. She has a railroad net as close as that of the Empire
+State, having one mile of road to about 6-1/2 miles of territory,
+although the population of that State is three times as dense as hers.
+Nevertheless, railroad construction is at present active in Iowa,
+several lines of road are in the process of construction at the present
+writing, and there is every indication of still greater activity in the
+near future. The _Railway Age_ of March 17, 1893, in a detailed list of
+new lines projected or under construction in the United States, gives
+for Connecticut only 32 miles, while it gives for Iowa 930 miles.
+
+Mr. Hadley continues:
+
+      "It is seen to some extent in the Northwest as a whole. At
+      the close of the year 1887 the States included by Henry V.
+      Poor in the Central, Northern and Northwestern groups had
+      25,040 miles of road, while those of the South Atlantic,
+      Gulf and Mississippi Valley had but 24,567. To-day this
+      relation is reversed: the Northwest has but 27,294 miles,
+      while the South has 30,696."
+
+Had Mr. Hadley taken the pains to look up the population of these groups
+he would have found that the "South" is fully three times as populous as
+the "Northwest," and that therefore his figures prove nothing beyond the
+fact that at the present rate of gain the railroad facilities of the
+South will in a quarter of a century be equal to those of the Northwest
+to-day.
+
+But the argument is weak in another respect. The State in the Southern
+group that made by far the greatest gain in railroad mileage during the
+period mentioned by Mr. Hadley is Georgia, which gained about 1,000
+miles in three years, yet that State prescribed rates for railroad
+companies six years before Iowa did, and has for many years exerted a
+more thorough control over her railroads than perhaps any other State in
+the Union. The smallest increase is in West Virginia, which during the
+period given gained an average of only 69 miles per annum; and yet in
+West Virginia railroads charge their own rates and usually have their
+own way.
+
+Finally Prof. Hadley says:
+
+      "Where are we to find the limit to such unwise action? The
+      United States Supreme Court can do something and has shown a
+      disposition to do something. In the Minnesota cases it
+      repudiated the doctrine of uncontrolled rights on the part
+      of the legislature to make rates, as emphatically as it
+      repudiated the doctrine of uncontrolled rights on the part
+      of agents of the corporation in the Granger cases, twelve
+      years before."
+
+It is evident that Mr. Hadley is as much mistaken in his interpretation
+of the decision of the court as he has been in his other assertions, as
+will be seen from the following extract from Judge Blatchford's opinion
+in Budd vs. New York, in which he says, "The main question involved is
+whether this court will adhere to its decision in Munn vs. Illinois."
+
+The court first quoted from the opinion of Judge Andrew of the Court of
+Appeals of New York, as follows: "The opinion further said that the
+criticism to which the case of Munn vs. Illinois had been subjected
+proceeded mainly upon a limited and strict construction and definition
+of the police power; that there was little reason, under our system of
+government, for placing a close and narrow interpretation on the police
+power, or restricting its scope so as to hamper the legislative power in
+dealing with the varying necessities of society and the new
+circumstances as they arise calling for legislative intervention in the
+public interest; and that no serious invasion of constitutional
+guarantees by the legislature could withstand for a long time the
+searching influence of public opinion, which was sure to come sooner or
+later to the side of law, order and justice, however it might have been
+swayed for a time by passion or prejudice or whatever aberrations might
+have marked its course."
+
+Judge Blatchford then said: "We regard these views, which we have
+referred to as announced by the Court of Appeals of New York, so far as
+they support the validity of the statute in question, as sound and
+just.... We must regard the principle maintained in Munn vs. Illinois as
+firmly established."
+
+General Horace Porter has made a contribution to the railway rate
+literature by an article which appeared in the December, 1891, number
+of the _North American Review_. Unfortunately many of the General's
+statements are either false or misleading. Thus, in a table which he
+presents for the purpose of comparing the passenger rates of Europe with
+those of the United States, he gives the regular first-class schedule
+rates for the United Kingdom, France and Germany and the average
+earnings per passenger per mile for this country. That this is an unfair
+comparison needs no further argument, especially when it is remembered
+that in Europe from 85 to 90 per cent, of all passengers are carried in
+the third class at a regular rate averaging about 1-1/2 cents per mile,
+and that considerable reductions are made for excursion, commutation and
+return tickets.
+
+But General Porter says concerning American rates:
+
+      "When we take into consideration the excursion and the
+      commutation rates, we find first-class passengers carried as
+      low as half a cent a mile."
+
+Now the question arises whether American railway companies carry
+passengers at such rates with or without loss to themselves. If they are
+carried at a loss, an injustice is done to the regular passengers, whose
+fare must not only make up the loss, but yield a larger profit than
+would otherwise be necessary. If, on the other hand, a rate of half a
+cent a mile can be made remunerative, there is certainly no justice in
+maintaining rates five and six times as large on well-patronized lines.
+General Porter places stress upon our superior accommodations in the way
+of lighting, ventilation, ice-water, lavatories, and free carriage of
+baggage, etc., and then adds:
+
+      "In this connection we must also recollect that the cost of
+      fuel, wages and all construction materials is considerably
+      higher here than in Europe, while the population from which
+      the railways derive their support is much more sparse; the
+      United States having 166,000 miles of railway with a
+      population of 63,000,000, while Europe has only 135,000
+      miles with a population of 335,000,000."
+
+We grant the point which the General makes on ventilation, ice-water,
+etc.; but, to make the comparison a fair one, he should also have
+referred to the much greater cost of European roads, to their much
+greater number of employes per mile, to the much shorter haul, to the
+higher price of their fuel, to the superiority of their roadbed and the
+greater security of their passengers. Moreover, whether the railroads of
+a country are profitable or not cannot be ascertained by merely
+comparing miles of road with square miles of territory and number of
+inhabitants. British India has a population of 275,000,000 and only
+about 16,000 miles of railroad, and yet her roads are scarcely as
+profitable as our own. China has 3,000,000 and Asia has about 4,000,000
+people to every mile of railroad, but so far their railroads have proved
+no bonanza. The question is not how many people there are to each mile
+of railroad, but rather to what extent the railroad is used by the
+people. The amount of freight carried annually by the railways of the
+United States is about 680,000,000 tons, or 85,000,000,000 ton miles,
+and the number of passengers carried is about 535,000,000, representing
+an aggregate of travel of nearly 13,000,000,000 miles. This shows an
+average of 1,300 tons of freight carried one mile, and 200 miles
+traveled annually for each inhabitant of the nation, and a greater use
+of railway facilities than that of any other country in the world. The
+income of the railroads per capita is $17 in the United States, $11 in
+the United Kingdom, $5 in Germany, $4 in France, and still less in
+Italy, Austria and Russia. The average freight haul is 63 miles in
+Europe and 120 miles in the United States; the average passenger haul 15
+miles in Europe and 24 miles in the United States. It has already been
+shown that the average earnings per train mile are also larger here than
+there. Röll's Encyclopedia of Railroads for 1892 shows that in France
+the average rate for all traffic for the year 1888 was for passengers
+1.45 cents per mile, and for freight 1.14 cents per ton per kilometer,
+and that the nation had also received by way of free or reduced rates on
+Government business during that year benefits to the amount of
+$59,000,000. Large reductions have been made during the past year in
+passenger rates.
+
+The General indulges in making the stereotyped railroad charge that "the
+legislatures of several of the States have enacted laws to effect a
+reduction of rates, the literal obedience to some of which would amount
+to the practical confiscation of railway property."
+
+The General or any of his friends cannot name a road that was ever
+confiscated by legislation, or even seriously injured. It is a fact that
+the very legislation of which railroad managers so bitterly complain has
+had a beneficial influence on railroad earnings. Thus, in Iowa, where,
+according to the testimony of railroad men, Grangerism has reigned
+supreme during the past few years, railroad earnings increased between
+1889 and 1892 from $37,000,000 to $44,000,000, or more than 18 per cent.
+Still better results could have been secured if the railroad managers
+had been in sympathy with the law. There is no doubt that they would
+gladly suffer, or rather have their companies suffer, a loss of revenue,
+if this would lead to a repeal of the laws and restore to them the power
+to manipulate rates for their own purposes.
+
+But the General comes to the main point of his article when he
+complains against "the unreasonable requirements and restrictions of the
+Interstate Commerce Law." He says:
+
+      "Principal among these are what is known as the 'long and
+      short haul clause,' which prohibits railway companies from
+      receiving any greater compensation in the aggregate for a
+      shorter than for a longer haul over the same line in the
+      same direction, the shorter being included within the longer
+      distance; and the anti-pooling clause, which prevents
+      railway companies from entering into any agreement with each
+      other for an apportionment of joint earnings."
+
+If we carefully examine the railroad literature of the last four years,
+we find that it has concentrated its efforts toward the creation of
+public sentiment in favor of the repeal of these two clauses of the
+Interstate Commerce Law. Railroad men are well aware of the fact that,
+with these two clauses stricken out, the Interstate Commerce Law would
+be practically valueless, and in clamoring for their repeal they evince
+a persistency worthy of a better cause. The practices which these
+clauses aim to prohibit cannot be defended upon any consideration of
+justice and equity, and it is folly to expect the American people to
+sacrifice their convictions of right to the selfish interest of a
+comparatively small number of persons interested in the manipulation of
+railroad stocks.
+
+The July, 1891, number of the _Forum_ contains an article on the
+operation of the Interstate Commerce Law from the pen of Aldace F.
+Walker, formerly a member of the Interstate Commerce Commission, and now
+commissioner of the Western Traffic Association. Mr. Walker evidently
+belongs to the old school of railroad men, who have not yet accepted the
+Granger decision. Referring to it, he says:
+
+      "This decision was not unanimous, and the reasoning
+      presented was not so convincing as to command universal
+      acceptance. It was at once challenged by the corporations,
+      and has been from time to time attacked in the same
+      tribunal; it has not yet been withdrawn, but it has been
+      materially modified, notably in a case from Minnesota,
+      decided in 1890, when it was established that there is a
+      limit beyond which the State cannot go in reducing railway
+      rates, which limit would be passed in case a State should
+      attempt to deprive a corporation of its property, without
+      due process of law, by fixing rates too low to permit of a
+      fair remuneration for its use. A large debatable ground yet
+      remains open, with a possibility that the position of the
+      railway in Federal jurisprudence may eventually be radically
+      modified."
+
+The passage quoted clearly indicates that railroad men expect better
+things of the court in the future, but Mr. Walker is much mistaken in
+supposing the court materially modified the Granger decision, as will be
+seen by referring to the case of Budd vs. the State of New York, decided
+in February, 1892, by the same court.
+
+Mr. Walker, unlike Mr. Depew, candidly admits the former universality of
+the evil of discrimination. He says:
+
+      "In order to secure traffic, a railway official felt called
+      upon to underbid his rival. He gave the shipper a private
+      rate, a rebate, a free pass--anything in the shape of a
+      concession or a favor. The land was honeycombed with special
+      arrangements of innumerable forms, all secret, because
+      otherwise they would have been useless, and all forced upon
+      the carriers by the exigencies of unbridled competition.
+      Many shippers became wealthy from such gains. Others were
+      envious of like success. At last the public sense of justice
+      demanded a reform."
+
+And Mr. Walker's candor rises to a still higher pitch when he admits
+that the ingenuity of railroad managers has found ways to evade the
+Interstate Commerce Law. The following passage from the Commissioner's
+article will, no doubt, be a great surprise to such law-abiding and
+confiding managers as Mr. Depew:
+
+      "There was nothing in the law specifically forbidding the
+      payment of 'commissions,' and it was found that the routing
+      of business might be secured by a slight expenditure of that
+      nature to a shipper's friend. Other kindred devices were
+      suggested, some new, some old; the payment of rent, clerk
+      hire, dock charges, elevator fees, drayage, the allowance of
+      exaggerated claims, free transportation within some single
+      State--a hundred ingenious forms of evading the plain
+      requirements of the law were said to be in use. The
+      demoralization was not by any means confined to the minor
+      roads. Shippers were ready to give information to other
+      lines concerning concessions which were offered them, and to
+      state the sum required to control their patronage. A freight
+      agent, thus appealed to, at first perhaps might let the
+      business go, but when the matter became more serious and he
+      saw one large shipper after another seeking a less desirable
+      route, he was very apt to throw up his hands and fall in
+      with the procession."
+
+Mr. Walker is very severe on the Interstate Commerce Act, which, he
+says, might in its present form "well be entitled, 'An act to promote
+railway bankruptcies and consolidations by driving weak roads out of
+competitive business.'" To remedy the evil which, in his opinion, the
+act causes, he favors the granting of differentials by the stronger to
+the weaker roads. Such a device is simply a species of pool under a less
+offensive name. Its manifest object is to maintain rates through a
+conspiracy of rival railroads. Mr. Walker admits this when he says:
+
+      "It operates in practice to affect a distribution of the
+      traffic somewhat roughly, giving rise to frequent
+      dissensions and bickerings over the 'differentials' which
+      are allowed; but after all it has enabled the trunk lines
+      usually to secure a better maintenance of tariff rates and a
+      better observance of the provisions of the law against
+      private rebates and discriminations than has been
+      attainable in other sections of the country where different
+      conditions make such an arrangement impracticable. It
+      vividly illustrates, however, the necessity of some plan by
+      which common business may be divided."
+
+This problem, which apparently causes so much perplexity to railroad
+managers, would soon be solved if railroad abuses were done away with.
+So long as these abuses exist and rates are maintained by artificial
+means there will be bickering and strife for business which legitimately
+belongs to others. Mr. Walker then bewails the proscription of the pool,
+saying:
+
+      "It may be stated without fear of contradiction that if the
+      carriers had been left free to make arrangements among
+      themselves upon which each line might rely for eventually
+      receiving in some form a fair share of competitive traffic,
+      the temptation for secret rate-cutting would have been in
+      great measure removed and the country would have been spared
+      most of the traffic disturbances and illegitimate
+      contrivances for buying business which have since been
+      periodically rife."
+
+This argument amounts to this, that, rather than place a law upon our
+statute books which reckless railroad managers might be strongly tempted
+to violate, they should be permitted to combine and control the highways
+and levy _ad libitum_ upon the commerce of the country. It is a most
+preposterous proposition.
+
+The article especially condemns the long and short haul clause of the
+law. That this clause is injurious to the commerce of the country is,
+however, not obvious from his reasoning. Mr. Walker makes the statement
+that this clause of the law "has removed from many jobbing centers
+important advantages which they previously had, and has enabled interior
+communities, formerly of little apparent consequence, to deal directly
+with distant markets." If he means by this that this feature of the law
+has equalized shipping throughout the country, he is doubtless right. If
+he wishes us to infer, however, that it prevents the railroad companies
+from doing substantial justice to all, he presumes altogether too much
+upon the credulity of his readers.
+
+Another article from the same author appeared under the title
+"Unregulated Competition Self-destructive," in the December, 1891,
+number of the same periodical. He commences his article with an inquiry
+into the pedigree and merit of the time-honored proverb, "Competition is
+the life of trade," and arrives at the conclusion that the phrase is
+fatherless and insignificant. He says:
+
+      "'Competition is the life of trade;' 'Competition is the
+      death of trade;' one phrase is as true as the other. For all
+      that appears, it was a toss-up which of the two should
+      become current as the expression of the general thought."
+
+It is its general recognition that gives a truth a proverb's currency.
+Mr. Walker sneers at a disagreeable proverb because, like the majority
+of his colleagues, he holds the masses in contempt. He gives his
+estimate of popular intelligence in the following words:
+
+      "Unfortunately most men do not think worthily, or do not
+      think at all; they are ruled by phrases, and they catch the
+      crude ideas of others as they fly."
+
+Mr. Walker's whole argument is one in favor of the legalization of the
+pool, though he carefully avoids the word which grates so harshly on the
+American ear. He makes the broad statement, without offering the least
+proof in support of it, that measures have been everywhere adopted "to
+subdue and ameliorate the evil results of inordinate and excessive
+competitive strife," and then he asks:
+
+      "Has not the time come for a reversal of the legislative
+      attitude? Would it not be well for Congress, State
+      legislatures and the judiciary to cease their futile
+      attempts to maintain unqualified freedom of competition, and
+      substitute therefore a recognition of the right of every
+      industry to combine under proper supervision, and to make
+      agreements for the maintenance of just and reasonable
+      prices, the prevention of the enormous wastage consequent
+      upon warlike conditions, and the preservation of existing
+      institutions through the years to come?"
+
+Mr. Walker then proceeds to make the bold prediction that revolution and
+anarchy will follow if the demands of the railroad corporations are not
+complied with, saying:
+
+      "Unless this course is adopted a social convulsion may
+      fairly be apprehended, forced by the universal and necessary
+      repudiation of existing laws and rules of decision, and by
+      the general formation of combinations without their pale."
+
+This is a strange threat indeed, and unworthy of a man who has held as
+great a public trust as Mr. Walker has. The article also contains the
+statement that combinations do not extinguish competition. "They
+regulate it," says Mr. Walker, "with more or less efficiency, and they
+often go so far as to suspend its operation in respect to one or more
+important features of the strife; for example, the price paid or the
+time consumed. But as long as the employer or the purchaser has a
+choice, so long there is competition." Here is a sample of Mr. Walker's
+irony, for the choice which the shipper has under the pool is simply
+Hobson's choice.
+
+Mr. Walker has also an article in the August, 1892, number of the
+_Forum_, the substance of which is to show that organizations among
+railroad companies, like the Western Traffic Association, are necessary
+for the purpose of restraining competition among them. He holds that
+such competition as exists in almost all other lines of business "is
+radically vicious to all interests, however pleasant and desirable it
+may seem to self-styled anti-monopolists," and that "it is a calamity
+not only to the owners of the roads, but to the public also."
+
+According to his statement, the Traffic Association is simply a little
+innocent and inoffensive organization whose duty it is only to maintain
+rates, and he sees nothing wrong in allowing a few representatives of
+corporations to meet in secret and discuss, scheme and levy such a tax
+upon the commerce of this country as may suit their convenience; and he
+regrets that their attempts are "hampered by legislation which forbids
+the formation of pools." In other words, he proposes to have the case in
+court decided by a jury made up entirely of the parties at interest in
+the case. This piece of effrontery is about on a par with the average
+argument of this class of pleaders.
+
+Suppose we apply the same rule to other classes. Take the farmers, for
+instance. Let them have an organization for the purpose of maintaining
+rates, with their representatives meeting in secret and fixing the price
+of their produce and asking the Government to enforce their orders,
+pools and edicts, so as to afford them relief from selling corn at ten
+cents per bushel, beef and pork at a dollar and a half per hundred, and
+hay at two dollars per ton, and their other produce at proportionate
+rates. Who would condemn such an organization more severely than the
+advocates of the Traffic Association? They never find terms sufficiently
+expressive with which to condemn the Farmers' Alliance and other kindred
+associations, which are organized solely for the purpose of lawfully
+correcting existing abuses and of forming a wholesome public sentiment.
+
+It is evident that some progress is being made upon this question, as
+Mr. Walker admits that "the fortunes which have been made are seen to
+have been the result of dealings in stocks and in titles, the
+consequences of which, if involving wrong, are rightly charged against
+the lax legislation which has made such operations possible." "Every
+person seeking for the services of a common carrier is entitled to know
+that he is charged no more than his neighbor who obtains the same
+service under the same conditions." "The theory that any unjust
+discrimination or unjust preference or advantage in respect to
+individuals, communities or descriptions of traffic must be suppressed
+by the State, has become firmly lodged in legislation." This improvement
+in the sentiment of railroad men is gratifying.
+
+This gentleman, as has already been stated, was for several years a
+member of the Interstate Commerce Commission, a board created by
+Congress for the special purpose of enforcing the law which he so
+unreservedly condemns. No doubt Mr. Walker performed the duties of his
+office as he understood them; but if he held then the views which he
+holds now, his work must have been a hindrance rather than a help to the
+commission.
+
+Among financial journals, so many of which are devoted to the support of
+vicious and demoralizing methods, and are ever ready to defend whatever
+is bad in corporation management, it is refreshing to find occasionally
+one that exposes abuses and favors the earning of legitimate dividends,
+and it is a pleasure to quote the following from the June number, 1892,
+of the _Banker's Magazine_:
+
+      "There are two widely differing theories concerning the
+      management of railroads in this country; one theory is that
+      profits should be acquired from fluctuations in the stock,
+      and the other is that the profits should be acquired in the
+      old-fashioned way, by performing a useful service and
+      receiving a reward therefor, to be divided among the
+      stockholders in the way of a dividend. These two theories
+      are so different in their practical operation that they give
+      rise to the most diverse consequences. Of course, many
+      railroads are not dividend-earning, and with these the
+      profits to the managers and those who are allied with them
+      must come from stock fluctuations and from whatever sucking
+      arrangements can be devised whereby their vitality or
+      sustenance can be acquired by the favored few who are in
+      control. Unfortunately, there are many railroads in this
+      condition, the history of which is too well known to require
+      description. Once in control, the way is easy to retain it
+      and to make money by a thousand devices which ingenious and
+      unscrupulous managers are constantly planning and putting
+      into operation.
+
+      "The consequences of the other theory are as different, both
+      to the corporate property and to the public, as can be
+      imagined. When a railroad is properly managed and earning
+      dividends, a policy of development is adopted, having for
+      its end the natural expansion of the property in harmony
+      with the growth of the country, the needs of business and
+      the desires of the people. The fruits of such a policy may
+      not be apparent at once, but they inevitably come, and, when
+      they are reaped, are enjoyed and appreciated by all. Only by
+      such a policy can our roads ever become great, commanding
+      the confidence of the people, and fulfilling their highest
+      uses; in short, only by such a policy can a railroad be
+      brought to a high degree of perfection.
+
+      "The difference is clearly seen by contrasting a road of
+      this character with one that is run by the Wall Street
+      method for stock-jobbing purposes. By this method dividends
+      are not regarded as of so much consequence to investors as
+      an instrument or argument for affecting the value of the
+      stock. In other words, if a dividend is earned and paid at
+      all, it is chiefly as an instrument or agency for
+      stock-jobbing purposes, and not because the road is managed
+      primarily for this purpose. Furthermore, dividends, too
+      often, are disregarded altogether, as well as any policy of
+      permanent improvement or of general development. The
+      cardinal idea always is, how can the road be maintained and
+      manipulated so as to cause the largest variations in the
+      stock and the most money for the managers?
+
+      "Too many managers, as is well known, have made great sums
+      for themselves and built additions long in advance of their
+      means, and have seriously crippled their corporations by so
+      doing. But they have made fortunes for themselves. What the
+      great majority of mankind consider is the immediate present,
+      and not the future.
+
+      "It is undoubtedly a hard thing for those who are conducting
+      their corporations in an honest and able manner, for the
+      benefit of their owners, to keep still while their enemies
+      are pounding them and glorifying those who are managing
+      their corporations for personal and corrupt ends; but all
+      cheap and false practices must finally lead to disaster. We
+      hear a great deal of this kind of thing nowadays. One of the
+      evil effects of speculation and newspaper reading is, that
+      people have got in the way of not thinking much for
+      themselves; of regarding as truth whatever is printed, and
+      of not opening their eyes wide enough to discover the
+      shallowness of the reasonings and falsehoods that are put
+      forth at the behests of speculators, or of those who are
+      managing corporations for speculative purposes. The American
+      people have had an amazing experience in losses from
+      following advice thus plentifully and freely given;
+      nevertheless, there seem to be persons left who are willing
+      to listen and fall into the old ways and be trapped, as so
+      many others have been in the past. There is a considerable
+      class, having means and nothing to do, who perhaps might
+      just as well lose their money in poker, railroad or grain
+      speculation as in any other way, for this furnishes about
+      the only source of amusement to them; but, after all, there
+      is no reason why railroads should be managed so exclusively
+      for the amusement of this class. The time is coming, and
+      probably is not far off, when they will get enough of it;
+      and railroad investors will conclude that dividends for
+      themselves are better than profits for speculators; and when
+      they do, all stock-jobbing managers will be consigned to the
+      limbo which is their proper destination."
+
+This magazine is edited by Mr. Albert S. Bolles, author of several
+excellent financial works. We are much indebted to him for the sound
+banking system which we now have, and which has contributed so largely
+to the unexampled prosperity which this country has enjoyed for the last
+thirty years.
+
+Our national banking system illustrates well how service able the
+corporation may be to a people when its use is restricted by wholesome
+laws to the performance of its proper functions.
+
+The old United States Bank was organized for practically the same
+purposes as our present national banks, but for lack of proper
+restrictions its use was soon perverted to ignoble purposes. The bank
+managers showed so much partiality in the distribution of their favors
+and accommodations, and meddled in politics to such an extent, that the
+people became disgusted with it, and a renewal of its charter was
+refused.
+
+Mr. Clay clearly saw how dangerous a great money power might become to
+our country, and, in opposing the extension of the bank's charter, said:
+
+      "The power to charter companies is one of the most exalted
+      attributes of sovereignty. In the exercise of this gigantic
+      power we have seen an East India Company created, which is
+      in itself a sovereignty, which has subverted empires and set
+      up new dynasties, and has not only made war, but war against
+      its legitimate sovereign! Under the influence of this power
+      we have seen rise a South Sea Company, and a Mississippi
+      Company, that distracted and convulsed all Europe, and
+      menaced a total overthrow of all credit and confidence, and
+      universal bankruptcy."
+
+Can we afford to ignore the lessons of history?
+
+Mr. Henry Clews makes some spicy and pertinent observations on railroad
+men's methods in an article which recently appeared in the _Railway
+Age_. Mr. Clews seems to have but little confidence in the average
+railroad director. He advises stockholders to exercise constant
+vigilance and defensive conservatism, "lest they become the instruments
+by which unscrupulous and crafty directors work out schemes that are in
+reality nothing but frauds or robbery." And then he adds:
+
+      "In estimating corporate acts we must never forget that,
+      while the best of men will bear watching as to their
+      individual dealings with others, they need to be doubly
+      watched when they sit around a corporation board and vote as
+      to transactions in respect of which none of them can be
+      called to personal account. Temptations attack with enormous
+      force when the gains are prospectively great and the risk of
+      penalty inappreciable or non-existent."
+
+Mr. Clews also tells us how roads are wrecked by their boards of
+directors. "In one case," he says, "the stock of a leading railway,
+which in 1880 sold at 174, in 1884 sold at 22-1/2, and in 1885 at 22.
+This vast shrinkage of value was not owing to panic or to stringency of
+money, nor did it arise from a diminution of traffic on the original
+line; but it was because consolidation had been pushed to an extreme by
+the directors of the corporation, so much so that the entire system
+yielded no dividends; a fleet and useful animal had been loaded down
+with dead wood and rubbish till he could scarcely crawl; barren acres
+had been added to an originally fruitful farm until the whole estate
+could hardly pay taxes; a mass of rotten apples had been thrown into the
+measure with sound fruit, and buyers refused the whole as a mere heap
+of corruption. And it was generally believed that the men who
+perpetrated this mischief under the names of 'construction,' 'requisite
+consolidation,' 'absorption of necessary branches,' etc., had made a
+great deal of money by it and had not made it honestly. But it was all
+done pursuant to legal forms and by boards of directors, so that the
+defrauded stockholders were without remedy."
+
+Mr. Clews then gives us a more detailed account of the way in which
+branch roads are built and absorbed, viz.:
+
+      "Given a useful, well constructed, dividend-paying road, a
+      body of people with some capital and political influence,
+      aided by some of the directors of this prosperous line;
+      construct a branch road to some outside point; the more
+      important such point the better, but that is of small
+      consequence. The road gets itself built; it is bonded for
+      more than it cost, and it cost twice as much as it ought,
+      since the constructors were all together in the ring and
+      have favored each other. Then the capital stock is fixed at
+      so much, and this is mostly distributed among the
+      constructors. The road then, swelled to a fictitious price
+      of three or four to one, and not worth anything to start
+      with, is ripe for absorption and consolidation. Its
+      directors and those of the main line meet, confer and vote
+      the measure through. They all profit by it, more or less,
+      but their profits are enormously in excess of the trifling
+      losses due to the shrinkage of values of the shares of the
+      main line. A director of the main line may perhaps lose
+      $20,000 on a thousand shares, but what is this when compared
+      to a gain of hundreds of thousands in his holdings of the
+      branch road, whose liabilities are assumed by his victimized
+      corporation? And such a director would not be equal to the
+      demands of his covetousness if he had not sold thousands of
+      shares short, in anticipation of the fall which the
+      transactions of himself and his associates were inevitably
+      bound to produce."
+
+Mr. Clews concludes his article with the following passage:
+
+      "The profits realized on the speculative constructions are
+      enormous and have constituted the chief source of the
+      phenomenal fortunes piled up by our railroad millionaires
+      within the last twenty years. It is no exaggeration to
+      characterize these transactions as direct frauds upon the
+      public. They may not be such in a sense recognized by the
+      law, for legislation has strangely neglected to provide
+      against their perpetration; but morally they are nothing
+      less, for they are essentially deceptive and unjust, and
+      involve an oppressive taxation of the public at large for
+      the benefit of a few individuals who have given no
+      equivalent for what they get. The result of this system is
+      that, on the average, the railroads of the country are
+      capitalized at probably fully 50 per cent. in excess of
+      their actual cost. The managers of the roads claim the right
+      to earn dividends upon this fictitious capital, and it is
+      their constant effort to accomplish that object. So far as
+      they succeed they exercise an utterly unjust taxation upon
+      the public by exacting a compensation in excess of a fair
+      return upon the capital actually invested. This unjust
+      exaction amounts to a direct charge and burden on the trade
+      of the country which limits the ability of the American
+      producer and merchant to compete with those of foreign
+      nations and checks the development of our vast natural
+      resources. In a country of 'magnificent distances' like ours
+      the cost of transportation is one of the foremost factors
+      affecting the capacity for progress; and the artificial
+      enhancement of freight and passenger rates due to this false
+      capitalization has been a far more serious bar to our
+      material development than public opinion has yet realized.
+      The hundreds of millions of wealth so suddenly accumulated
+      by our railroad monarchs is the measure of this iniquitous
+      taxation, this perverted distribution of wealth. This
+      creation of a powerful aristocracy of wealth, which
+      originated in a diseased system of finance, must ultimately
+      become a source of very serious social and political
+      disorder. The descendants of the mushroom millionaires of
+      the present generation will consolidate into a broad and
+      almost omnipotent money power, whose sympathies and
+      influence will conflict with our political institutions at
+      every point of contact. They will exercise a vast control
+      over the larger organizations and movements of capital;
+      monopolies will seek protection under their wing, and by the
+      ascendancy which wealth always confers they will steadily
+      broaden their grasp upon the legislation, the banking and
+      commerce of the nation."
+
+These are strong words, but they come from a man whose thirty years'
+experience in Wall Street enables him to speak intelligently upon this
+subject and who certainly cannot be accused of being prejudiced against
+railroad men or corporate investments. In a recent number of his _Weekly
+Financial Review_ Mr. Clews said of the railroad stock market:
+
+      "Judgment passes for little in estimating the future of many
+      securities, for the market is almost wholly under the
+      control of comparatively few persons, whose operations must
+      inevitably influence the value of thousands of millions of
+      stocks and bonds. Never in the history of Wall Street was
+      the value of such an enormous aggregation of securities so
+      absolutely under the control of so small a circle as at this
+      time. Such a state of affairs cannot be considered
+      satisfactory; hence not only is speculation likely to be
+      unhealthily stimulated, but the future of these combinations
+      gives birth to a variety of uncertainties which, while they
+      may elevate prices, will certainly not add to their
+      stability."
+
+If the silly claim of railroad men, that Western people do not invest in
+railroad securities on account of their unprofitableness, needed any
+answer, the above words would furnish it.
+
+The May, 1893, number of the _North American Review_ contains an article
+entitled "A Railway Party in Politics," by Mr. H. P. Robinson, editor of
+the _Railway Age_. Mr. Robinson belongs to that class of reformers who
+can see but one side of a question, and only a short-sighted view of
+that. He is as zealous as a new convert, and is expert, in the ward
+politician's way, in defense of the worst abuses practiced by railway
+men. He says:
+
+      "That the right to 'regulate' the railways, which is vested
+      in the State, has now been carried in the West to a point
+      not only beyond the bounds of justice, but beyond its
+      constitutional limits, and that it would soon be impossible
+      for any railway company in the West to keep out of
+      bankruptcy unless some vigorous and concerted action were
+      taken to arouse public opinion, and to compel a modification
+      of the present policy.
+
+      "It is easy to see how much strength such a party, if
+      formed, would possess. According to the reports of the
+      Interstate Commerce Commission there were in the immediate
+      employ of the railways of the United States a year and a
+      half ago 749,301 men, all or nearly all voters, which number
+      has now, it may be assumed, been increased to about 800,000.
+      There are, in addition, about one million and a quarter
+      shareholders in the railway properties of the country; and
+      in other trades and industries immediately dependent upon
+      the railways for their support there are estimated to be
+      engaged, as principals or employes, over one million voters
+      more. These three classes united would give at once a massed
+      voting strength of some three millions of voters. There are
+      also, in the smaller towns especially, and at points where
+      railway shops are located, all over the country, a number of
+      persons, small tradesmen, boarding-house keepers, etc., who
+      are dependent for their livelihood on the patronage of
+      railway employes, and whose vote could unquestionably be
+      cast in harmony with any concerted employes' movement.
+      Moreover, unlike most new parties, this party would be at no
+      loss for the sinews of war or for the means of organization.
+      The men whom it would include form even now almost a
+      disciplined army. With them co-operation is already a habit.
+      While the financial backing and the commercial and physical
+      strength of which the party would find itself possessed from
+      its birth would be practically unlimited....
+
+      "For the present it seems to them better to believe that the
+      people--those people who are not railway men--are acting now
+      only in ignorance, and that as soon as they see the truth
+      they will, by their own instinctive sense of justice,
+      re-mould their opinions and their policy without political
+      coercion.
+
+      "At the same time there has already come into existence in
+      some of the Western States a movement which has its
+      significance and its practical influence. This is what is
+      called the Railway Employes' Club movement. It started in
+      Minnesota, at a small meeting of railway employes held in
+      Minneapolis in 1888. From that meeting the movement grew,
+      and made a certain feeble effort, not entirely unsuccessful,
+      to influence the State election in the fall of that year. By
+      the State election of 1890 the movement had grown and was
+      better organized, and the Employes' Club did exercise
+      considerable influence in the election of certain of the
+      State officers and certain members of the State legislature
+      in that year.
+
+      "From Minnesota the movement spread to Iowa, and there is no
+      contradiction of the fact that the railway employes' vote
+      was one of the strongest forces in the State election of the
+      fall of 1891. It also overflowed into Kansas, Nebraska,
+      Missouri and Texas. Had the election of last November been
+      normal it is probable that the effect of the Railway
+      Employes' Club vote would have been as visible in two or
+      three of those States then as it had been in Iowa in the
+      preceding year. But in the deluge which occurred all trace
+      of the smaller streams and currents was obliterated. Had the
+      members of the clubs not taken the precaution to do
+      considerable work in the local nominating conventions of
+      both parties they would be compelled to confess that their
+      campaign of 1892 was a failure....
+
+      "So far the clubs have admitted and will admit of no
+      negotiations with the State committees of other parties.
+      They hold their own meetings and decide for themselves that
+      such and such a candidate is inimical to their interests as
+      railway employes, and such and such a man is their friend.
+      Then they go to the polls and vote--voting in the main
+      their normal party ticket, scratching only a man here and a
+      man there, their attention being chiefly centered upon
+      members of the boards of railroad commissioners and of the
+      State legislatures.
+
+      "In Minnesota in 1890 their weight was thrown chiefly in
+      favor of Republicans. In Iowa in 1891 it was given to
+      Democrats. In all States the men whom they oppose are those
+      who have made themselves conspicuous as 'Granger' and
+      anti-railway politicians. The keynote of the movement and
+      the one plank in the platform of the clubs is that the
+      extreme anti-railroad legislation of late years has reduced
+      the earnings of the companies to a point at which they are
+      unable any longer to keep full forces on their payrolls or
+      to pay such wages as they should, and that by this
+      legislation the railway employes are necessarily the
+      immediate sufferers....
+
+      "A railway party is therefore already in existence.... And
+      moreover, though accidentally only, it is working forcibly
+      in behalf of railway interests as a whole....
+
+      "Meanwhile Mr. A. F. Walker, the chairman of the Joint
+      Committee of the Trunk Line and Central Traffic
+      Associations, prophesies that if things go on as they are
+      going now, before long 'the managers of the railways will be
+      chiefly receivers.' In the year 1891 receivers were
+      appointed for twenty-six companies in the United States,
+      representing $84,479,000 of capital, and twenty-one
+      companies, with 3,223 miles of road, with a capitalization
+      of $186,000,000, were sold under foreclosure.
+
+      "It is doubtful whether the result which Mr. Walker
+      foretells would be regarded as a calamity by the 'uninformed
+      public opinion of the West.' That Minnesota railroad
+      commissioner was quite sure of the public applause before he
+      made his classic declaration that he proposed to 'shake the
+      railroads over hell' before he had done with them, and the
+      Governor of Iowa, who announced that he did not care if
+      'every d--d railroad in the State went into bankruptcy'
+      before the expiration of his term of office, knew that the
+      sentiment would have the sympathies of his constituents.
+      This attitude of the Western mind is, of course, largely
+      explained by the fact that the people of the West do not as
+      a rule own railway securities. In two States (the only two
+      in the West in which, so far as I am aware, the figures have
+      been compiled) out of 27,645 stockholders in the lines
+      within the State borders only 359 are residents of the
+      States. If the other 27,286 were also residents of these
+      States (that is to say, if 27,286 of the present residents
+      were also stockholders in the railways), it is probable that
+      the ferocity of the public opinion in these States against
+      railways would be materially modified."
+
+It is evident that Mr. Robinson has not been as successful in organizing
+small tradesmen, boarding-house keepers, employes and shareholders into
+a new party as he contemplated, notwithstanding "it was at no loss for
+the sinews of war."
+
+He attempts to show that this movement originated with the employes, but
+it is too well known that the employes who organized the movement were
+under pay of the railroad companies and received their instructions from
+the railroad managers. The statement which Mr. Robinson attributes to
+the Governor of Iowa undoubtedly originated in the mind of one who is
+laboring to modify the ferocity of "the uninformed public opinion of the
+West." No Governor of Iowa ever made any such statement, nor ever
+entertained any such sentiment. It is a sheer fabrication.
+
+There are a number of standard text-books of law which are indispensable
+to the student of railroad questions desiring to go back to first
+principles. Only a few of them can be mentioned here.
+
+I. F. Redfield, in his "Law of Railways," says concerning the necessity
+for railroad supervision:
+
+      "Railways being a species of highway, and in practice
+      monopolizing the entire traffic, both of travel and
+      transportation, in the country, it is just and necessary and
+      indispensable to the public security that a strict
+      legislative control over the subject should be constantly
+      exercised."
+
+Regarding the original character of the railway as a common highway,
+Redfield says:
+
+      "The Railways Clauses Consolidation Act provides, in detail,
+      for the use of railways by all persons who may choose to put
+      carriages thereon, upon the payment of the tolls demandable,
+      subject to the provisions of the statute and the regulations
+      of the company. The view originally taken of railways in
+      England evidently was to treat them as a common highway,
+      open to all who might choose to put carriages thereon. But
+      in practice it is found necessary for the safety of the
+      traffic that it should be exclusively under the control of
+      the company, and hence no use is, in fact, made of the
+      railway by others."
+
+As to the questionable financial expedients so frequently resorted to in
+building American railways, this author says:
+
+      "This is not the place, nor are we disposed, to read a
+      homily upon the wisdom of legislative grants, or the
+      moralities of moneyed speculations in stocks on the exchange
+      or elsewhere. But it would seem that legislation upon this
+      subject should be conducted with sufficient deliberation and
+      firmness so as not to invest such incorporations with such
+      unlimited powers as to operate as a net to catch the unwary,
+      or as a gulf in which to bury out of sight the most
+      disastrous results to private fortunes, which has justly
+      rendered American investments, taken as a whole, a reproach
+      wherever the name has traveled."
+
+The opinion is expressed in this work that under certain circumstances
+railroad securities should be aided by State credit, and is supported by
+the following argument:
+
+      "Here we have no national funded stock in convenient sums
+      for small investment, and which, being sure, is really a
+      great blessing to the mass of those who wish to invest
+      moderate sums as a protection against age or calamity. In
+      those countries where such opportunities exist, it removes
+      all temptation to invest small sums in these enterprises,
+      which, however necessary for the public, such small owners
+      can but poorly afford to aid in carrying forward, and which
+      consequently should in justice either be guaranteed or owned
+      by the State, or at all events aided by State credit, when
+      they become indispensable for the public convenience."
+
+Upon the subject of eminent domain Redfield says:
+
+      "That railways are but improved highways, and are of such
+      public use as to justify the exercise of the right of
+      eminent domain, by the sovereign, in their construction, is
+      now almost universally conceded."
+
+Kent says in his "Commentaries on American Law":
+
+      "The right of eminent domain, or inherent sovereign power,
+      gives to the legislature the control of private property for
+      public uses, _and for public uses only_.... So, lands
+      adjoining New York canals were made liable to be assumed for
+      the public use, so far as was necessary for the great object
+      of the canals.... In these and other instances which might
+      be enumerated, the interest of the public is deemed
+      paramount to that of any private individual; and yet, even
+      here, the constitutions of the United States and of most of
+      the States of the Union have imposed a great and valuable
+      check upon the exercise of legislative power, by declaring
+      that private property should not be taken for public use
+      without just compensation.... It undoubtedly must rest, as a
+      general rule, in the wisdom of the legislature to determine
+      when public uses require the assumption of private property;
+      but if they should take it for a purpose not of a public
+      nature, as if the legislature should take the property of A
+      and give it to B, or if they should vacate a grant of
+      property, or of a franchise, under the pretext of some
+      public use or service, such cases would be gross abuses of
+      their discretion, and fraudulent attacks on private right,
+      and the law would clearly be unconstitutional and void."
+
+Concerning the construction of corporate powers Kent lays down the
+following rule:
+
+      "The modern doctrine is to consider corporations as having
+      such powers as are specifically granted by the act of
+      incorporation, or as are necessary for the purpose of
+      carrying into effect the powers expressly granted, and as
+      having no other. The Supreme Court of the United States
+      declared this obvious doctrine, and it has been repeated in
+      the decisions of the State courts. No rule of law comes with
+      a more reasonable application, considering how lavishly
+      charter privileges have been granted. As corporations are
+      the mere creatures of law, established for special purposes,
+      and derive all their powers from the acts creating them, it
+      is perfectly just and proper that they should be obliged
+      strictly to show their authority for the business they
+      assume, and be confined in their operations to the mode and
+      manner and subject matter prescribed."
+
+As to the duties of common carriers he says:
+
+      "As they hold themselves to the world as common carriers for
+      a reasonable compensation, they assume to do and are bound
+      to do what is required of them in the course of their
+      employment, if they have the requisite convenience to carry
+      and are offered a reasonable and customary price; and if
+      they refuse without just ground, they are liable to an
+      action."
+
+Judge Cooley, in his very able work, "Constitutional Limitations,"
+refers to the so-called vested rights of corporations and the abuse
+growing out of them as follows:
+
+      "It is under the protection of the decision in the Dartmouth
+      College case that the most enormous and threatening powers
+      in our country have been created, some of the great and
+      wealthy corporations actually having greater influence in
+      the country at large, and upon the legislation of the
+      country, than the States to which they owe their corporate
+      existence. Every privilege granted or right conferred--no
+      matter by what means or on what pretense--being made
+      inviolable by the Constitution, the Government is
+      frequently found stripped of its authority in very important
+      particulars, by unwise, careless or corrupt legislation; and
+      a clause of the Federal Constitution whose purpose was to
+      preclude the repudiation of debts and just contracts
+      protects and perpetuates the evil."
+
+The late President Garfield, in one of his legislative speeches, called
+attention to the fact that Chief Justice Marshall pronounced the
+decision in the Dartmouth College case ten years before the steam
+railway was born, and then said:
+
+      "I have ventured to criticise the judicial application of
+      the Dartmouth College case, and I venture the further
+      opinion that some features of that decision, as applied to
+      the railway and similar corporations, must give way under
+      the new elements which time has added to the problem."
+
+Charles Fisk Beach, Jr., in his recent work entitled "Commentaries on
+the Law of Private Corporations," well defines what constitutes
+dedication to a public use. He says:
+
+      "Whenever any person pursues a public calling and sustains
+      such relations to the public that the people must of
+      necessity deal with him, and are under a moral duress to
+      submit to his terms if he is unrestrained by law, then, in
+      order to prevent extortion and an abuse of his position, the
+      price he may charge for his services may be regulated by
+      law. When private property is affected with a public
+      interest it ceases to be _juris privati_ only. This was said
+      by Lord Chief Justice Hale more than three hundred years ago
+      in his treatise _De Portibus Maris_, and has been accepted
+      without objection as an essential element in the law of
+      property ever since."
+
+Treating of the fiduciary position of directors and officers of
+corporations, the same author says:
+
+      "The directors, officers and agents of a corporation are
+      held to the general rule of law resting 'upon our great
+      moral obligation to refrain from placing ourselves in
+      relations which ordinarily excite a conflict between
+      self-interest and integrity.' The directors and officers
+      are the agents of the company, and while acting in that
+      capacity for it cannot deal with themselves to the detriment
+      of the corporation. All contracts of that character are
+      voidable at the option of the corporation."
+
+And further he says:
+
+      "A director whose personal interests are adverse to those of
+      the corporation has no right to act as a director. As soon
+      as he finds he has personal interests which are in conflict
+      with those of the company he ought to resign."
+
+T. Carl Spelling, in his treatise on "The Law of Private Corporations,"
+says of pooling arrangements:
+
+      "Courts long ago exercised jurisdiction to regulate rates of
+      _quasi_ public corporations, and on the same principle will
+      refuse to enforce pooling contracts between railroad and gas
+      companies. Such contracts are void as against public
+      policy.... There is substantial harmony between the English
+      and American definitions of monopoly, the two countries
+      agreeing that contracts entered into by and between two or
+      more corporations, the necessary result of whose performance
+      will crush and destroy competition, are illegal."
+
+Upon the subject of eminent domain Mr. Spelling remarks:
+
+      "That the legislature may thus select any agency it sees fit
+      for the exercise of eminent domain, and also that it may
+      determine what purposes shall be deemed public, are
+      propositions too deeply rooted in the jurisprudence of this
+      country to admit now of doubt or discussion. Making an
+      application of this doctrine to railway operations,
+      conceding it to be settled that these facilities for travel
+      and commerce are a public necessity, if the legislature,
+      reflecting the public sentiment, decide that the general
+      benefit is better promoted by their construction through
+      individuals or corporations than by the State itself, it
+      would clearly be pressing a constitutional maxim to an
+      absurd extreme if it were to be held that the public
+      necessity should be only provided for in the way which is
+      least consistent with the public interest.... The power of
+      eminent domain being an inherent element of sovereignty, it
+      cannot be divested out of the State or abridged by contract
+      or treaty so as to bind future legislatures. Nor can the
+      right be divested by private contract."
+
+Concerning State control of corporations the same author says:
+
+      "The subordination of all private interests to the purposes
+      of government, subject only to the condition that the object
+      to be accomplished shall be one in which the public has an
+      interest, is no longer an open question. In its general
+      bearing this principle is too well settled and uniformly
+      recognized--underlying the adjudications by courts of all
+      cases involving constitutional provisions--to require more
+      than a mere statement."
+
+And again he says:
+
+      "Nor is it longer necessary to seek a justification of the
+      common practice of regulating the rates of charges and
+      general management of railroads on the ground that they have
+      received valuable franchises of a public nature and had
+      important powers of sovereign character conferred upon them.
+      That may be an important political consideration, and as
+      such may strengthen the argument in favor of the right; but
+      the right itself rests upon firmer ground, and upon other
+      considerations than that of pecuniary consideration derived
+      from the State. The State may regulate their business, not
+      because they are corporations, nor yet because they are
+      corporations of a particular kind, but because they, like
+      the individuals of which they are composed, are subject to
+      the laws which say that when one devotes his property to a
+      use in which the public has an interest, he in effect grants
+      to the public an interest in that use, and must submit to be
+      controlled by the public for the common good to the extent
+      of the interest he has thus created."
+
+
+
+
+CHAPTER XI.
+
+RAILROADS AND RAILROAD LEGISLATION IN IOWA.
+
+
+The first survey for a railroad in the State of Iowa was made in the
+fall of 1852. The proposed road had its initial point at Davenport and
+followed a westerly course. It was practically an extension of the
+Chicago and Rock Island Railroad, which was then being built between
+Chicago and the Mississippi River. On the 22d day of December, 1852, the
+Mississippi and Missouri Railroad Company was formed, its object being
+to build, maintain and operate a railroad from Davenport to Council
+Bluffs. The articles of association were acknowledged before John F.
+Dillon, notary public, and filed for record in the office of the
+Recorder of Scott County, on the 26th of January, 1853, and in the
+office of the Secretary of State on the first day of February following.
+In 1853 the Mississippi and Missouri Railroad Company entered into an
+agreement with the Railroad Bridge Company of Illinois for the
+construction and maintenance of a bridge over the Mississippi at Rock
+Island. The work was commenced in the fall of that year, and the bridge
+was completed on April 21, 1856, it being then the only bridge spanning
+the Mississippi River. The first division of the Mississippi and
+Missouri Railroad, extending from Davenport to Iowa City, was completed
+on the first of January, 1856, and was formally opened two days later. A
+branch line to Muscatine was completed shortly thereafter. On the first
+day of July the State of Iowa had in all sixty-seven miles of railroad,
+bonded at $14,925 a mile, which at that time probably represented the
+total cost of construction. The earnings of these sixty-seven miles of
+road during the six months following July 1, 1856, amounted to $184,193,
+or $2,749 per mile, which was equal to an annual income of about $5,500
+per mile.
+
+On the 15th of May, 1856, Congress granted to the State of Iowa certain
+lands for the purpose of "aiding in the construction of railroads from
+Burlington, on the Mississippi River, to a point on the Missouri River
+near the mouth of the Platte River; from the city of Davenport, Iowa, by
+way of Iowa City and Fort Des Moines, to Council Bluffs; from Lyons City
+northwesterly to a point of intersection with the main line of the Iowa
+Central Air Line Railroad near Maquoketa, thence on said line running as
+near as practical to the forty-second parallel across the State; and
+from the city of Dubuque to the Missouri River near Sioux City." The
+grant comprised the alternate sections designated by odd numbers and
+lying within six miles from each of the proposed roads. Provision was
+also made for indemnity for all lands covered by the grant which were
+already sold or otherwise disposed of.
+
+The wisdom of the land-grant policy has been questioned. When these
+grants were made it was believed by many that railroads would not and
+could not be built in the West without such aid. While others did not
+share this opinion, they at least supposed that land grants would
+greatly stimulate railroad enterprise and lead to the early construction
+of the lines thus favored.
+
+The land grant of the Mississippi and Missouri Railroad was a mere
+donation for that part of the line which was already completed at the
+time the grant was made; and the extension of this line, as well as the
+construction of the other lines to which the grant applied, was not
+made as fast as had been anticipated. The price of all Government lands
+lying outside of the land-grant belts was $1.25 per acre. To reimburse
+the public treasury for the loss resulting from these grants, the price
+of lands situated within the land-grant belts was advanced to $2.50 per
+acre, practically compelling the purchasers of the even-numbered
+sections of land, instead of the Government, to make the donation to the
+railroads, it being supposed that the benefits resulting to those
+regions from the immediate construction of railroads would
+correspondingly enhance the value of the alternate sections of land
+reserved by the Government. Designing men soon saw the advantages which
+the situation offered. They combined with their friends to organize
+companies for the construction of the land-grant roads, built a small
+portion of the proposed line, to hold the grant, and then awaited
+further developments, or rather the settlement of the country beyond.
+There are those who believe that the doubling of the price of Government
+land within the belt of the proposed land-grant roads greatly retarded
+immigration and with it the construction of roads. They hold that, had
+no grant whatever been made to any railroad company and had equal
+competition in railroad construction been permitted, the Iowa through
+lines, instead of following, would have led, the tide of immigration.
+
+It has been seen that in 1856 the Mississippi and Missouri Railroad was
+completed as far as Iowa City. On the second day of June of that year
+its Board of Directors asked the Governor of the State to convene the
+General Assembly in extra session, to consider the disposition which
+should be made of the recent Congressional grant. This urgency might
+lead one to suppose that the company was anxious to extend its line at
+the earliest opportunity. The General Assembly was convened, and the
+land given to the State by Congress for the purpose of aiding in the
+construction of a railroad from Davenport to Council Bluffs was given to
+the Mississippi and Missouri Railroad Company. The act was approved by
+the Governor on July 14, 1856, and three days later the company
+"assented to and accepted the grant." It then executed mortgage after
+mortgage, and built a branch line through quite a populous territory,
+from Muscatine to Washington, but the main line made very slow progress.
+In 1865 the bonded debt of the company amounted to $6,851,754, although
+the line was completed only to Kellogg, in Jasper County, about forty
+miles east of Des Moines. In spite of the fact that the cost of
+operating the road had from the beginning varied but little from 60 per
+cent. of its gross receipts, its president, in a circular letter to the
+stock-and bondholders, dated October 20th, 1865, made the statement that
+the company was "driven to the necessity of selling the road or
+reorganizing." In 1866 suit was brought in the Circuit Court of the
+United States for the District of Iowa for the foreclosure of the
+company's mortgages, and a decree of foreclosure was entered on the 11th
+day of May of that year. The property was sold on the 9th day of July
+following at Davenport, and was purchased by the Chicago, Rock Island
+and Pacific Railroad Company, which was incorporated in this State a few
+weeks previous to the sale, for the purpose of acquiring the railroads
+built by the Mississippi and Missouri Railroad Company with all its
+appurtenant property, "and all the rights, privileges and franchises
+granted by the act of Congress of May 15th, 1856, to the State of Iowa,
+and by the State of Iowa granted to the said Mississippi and Missouri
+Railroad Company, and when so acquired to maintain and operate the said
+railroad." It is a significant fact that all the corporators of the new
+company, except one, were directors of the bankrupt company. On the 20th
+of August, 1866, the Chicago, Rock Island and Pacific Company of the
+State of Iowa consolidated with the Chicago, Rock Island and Pacific
+Railroad Company of Illinois, and conveyed all its property, powers and
+franchises to the consolidated company. The validity of the
+consolidation was questioned by a large number of stock-and bondholders,
+and the courts were appealed to to issue injunctions restraining the
+consolidated company from extending its line or expending any money
+obtained through the sale of its securities. In this predicament the
+company turned to the Iowa legislature for protection. Anxious to secure
+the early completion of the road, the Twelfth General Assembly, by an
+act approved February 11th, 1868, recognized the consolidated company,
+and resumed and granted to it "all right or interest" which the State
+had in the lands previously granted to the Mississippi and Missouri
+Railroad Company. The act expressly provided, however, that the Chicago,
+Rock Island and Pacific Railway Company should "at all times be subject
+to such rules, regulations and rates of tariff for transportation of
+freight and passengers as may from time to time be enacted and provided
+for by the General Assembly of the State of Iowa," and that if the
+company should neglect to comply with any of the requirements of the
+act, it should forfeit to the State all its franchises and corporate
+rights acquired by or under the laws of the State, and all lands granted
+to aid in the construction of its road. The line was completed to
+Council Bluffs in June, 1869.
+
+The lands in aid of the construction of a railroad running across the
+State, as nearly as practicable along the forty-second parallel, were
+granted by the General Assembly to the Iowa Central Air Line on the 14th
+of July, 1856, but as this company failed to fulfill the conditions of
+its grant, it was, on the 17th of March, 1860, transferred to the Cedar
+Rapids and Missouri River Railroad Company. This company completed the
+road to Marshalltown in 1862, to Nevada in 1864, to Boone in 1865, and
+to Council Bluffs in the fall of 1867.
+
+The Burlington and Missouri River road reached the Missouri River but a
+few months later. Ten years after this company had received its grant,
+its line had only been completed as far as Albia, in Monroe County. In
+1867 the road was built little more than half across the State. But it
+managed not to be far behind its two rivals on the north in reaching the
+Missouri River.
+
+At first sight it might seem as if these companies had all at once
+become awake to their obligations. When it is remembered, however, that
+in 1869 the junction of the Union Pacific and Central Pacific railroads
+was effected, and thus a continuous line across the continent formed,
+the conclusion lies near that the haste with which the three Iowa
+land-grant roads were completed was simply the result of a strife for
+the large amount of through business which the completion of the Pacific
+route promised to bring to them.
+
+No such inducement existed for the Dubuque and Sioux City Company, and
+twelve years after receiving its grant it had not yet built half of its
+line. In his message to the Twelfth General Assembly, delivered January
+14, 1868, Governor Stone said: "Under the provisions of the act adopted
+by the General Assembly, at its extra session (in July, 1856), this (the
+Dubuque and Sioux City) company became the beneficiary of the grant
+designed to secure the construction of a railroad leading from Dubuque
+to Sioux City, and this valuable donation was accepted from the State,
+with all the terms and conditions imposed. A large portion of this grant
+has already been absorbed by the company, in various ways, by pretended
+sales and incumbrances. This road has been constructed to Iowa Falls, a
+distance of 143 miles from Dubuque, but I am unable to discover any
+reliable evidence of earnest intention on the part of this company to
+construct the line to its terminal point on the Missouri River."
+
+The Governor further recommended that the General Assembly pass an act
+resuming the control over these lands. At about the same time an
+agreement was effected between the Iowa Falls and Sioux City Railroad
+Company (which was organized in the fall of 1867) and the Dubuque and
+Sioux City Railroad Company, by which the latter transferred to the
+former its land grant for the unfinished portion of the Dubuque and
+Sioux City road. This agreement was confirmed by the General Assembly,
+through an act approved April 7, 1868. The road was completed to Fort
+Dodge in August, 1869, and to Sioux City a year or two later. The entire
+line was then leased to the Illinois Central.
+
+The land grant to this line of road embraced over 1,000,000 acres of the
+finest lands of the State. We can appreciate the magnitude of this
+donation when we consider that, had these lands been sold at only $8 per
+acre, the proceeds would have paid the whole expense of building and
+equipping the road from Dubuque to Sioux City. The lands granted to the
+C., R. I. & P. R. R. were sold at an average price of over $8 per acre,
+and those of the B. & M. at over $12 per acre.
+
+Among the other important land grants is that made to the McGregor
+Western Railroad Company. This company was the successor of the
+McGregor, St. Peters and Missouri River Railroad Company, which was
+organized in 1857 for the purpose of constructing a railroad from
+McGregor to the Missouri River. The construction of the road was
+commenced in 1857 at McGregor. Large local subscriptions were taken
+along the proposed line, the writer being one of the subscribers. Work
+was continued the next year until much of the heavy grading had been
+done, when the road was allowed to go through the process of
+foreclosure, like many other roads built in the West at that time. The
+old stock was completely wiped out, and new owners came into possession
+of the property, reorganizing under the name of the McGregor Western
+Railway Company. Nearly all the early investments of Iowa people were
+thus confiscated by the same class of men who now cry out loudly against
+confiscatory measures. By an act of Congress approved May 12, 1864, the
+State of Iowa was granted, for the use and benefit of the McGregor
+Western Railroad Company, every alternate section of land designated by
+odd numbers for ten sections in width on each side of the proposed road.
+The act contained the condition that in the event of the failure of said
+McGregor Western Railroad Company to build twenty miles of said road
+during each and every year from the date of its acceptance of the grant
+the State might resume the grant and so dispose of it as to secure the
+completion of the road in question. The McGregor Western Railroad
+Company failing to comply with the conditions of the grant, the General
+Assembly on the 27th day of February, 1868, resumed the lands and on the
+31st day of March of the same year regranted them to the McGregor and
+Sioux City Railway Company. The act specially provided that the company
+accepting the grant "shall at all times be subject to such rules,
+regulations and rates of tariff for the transportation of freight and
+passengers as may from time to time be enacted and provided for by the
+General Assembly of the State of Iowa, and further subject to the
+conditions, limitations, restrictions and provisions contained in this
+act and in the acts of Congress granting said lands to the State of
+Iowa." It also contained the condition that at least twenty miles of
+road should be built by the company every year and that the whole road
+should be completed to the intersection of the then proposed railway
+from Sioux City to the Minnesota State line by the first day of
+December, 1875.
+
+The McGregor and Sioux City Railway Company also failing to comply with
+the terms of the grant, the lands were again resumed by the General
+Assembly on March 15th, 1876, and regranted to the McGregor and Missouri
+River Railroad Company upon the condition that it complete the road to
+the intersection of the Sioux City and St. Paul Railroad on or before
+the first day of December, 1877.
+
+But the State found itself again disappointed, and two years later the
+General Assembly for the third and last time resumed its grant and then
+conferred it upon the Chicago, Milwaukee and St. Paul Railway Company
+upon the express conditions that it complete the road to Spencer on or
+before the first day of January, 1879, and to Sheldon within a year
+thereafter, and that the road should at all times be subject to State
+control. The road was completed to Sheldon without delay, and on the
+30th of November, 1878, the Governor of the State certified to the
+Secretary of the Interior that the Chicago, Milwaukee and St. Paul
+Railway Company had completed its road from Algona to Sheldon in
+compliance with the conditions of the original grant and the laws of the
+State.
+
+It thus took over twenty years to complete this road. Ten years after
+its construction had commenced it had only reached Calmar in Winneshiek
+County. In 1869 the road was completed to Clear Lake and in 1870 to
+Algona. This point remained its terminus until it passed into the hands
+of the Chicago, Milwaukee and St. Paul Railway Company.
+
+The State of Iowa has not derived that benefit from the large land
+grants made to its railroads which her people had a right to expect. In
+spite of these grants roads were built only when there was reason to
+believe that they would be immediately profitable to their owners. The
+land grants enriched the promoters of these enterprises much more than
+they did the State in whose interest the grants were presumed to be
+made. As a rule they enabled scheming men to hold the selected territory
+until a railroad through it promised to be a safe and profitable
+investment, and to avoid the payment of taxes on their millions of acres
+of land, which in the meantime became very valuable. Other roads were
+built at an early day without Government aid. They were pushed forward
+by the current of immigration until the threatened competition of roads
+favored by these grants checked their progress. The Chicago, Iowa and
+Nebraska road may be cited as a fair illustration. It was projected on
+the 26th of January, 1856, in the town of Clinton, to be built from
+Clinton to the Missouri River via Cedar Rapids. It was opened to De Witt
+in 1858 and completed to Cedar Rapids the following year. The road was
+82-1/2 miles long and was built entirely with private means, receiving
+neither legislative aid nor local subsidy. It is more than probable
+that this road would at an early day have been completed to the Missouri
+River, had it not feared the rivalry of the subsidized Cedar Rapids and
+Missouri road.
+
+The total number of acres of land granted by Congress to aid the
+construction of Iowa roads is 4,069,942. A fair idea of the value of
+these lands may be obtained from the fact that the Chicago, Rock Island
+and Pacific Railroad Company sold over half a million acres of its lands
+at an average of $8.68 per acre, and the Chicago Burlington and Quincy
+sold nearly 350,000 acres at an average of $12.17 per acre.
+
+But land grants form only a small part of the public and private
+donations which have been made to Iowa roads. Including the railroad
+taxes voted by counties, townships and municipalities, the grants of
+rights of way and depot sites and public and private gifts in money,
+these roads have received subsidies amounting to more than $50,000,000,
+or enough to build 40 per cent. of all the roads of the State. There is
+no doubt that the contributions of the public toward the construction of
+the railroads of Iowa is several times as large as the actual
+contributions of their stockholders for that purpose.
+
+The people of Iowa were from the first very favorably disposed towards
+railroads. Every inducement was held out to railroad builders to come
+here and help to multiply the tracks for the iron horse. They came and
+brought with them many abuses which since the first introduction of
+railroads had gradually been developed in other States.
+
+The contrast between the old and the new mode of transportation was so
+great, and the public appreciated so highly the superior conveniences
+afforded by the latter, that for years the abuses practiced by the early
+railroads were scarcely noticed, or, if they did attract the attention
+of the public, they appeared more like necessary features of the new
+system of transportation than like abuses. The evil gradually increased,
+but for years no attempt was made to check its growth. The railroad
+managers construed this failure of the people to interfere with, or even
+protest against, their unjust practices as a quasi-sanction of their
+course, and soon claimed to do by right what they had formerly done by
+sufferance. The evils increased until the patience of the people finally
+became exhausted.
+
+While the State thus for years dealt very leniently with the railroad
+companies, the laws of Iowa had from the beginning of railroad building
+emphasized the principle of State control. This principle was asserted
+in the very first railroad act ever passed in the State. Section 14 of
+chapter I. of the acts of the extra session of the Fifth General
+Assembly, regranting to the various railroad companies the lands granted
+to the State by Congress for railroad purposes, provides that "railroad
+companies accepting the provisions of this act shall at all times be
+subject to such rules and regulations as may from time to time be
+enacted and provided for by the General Assembly of Iowa...." In 1866 an
+attempt was made in the General Assembly to regulate rates, but the
+Attorney-General, to whom the question of constitutionality was
+submitted, held in his opinion that it was not in the power of the
+legislature to prescribe rates for railroad companies. This opinion
+provoked much indignation among the people of the State, and led to the
+expression of a sound public opinion by legislative acts which could not
+be misunderstood.
+
+When the Twelfth General Assembly (in 1868) regranted to the Chicago,
+Rock Island and Pacific Railroad Company the lands originally granted
+to the Mississippi and Missouri Company, it only did so upon the
+condition that "said railroad company, accepting the provisions of this
+act, shall at all times be subject to such rules, regulations and rates
+of tariff for transportation of freight and passengers as may from time
+to time be enacted and provided for by the General Assembly of the State
+of Iowa...." The same restricting clause, known as the Doud Amendment,
+was added to all other land grant acts passed by the Twelfth and
+subsequent General Assemblies, and the various companies willingly and
+gladly accepted it.
+
+The abuses of which the people of Iowa complained were far from being
+confined to their State. They were practiced throughout the Northwest,
+and the demand for reform was as loud in Minnesota, Wisconsin and
+Illinois as it was in Iowa. In 1871 laws were passed in Illinois and
+Minnesota fixing maximum charges for the transportation of freight and
+passengers and prohibiting discriminations. The railroads claimed that a
+State did not have the right to prescribe rates and refused to be bound
+by these laws. Instead of modifying their policy, they became daily more
+arrogant. Discriminations which had before been practiced under the veil
+of secrecy, or which had been defended by railroad managers as
+exceptions to the general rule made necessary by a peculiar combination
+of circumstances wholly beyond their control, were now openly and
+defiantly practiced by several of the larger roads. The Chicago,
+Milwaukee and St. Paul Railroad Company, in its effort to annihilate a
+rival, went so far as to openly announce to the public its intention to
+entirely disregard distance as a factor in rate-making. It gradually
+became the general rule to wage war against rivals at competitive
+points and to "recoup" by charging excessive rates at non-competitive
+points. Every encouragement was thus given by the railroads to the
+Granger movement, which spread in less than two years over the whole
+Northwest.
+
+In the fall of 1873 Iowa elected a Granger legislature, like Minnesota,
+Wisconsin and Illinois. The wildest predictions were made by railroad
+men as to the extremes to which the Granger legislature would go, but it
+confined itself to enacting a law establishing an official
+classification and fixing maximum rates for all railroad companies. The
+law was approved March 23, 1874, and went into effect on the 4th of July
+following. This law in no case compelled companies to carry freight at a
+lower rate than they had voluntarily carried it in the past. Many of the
+rates in force at the time of the passage of the act were considerably
+lower than the corresponding maximum rates fixed by the legislature. The
+average rates fixed by the law were higher than the rates at which the
+railroads had previously carried a large portion of corresponding
+freight. The revenues of the road were not even curtailed by this law;
+on the contrary, by equalizing rates, _i. e._, by leveling up the rates
+given to favored places and favored individuals and leveling down the
+exorbitant rates exacted from the public at non-competitive points, the
+railroad companies were enabled to effect an increase in their total
+revenue.
+
+The Granger law remained in force until 1878. Its constitutionality was
+tested by the railroad companies in the Supreme Court of the United
+States, but this high tribunal held that rate-making was a legislative
+and not a judicial function, that it was within the province of the
+State legislature to prescribe rates for the transportation of
+passengers and freight wholly within the State, and that for protection
+against abuses by legislatures the people must resort to the polls, and
+not to the courts.
+
+The Granger laws have been and are still severely criticised by those
+opposed to the principle of State control and by the ignorant. It is
+nevertheless true that those laws were moderate, just and reasonably
+well adapted to remedy the evils of which the public complained. It has
+been the policy of most railroad men to attack them as crude, intensely
+radical and socialistic. The obloquy heaped upon them was the work of
+designing men who desired to continue their impositions upon the people.
+Mr. Charles Francis Adams, however, admits that the Granger method was
+probably as good a method as could have been devised of approaching men
+who had thoroughly got it into their heads that they, as common
+carriers, were in no way bound to afford equal facilities to all, and,
+indeed, that it was in the last degree absurd and unreasonable to expect
+them to do so.
+
+The Iowa law was imperfect in detail, and yet its enactment proved one
+of the greatest legislative achievements in the history of the State. It
+demonstrated to the people their ability to correct by earnestness and
+perseverance the most far-reaching public abuses and led to an emphatic
+judicial declaration of the common-law principle that railroads are
+highways and as such are subject to any legislative control which may be
+deemed necessary for the public welfare.
+
+Defeated in the courts, the railroad managers now endeavored to make
+odious the new law which deprived them of the power to manipulate
+railroad interests to their personal advantage. By complying with only
+part of its letter and none of its spirit, they contrived to create
+hardships for certain interests and localities. Instead of charging in
+all cases reasonable rates, as the spirit of the law demanded, they
+would frequently charge the maximum rates permitted under the law, and
+when they by this practice succeeded in damaging certain interests, they
+would point to the Granger law as the source of all existing railroad
+evils. So, likewise, when they were asked by their patrons to reduce a
+high rate, they would plead the legislative schedule in excuse of their
+failure to comply with the request. When the legislature of 1878
+convened, the railroad managers appeared before it and pleaded
+submissively for a repeal of the Granger law and the establishment of a
+commissioner system. They claimed that they were ready and willing to
+submit to all reasonable regulation, but that a maximum tariff law was
+prejudicial both to the best interests of the roads and those of the
+public. They further asserted that the people had grown tired of this
+manner of regulating railroad charges and earnestly desired a change of
+policy; that the interference of the State with the railroad business
+had injuriously affected certain industrial interests and had greatly
+retarded railroad construction by driving capital and promoters of
+railroad enterprises from the State. These statements would indeed have
+argued strongly in favor of a repeal of the law if they had been based
+on facts. There had been, however, no expression of public
+dissatisfaction during the campaign preceding the session of the General
+Assembly. There were doubtless individuals and even communities to whom
+the law had been made so odious that they felt they had but little to
+lose by a change, but the masses of the people believed that the law was
+based upon just principles and desired its perfection rather than its
+repeal. As to the claim that railroad construction had been checked by
+hostile legislation, statistics prove that during the five years
+following the great panic of 1873 Iowa fared no worse in this respect
+than her sister States east, west or south.
+
+The arguments produced by the railroad managers no doubt influenced some
+members of the General Assembly; by far the greater number of them,
+however, realised that the failure of the law to bring the expected
+relief was not due so much to its own imperfections as to the absence of
+a power to enforce it. The writer, with others, was convinced that a
+strong and conscientious commission would be a much more potent agency
+to secure reasonable rates for the shipper than a maximum tariff law
+without proper provisions for its efficient enforcement; they, in short,
+preferred a commission without a tariff law to a tariff law without a
+commission. The question became the subject of many animated debates in
+both houses of the General Assembly, but the commissioner system at last
+prevailed. The act establishing a Board of Railroad Commissioners, and
+defining their duties, was approved on the 23rd of March, 1878, and went
+into force a few days later. The act empowered the commission to
+exercise a general supervision over all railroads operated in the State,
+to inquire into any neglect or violation of the laws of the State by any
+railroad corporation or its officers or employes, to examine the books
+and documents of any corporation, to investigate complaints of shippers
+that unreasonable charges had been made by railroad companies, and to
+modify any charge which they might deem unreasonable. It was also made
+the commissioners' duty to make an annual report to the Governor
+disclosing the working of the railroad system in the State, the officers
+of each company being required to make annual returns to the board for
+this purpose.
+
+Though the enactment of this law was a surprise to the people, they
+accepted it in good cheer, and determined to give it an honest trial.
+The law was extensive in its scope and stringent for that time, and, if
+strictly enforced in letter and in spirit, promised to be, and would
+have been, entirely sufficient for the thorough control of railroad
+corporations.
+
+Nevertheless, in the course of time it became apparent that either the
+law had not lodged sufficient authority in the commission or the
+commission did not make use of the authority which the law had given
+them. In spite of the commission, the railroad companies maintained
+pools and charged extortionate and discriminating rates, in direct
+violation of the law. It is true the commissioners righted many a wrong.
+In investigating the complaints of shippers against railroad companies
+they often rendered valuable services to those who had neither the means
+nor the inclination to prosecute their rights in the courts of law; but
+as they held that they could only pass upon individual charges, and did
+not have the power to revise the companies' tariffs, the companies were
+virtually in a position to become guilty of more extortions in one day
+than the commission could investigate in a year. Moreover, the railroad
+company might be ordered by the commission to return an overcharge to a
+certain shipper, but this did not prevent it from continuing the
+excessive charge. If the overcharged shipper again wanted relief it was
+his privilege to again apply to the commission, and to continue this
+tedious process until either his or the commissioners' patience became
+exhausted. The people soon found that the new system of control was
+almost as inadequate as that which it had displaced. Some attributed the
+weakness of the commission to its personnel, others to the law. There
+is no doubt that the commission might have accomplished more than it
+did.
+
+It was hoped by some that as the commission gained in experience it
+would gain in influence, and that railroad evils would gradually
+diminish. But they were disappointed in their expectations. Every year
+seemed to add to the grievances of the public. Success greatly
+emboldened the railway companies. Discriminations seemed to increase in
+number and gravity. At many points in the western part of the State
+freight rates to Chicago were from 50 to 75 per cent. higher than from
+points in Kansas and Nebraska. A car of wheat hauled only across the
+State paid twice as much freight as another hauled twice the distance
+from its point of origin to Chicago. Minnesota flour was hauled a
+distance of 300 miles for a less rate than Iowa flour was carried 100
+miles. Certain merchants received from the railroad companies a discount
+of 50 per cent. on all their freights and were thus enabled to undersell
+all their competitors. The rate on coal in carload lots from Cleveland,
+Lucas County, to Glenwood was $1.80 per ton, and from the same point to
+Council Bluffs only $1.25, although the latter was about thirty miles
+longer haul. Innumerable cases of this kind could be cited. There was
+not a town or interest in the State that did not feel the influence of
+these unjust practices. Many of the rates complained against, it is
+true, were beyond the direct control of the State commission, but there
+was an impression among well-informed shippers that if the commission
+had the power to fix local rates and exercised it judiciously, the
+railroad companies would soon find it to their interest to be as
+reasonable in making through rates for Iowans as they expected the
+commission, to be in prescribing local tariffs.
+
+The demand of the people for more equitable rates and a more thorough
+control of the railroad business increased from year to year. Repeated
+attempts were made in the General Assembly to secure the passage of an
+act looking to that end, but, owing to shrewd manipulations on the part
+of the railroad lobby, every attempt was defeated. There always was, of
+course, a large number of members who represented districts not well
+supplied with railroad facilities. These, as a rule, honestly opposed
+restrictive legislation, believing that such legislation would check
+building, and that, on the other hand, competition could be relied upon
+to correct abuses. Of those members who had less positive convictions
+many were retained as railroad attorneys and were thus made serviceable
+to the companies. Other members with political ambition were nattered or
+intimidated into subjection, and bribes in disguise, such as passes and
+special rates, were not unfrequently resorted to to strengthen the
+railroad following in both houses of the General Assembly.
+
+Railroad corruption did not pause here. It is a notorious fact that
+large sums of money were paid to venal papers of both parties in
+consideration of an agreement on their part to defend transportation
+abuses and exert their influence against progressive railroad
+legislation. The vilest means were often resorted to by these sheets to
+obtain their end. Public men who had the courage to avow their
+opposition to existing railroad abuses or to favor a more perfect system
+of State control of railways were misrepresented, ridiculed, traduced
+and denounced as demagogues and socialists by hypocritical editors, who
+prostituted their political influence as long as they enjoyed railroad
+stipends, and who at intervals became converts to the cause of the
+people for the purpose of extorting from the railroad companies a new
+and increased subsidy. But truth can not long be suppressed. The masses
+of the people may be imposed upon for a time, but even the shrewdest
+rogue will eventually be compelled to surrender. In time even rather
+unsophisticated voters learned to place a true estimate upon the motives
+of the editors, whose policy, as one of them expressed it in the
+author's presence, was "controlled by the counting-room."
+
+Railroad politicians gradually lost their influence, and the symptoms of
+public discontent greatly increased. In the political campaign of 1887
+State control of railroads became one of the main issues. Both of the
+great political parties in their platforms had declared themselves very
+emphatically in favor of such legislation as would bring railroad
+corporations under complete State control, and with very few exceptions
+the various legislative districts had nominated only such men as
+candidates for legislative offices as were known to be in thorough
+accord with the masses of the people upon the railroad question.
+
+The election resulted in an even more complete defeat of the railroad
+forces than had been generally anticipated. Yet no hasty step was taken
+when the General Assembly convened. A large number of bills
+contemplating railroad reforms in various ways were introduced, but the
+material presented was carefully sifted by the railroad committees and a
+committee bill was framed which incorporated the best features of them
+all. The committees listened patiently for weeks to the arguments of the
+representatives of both the railroads and the shippers.
+
+Never before had so formidable a railroad lobby assembled at the State
+Capitol. The danger signal had been raised, and not only were the great
+political manipulators of the State called into requisition, but experts
+from adjoining States joined them in besieging the legislature. The
+dogs of war were let loose from all quarters. A legion of hirelings were
+zealous to show their servility and loyalty to their lords. The daily
+and weekly papers of the State in the service of railroad companies
+teemed with arguments from the pens of railroad attorneys, and their
+columns were profusely supplemented with editorials copied from
+prominent corporation papers like the New York _Tribune_, New York
+_Times_, New York _World_, Albany _Evening Argus_, Boston _Advertiser_,
+and others from various parts of the country.
+
+These papers, attempting to disguise the motives that prompted them to
+come to the defense of the Wall Street interest, affected the position
+of disinterested and impartial observers. They condemned the proposed
+measures as wild and socialistic, and they painted in dark colors the
+disasters to railroad property, the injustice to its owners, and
+misfortunes to the people of Iowa, that would follow their adoption.
+Especially did they bewail the losses that would fall upon the widows
+and orphans who had confidingly invested all of their hard earnings in
+this property.
+
+They never uttered a word of condemnation, but entirely ignored or
+defended the abuses by which the stockholders were robbed at one end of
+the line and the patrons were imposed on at the other.
+
+Many of these papers were notified that their statements were altogether
+erroneous, but they would not admit a line to their columns in relation
+to the matter that indicated any other disposition than complete
+subserviency to the interests of Wall Street.
+
+There were, however, an unusual number of strong men in this General
+Assembly, and this extraordinary display of railroad forces only tended
+to impress more strongly upon them the necessity of curbing the railroad
+power, and their best energies were concentrated upon the subject, with
+a firm determination to deal with it in a manner dictated by reason and
+experience.
+
+So well did the bill which was finally adopted by the committee reflect
+the general sentiment of the members of the General Assembly that not a
+single vote was cast against it in either house upon its final passage.
+Since the adjustment of business under this law, there has been less
+friction between the people and the railroads than before for thirty
+years, and so satisfactory has it proved to all that no one, not even a
+railroad man, has to this day asked the legislature to repeal the law or
+any part of it. The act contains no new principle of railroad control.
+By far the greater part of its provisions were taken from the old law.
+Nearly every one of its features may be found either in the Interstate
+Commerce Act or upon the statute books of other States. It provides that
+charges must be reasonable and just, that no undue preference or
+advantage shall be given to any railroad patron, and that equal
+facilities for interchange of traffic shall be given to all roads; it
+prohibits pooling, a greater charge for a shorter than longer haul, the
+shorter or any portion of it being included in the longer, and
+discrimination against any shipping point. It requires that schedules of
+rates and fares shall be printed and kept for public inspection, and
+that no advance shall be made in rates or fares once established except
+after ten days' public notice; and it empowers the Board of Railroad
+Commissioners to make and revise schedules for railroads, the rates
+contained in such schedules to be received and held in all suits as
+_prima facie_ reasonable maximum rates. The act further provides
+penalties and means of enforcement.
+
+It must not be supposed that by the passage of this act the legislature
+disclaimed the right to fix absolute rates; it simply chose this
+expedient because in the present tentative stage of rate regulation it
+seemed most efficient.
+
+There has been much misunderstanding concerning the Iowa law. Many
+suppose that the Iowa commissioners have power to make confiscatory
+rates for the railroads, while in fact they can only name maximum rates
+which shall be deemed and taken in all courts of the State as _prima
+facie_ evidence that they are reasonable and just maximum rates until
+the railroads show that they are not. They are at liberty to go into
+court any day and show this, if they are able. They are, however,
+careful not to undertake it, for no one knows better than they do that
+the rates fixed by the commissioners are liberal for the railroads.
+
+There are nine States, besides Iowa, in which the power to fix rates has
+been conferred upon railroad commissioners. This feature of the law was
+therefore far from being a novel one, yet no provision of the act was,
+previous to its passage, so furiously opposed, or subsequent to it so
+stubbornly resisted as this. Railroad managers realized that a surrender
+of the right to make their own rates was virtually a surrender of the
+power to practice abuses.
+
+Soon after the passage of the law the commissioners commenced the work
+of preparing schedules of the rates for the roads. They endeavored to do
+justice to both the railroad companies and their patrons by affording a
+fair compensation to the former and at the same time giving relief to
+the depressed interests represented by the latter. Their rates were not
+as low as the special rates that had at various times been granted to
+favorite shippers, but were a fair average of the various rates in vogue
+at the time. While the schedule was under consideration, the railroad
+managers were given frequent hearings, in which they endeavored to
+impress their views upon the commissioners and to obtain many important
+concessions, which they urged as essential to the welfare of the
+railroad interests. Their views guided the commission to such an extent
+that it was generally supposed that the schedule as finally adopted
+would be accepted by the railroad companies without protest.
+
+The schedule of the Iowa commission has been sharply criticised by Mr.
+Stickney in his "Railway Problem." He finds in it inconsistencies and
+confusion, due, as he charges, to faulty mathematics. But it is claimed
+by the commission, and Mr. Stickney should know, that whenever
+mathematics were ignored in the construction of the schedule it was done
+at the earnest and persistent solicitation of the railroad managers,
+who, it seems, were more interested in maintaining their interstate
+rates than in the consistency of the Iowa schedule.
+
+The rates were published, as required by law, and June 28, 1888, was
+fixed as the day on which they were to take effect. A few days previous
+to this date the companies asked that the taking effect of the new
+tariff be postponed a week. When this request was granted by the
+chairman of the commission, the railroad managers took advantage of the
+courtesy by enjoining the commissioners in the Federal court from
+enforcing it.
+
+Several months later the commissioners modified their schedule by the
+adoption of the Western Classification. Again the railroad managers
+asked the court for an injunction, but this time met with a refusal.
+
+After many suits for penalties had been instituted against them, and
+many more threatened, they adopted the new schedule, but endeavored to
+inaugurate a policy of retaliation by reducing their train service and
+discharging a large number of employes, and in many ingenious ways
+continued their seditious course with a determination characteristic of
+a band of insurrectionists. But the impetus which railroad traffic
+received under the operation of the commissioners' schedule was such
+that they soon found it necessary to restore to the service its former
+efficiency.
+
+The Railroad Commissioners' report shows that while the number of
+employes was 24,642, and their yearly compensation was $14,212,500 in
+1889, in 1892 there were 30,492 employes, and their yearly compensation
+$18,070,915.
+
+The increase in both the gross and net earnings of Iowa lines has been
+remarkable, as shown in the following table gathered from the
+commissioners' reports:
+
+             Gross Earnings,    Net Earnings,
+   Year.         Total.            Total.         Per Mile.
+
+  1888-89     $37,369,276        $11,861,310       $1,421
+  1889-90      41,318,133         12,798,430        1,522
+  1890-91      43,102,399         14,463,106        1,720
+  1891-92      44,540,000         14,945,000        1,777
+
+It was claimed by railroad men that the effect of Iowa legislation would
+be particularly disastrous to her local roads, which had no opportunity
+to make up on through business the losses incurred in the local traffic.
+The Burlington, Cedar Rapids and Northern was particularly cited as a
+line which would have to go into bankruptcy under the new law. Its
+earnings commenced to increase, however, immediately after the adoption
+of the commissioners' schedule, and at the end of the first year they
+were large enough to change this line from a Class "C" to a Class "B"
+road. They continued to increase, and in 1891 its gross earnings on
+substantially the same mileage were 36 per cent, and its net earnings 64
+per cent. larger than they had been in 1888. The increase continued and
+enabled the company to make a dividend to its stockholders February 1,
+1893, it being the first dividend ever made by the company. It is a good
+illustration of what the Iowa law has done for weak railroads. It has
+again changed class and is now a Class "A" road.
+
+It is seen that the fears, or rather the pretended fears of the railroad
+managers, that the legislature of Iowa would bankrupt her railroads,
+were entirely groundless. As a result of the law railroads have been
+able to increase their gross earnings as well as their profits. They
+have been enabled to give employment to a larger number of men, and
+there has been no occasion for them to carry out the dishonest threat to
+decrease the wages of their employes. Had it not been for their
+increased earnings in Iowa, the losses recently sustained in other
+States by several of the through lines would have made it impossible for
+them to declare the dividends which they did.
+
+Under her beneficial railroad policy Iowa has prospered wonderfully, and
+her railroads have been more prosperous than when they were allowed to
+have their own way. The commissioners' tariff has made jobbing and
+manufacturing profitable where it was unprofitable before. It has added
+to our industries and our commerce, and has made new business for the
+people as well as the railroads. It has contributed to the increase in
+the value of our farms and factories and their products, and the time
+will come when wise railroad managers, like the majority of former
+slaveholders of the South, would not resurrect the past if they could.
+In fact, honorable managers now acknowledge that they would not if they
+could.
+
+The railroad companies are at present making a systematic effort to
+weaken the Iowa commission, but if they should succeed in doing so, the
+people, under our system of electing the commissioners, can readily
+correct the evil.
+
+Other States have much experience similar to that of Iowa. Nebraska has
+just adopted a maximum tariff law for the control of her roads. It will,
+of course, be resisted by the railroad managers of that State.
+
+The State of Texas is not so productive in proportion, but is much
+greater in extent than Iowa, and upon the whole resembles it much in its
+prominent characteristics. Both are thrifty, progressive States, with no
+large commercial or manufacturing centers where their people can easily
+organize to protect their financial interests.
+
+The people of Texas endured patiently the abuses so prevalent in
+railroad management until a few years since they enacted a railroad law
+similar to that of Iowa. The Wall Street managers of the Texas railroads
+are at the present time using all of their familiar methods to influence
+the people of that State to repeal their law. The following letter
+serves to show the spirit with which they are approached:
+
+
+      "23 BROAD STREET,
+      NEW YORK, November 30, 1891.
+
+      James B. Simpson, Esq., Dallas, Tex.
+
+      "DEAR SIR: Yours of the 26th is received and contents
+      carefully noted. Very likely you have valuable franchises,
+      or what would be valuable in almost any other state than
+      Texas; but while there are many places in Texas where we
+      would like to build some railroads--mostly short ones--we
+      cannot do anything so long as the disposition exists that
+      now seems to in Texas; that is, to do all the harm they
+      can do this kind of property, and I think my views are
+      shared by all people who have money to invest. No one is
+      disposed to create property which, after being created, is
+      not to be controlled by its ownership. Of course, we all
+      expect to be subject to the police regulations and to pay
+      the taxes of any State even as other property, but whenever
+      anything is done beyond that it checks this kind of
+      improvement, and where it approaches so near confiscation as
+      the sentiment of Texas tends it entirely prevents capital
+      from being invested.
+
+      "I think there is no road in Texas that is to-day earning
+      its operating and fixed charges. Every road, I think, has
+      been or is in the hands of a receiver, excepting our great
+      east and west line, which is supported by business going
+      entirely through the State, which business could also be
+      sent another way, and would be so sent, excepting that we
+      believe the people of Texas will some time take a sober
+      second thought and treat the railroads as they do other
+      kinds of property. When that time comes I shall be ready to
+      talk to you about your franchises, if it comes in my day,
+      and I believe it will, as I think no other people are
+      suffering from an unwise policy persistently pursued as are
+      the people of your State.
+
+      "Yours truly,
+      C. P. HUNTINGTON."
+
+               "Now, in the name of all the gods at once,
+               Upon what meat doth this our Cæsar feed,
+               That he hath grown so great?"
+
+It was but a few years ago when this Mr. Huntington was keeping a small
+retail store in the city of Sacramento, and he exhibited then no greater
+ability, except perhaps that he was a little more venturesome, than
+thousands of others engaged in the same occupation; subsequently he
+engaged, with several others, in the Central Pacific Railroad scheme,
+and received from the bounties of our generous Government as his share
+of the profits in that enterprise several million dollars, which sum has
+ever since been continually swelled by the exercise of a power scarcely
+inferior to the power of taxing the property of the Pacific Coast. He
+has been so successful for years in manipulating Congressmen and State
+legislatures and shaping the policies of States that he now considers it
+impertinent and short-sighted for a people to take steps to limit his
+levies upon them. It is to be hoped that the boycotting and intimidating
+methods resorted to will have no more effect upon the people of that
+State than they had on the people of Iowa.
+
+Iowa is the queen among the States of the Union. No other State has so
+little waste land or is so productive. Her annual output of staple
+products amounts to hundreds of millions of dollars in value. Her people
+are intelligent, progressive and just. None are governed more by the
+precepts of the golden rule, or are more disposed to render unto Cæsar
+the things that are Cæsar's. She can well be proud of the progress she
+has made in State control of railroads. Let no backward step be taken.
+
+
+
+
+CHAPTER XII.
+
+THE INTERSTATE COMMERCE ACT.
+
+
+The Constitution of the United States was adopted nearly fifty years
+before the locomotive made its appearance. Had the steam railroad been
+in existence in 1787 and been as important an agency of commerce as it
+is to-day, there is every reason to believe that the railroad question
+would have received the special attention of the framers of that
+instrument. It is a well-known fact that the "new and more perfect
+government" had its origin in the necessities of commerce, and while the
+future exigencies of trade were beyond the reach of the most speculative
+mind, the provisions of the Constitution relating to the subject of
+interstate commerce were made broad and far-reaching. Section 8 of
+Article I. of the Constitution provides that "the Congress shall have
+power ... to regulate commerce with foreign nations, and among the
+several States, and with the Indian tribes ... and to make all laws
+which shall be necessary and proper for carrying into execution the
+foregoing powers and all other powers vested by this Constitution in the
+Government of the United States, or in any department or officer
+thereof."
+
+If any doubt ever existed as to the import of the phrase "to regulate
+commerce," it has been entirely removed by the decisions of the Supreme
+Court. In the Passenger cases, 7 Howard, 416, the court said:
+
+      "Commerce consists in selling the superfluity; in purchasing
+      articles of necessity, as well productions as manufactures;
+      in buying from one nation and selling to another, or _in
+      transporting the merchandise_ from the seller to the buyer
+      to gain the freight."
+
+And again, in the Philadelphia and Reading Railroad vs. Pennsylvania,
+the Supreme Court said:
+
+      "Beyond all question the transportation of freights or of
+      the subjects of commerce for the purpose of exchange or sale
+      is a constituent of commerce itself. This has never been
+      doubted, and probably the transportation of articles of
+      trade from one State to another was the prominent idea in
+      the minds of the framers of the Constitution when to
+      Congress was committed the power to regulate commerce among
+      the several States.... It would be absurd to suppose that
+      the transmission of the subjects of trade from the seller to
+      the buyer, or from the place of production to market, was
+      not contemplated, for without that there could be no
+      consummated trade with foreign nations or among the States."
+
+Chief Justice Marshall, in Gibbons vs. Ogden, 9 Wheaten, 196, construed
+the words "power to regulate" as follows:
+
+      "This power, like all others vested in Congress, is complete
+      in itself, may be exercised to its utmost extent, and
+      acknowledges no limitations other than are prescribed in the
+      Constitution."
+
+It is a strange fact that during the first eighty years of the
+Government's existence Congress did not exert its power to regulate the
+conduct of common carriers engaged in interstate transportation. The
+first act regulating such carriers was passed in July, 1866. It
+authorized railroad companies chartered by the States to carry
+passengers, freights, etc., "on their way from any State to another
+State, and to receive compensation therefor, and to connect with roads
+of other States so as to form continuous lines for transportation of the
+same to the place of destination." The passage of this act, it should be
+remembered, was urged by the railroad companies themselves. Seven years
+later an act was passed providing that "no railway within the United
+States, whose road forms any part of a line or road over which cattle,
+sheep, swine or other animals shall be conveyed from one State to
+another, or the owners or masters of steam, sailing or other vessels
+carrying or transporting cattle, sheep or swine or other animals from
+one State to another, shall confine the same in cars, boats or vessels
+of any description for a longer period than twenty-eight consecutive
+hours, without unloading the same for water, rest and feeding, for a
+period of at least five consecutive hours, unless prevented from so
+unloading by storm or accidental causes."
+
+Every violation of this act was made punishable by a penalty of from
+$100 to $500.
+
+Though Congress had asserted the right to regulate commerce among the
+States, it had made previous to 1873 very limited use of that power. In
+the midst of the Granger movement the Senate of the United States passed
+on the 26th day of March, 1873, the following resolution:
+
+      "_Resolved_, That the Select Committee on Transportation
+      Routes to the Seaboard be authorized to sit at such places
+      as they may designate during the recess, and to investigate
+      and report upon the subject of transportation between the
+      interior and the seaboard; that they have power to employ a
+      clerk and stenographer, and to send for persons and
+      papers...."
+
+The committee, under the chairmanship of Mr. Windom, discharged their
+duty with great fidelity, and submitted their report to the Senate
+during its next regular session. They declared that the defects and
+abuses of the then existing systems of transportation were insufficient
+facilities, unfair discrimination and extortionate charges. As the
+principal causes of such excessive rates they assigned stock watering,
+capitalization of surplus earnings, construction rings, general
+extravagance and corruption in railway management, and combinations and
+consolidations of railway companies. The committee were of the opinion
+that the promotion of competition would not permanently remedy the
+existing evils, and laid it down as a general rule that competition
+among railways ends in combination and in enhanced rates. As expedient
+and practical remedies for the existing evils they recommended the
+following measures:
+
+1. Direct Congressional regulation of railway transportation, under the
+power to regulate commerce among the several States.
+
+2. Indirect regulation and promotion of competition, through the agency
+of one or more lines of railway, to be owned and controlled by the
+Government.
+
+3. The improvement of natural water-ways and the construction of
+artificial channels of water communication.
+
+The report was accepted and considered, but there the matter rested, so
+far as the practical results were concerned.
+
+In 1878 Mr. John H. Reagan, of Texas, introduced in the House of
+Representatives a bill for an act to regulate railroad companies engaged
+in interstate commerce. This may be said to have been the first real
+interstate commerce bill before Congress. It was a progressive, thorough
+and well-planned measure, but failed to receive the approval of Congress
+because a majority of its members considered it too radical a measure.
+The bill contained many of the provisions of the present Interstate
+Commerce Act, including the anti-pooling and the long and short haul
+clauses; but instead of creating a commission it lodged in the courts,
+both State and Federal, the power to enforce the law.
+
+Other bills were introduced from year to year, but during a period of
+nine years none of them drew sufficient votes to make it a law. Congress
+may be said to have been divided into three camps upon the railroad
+question, viz.: those who favored the system of regulation proposed by
+Mr. Reagan, those who favored the commissioner system and those who were
+opposed to every mode of Federal regulation of interstate commerce. In
+the meantime, the inactivity of Congress caused considerable
+restlessness among the people, and the demand for action became louder
+every year. The issue entered into politics, and a number of Western
+Congressmen owed their failure to be re-elected to their indifference or
+enmity to Federal railroad legislation.
+
+On March 21st, 1885, under authority of a resolution adopted by the
+Senate of the United States, the President of the Senate appointed a
+select committee to investigate and report upon the subject of the
+regulation of the transportation of freight and passengers between the
+several States by railroad and water routes. Senator Cullom, of
+Illinois, became its chairman. The committee examined a large number of
+witnesses, including railroad managers and shippers, addressed letters
+to the railroad commissioners of the several States, to boards of trade,
+chambers of commerce, State boards of agriculture, Patrons of Husbandry,
+Farmers' Alliances, etc., and made every effort to obtain the opinions
+of those who had given special attention to the transportation problem.
+
+The report of the committee was submitted to the Senate on January 18,
+1886. Concerning the abuses of railroad transportation it differed but
+little from that of the Windom committee. The report declared publicity
+to be the best remedy for unjust discrimination and recommended that
+the posting of rates and public notice of all changes in tariffs be
+required. It also recommended that a greater charge for a shorter than a
+longer haul be made presumptive evidence of an unjust discrimination,
+and that a national commission be established for the enforcement of any
+laws that might be passed for the regulation of interstate commerce.
+Upon the question of pooling the report stated:
+
+      "The committee does not deem it prudent to recommend the
+      prohibition of pooling, which has been urged by many
+      shippers, or the legalization of pooling compacts, as has
+      been suggested by many railroad officials and by others who
+      have studied the question.... The majority of the committee
+      are not disposed to endanger the success of the methods of
+      regulation proposed for the prevention of unjust
+      discrimination by recommending the prohibition of pooling,
+      but prefer to leave that subject for investigation by a
+      commission when the effects of the legislation herein
+      suggested shall have been developed and made apparent."
+
+The report was accompanied by a bill representing "the substantially
+unanimous judgment of the committee as to the regulations which are
+believed to be expedient and necessary for the government and control of
+the carriers engaged in interstate traffic."
+
+The bill was before Congress for more than a year, receiving several
+important amendments before its final passage in both houses. It was
+approved by the President on the 4th day of February, 1887, and took
+effect sixty days after its passage, except as to the provisions
+relating to the appointment and organization of an Interstate Commerce
+Commission, which took effect at once.
+
+The act contains twenty-four sections, but is by no means cumbersome. It
+is, in many respects, the most important piece of legislation that has
+been had in Congress for the past twenty years. It applies to common
+carriers engaged in the transportation of passengers or property wholly
+by railroad, or partly by railroad and partly by water, when both are
+used, under a common control, management or arrangement, for a
+continuous carriage or shipment from one State or Territory of the
+United States, or the District of Columbia, to any other State or
+Territory in the United States or the District of Columbia, or from any
+place in the United States to an adjacent foreign country, or from any
+place in the United States through a foreign country to any other place
+in the United States. It prohibits unjust and unreasonable charges,
+special rates, rebates, drawbacks, undue or unreasonable preferences,
+advantages, prejudices and disadvantages, as well as all discriminations
+between connecting lines. It makes unlawful a less charge for a longer
+than for a shorter haul over the same line, in the same direction, the
+shorter being included within the longer distance, except when specially
+authorized by the Interstate Commerce Commission. It prohibits pools,
+requires schedules of freight rates and passenger fares to be kept in
+all depots and stations, permits no advance in the rates, fares and
+charges once established, except after ten days' public notice, and
+makes it unlawful for common carriers to charge either more or less than
+schedule rates.
+
+It also requires them to file copies of all schedules, traffic contracts
+and joint schedules with the Interstate Commerce Commission, as well as
+to make them public when directed by the commission, and prohibits
+combinations to prevent the carriage of freight from being continuous
+from the place of shipment to the place of destination. It makes common
+carriers liable for all damages to persons injured by violations of the
+act, and specially provides that any court before which such a damage
+suit may be pending may compel any director, officer, receiver, trustee
+or agent of the defendant company to appear and testify in the case, and
+that the claim that any such testimony or evidence may tend to criminate
+the person giving such evidence shall not excuse such witness from
+testifying, but that such evidence or testimony shall not be used
+against such person on the trial of any criminal proceeding. It likewise
+subjects such officers and employes of a railroad company as may be
+guilty of aiding or abetting in violations of the act to fines not
+exceeding $5,000 for each offense.
+
+These provisions are covered by the first ten sections of the act.
+Section 11 establishes the Interstate Commerce Commission, to be
+composed of five commissioners appointed by the President by and with
+the advice and consent of the Senate. It provides that the commissioners
+first appointed shall continue in office for the term of two, three,
+four, five and six years, respectively, from the first of January, 1887,
+the term of each to be designated by the President, and that their
+successors shall be appointed for terms of six years, except that any
+person chosen to fill a vacancy shall be appointed only for the
+unexpired term of the commissioner whom he shall succeed. No more than
+three commissioners may be appointed from the same political party, and
+the President has the power to remove any commissioner for inefficiency,
+neglect of duty or malfeasance in office. Authority is given to the
+commission to inquire into the management of the business of all common
+carriers subject to the provisions of the act and to require the
+attendance of witnesses and to invoke the aid of any court of the United
+States for that purpose.
+
+Section 13 authorizes any person, firm, corporation or association, any
+mercantile, agricultural or manufacturing society, any body politic or
+municipal organization to file complaints against any common carrier
+subject to the provisions of the act, with the commission, whose duty it
+is made to forward a statement of the charges to such common carrier and
+call upon him to satisfy the complaint or answer the same in writing,
+and to investigate the matters complained of, if the complaint is not
+satisfied. The commission is also charged with the duty of making such
+investigations at the request of State or territorial railroad
+commissions and may even institute them at its own motion. Section 14
+requires the commission to make a report in writing of any investigation
+it may make and to enter it of record and furnish copies of it to the
+complainant and the common carrier complained of. Section 15 makes it
+the commissioners' duty, when it is found that any law cognizable by it
+has been violated by a common carrier, to serve notice on such carrier
+to desist from such violation and to make reparation for an injury found
+to have been done. If any lawful order or requirement of the commission
+is disobeyed by a common carrier, it becomes their duty and is lawful
+for any company or person interested in such order to apply by petition
+to the Circuit Court of the United States sitting in equity in the
+judicial district in which the common carrier complained of has its
+principal office, and the court has power to hear and determine the
+matter speedily and without the formal pleadings and proceedings
+applicable to ordinary suits, and to restrain the common carrier from
+continuing such violation or disobedience. It is further provided by
+this section that on such hearings the report of the commission shall be
+accepted as _prima facie_ evidence.
+
+Section 17 regulates the proceedings of the commission. A majority
+constitute a quorum for the transaction of business. The commission may
+from time to time make or amend rules for the regulation of proceedings
+before it. Any party may appear before it and be heard in person or by
+attorney, and every vote or official act of the commission must be
+entered of record and its proceedings made public upon the request of
+either party interested.
+
+Section 19 provides that the principal office of the commission shall be
+in Washington, but that for the convenience of the public it may hold
+special sessions in any part of the United States.
+
+Section 20 authorizes the commission to require annual reports from all
+common carriers subject to the provisions of the act, to fix the time
+and prescribe the manner in which such reports shall be made, and to
+require from such carriers specific answers to all questions upon which
+the commission may need information.
+
+Section 21 excepts from the operation of the act the carriage of
+property for the United States, State or municipal governments, or for
+charitable purposes, or for fairs and expositions; also the issuance of
+mileage, excursion and commutation tickets, the giving of reduced rates
+to ministers of religion, the free carriage by a railroad company of its
+own officers and employes, and the exchanging of passes or tickets among
+the principal officers of railroad companies.
+
+The sections not noticed are of minor importance, relating to annual
+reports, salaries, appropriations of funds, etc.
+
+The act was amended on March 2, 1889, but the amendments made did not
+materially affect its principal provisions.
+
+When the law was passed its friends well realized that its success would
+greatly depend on the character of the commissioners whom it was
+incumbent upon the President to appoint. It was feared that if the
+railroad influence should control these appointments, the power to
+suspend the long and short haul clause would be the chief and perhaps
+the only power exercised by the commission. There was great danger that
+the office of Interstate Commerce Commissioner might become a sinecure
+for servile railroad lawyers, as similar State officers had been before,
+and that a public trust might be turned into an additional corporation
+agency for evil. The selection of the commissioners, and especially that
+of Judge T. M. Cooley, of Michigan, was greatly to the credit of
+President Cleveland. A man of unquestionable integrity, an eminent
+jurist and close student of railroad affairs, Judge Cooley was
+particularly well qualified for the office of chairman of the Interstate
+Commerce Commission, which he occupied for nearly five years with signal
+fitness, and from which he only retired to the sincere regret of the
+American people. Under Judge Cooley's leadership the commission has been
+more than a purely executive board. It was under the Constitution not in
+the power of Congress to clothe the Interstate Commerce Commission with
+full judicial authority without giving its members, like other Federal
+judges, tenure for life, instead of a term of years. The inherent force
+of the commission's decisions in its interpretation of the law made them
+in many cases virtually the equivalent of judicial rulings.
+
+A few of the most important decisions of the commission may be mentioned
+here. Construing the long and short haul clause, they held that, in case
+of complaint for violating this section of the act, "the burden of proof
+is on the carrier to justify any departure from the general rule
+described by the statute, by showing that the circumstances and
+conditions are substantially dissimilar." They also decided that "when a
+greater charge in the aggregate is made for the transportation of
+passengers or the like kind of property for a shorter than a longer
+distance over the same line in the same direction, the shorter being
+included in the longer distance, it is not sufficient justification
+therefor that the traffic which is subjected to such greater charge is
+way or local traffic and that which is given the more favorable rates is
+not; and that it is not "sufficient justification for such greater
+charge that the short-haul traffic is more expensive to the carrier,
+unless when the circumstances are such as to make it exceptionally
+excessive, or the long-haul traffic exceptionally inexpensive, the
+difference being extraordinary and susceptible of definite proof; nor
+that the lesser charge on the longer haul has for its motive the
+encouragement of manufactures or some other branch of industry, nor that
+it is designed to build up business or trade centers."
+
+Upon the question of publicity of the railroad business the commission
+held that, as the books of the defendant carriers, as to rates charged,
+facilities furnished and general movements of freight, are in the nature
+of semi-public records, the officers and agents of defendant carriers
+ought to give promptly to a complainant any statement of facts called
+for, if such statement may probably have importance on the hearing.
+
+Judge Brewer's opinion as to what constitutes a reasonable rate was
+evidently not shared by Judge Cooley and his colleagues, for in the case
+of the New Orleans Cotton Exchange vs. the Cincinnati, New Orleans and
+Pacific Railway Company the commission decided that the fact that a
+road earns but little more than operating expenses cannot be made to
+justify grossly excessive rates, and that "wherever there are more roads
+than the business at fair rates will remunerate, they must rely upon
+future earnings for the return of investments and profits." In another
+case the commission hold that "in fixing reasonable rates the
+requirements of operating expenses, bonded debt, fixed charges and
+dividend on capital stock from the total traffic are all to be
+considered, but the claim that any particular rate is to be measured by
+these as a fixed standard, below which the rate may not lawfully be
+reduced, is one rightly subject to some qualifications, one of which is
+that the obligations must be actual and in good faith."
+
+The rules governing the proper construction of classification sheets
+which the commission has laid down are founded upon common sense and
+justice. They say:
+
+      "A classification sheet is put before the public for general
+      information; it is supposed to be expressed in plain terms
+      so that the ordinary business man can understand it and, in
+      connection with the rate sheets, determine for himself what
+      he can be lawfully charged for transportation. The persons
+      who prepare the classification have no more authority to
+      construe it than anybody else, and they must leave it to
+      speak for itself."
+
+In defining what is legitimate traffic the commission made the following
+decision:
+
+      "The transportation of traffic under circumstances and
+      conditions that force a low rate for its carriage or an
+      abandonment of the business, but which affords some revenue
+      above the cost of its movement, and works no material
+      injustice to other patrons of a carrier, is to be deemed
+      legitimate competition. When, however, its carriage is at a
+      loss and imposes a burden on like traffic at other points
+      and on other traffic, it is to be deemed destructive and
+      illegitimate competition."
+
+It has been shown in a former chapter that the weaker oil refiners have
+been discriminated against by the railroads, which permitted the
+Standard Oil Company to use their own tank cars in the shipment of oil
+and charge its competitors excessive rates for like shipments in
+barrels. Complaint being made of this discrimination, the commission
+held that it is properly the business of a carrier by railroad to supply
+rolling stock for the freight he offers or proposes to carry, and that
+"if the diversities and peculiarities of traffic are such that this is
+not always practical, and the consignor is allowed to supply it for
+himself, the carrier must not allow its own deficiencies in this
+particular to be made the means of putting at unreasonable disadvantage
+those who may use in the same traffic all the facilities which it
+supplies."
+
+A most important ruling of the commission is that relating to the pass
+abuse. Complaint was made that the Boston and Maine Railroad Company
+issued in the States of Maine, New Hampshire, Vermont and Massachusetts
+free passes to certain classes of persons, among them "gentlemen long
+eminent in the public service, higher officials of the States, prominent
+officials of the United States, members of the legislative railroad
+committees of the above named States, and persons whose good will was
+claimed to be important to the defendant." The commission decided that
+such a discrimination is unwarranted, that a carrier is bound to charge
+equally to all persons, regardless of their relative individual standing
+in the community, and that the words "under substantially similar
+circumstances and conditions" relate to the nature and character of the
+service rendered by the carrier, and not to the official, social or
+business position of the passenger.
+
+It is a notorious fact that the practice of issuing free passes to
+public officials and other influential persons has been more or less
+indulged in by nearly every railroad in the country up to the present
+time. It is to be hoped that this ruling of the commission will be
+enforced in such a manner as to put an end to this intolerable abuse.
+
+The Interstate Commerce Commission has been equally efficient in its
+administrative capacity. From the very first it called attention to the
+great advantage of having one classification of freight throughout the
+country, and it has since labored diligently to unify the various
+classifications in use. As the commission in this undertaking is only
+armed with the armor of moral suasion, it is a difficult task; but there
+is little doubt that the accomplishment of this great reform is only a
+question of a few years. Iniquities in classifications and rates are
+constantly pointed out by the commission and corrected by the companies.
+Moreover, the annual reports of the commission, not to mention its very
+excellent statistical data, diffuse much useful information and dispel
+many delusions. Thus the fourth annual report of the commission says:
+
+      "A stranger to the law might infer, from some public
+      addresses and pamphlets which have assumed to discuss this
+      subject, that the railroad companies were prohibited from
+      carrying the necessities of life over long distances at very
+      low rates, unless their rates on other subjects of
+      transportation for shorter distances were made to
+      correspond. Indeed, instances have been pointed out in which
+      it was said that certain articles of commerce could not now
+      be transported for long distances, because, by reason of
+      this provision, they would not bear the charges that must
+      under compulsion of law be imposed upon them. Among such
+      instances has been mentioned the granite industry of New
+      England, as to which it has been said that valuable
+      manufactories have ceased to be profitable because it has
+      now become impossible for the proprietors to obtain from
+      the railroad companies the nominal rates for the
+      transportation of their products which they formerly
+      enjoyed, since it is now, by the long and short haul clause,
+      made criminal for the companies to give such rates.
+
+      "A complaint of this nature is not to be met by argument,
+      because it is baseless in point of fact. The instance
+      mentioned may safely be assumed to be chosen rather from
+      regard to the need of an attack upon the law than from any
+      belief in the justice of its application. The prohibition of
+      the fourth section, so far as concerns this article of
+      commerce, or any other that can be named, will have no
+      application whatever until it is made to appear that
+      elsewhere upon the lines of the road conveying it there is
+      property of the same kind, for transportation by the same
+      carriers in the same direction, upon which the carriers are
+      disposed to making greater charges in the aggregate for the
+      shorter hauls.
+
+      "The wheat of the extreme West, it is also said, can no
+      longer have the nominal rates which were formerly made for
+      transportation to the seaboard, but this assertion is also
+      without point or applicability, unless it is shown that the
+      carriers are not only disposed to give such rates, but
+      propose to make up for the consequent losses to themselves
+      by the imposition of greater charges in the aggregate for
+      the carriage of the like grain when offered for carriage by
+      growers in the States nearer the seaboard. Nominal rates
+      impartially made as between shippers of like articles in the
+      same direction and under like circumstances and conditions
+      are as admissible now as they ever were."
+
+The same report contains a rather pointed reply to Judge Brewer's ruling
+in the Iowa rate cases, viz., that, "where the rates prescribed will not
+pay some compensation to the owners, then it is the duty of the courts
+to interfere and protect the companies from such rates," and that
+compensation implies three things: "Payment of cost of service, interest
+on bonds and then some dividends." The commission reviews this stupid
+rule as follows:
+
+      "The effort has sometimes been made to indicate a rule which
+      must constitute the minimum of reduction in all cases, and
+      it has been said that rates must not be made so low that the
+      carriers would be left unable to pay interest on their
+      obligations and something by way of dividend to
+      stockholders, after maintaining the road in proper condition
+      and paying all running expenses. This comes nearer to a
+      suggestion of a rule of law for these cases than any other
+      that has come to the knowledge of the commission. But it is
+      so far from being a rule of law, that it is not even a rule
+      of policy, or a practical rule to which any name can be
+      given, and to which the carriers themselves or the public
+      authorities can conform their action. In the first place,
+      when we take into consideration the question of the
+      condition of roads and of equipment, the proper improvements
+      to be made, the new conveniences and appliances to be
+      considered and made use of, if deemed desirable, and the
+      innumerable questions that are involved in the matter of
+      running expenses, it is very obvious that there can be no
+      standard of expenses which the court can act upon and apply,
+      but that the whole field is one of judgment in the exercise
+      of a reasonable discretion by the managing powers or by the
+      public authorities in reviewing their action. It is to be
+      borne in mind that there are many roads in the country that
+      never have been and in all probability never will be able to
+      pay their obligations and to pay dividends, even the
+      slightest, to their stockholders.... If the rule suggested
+      is a correct one, and must be adhered to by the public
+      authorities, then it is entirely impossible that those who
+      operate these roads can prescribe excessive charges, since
+      it is impossible to fix any rates that would bring their
+      revenues up to the point of enabling them to pay any
+      dividends.... But the rule suggested would also be one under
+      which those roads would be entitled to charge the most
+      which, instead of being built with the money of the
+      stockholders themselves, had been constructed with money
+      borrowed; the larger the debt the higher being the rates
+      that would be legal. If a road were out of debt so that it
+      had no bonds to provide for, it must content itself with
+      such rates as would pay some dividend to its stockholders.
+      If the road were in debt, though it perhaps served the same
+      communities, it might be entitled to charge rates 50, or
+      possibly 100 per cent higher.... But over and beyond all
+      this the attempt to apply the rule suggested would be
+      absolutely futile for the reason that the rates prescribed
+      for one road would necessarily affect all others that either
+      directly or indirectly came in competition with it."
+
+It is no exaggeration to say that the annual reports of the commission
+stand unexcelled as dauntless, clear, concise and instructive public
+documents. It may also be asserted that whatever success has so far
+attended the Interstate Commerce Law, that success is in a great measure
+due to the tact, courage and ability of the men who, in the past, have
+been the guiding spirits of the commission.
+
+Efforts will be made by railroad managers in the future, as they have
+been made in the past, to weaken the commission by securing the
+appointment of men servile to the railroad interest as members of that
+body.
+
+Mr. Depew says that "all railroad men are politicians, and active ones."
+This is true as to manipulating managers and will continue to be so just
+as long as we allow such extraordinary powers to be exercised by them.
+The saloon men are politicians, and active ones. There is not a city or
+town in this broad land that is not in danger of falling under their
+sway unless their offensive efforts are resisted. The old United States
+Bank managers were politicians, and active ones. They perverted the
+trust reposed in their hands to such an extent that the indignation of
+the people was aroused, and under the lead of a stern old patriot the
+bank was swept out of existence. Shall we restrain corporation
+management within proper limits and make corporations serve the public
+welfare, or shall we let the abuses go on until the people, under the
+lead of another Jackson, demand emphatically the application of some
+remedy, for better or for worse? Perhaps Government ownership, perhaps
+something else. Nations, like individuals, should profit by the
+experience of the past.
+
+The Interstate Commerce Commission, in their sixth annual report, say,
+concerning the Interstate Commerce Law:
+
+      "It was scarcely possible that it should be so complete and
+      comprehensive at the outset as to require no alteration or
+      amendment. Those who are familiar with the practices which
+      obtained prior to the passage of this law, and contrast them
+      with the methods and conditions now existing, will accord to
+      the present statute great influence in the direction of
+      necessary reforms and a high degree of usefulness in
+      promoting the public interest.
+
+      "Whoever will candidly examine the reports of the commission
+      from year to year, and thus become acquainted with the work
+      which has been done and is now going on, will have no doubt
+      of the potential value of this enactment in correcting
+      public sentiment, restraining public injustice and enforcing
+      the principle of reasonable charges and equal treatment.
+      Imperfections and weaknesses which could not be anticipated
+      at the time of its passage have since been disclosed by the
+      effort to give it effective administration. The test of
+      experience, so far from condemning the policy of public
+      regulation, has established, its importance and intensified
+      its necessity. The very respects in which the existing law
+      has failed to meet public expectation point out the
+      advantages and demonstrate the utility of Government
+      supervision....
+
+      "Of this much we are convinced: The public demand for
+      Government regulation and the necessity for legal
+      protection against the encroachments of railroad
+      corporations have not been diminished by the experience of
+      the last six years. The act to regulate commerce was not
+      framed to meet a temporary emergency, nor in obedience to a
+      transient and spasmodic sentiment. The people will not
+      tolerate a return to the injustice and wrong-doing which
+      inevitably occurs when no correction is undertaken and no
+      regulation attempted. The evils of unrestricted management
+      will not be permanently endured, and legal remedies will
+      continue to be sought until they are amply provided. The
+      present statute, however crude and inadequate in many
+      respects, was the constitutional exercise of most important
+      powers and the legislative expression of a great and
+      wholesome principle. Its fundamental and pervading purpose
+      is to secure equality of treatment. It assumes that the
+      railroads are engaged in a public service, and requires that
+      service to be impartially performed. It asserts the right of
+      every citizen to use the agencies which the carrier provides
+      on equal terms with all his fellows, and finds an invasion
+      of that right in every unauthorized exemption from charges
+      commonly imposed.
+
+      "The railroad is justly regarded as a public facility which
+      every person may enjoy at pleasure, a common right to which
+      all are admitted and from which none are excluded. The
+      essence of this right is equality, and its enjoyment can be
+      complete only when it is secured on like conditions by all
+      who desire its benefits. The railroad exists by virtue of
+      authority proceeding from the State, and thus differs in its
+      essential nature from every form of private enterprise. The
+      carrier is invested with extraordinary powers, which are
+      delegated by the sovereign, and thereby performs a
+      governmental function. The favoritism, partiality and
+      exactions which the law was designed to prevent resulted, in
+      large measure, from a general misapprehension of the nature
+      of transportation and its vital relation to commercial and
+      industrial progress. So far from being a private possession,
+      it differs from every species of property, and is in no
+      sense a commodity. Its office is peculiar, for it is
+      essentially public. The railroad, therefore, can rightfully
+      do nothing which the State itself might not do if it
+      performed this public service through its own agents instead
+      of delegating it to corporations which it has created. The
+      large shipper is entitled to no advantage over his smaller
+      rival in respect of rates or accommodations, for the
+      compensation exacted in every case should be measured by the
+      same standard. To allow any exceptions to this fundamental
+      rule is to subvert the principle upon which free
+      institutions depend and substitute arbitrary caprice for
+      equality of right.
+
+      "The spirit of the law is opposed to usages so long
+      continued and so familiar that their unjust and demoralizing
+      character has not been clearly perceived, but it is a long
+      step towards such regulation of the agencies of
+      transportation as will make them equally available to all
+      without discrimination between individuals or communities.
+      It can hardly be the fault of those who are charged with its
+      administration if the beneficial aims of this statute have
+      not been fully attained and compliance with its provisions
+      not completely secured. A better understanding of its
+      purpose and an educated public sentiment, aided by the
+      needful amendments which experience suggests, will fully
+      vindicate the policy of Congress in undertaking to bring the
+      great transportation interests of the country into general
+      harmony with its requirements.
+
+      "It affords us gratification to add that many railroad
+      managers of the highest standing now concede the necessity
+      for Government regulation, and avow themselves in favor of
+      such further enactments as will make that regulation
+      effective."
+
+
+
+
+CHAPTER XIII.
+
+THE RATE QUESTION.
+
+
+Railroad managers frequently make the assertion that the average freight
+rates charged in the United States are lower than those usually charged
+in European countries and that this fact is in itself sufficient proof
+that they are too low. A comparison of the transportation problem of
+Europe with our own will show this argument to be fallacious.
+
+While from $25,000 to $30,000 a mile is a very liberal estimate of the
+average cost of American roads, the average cost of European railroads,
+owing to their expensive rights of way, substantial road-beds and heavy
+grades, is probably not less than $75,000 per mile. British railway
+companies have laid out for the purchase of land, for right of way and
+depot accommodations an amount about equal to the entire average cost of
+American roads for the same number of miles.
+
+For instance, the Southeastern Company paid $20,000; the Manchester and
+Leeds Company, $30,750, and the London, Birmingham and Great Western,
+$31,500 per mile. The first Eastern Counties line paid even $60,000 per
+mile for land through an agricultural district. As nearly as can be
+ascertained, the average cost of the right of way of railroads was over
+$20,000 for the United Kingdom. In Belgium the average cost of the right
+of way was $11,000. It was lower, however, in the other countries of the
+European continent.
+
+The topography of the country through which the English railways are
+built is such as necessitated enormous expenses for heavy embankments,
+cuttings, viaducts, tunnels and bridges, and in some cases increased the
+cost of the roads to fabulous sums. The Lancashire and Yorkshire Railway
+actually cost $260,000 per mile for the whole of its 403 miles. European
+roads have been built in a much more permanent manner and have terminal
+facilities whose cost is far beyond any sum paid for such purposes in
+this country. In Great Britain, moreover, the expenses of contests and
+of procuring charters have been very great and have probably averaged
+$3,000 per mile.
+
+English railway men charge Americans with having indulged in
+stock-watering to a greater extent than any other people in the world.
+This is probably true, yet the English have not been dull students of
+this art, and they are far from free of having indulged in this luxury.
+Much of their railroad stock was issued in a wasteful manner and
+represents no actual investment, and it is safe to say that from 30 to
+40 per cent. of their present railroad capitalization is water.
+
+If upon the above basis both European and American railroads are to
+yield an interest of 4-1/2 per cent. on the actual investment, the
+former will have to earn at least $2,250 per mile more than the latter,
+and this difference equals about 50 per cent. of the average operating
+expenses of American roads per mile. Labor is cheaper across the
+Atlantic, but this difference is more than equalized by the employment
+of a much larger number of men per mile, as the following table will
+show:
+
+  Countries.      No. of men employed   Average wages   Wages paid
+                       per mile.          per annum.      per mile.
+
+  United Kingdom          18                $335          $6,000
+  Belgium                 22                 210           4,620
+  Russia                  15                 240           3,600
+  Germany                 14                 250           3,500
+  France                  14                 220           3,080
+  United States            5                 555           2,625
+
+The London and Northwestern Railway is 1,793 miles long and has over
+55,000 employes, or over 30 per mile. The Lancashire and Yorkshire
+Company employs over 42 per mile.
+
+The train men of Europe work less hours and earn less per capita for
+their employers than do the train men of this country. The average
+annual gross earnings per employe on sixteen of the leading lines of
+Great Britain, as shown by Mr. Jeans, appear to be $975 against $1,600
+on fifteen leading lines of the United States, while the average net
+earnings per employe are $465 on the British lines against $720 on the
+American lines; making a difference in favor of this country of 70 per
+cent. in gross earnings and 53 per cent. in net earnings. If American
+labor is more expensive, it is also more efficient than labor is
+elsewhere.
+
+It must also be considered that the average haul in Europe is much less
+than the average haul in the United States. It has always been
+maintained by the railroad companies, and very justly, too, that the
+terminal charges are as important a factor of freight rates as is the
+cost of carriage. The terminal charges are the same for a
+twenty-five-mile haul as for a thousand-mile haul; they form a
+comparatively large part of the total charges for the former and a very
+small part of the total charges for the latter. It is therefore
+manifestly unjust to compare the rates per ton per mile of Europe with
+those of the United States without making due allowance for the
+difference in the length of their average hauls. All other things being
+equal, a fair comparison between the freight rates of different
+countries should be based upon hauls of equal length.
+
+There is another consideration which should not be lost sight of. The
+commodities in the United States which contribute principally to the
+long haul are raw products. The universally low rates of these
+commodities greatly lower the general average. In Europe, on the other
+hand, manufactured goods predominate as long-haul freight, and based
+upon increased risk and increased cost of carriage, considerably swell
+the general average of freight charges. The railroads of the United
+States also do more business per train mile than those of any other
+country excepting perhaps Austria, Russia and India. This should
+certainly enable them to do business for less than it is done by
+transatlantic lines.
+
+In addition to all this, a number of European countries, particularly
+France, require their railroads to perform large services, such as the
+carrying of the mails and the transportation of the officers and
+employes of the Government, gratuitously, and to carry soldiers at
+reduced rates.
+
+Another factor in the equation should be considered. European roads are
+built, equipped and all permanent improvements wholly made at the
+expense of the stock- and bondholders, while in this country they are
+partially constructed at the expense of the patrons of the road. In the
+former case the capitalization of the road represents what has been paid
+by the stock- and bondholders, and in the latter, not only what they
+have paid, but large contributions paid from the income of the road and
+from public and private donations.
+
+It will thus be seen that railroad rates ought to be lower, and even
+much lower, here than in Europe. If it _is_ true that the average rate
+per ton per mile is lower in America than across the Atlantic, this is
+chiefly due to the fact that water transportation has forced down
+through (or long-haul) rates and has thus lowered the general average.
+This reduction was by no means made voluntarily by the railway
+companies, but was forced upon them. Where in the United States water
+does not exist, as in local traffic, rates are usually much higher than
+in Europe.
+
+The reduction in freight rates was brought about by a number of
+inventions which greatly lowered the cost of both the construction and
+the operation of railways. Through the introduction of the steam shovel,
+of the wheel-scraper, of improved rock-drills, and of other labor-saving
+machines, as well as by a general improvement in the methods of grading,
+the cost of grading has been reduced from 25 to 50 per cent., and
+railroad bridges are now built at one-third of their former cost. Owing
+to Bessemer's great invention, steel rails can at the present time be
+bought for one-half of what iron rails cost ten or fifteen years ago,
+and about one-third of the cost twenty years ago. According to David A.
+Wells, the author of "Recent Economic Changes," the annual producing
+capacity of a Bessemer converter was increased fourfold between 1873 and
+1886, and four men can now make a given product of steel in the same
+time and with less cost of material than it took ten men ten years ago
+to accomplish. A ton of steel can now be made with 5,000 pounds of coal,
+while it required twice that quantity in 1868. When it is considered
+that rails and tires made of steel last three times as long as those
+made of iron, permit greater speed, carry a much larger weight, and
+require less repairs, the importance to the railroad interests of the
+improvements made in the manufacture of steel can hardly be
+overestimated. Similar reductions have been made in the car and machine
+shops. An average train to-day probably costs no more than one-half as
+much as it did twenty years ago. Mr. Wells, in the work just mentioned,
+says:
+
+      "In 1870-'71 one of the leading railroads of the
+      Northwestern United States built 126 miles, which, with some
+      tunneling, was bonded for about $40,000 per mile. The same
+      road could now (1889) be constructed, with the payment of
+      higher wages to laborers of all classes, for about $20,000
+      per mile."
+
+A great saving has also been made in the consumption of coal. Under
+favorable circumstances a loaded freight car can now be propelled a mile
+with one pound of coal. A similar economy of fuel has, through the
+improvement of their engines, been effected in ocean steamers. The
+invention of the compound engine has reduced the expense of running
+about one-half, while it has doubled the room left for the cargo. The
+statement has recently been made that a piece of coal half as large as a
+walnut, when burned in the compound engine of a modern steamboat, drives
+a ton of food and its proportion of the ship one mile on its way to a
+foreign port.
+
+Furthermore, the invention of the air-brake has materially reduced the
+number of train men formerly necessary to safely manage a train, just as
+the introduction of steam-hoisting and other machines, both upon docks
+and vessels, has greatly decreased the number of men employed upon the
+mercantile marine.
+
+There is certainly much similarity between the railroad and the
+steamboat as agencies of transportation. Whatever fuel and labor-saving
+causes operate on one must necessarily operate upon the other. When we,
+therefore, find that the ocean rates are only from one-third to
+one-fourth of what they were thirty years ago, we are justly surprised
+to see railroad rates maintained as high as they are. Operating expenses
+have been greatly reduced and passenger travel has largely increased
+during the past twenty years, but reductions corresponding in the
+passenger rates of the United States have not been made.
+
+It is, nevertheless, no easy matter always to determine what are
+reasonable rates. It is easier to tell what rates are unreasonable.
+Rates are unreasonable that bring an income in excess of sufficient to
+keep the road in proper condition, to pay operating expenses, including
+taxes and a fair rate of interest on the amount, not including
+donations, actually invested in the road. The patrons of a road should
+not be taxed to pay interest on their own donations, or on public
+donations, to the road, as the donations were made for the benefit of
+the public, and not for the benefit of private individuals. A rate which
+may appear reasonable to the carrier is apt to be regarded as too high
+by the shipper; and, again, one that seems reasonable to the shipper is
+denounced as too low by the railroad man. Each is tempted to consult
+only his own interests and to disregard the just claims of the other
+side. Thus, while the shipper will claim that his rates ought to be low
+enough to enable him to compete with other shippers more advantageously
+located than he is, the railroad manager will demand a rate which would
+enable him to declare high dividends on largely fictitious values. The
+owners of roads which were built merely for purposes of speculation or
+blackmailing insist on being permitted to charge exorbitant rates to
+bring up their earnings to the level of those roads for whose
+construction there was a legitimate demand.
+
+It is a settled principle of common law that all rates must be
+reasonable, but no uniform rule has as yet been adopted by which the
+question of reasonableness is to be determined. The doctrine laid down
+by Judge Brewer, that "where the rates prescribed will not pay some
+compensation to the owners, then it is the duty of the courts to
+interfere and protect the companies from such rates," and that
+"compensation implies three things: cost of service, interest on bonds,
+and then some dividends," is absurd. A question is never settled until
+it is settled right, and this rule is certainly open to very serious
+objections. A road may be bonded for several times its cost or its real
+value, it may be managed with such recklessness or extravagance that its
+operating expenses may be twice what they would be under a careful and
+economical management, yet under this rule the shipper must pay the
+premium which bond-watering and bad management command. The general
+enforcement of such a rule would place the public at the mercy of
+scheming railroad manipulators. No matter to what extent the business of
+a road may increase, a reduction of rates can always be prevented by the
+issue of new bonds and the doubling of the already lordly salaries of
+its managers. Again, under the operation of this rule a road which
+entirely suffices to do the business between two points may be
+paralleled by another and the public be compelled to pay excessive rates
+to maintain both. It might be said that the public cannot be forced to
+patronize any road, that if it would not withdraw its patronage from the
+old line, the new line would soon become bankrupt, and that in such an
+event its owners, and not the public, would be the sufferers. This
+argument may be met by the statement that, aside from the fact that
+concerted action among a large number of people can never be secured,
+few roads rely for their support solely upon local business, and that
+any loss which the older road sustains from encroachments by its rival
+upon its through traffic it is compelled to make up by raising its rates
+upon its local business. It is the almost inevitable consequence when
+one road is paralleled by another that the business which was
+previously done by one road will be nearly equally divided between the
+two, and under the rule laid down by Judge Brewer the public will be
+called upon to pay the operating expenses and the interest on the bonds
+of both, together with such dividends on the stock as the financiering
+ability of their managers may secure. The better judgment seems to be
+that to determine what are reasonable rates is not a question for
+judicial adjudication.
+
+The Interstate Commerce Commission, in their fourth annual report,
+assert that "there can be no standard of expense which the courts can
+act upon and apply, but that the whole field is one of judgment in the
+exercise of a reasonable discretion by the managing powers, or by the
+public authorities in reviewing their action." Their views upon this
+subject are still more definitely stated in the following words
+contained in the same report:
+
+      "An attempt is made to give authority to the courts to
+      interfere by the suggestion that property or charter
+      contract rights, or both, are involved in the matter of
+      fixing rates, and therefore that it is not possible the
+      conclusions of administrative boards should be final. This
+      is an endeavor, by the mere use of words, to confer
+      jurisdiction upon the courts where the substance is
+      altogether wanting. Property or contract rights are involved
+      in these cases precisely as they are in numerous other cases
+      of the exercise of power under the police authority of the
+      State, either by the State itself or by its municipalities."
+
+These views cannot fail to commend themselves to any unprejudiced mind.
+It is a well-established fact that all officials will, if permitted,
+extend their jurisdiction, and judges are no exception to the rule. It
+was therefore but natural that the courts should attempt to solve the
+problem of railroad rates.
+
+The attempt so far has been fruitless, nor will it be otherwise as long
+as the courts persist in approaching with abstract legal maxims a
+question which, above all things, requires the light of experience and
+the exercise of sound discretion. The question of railroad rates will
+never be satisfactorily settled until it is definitely referred to
+expert administrative State and National boards empowered and prepared
+to meet the many contingencies that will always arise in the
+transportation business.
+
+It is not difficult to account for the inability of the courts to
+properly adjudicate the question of reasonable rates. The legislature,
+or a board to which it has delegated its power, prescribes for a
+railroad company a classification and tariff. The company claims that
+the rates so fixed are unreasonably low and applies to the courts for
+redress.
+
+Now, if the rates were based upon the cost of service only, it might,
+perhaps, be possible for a court to determine whether the prescribed
+rates are adequate or not. But even in such a case the question would
+arise whether the capitalization and the operating expenses of the road
+are not excessive, and its determination would require expert knowledge
+and sound discretion rather than legal lore. However, since the cost of
+service is not the only, and with railroad men not even an essential,
+factor in rate-making, it is evident that the rates upon single
+commodities can not be reviewed upon their individual merits, but the
+tariff must, in the judicial determination of the question whether it is
+reasonable or not, be viewed as a whole. But as it is impossible to
+foretell what effect a readjusted tariff would have on the revenues of a
+road, even courts are forced to admit that an actual trial of the tariff
+is necessary to establish its merits or demerits.
+
+If the complaining company were as anxious to give the new tariff a fair
+trial as it usually is to demonstrate to the satisfaction of the court
+that it is devoid of every principle of justice, such a test might be
+accepted by the public as a reliable basis of judicial procedure. But
+railroad managers are not only striving to perpetuate their own high
+rates, but to show to the public that freight tariffs not emanating from
+a railroad company's office are of necessity crude and unjust to the
+carrier. They know that if they should succeed in convincing the public
+that administrative boards are incapable of dealing with that question,
+they might for years to come be left in undisputed possession of the
+power to make their own rates. This is certainly for the railroad
+manager a prize worth contending for, and no sacrifice is too great for
+him to make when there is any hope of ultimate victory. Being absolutely
+uncontrolled in his action, he finds it an easy matter, by temporarily
+diverting business from his line, by the increase of operating expenses
+and by repressing growing industries, and in many other ways, to curtail
+the business of his road and diminish its revenues. He can court losses
+in a thousand different ways discernible neither to the courts nor the
+general public. In short, it is in the power of any railroad manager to
+manipulate such a trial in his own interest, and, if determined, to
+obtain a verdict against any tariff not of his own making. This policy
+was pursued by several Iowa roads subsequent to Judge Brewer's decision
+that the alleged unreasonableness of the Iowa commissioners' tariff must
+be established by an actual trial, and was persevered in until the suit
+was withdrawn.
+
+But even if the competency of the courts to properly determine such
+questions were admitted, there would still exist one serious objection
+to their jurisdiction. Courts necessarily move slowly, while all
+differences arising between the public and the railways, and especially
+those concerning rates of transportation, require prompt and decisive
+action. There are no fixed conditions in commerce. It is a kaleidoscope
+constantly presenting new phases. Competition at home and abroad, tariff
+duties, the condition of the crops and a thousand other influences
+affect it and may require a prompt readjustment of the tariff. So long
+as railroad companies are permitted to resort to injunctions and effect
+other delays rendered possible through the machinery of the courts, to
+prevent for years the enforcement of tariffs prescribed by
+administrative authorities, so long will the public be at their mercy.
+So long as they have nothing to lose and everything to gain by a
+judicial contest, it will be their policy to delay through the courts
+the enforcement of any tariff, whether prescribed by legislature or by
+an authorized commission, that falls below their standard. It is not to
+be understood that the acts of railroad commissioners should never be
+subject to a judicial view. If such boards clearly exceed their
+authority or are otherwise guilty of maladministration, if they violate
+constitutional rights, then railroad companies, if injured by their
+acts, should be permitted to seek redress in the courts; but they should
+not be permitted to nullify an official tariff by legal maneuvers. It is
+clearly not within the province of the courts to make rates or to lay
+down rules to be followed by those to whom the law has delegated the
+power to make them, nor should the courts aid the railroads in any
+attempt to nullify an official tariff that has been legally promulgated.
+A tariff prepared by sworn and disinterested officials is more likely to
+be just than one prepared by interested railroad men, and railroad
+companies should be compelled to adopt it and continue it in use until
+it is amended or revoked by legal authority.
+
+Individual shippers are powerless as against strong corporations.
+Railroads apply to the courts for what they are pleased to term redress,
+and in the meantime refuse with impunity to accept an official tariff;
+but the shipper has no protection: he must pay their rates or go out of
+business. What reason can be assigned why the weaker should thus be
+discriminated against? A promulgation of a tariff prepared by a
+commission is equivalent to a declaration on the part of these officials
+that the rates or some of the rates charged by the railroads are
+unreasonably high. The railroad, in applying to the courts for
+protection, claims that the tariff prescribed by the commission is
+unreasonably low. Both tariffs are therefore impeached, one being that
+of an interested private company, the other that of a disinterested
+public board. It is evident that, even if the people should see fit to
+give the courts jurisdiction in such controversies, one of these tariffs
+must temporarily prevail pending the decision of the court, and sound
+public policy and justice to the patrons of the road certainly require
+that the official tariff be recognized by the courts and made to be
+respected by the railroad company until it is proved to be unreasonable
+and is set aside by lawful authority.
+
+It is claimed by railroad men that they should be allowed to make their
+own tariffs because rate-making is so intricate a subject that none but
+railroad experts can do it justice. If this were so the courts would be
+even less competent to review a schedule of rates than a State or
+National commission would be to make one. Courts cannot be expected to
+have expert knowledge in all matters that are likely to be brought
+before them. They must rely upon the testimony of expert witnesses
+whenever technical questions are involved in the determination of cases.
+The identical sources of information from which courts draw are
+accessible, or may be made accessible, to a commission, which has the
+additional advantage that its members may be selected with special
+reference to their fitness for the duties which they will be called upon
+to perform and are expected to devote their whole time to the settlement
+of questions arising in the transportation business. Such a commission
+can practically be made a court with jurisdiction over all matters
+connected with railroad business. The railroad manager, no doubt, is
+thoroughly familiar with the wants and desires of his company; but it
+may fairly be presumed that he is less familiar with the needs of the
+public than a railroad commission whose members are in constant
+communication with the people, patiently listen to the complaints of
+shippers, court and receive suggestions as to needed changes in
+classification and rates, and study the relative advantages of the
+different sections and different interests of the State or the country
+as regards transportation. A railroad freight agent, on the contrary, is
+disposed to think that shippers ought to be satisfied with any rate
+lower than those charged fifty years ago for carting or other crude
+methods of transportation. He regards their views and suggestions as
+chimerical and not worthy of any notice, and does not even hesitate to
+inform them that rate-making is a branch of the railroad business wholly
+beyond their comprehension, and ought not to be meddled with or even
+inquired into by the public. The general freight agent is the employe of
+a company which rates his usefulness solely by his ability to constantly
+increase its revenues, and he invariably proceeds upon the theory that
+the best tariff is that which comes nearest imposing upon each commodity
+offered for carriage the maximum transportation tax that it will bear. A
+man who entertains such opinions cannot be supposed to be able to do
+justice to the shipper, and should not be permitted to act as arbitrator
+in rate controversies between the public and the company whose employe
+and advocate he is. Nor have we any reason to hope for a change in the
+present tariff policy of railroads. History has sufficiently
+demonstrated the fact that reforms must come from without. As long as
+human nature remains as it is, railroad officials will, if permitted,
+arrange tariffs in the interest of the men who give them employment, for
+if they did otherwise their services would soon be dispensed with. A
+freight tariff should be in the nature of a contract between the carrier
+and the shipper, and the assent of both parties ought to be essential to
+its validity. But as it is impracticable for all the parties interested
+to meet for the purpose of effecting an agreement, the power to make
+rates has in several States wisely been conferred upon railroad
+commissioners, and there is a strong tendency in others to adopt the
+same policy. Such boards have every opportunity to obtain any
+information needed for the efficient and faithful discharge of their
+duties. They can hear the representatives of the railroads as well as
+those of the shippers, investigate carefully disputed points, summon
+experts and witnesses, and obtain official information relating to
+classifications and rates from every State in the Union, and, if
+necessary, from every quarter of the civilized world. The assertion may
+safely be made that, with experience, a commission acquires more expert
+knowledge relating to the business of rate-making than a railroad
+manager. If there is any mystery connected with the business of
+rate-making which has so far been in the sole possession of railroad
+men, it is to their interest to initiate the commissioners into their
+profound secrets. It will be their privilege to enlighten the
+commissioners as to the actual cost of their respective lines, the cost
+of every branch of the railway service, and as to a thousand other
+matters which the public has both a desire and a right to know. If,
+after a schedule of rates has been prepared, and before it is
+promulgated, railroad men can suggest any improvement in it, they should
+have the privilege to do so; or if, after giving it a fair trial, they
+should be prepared to show that any rate is unreasonably low and
+injurious to them, their complaint should be carefully investigated,
+and, if found well grounded, the wrong should at once be righted.
+
+But the same privileges should be extended to shippers. Their rights and
+their welfare should be guarded as sacredly as those of the railroad
+companies. They should have the same opportunity to examine a proposed
+schedule before its promulgation and protest against any feature of it
+which they may regard prejudicial to their interests, and their
+statements should receive the same consideration as is accorded to those
+of representatives of the railroad companies. So, likewise, when
+shippers prove to the satisfaction of the commission that a rate has
+outlived its reasonableness, their complaints should at once be
+investigated, and if their cause is found to be a just one, the tariff
+should be so amended as to give them relief.
+
+The labors of a board of railroad commissioners are onerous, and their
+responsibility is great. No uniform rule can be laid down for their
+guidance in the fixing of rates, yet there are a few fundamental
+principles which should always be adhered to. The cost of service
+should invariably be an important factor of a rate. Railroads should not
+be compelled to carry any commodity for less than the actual cost of
+moving it, nor should rates be fixed greatly in excess of such cost of
+service. The carload should be the unit of wholesale shipments. Since it
+costs the railroad company as much to move ten carloads of freight which
+belong to one shipper as it costs to move ten carloads belonging to ten
+shippers, no advantage beyond the general carload rate should be given
+to the large shipper. The difference in the rates between shipments in
+less than carload lots ought to be determined solely by the difference
+in the cost of carriage and handling. Where shipments are made in
+carload lots, the loading and unloading is usually done by the shipper
+and consignee, cars are loaded to their full capacity, and no loading or
+unloading of shipments at intermediate points is necessary. It is
+therefore but just that the consignor and consignee should have the
+benefit of the reduced cost of such shipments. Raw materials, and
+especially coal and lumber and kindred articles, the transportation of
+which requires neither an expensive rolling stock nor warehouse
+accommodations nor speedy movement, and in which the risk of loss or
+damage is insignificant, should be carried at the lowest rate possible.
+Such a policy will tend to foster other interests, which will develop
+business for the road and will build up remote sections of the country,
+and will often enable railroads to carry large quantities of these
+commodities at times when they would otherwise be nearly idle. There
+should be a uniform classification throughout the country, based upon
+considerations of justice and equity instead of railroad tradition. Such
+articles should be classed together as resemble each other as concerns
+bulk, weight and risk, or what is virtually the same, cost of carrying
+and handling. It may be safely assumed that a rate which has been made
+and used by railroad companies is remunerative. If it is claimed by
+railroad men that it is not, the burden of proof should rest upon them.
+A rate may also be considered remunerative to a road if other lines
+similarly situated have voluntarily adopted it. A schedule finally must
+be considered reasonable if it enables the company for which it is
+prescribed to earn under efficient and economical management sufficient
+to maintain its road in proper condition and a fair rate of interest
+upon a fair valuation of its road. Property is never worth more than
+what it can be duplicated for, and railroad property is no exception to
+the rule. If there has been a depreciation in the property of a company,
+it should not demand dividends upon values which no longer exist. Nor
+can the same returns be conceded to railroad property as to private
+capital. Its investment is permanent and well secured, if it is honestly
+and intelligently made; and its dividends are net returns after the
+payment of all expenses, including taxes, cost of management and
+maintenance. The three per cent. bonds of the United States Government
+find a ready sale at prices above par. Were there less speculation and
+more honesty and stability in railroad management, railroad securities
+yielding a revenue of from 2-1/2 to 4 per cent. on the actual investment
+would be eagerly sought after by conservative capitalists.
+
+Rate-making requires honesty of purpose, intelligence and discretion,
+qualities as likely to be found among the servants of the people as
+among those of corporations. A commission may err, but its errors are
+not likely to prove as detrimental to the railroad companies as the
+extortionate and discriminating rates imposed by railroad managers have
+proved to the interests of the public. Railroad managers acknowledge no
+obligation except that of earning dividends for their companies, while
+the members of a railroad commission, on the contrary, are responsible
+for their acts to the people, with us the source of all government and
+all power. To question the justice and sincerity of the people, or to
+deny the efficacy of such a control, is to deny the wisdom of popular
+government.
+
+Railroads might be permitted to reduce their rates below the official
+tariff, but they should be required to give at least thirty days' notice
+of such a change, to enable shippers to prepare for it. The companies
+should not be permitted, however, to raise rates again without obtaining
+the commissioners' consent and giving at least two months' notice of the
+proposed advance. Sudden fluctuations in rates are a fruitful source of
+disaster in those branches of business in which the cost of
+transportation forms an important factor in the price of commodities,
+and are as unjust and unwarrantable as would be fluctuations in import
+duties. As long as they are tolerated there can be no reliable basis for
+business calculations or contracts. There is little doubt that, were
+such regulations enforced, railroad wars, so demoralizing to the
+business of the country, would soon belong to the things of the past,
+and a far-reaching assurance of future welfare would be given to the
+commercial, manufacturing and all other legitimate interests of the
+country. It should always be kept in view by the rate-making power that
+the railroad company, like the gas company, the water company and the
+street car company, is acting in the capacity of a public agent, and the
+rate of compensation should be fixed by public authority.
+
+
+
+
+CHAPTER XIV.
+
+REMEDIES.
+
+
+The railroad in America is still in its infancy, both as regards extent
+of mileage and methods of operation. In 1860 the United States had in
+round numbers 30,000 miles of road; in 1870 this number had increased to
+53,000; in 1880 to 93,000, and in 1890 to 167,000. It will thus be seen
+that the average increase during each of those three decades was nearly
+80 per cent. Should this rate of increase continue during the next three
+decades there would be in the present territory of the United States a
+little over three hundred thousand miles in 1900, 550,000 miles in 1910
+and close to one million miles in 1920, or about one mile of road for
+every three miles of territory. It is not likely that the rate of
+increase of the past will continue in the future; but even if this
+should be reduced from 80 to 40 per cent. it would be less than
+fifty-five years when the railroad mileage of the United States would
+reach the million point.
+
+Even this might seem an extravagant estimate, but it must be remembered
+that there are already a number of States in the Union with a railroad
+mileage closely approaching this proportion. The District of Columbia
+has one mile of road for every 3.39 square miles of territory, New
+Jersey for every 3.79, Massachusetts for every 3.96, and Connecticut for
+every 4.96 square miles. Ohio, Pennsylvania, Rhode Island and Illinois
+follow with one mile of railroad for every 5.14, 5.20, 5.57 and 5.59
+square miles of territory, respectively, and Indiana, New York, Delaware
+and Iowa are not far behind them.
+
+It should also be borne in mind that many of the through lines have
+double, some triple, and some even quadruple tracks, which, if taken
+into the account, would increase the mileage much more; and still
+railroad construction in most of these States is far from being at a
+standstill. The United States will eventually be able to sustain a
+closer net of railways than any country in Europe, and we may rest
+assured that the time will come when the fertile prairie States of the
+Northwest will have a mile of railroad for every square mile of
+territory.
+
+In view of the future magnitude of the transportation interest the
+importance of placing its control and management early upon sound
+principles should not be under-estimated. Abuses crept into railroad
+management in the past, not because the men who controlled it were
+necessarily worse than men engaged in other pursuits, but because the
+States failed to provide adequate legislation for the control of this
+new social and commercial force, and the license enjoyed by railroad men
+gradually turned into serious evils what seemed at first only harmless
+practices. It cannot be denied, however, that the absence of restraint
+in time attracted to the business unscrupulous men whose sharp practices
+frequently forced their colleagues of better conscience to do what their
+sense of honor and justice condemned. These evils and abuses have
+increased with the growth of the railroad system, and nothing short of
+the sovereign power can now correct them. It is incumbent upon the state
+not only to correct the evils of the past, but to base legislative
+control of railroads upon principles so wise and so broad as to endure
+for ages, permitting the unlimited growth of the system and at the same
+time insuring commercial liberty and prosperity to the generations to
+come.
+
+As it is always easier to tear down than to build up, so it is likewise
+easier to point out evils than it is to provide proper remedies for
+their cure. Almost any one can criticise existing conditions, but it
+requires wise and constructive statesmanship to propose practical
+measures which will bring about desired improvement. The apparent
+magnitude of the work of correcting the evils and abuses connected with
+the transportation business, many of which have been in vogue for more
+than a generation, has discouraged many from seriously undertaking it.
+And yet we shall find the problem by no means a difficult one, if we
+properly analyze it and go to the root of the evil. Prof. Bryce, in his
+work "The American Commonwealth," refers to the fact that the people of
+this country have been equal to the task of solving the gravest problems
+which have been presented to them, and we need have no doubt of their
+ability to solve the railroad problem. Railroad regulation does not
+require the adoption of any new principle of law. If the common law is
+rightly applied and provision is made for its strict and systematic
+enforcement, it will meet every condition that is likely to arise in the
+transportation business. It should always be remembered that the
+railroad is an improved highway, and the principal reason for which it
+is built is to accommodate the people and promote their welfare, and not
+to serve the selfish ends of a few individuals, and that private
+companies were permitted to build and operate it only because the State
+believed that the public interests could best be served in this way.
+
+It is one of the duties of the State to facilitate transportation by
+establishing highways. These highways may be built by the State directly
+or through municipalities or even private corporations. Thus, under
+authority derived from the State, cities lay out, construct and
+maintain streets within their limits. But these streets become public
+and are always subject to State control. The same rule applies to
+turnpikes and ferries. Although the State transfers to an individual or
+a company its right to maintain a ferry or to build and maintain a
+turnpike, and to compensate itself for its outlay by the collection of
+tolls, the ferry and turnpike nevertheless remain highways, subject to
+the control of the State.
+
+The railroad partakes of two natures, that of a highway and that of a
+common carrier. Railroad companies therefore enjoy the privileges and
+assume the duties of both. The State justly exercises in behalf of such
+companies the right of eminent domain, _i. e._, the right of the
+sovereign to apply private property to public use; but it cannot
+rightfully appropriate private property for private use, even if legal
+compensation were to be made for it. It is only upon the theory that
+railroads are highways, constructed for the public good and subject to
+public control, that the State has authorized railroad companies to take
+private property for their own use by paying for it a reasonable
+compensation. A railroad may even take possession of and intersect a
+public road for the purpose of carrying on its functions. But while the
+sovereign may exercise the right of eminent domain, it cannot delegate
+it to any individual or number of individuals, except to its agents,
+performing its functions and being bound to comply with any rule which
+may be prescribed for the public good. Under the common law the
+individual is entitled to as full use of the railroad as he is of the
+common highway. If he is not allowed to put on his own vehicle, this
+restriction is simply due to the fact that the people believe that the
+business can be done most safely, most economically and most
+efficiently by one company or a limited number of companies operating
+the road for a reasonable compensation. Nor does this restriction differ
+materially from that which the law has placed upon the use of the common
+road. Without legislative sanction no one has a right to put upon it a
+team of elephants or a locomotive and train of cars, or other strange
+motors, and thereby obstruct the public travel. These restrictions might
+be removed by the legislative power, and there is also no doubt that
+under the common law the State has the right to permit the independent
+use of the railroad track by any person having motive power and cars
+adapted to it. The persons and freight transported on the railroad are
+taxed to maintain it, while in the case of the common road this tax is
+placed upon the people and the adjoining property. How to collect the
+tax necessary to sustain the road is simply a question of public policy,
+and it cannot be collected in any case except with the expressed
+permission of the State. If a company is permitted by the State to
+operate a railroad it should only be permitted to collect such tolls as
+are just and reasonable, and what is just and reasonable should be
+determined by the sovereign State, and not by the operating company. The
+railroads of the United States collect from our people in round numbers
+a transportation tax of eleven hundred million dollars annually. This
+tax is equal to a levy of $17 per head, or $85 per family; it is about
+as large as all our other taxes combined. In the State of Iowa it
+amounts to about $22 per head, or $110 per family, and is two and
+one-half times as large as all the State, county, school and municipal
+taxes collected within her borders.
+
+When we consider how thoroughly other public charges are hedged about,
+by careful restrictions and limitations, and with what caution the
+amount to be collected is fixed after thorough public discussion, by
+agents of the people selected by them to serve only for short periods,
+and that those who collect and disburse the funds are under oath and
+bonds for a faithful performance of their duty, is it not preposterous
+to permit agents appointed by a few interested persons, and often
+serving for a long term of years, without any responsibility to the
+public, to fix the rate of this tax, and to collect and disburse the
+immense sums levied for the support of these highways without any
+supervision or restraint?
+
+The Government might as well lease the post-office, waterways and the
+collection of import duties to the highest bidder and permit the lessees
+to reimburse themselves by the collection of such tolls as they might
+see fit, without any governmental restraint whatever, their franchises
+enabling the operating companies to tax each individual, each locality
+and each letter, parcel or article as they saw fit. How long would the
+people of this country endure such a condition of things? The collection
+of taxes has been farmed out, but not by any civilized nation in modern
+times. History shows that this system of taxation has always been
+productive of the gravest abuses, and prejudicial to the public welfare.
+As has already been shown, the railroad is an improved highway, and the
+railroad company in operating it is doing a public business and not a
+private business, and therefore it should be governed by rules
+applicable to public business, and not such as are applicable to private
+business. It is admitted by all that for the services which it performs
+the operating company should receive a reasonable compensation; but to
+say what a reasonable compensation is, how it shall be collected, and to
+prescribe rules regulating the business of the public carrier, is
+solely the right and the duty of the State. The people have never
+permitted the rate of any other public charge to be fixed by the
+beneficiary. Why, then, should privileges be conceded to one beneficiary
+which are denied to all others?
+
+The assertion is often made by railroad managers that railroad
+transportation is a private business as much as any other branch of
+commerce. It is not likely that these same managers would wish to have
+their argument carried to its logical conclusion, for, should the courts
+at any time take their view, they would be under the necessity of
+declaring null and void all their charters, which were granted to them
+upon the assumption that the railroad was a highway operated under the
+authority and control of the State by private companies for the public
+good. If, on the other hand, railroad managers are, for their own
+protection, forced to recognize the public character of railroads, they
+can no longer question the right of the State to so control their
+business as the public good may demand. And this shows the absurdity of
+the claim often made by railroad managers, that, as long as the rates
+charged by them are reasonable, the State has no right to interfere with
+their business, or, in other words, that they may discriminate between
+individuals and localities, and that they may legally practice a
+thousand other abuses as long as individual shippers find it beyond
+their power to prove that they have been charged exorbitant rates.
+
+Charles Fisk Beach, Jr., in his "Commentaries on the Law of Private
+Corporations," lays it down as a general principle of law that "whenever
+any person pursues a public calling and sustains such relations to the
+public that the people must of necessity deal with him, and are under a
+moral duress to submit to his terms if he is unrestrained by law, then,
+in order to prevent extortion and an abuse of his position, the price he
+may charge for his services may be regulated by law." And applying this
+principle to common carriers, and especially railroads, this author
+says:
+
+      "The sovereign has always assumed peculiar control over
+      common carriers as conducting a business in which the public
+      has an interest, and in the case of railway carriers an
+      additional basis of governmental control is grounded in the
+      extraordinary franchise of eminent domain conferred upon
+      these companies. For corporations engaged in carrying goods
+      for hire as common carriers have no right to discriminate in
+      freight rates in favor of one shipper, even when necessary
+      to secure his custom, if the discriminating rate will tend
+      to create a monopoly by excluding from their proper markets
+      the products of the competitors of the favored shipper."
+
+If railroads had no obligations or advantages beyond those of other
+common carriers, such as stage lines and steamship companies, their
+discriminations might be less objectionable, but, as keepers of the
+toll-gates of the public highways, they are no more at liberty to
+regulate their own business regardless of the public welfare than were
+their predecessors, the toll-collectors stationed along the public
+turnpikes and canals. As such public tax-collectors they are bound to
+give equal treatment to all persons and places.
+
+Although the business of constructing and keeping in repair the turnpike
+roads was, as a rule, left to private persons, and the promoters of such
+enterprises were permitted to reimburse themselves for their outlay by
+the collection of tolls, their schedules of tolls were prescribed by the
+State and their business was placed under the supervision of public
+officers, whose duty it was to see that neither extortion nor
+discrimination was practiced in the collection of these tolls, and that
+the private management of a public business did not become the source of
+abuse. The State thus insisted upon exercising a restraining influence
+over the business of turnpike companies because it realized the danger
+of entrusting the management of a semi-public business to companies
+organized solely for private gain, with officers responsible only to
+their stockholders, who, under ordinary circumstances, could be relied
+upon to measure the usefulness of an employe by his ability to
+contribute to the increase of the annual dividends. It will scarcely be
+claimed, even by railroad men, that since the days of turnpikes and
+stage-coaches corporations have become more unselfish and their officers
+less servile. The temptations have increased, while human frailty
+remains the same.
+
+Of course, if we consult the railroad managers as to the best policy to
+be adopted for the future control of railroad companies, we shall be
+informed that we have already gone too far in railroad legislation, that
+nearly all the present evils of transportation of which the public and
+the railroad companies complain may be traced to legislative
+restrictions, and especially to certain features of the Interstate
+Commerce Act. They reluctantly admit that this act has been instrumental
+for good inasmuch as it has corrected some of the abuses that formerly
+existed, but they insist that several of its provisions are too radical
+and do infinitely more harm than good, both to the railroad companies
+and the people; that these obnoxious provisions ought to be repealed,
+and that under such restrictions as would still remain railroad
+companies ought to be permitted to manage their own business. If we
+inquire what modification of the Interstate Commerce Act the railroads
+desire, we find that if the act were amended in conformity with their
+wishes there would be little of it left that is of value. But the
+features which are specially obnoxious to them are the long and short
+haul and the anti-pooling clauses. They even go so far as to demand that
+the Government should not only permit pooling, but should use its strong
+arm to enforce all pooling contracts which railroad companies might see
+fit to enter into. This means, in other words, that the Government
+should enforce an agreement to restrict competition, which is made in
+direct violation of the common law, and aid the companies in maintaining
+such rates as they see fit to establish. If the railroad manager is
+cross-examined and forced to confess the truth, he will have to admit
+that what he really desires is freedom from all restraint, or, if public
+opinion will not tolerate this, then only law enough in letter to
+satisfy a public clamor and permit him to violate its spirit, and to
+then trust to him and the future to bring it into disrepute and cause
+its repeal.
+
+Some shrewd managers have recently expressed a willingness to submit
+their pooling arrangements to a public commission for approval, before
+they should go into effect. This is objectionable on the ground that
+they would then, more even than before, endeavor to control the making
+of the commission. It is far safer to absolutely prohibit pooling and
+all devices used as a substitute for it. No necessity for pooling
+exists, and no good reason can be given why it should be permitted
+unless complete government control is established.
+
+State control of railroad transportation is as essential to the welfare
+of the companies as it is to that of the public. The history of the past
+twenty years has shown that railroad companies are utterly unable to
+regulate their relations with each other. They either cannot arrive at
+an understanding, and then the stronger companies resort to hostilities
+to bring the weaker ones to their terms; or, when an agreement has been
+reached among them, they find themselves unable to enforce it. Anarchy
+then reigns supreme, until finally a truce is patched up, to be again
+followed by evasions, defiance and "war." The nature of the railroad
+business is in fact such that, in the absence of strict State control,
+it is impossible for a conscientious manager to retain the business to
+which his road is naturally entitled, and do full justice to both the
+patrons and the stockholders of his road. Efforts have been made again
+and again by railroad companies to regulate their affairs and adjust
+their difficulties by resorting to pools, agreements, associations and
+combinations, formed with all the ingenuity of which men are capable,
+and supported by penalties and fines; but the unscrupulous railroad
+manager has always found a way to violate or subvert the agreement.
+There is a disposition among railroad companies to arrogate all the
+powers of sovereignty. They want to make their own laws, impose fines
+and declare war, and often go even so far as to openly defy the power of
+the State that has given them their existence.
+
+When railroad managers are shorn of the power to practice abuses, they
+are at the same time deprived of the many advantages they now have to
+speculate in railroad securities and enrich themselves at the expense of
+the public and of other railroad stockholders. The great fortunes of
+this country have been amassed within a few years, and chiefly from
+manipulations of railroad property. If the people permit these practices
+to go on without restraint but a few years more, the property of the
+nation will be largely under the control of a few bold adventurers. The
+great fortunes of Europe which it has required centuries to accumulate
+are already outstripped by the "self-made" millionaires of this country.
+However persistently railroad managers may assure the people that abuses
+in the transportation business have been reduced to a minimum and that
+more stringent legislation will be an evil, it is a fact that many of
+the graver railroad abuses are still practiced and that much more
+reformation is needed in railroad management, or in railroad
+supervision, or in both, to make the railroad what it was designed to
+be, a highway operated for the public and open to all upon equal and
+equitable terms.
+
+The virtual ruler of the United States is public opinion. It is the
+power that controls the legislative as well as the executive and
+judicial departments of the Government. Enactments of legislatures and
+of Congress and decisions of the courts, even of the Supreme Court of
+the United States, not in harmony with an intelligent and determined
+public opinion, cannot endure, and executives not in accord with the
+masses of the people cannot long retain public confidence or official
+authority.
+
+Under these circumstances no reform movement has any prospect of success
+unless it is supported by public opinion. It should therefore be the
+principal endeavor of all advocates of railroad reform to create public
+opinion in favor of the measures proposed by them. With an intelligent
+public on the alert, the Government may be relied upon to pursue a
+healthy and progressive railroad policy. Unfortunately, there are times
+when public opinion upon great questions is dormant, while pecuniary
+interests, like the force of gravity, never suspend their action. To
+arouse the masses at such times, we must rely largely upon an honest,
+independent and courageous press, not influenced by gift or patronage.
+
+Many plans have been proposed for a better control of railroads. Some of
+these are merely theoretical; others have been tried in part, and a few
+have been tried in their entirety, but under circumstances radically
+different from those surrounding us. A system which may be well adapted
+to a monarchy with a centralization of governmental powers would
+probably prove a failure here, when brought in contact with the
+principles of dual sovereignty and local rule. Unless a revolution
+should change our system of government, a dual system of railroad
+control will always be necessary in the United States; for it is not at
+all likely that the individual States will ever voluntarily give up
+their right to regulate commerce carried on within their respective
+borders. On the other hand, the common welfare requires that the
+commerce which is carried on between the States should not be hampered
+by local interference, but should be regulated only by Congress. Our
+experience as a nation has shown that such a quality of sovereignty is
+not inconsistent with strength or efficiency, nor need it be productive
+of rivalry or friction. The fact that a certain mode of railroad
+management has been successful elsewhere is not sufficient proof that it
+would be successful here, nor is the fact that it has not been
+successful elsewhere sufficient proof that it would not be successful
+here. The more the conditions which exist here resemble those under
+which it was tested, the greater is the probability that it can be
+adapted to our circumstances. Independent thought and action is an
+essential element of progress, yet it is the part of wisdom to profit by
+the speculation and experience of others.
+
+The following are the principal methods that have been tried or proposed
+for the control and management of railroads:
+
+_1. Publicity of the railroad business._
+
+It is held by some that the secrecy with which railroad business is at
+present transacted is the source of all evils. It is contended that if
+railroads were required to report to the public every item of income and
+expenditure, discrimination and extortion, as well as bribery and
+corrupt subsidizing, would soon cease. If the companies were compelled
+to render an account of all receipts, special rates and drawbacks could
+not safely be granted by railroad managers, or, if granted, would soon
+lose their charm for recipients, for it would be but a short time until
+others would demand and even exact the same privileges. An attorney
+would, as a member of the legislature, be slow to accept a retaining fee
+if the amount of such fee were made known to his constituents.
+Publishers would hesitate to apply for railroad subsidies if the
+companies were compelled to render periodically an itemized account of
+such expenditures, and railroad companies would, under similar
+circumstances, hesitate to pay subsidies, for the subsidized journal
+would soon be without patrons. If the items annually expended upon
+railroad lobbies were reported, these lobbies would soon be frowned, or
+even hissed, out of legislative halls. There can be no doubt that full
+and complete publicity in railroad business would correct a large number
+of existing abuses, and it should therefore be insisted upon as one of
+the first and essential features of railroad reform. It is questionable,
+however, whether railroad managers are so sensitive to public opinion
+that publicity could be relied upon as a cure for all railroad evils. To
+what extent it is desirable to supplement publicity by other measures
+of State control will be considered hereafter.
+
+It will, of course, be urged by railroad managers that the State has no
+right to pry into the privacy of their business and that they should be
+guaranteed the same protection against intrusion that is enjoyed by
+other branches of business. To this we must reply that not even banks or
+insurance companies are permitted to conduct their business as private,
+and that controlling the highway and levying a transportation tax upon
+every article of commerce passing over it is essentially public business
+and unquestionably subject to public control. Every citizen is as much
+interested in it as he is in the transactions of the custom-house, or of
+the public treasury, and any transaction of a railroad manager that
+shuns public inspection can be set down as a public evil and should be
+suppressed. It may safely be laid down as a general rule that the
+refusal of a railroad company to give publicity to its transactions is
+presumptive evidence of wrong. The people are not alone interested in
+such publicity. Stockholders have likewise a right to be protected
+against the sinister manipulations of dishonest managers, and publicity
+furnishes them the best guarantee of honest management.
+
+Stockholders should attend the meetings of their companies and should
+obtain full knowledge of the management of their affairs. If they will
+make thorough examination and get at bottom facts the chances are that
+contracts will be found with owners of patents, white lines, blue lines,
+refrigerator car lines, coal companies, ferry companies, manufacturing
+companies, packing companies and other kindred organizations, by which
+hundreds of millions of dollars are diverted from the treasuries of the
+railroad companies to the pockets of influential persons connected with
+the management of the roads.
+
+It has recently come to light that the officers of a Pennsylvania
+railroad company, during fifteen years, by some means of secret rebates
+and other allowances, have taken about $100,000,000 out of the treasury
+of the company and distributed it as largesses to about half a dozen
+iron and steel establishments.
+
+This is a method of getting wealthy at the expense of others not unknown
+to many another great fortune accumulated in the last twenty years.
+Railroad discriminations have been a fruitful source of those gross
+inequalities in wealth distribution which now agitate society and call
+people's parties and the like into existence. The modern millionaire
+appears to be an entirely natural creation. Perhaps this money taken in
+special rates from the Pennsylvania railroad's treasury, or, rather,
+from the pockets of the road's other patrons, and of the men who may
+have sought, without special rates, to compete with the favored ones in
+their business, only to be crushed in financial ruin, will be spent in a
+praiseworthy way, in accord with the principles of "the gospel of
+wealth." What we need now is the gospel of distribution of facilities
+for the accumulation of wealth, as well as the gospel of distribution of
+great fortunes.
+
+Whether inspired by a bull or a bear interest or neither, all will
+concede the ability of Mr. Henry Clews to picture the evils of railroad
+management; and his lack of generosity in accrediting ability or honesty
+to legislators who are called upon to provide remedies for the wrongs
+that he so well depicts will not deter me from indorsing the following
+statement made by him in a magazine article which is pertinent to this
+discussion:
+
+      "One great difficulty that present railroad legislators have
+      to contend with is the evil methods of railroad building and
+      extension. A great deal of the mileage of the last two years
+      has been premature, and doubtless for speculative purposes.
+      Most of it has been constructed, however, by old companies
+      who had good credit to float bonds and could raise all the
+      money required. Hence there has been but little financial
+      embarrassment arising from the too rapid construction. But
+      people are beginning to find out that a great deal of this
+      building has been in the interest of speculative directors
+      and their friends, who, for a mere song, had bought up
+      barren lands considered worthless because there was no means
+      of transportation. But these lands soon become immensely
+      valuable for sites of villages, towns and cities. The
+      construction companies, by which these roads were generally
+      built, raised the cost to the highest possible figures, in
+      order, I fear, to make dividends for the construction
+      stockholders. It is noteworthy that the directors connected
+      with these construction schemes have been exceedingly
+      prosperous, while the stockholders of the roads have grown
+      poor in an inverse ratio. The dividends of the latter have
+      disappeared. The new mileage, much of which, I apprehend,
+      has been made on this principle, was about twenty-one
+      thousand miles, which is greater than the entire mileage of
+      Great Britain. There should be additions to the Interstate
+      Law, or a special law regulating the methods of construction
+      companies, which are probably doing more to demoralize the
+      railroad system--and doing it very insidiously, too--than
+      any other factor connected with these great arteries of the
+      country's prosperity.
+
+      "Legislative reform is greatly needed in the matter of
+      railroad reports, especially for the safety of investors,
+      and to prevent speculative abuses among railroad officials
+      and their friends and favorites. There should be statements
+      issued annually, or perhaps more frequently, upon the truth
+      of which everybody might rely. These should be sworn
+      statements, and should bear the signatures of at least three
+      of the directors. These directors should be required to
+      call to their aid expert accountants, and should have placed
+      at their disposal all the books of the company or
+      corporation and all the other papers necessary to verify the
+      accuracy of their report. The correctness of the statement,
+      when issued, would then be a foregone conclusion, and an
+      investor in London, Paris or Berlin could buy or sell on his
+      own judgment, an experiment which, under existing
+      arrangements, might prove very costly. It is proverbial that
+      a railroad statement now is defective in the most essential
+      particulars, and, to put it mildly, usually covers a
+      multitude of sins. According to one plan approved by
+      railroad companies, the statement published to-day, for
+      instance, is made to show a surplus of many millions, but
+      there is nothing said about an open construction account to
+      which the surplus is debtor. On this favorable showing (with
+      this _suppressio veri_) the stock goes up and the insiders
+      quickly unload upon the investment public. The following
+      statement, which comes out six months later, shows that the
+      surplus has been used to settle the construction
+      indebtedness. The surplus has disappeared; consequently the
+      stock suffers a serious decline. Those who bought on the
+      strength of the large surplus sell out, on being informed of
+      its distribution. Then the inside sharks come forward again
+      and purchase at reduced prices, probably at a depreciation
+      of from ten to fifteen points or more, and keep their stock
+      until the next periodical appearance of the bogus surplus.
+      Thus the insiders grow rich, while the outsiders become
+      poor. The only remedy for this abuse is a sworn statement at
+      regular intervals, and if the directors should commit
+      perjury they would render themselves liable to State prison.
+      If a few of them should be tempted to fall into the trap,
+      and be made examples of in this way, nothing would do more
+      to work a speedy reform in this contemptible method of
+      book-keeping.
+
+      "I would also suggest a change in the character of the
+      directors. Those usually chosen for this office now are men
+      who have vast interests of their own, more than sufficient
+      to absorb their entire time and thoughts. They are selected
+      mainly on account of their high-sounding names, to give
+      tone to the corporation and solidify its credit, in order
+      that the lambs of speculation may have proper objects in
+      whom confidence can be reposed and no questions asked. The
+      management of the affairs of the corporation is frequently
+      intrusted to one man, who runs the business to suit his own
+      individual interests."
+
+We can appreciate the force of the above remarks when we consider that
+last year seventy-five companies realized a gross income of
+$846,888,000, which is equal to about 80 per cent. of the total income
+received by all of the railroads of the United States.
+
+_2. Free competition upon all railroads._
+
+Mr. Hudson, in his excellent work, "The Railways and the Republic,"
+recommends the following remedy:
+
+      "Legislation should restore the character of public highways
+      to the railways, by securing to all persons the right to run
+      trains over their tracks upon proper regulations, and by
+      defining the distinction between the proprietorship and
+      maintenance of the railway and the business of common
+      carriers."
+
+Mr. Hudson proposes to leave the track in the possession of its present
+owners, but to permit any individual or company to run, upon the payment
+of a fixed toll, trains and cars over it, under the control of a
+train-dispatcher stationed at a central point. This train-dispatcher is
+to be notified by telegraph of the movement of each train, and is to
+give his orders to the officers in charge of each train, as to what
+points they are to go, where to pass one train and where to wait for
+another. Each transportation company is to own, load and forward its own
+trains; it is to be required to run its regular train on schedule time
+or to have it follow another train as an extra. They are to be liable to
+their shippers as well as to the railway company for all damages caused
+by their neglect, while the railroad company is to be held responsible
+for the condition of its track. It will not be necessary to go into the
+details of Mr. Hudson's plan. Suffice it to say that he proposes to
+establish free competition in the railway business by making the use of
+the railway track as free as that of the turnpike or canal, subject only
+to such control on the part of the public train-dispatcher as the
+paramount considerations of speed and safety may require.
+
+The adoption of Mr. Hudson's plan would simply be a return to the first
+principle of railroad transportation. It has already been shown that the
+first English charters permitted the public to use their own vehicles
+and motive power upon the railroad track, but that shippers and
+independent carriers could not avail themselves of these provisions of
+the early charters because it was in the power of the railroad companies
+to make their tolls prohibitory. There is but little question as to the
+practicability of Mr. Hudson's plan from a purely technical standpoint,
+and its adoption might be advisable if it should be demonstrated that a
+monopoly of the track is inconsistent with the operation of the railways
+for the public good. It is seriously doubted, however, whether such
+ideal competition as Mr. Hudson desires to bring about could be secured
+except at the expense of true economy. Concentration, or, rather,
+consolidation in the railroad business has, under proper legal
+restriction, always resulted in a saving of operating expenses, and
+usually in a reduction of rates. Any step in the opposite direction,
+whatever other merits it may possess, is in the end not likely to give
+lower rates. If it is a settled principle that railroads are only
+entitled to a fair compensation for their services, it must be evident
+that what would be a fair compensation for the same or similar services
+to a large, well-organized, well-regulated and well-managed company
+cannot be sufficient compensation to an individual carrier or a small
+company, whose expenses will always be comparatively larger than those
+of its better-equipped rival. Monopoly and extortion need not
+necessarily be synonymous. In fact, States and municipalities in their
+public works often prefer monopoly to competition as the cheaper of the
+two. Nevertheless, should it ever be found that monopolies cannot be
+reconciled with justice and economy, a return to the first principles of
+railroading may become advisable.
+
+_3. State ownership and management._
+
+A number of European states, notably Prussia, France and Belgium, as
+well as Australia, British India and the British colonies in Southern
+Africa, have adopted government ownership of railroads. The motives
+which led to this step in the various countries differ greatly. While in
+Europe military and political considerations predominated, in Africa and
+Australia it was more the want of private capital and energy which led
+the government to engage in railroad enterprises. There has in most of
+these states been a desire to avoid the evils usually connected with
+private management. The experiment of state ownership and management of
+railroads has been longest tried in Belgium, and with the best results.
+With an excellent service the rates of the Belgian state roads are the
+lowest in Europe. Their first-class passenger tariffs are, next to the
+zone tariff recently adopted on the state roads of Hungary, the lowest
+in the world, and are, for the same distance, lower than those of
+American roads. In Prussia the state service, upon the whole, is also
+superior to that of private companies, and is probably equal to the
+public demand. In France the government only owns and operates less
+important lines, but furnishes upon these a more efficient and cheaper
+service than private companies would either be able or disposed to
+furnish. The oft-repeated statement of those opposed to government
+regulation to the contrary notwithstanding, government ownership and
+management of railroads is a decided success in Europe, Mr. Jeans says
+of state railroads:
+
+      "Notwithstanding the superior financial result, the lines
+      worked by the state are those kept in the best order, and
+      the working of which gives the greatest satisfaction to the
+      commercial world and the public in general as regards
+      regularity of conveyance, cheapness of transit and the
+      comfort of travelers."
+
+It is difficult to see how any unbiased person can travel on any of the
+state roads of Europe without coming to the same conclusion. State
+management offers certainly some decided advantages to the public. Above
+all, the business of the roads is not conducted for the pecuniary
+advantage of a few, but for the common good. Commerce is not arbitrarily
+disturbed to aid unscrupulous managers in their stock speculations. New
+lines are not built for speculative purposes, but for the development of
+the country. Rates are based more upon the cost of service than upon
+what the traffic will bear, and the ultimate object of the state's
+policy is not high profits, but a healthy growth of the country's
+commerce, while the sole aim of a private company is to get the largest
+revenue possible. The permanent way of the state road is kept in better
+condition, the public safety and convenience being paramount
+considerations. Rates are stable and uniform, instead of being
+changeable and discriminating, and all persons and places are as equal
+before the railroad tax collector as before the law. It may be laid down
+as a general rule that under private management of railroads efforts
+will be made to secure the highest rates possible, while it is the aim
+of the Government to grant the lowest rates possible. Mr. Jeans proves
+by statistics that the cost of maintenance of way is generally higher on
+the state lines, and that traffic expenses are higher on the lines of
+private companies. In commenting upon this difference he says:
+
+      "It might easily be contended, and even proved beyond all
+      doubt, that the first characteristic is a result of the
+      better condition in which the state keeps the permanent way;
+      and, so far as this is the case, the public convenience,
+      safety and general advantage are promoted.
+
+      "The highest range of traffic expenses on companies' lines
+      undoubtedly argues greater laxity of management, since, as
+      we have already shown, this is one of the most elastic of
+      items, and may be either very high or very low, according as
+      economy or extravagance is the prevailing system.... The
+      experience of Continental Europe points unmistakably to the
+      exercise of greater economy in state management."
+
+Judge Dillon, of the United States Court, in his order appointing Hon.
+J. B. Grinnell receiver for the Central Railroad of Iowa, in 1876, said:
+
+      "The railroads in the hands of the court--and in the circuit
+      there are eight or ten--have all been run with less expense,
+      and have made more money, than when they were operated by
+      the companies; and we hope and believe under your
+      supervision that this road will prove no exception, and that
+      the property will be worth more at the end of the
+      litigation."
+
+Upon Mr. Grinnell's resignation, after nearly three years of service,
+Judge Grant said, in asking for the discharge of his bondsmen:
+
+      "I concur entirely in the opinion of the State commissioners
+      that he has very much improved the condition of the road,
+      and he left it in far superior condition to that in which he
+      received it."
+
+Yet Government ownership and management of railroads also has its
+drawbacks. It is claimed by some that such management is more expensive
+than that of lines owned by private companies. It has already been shown
+that the permanent way is kept in better condition by the state than by
+private corporations. In Russia, Germany, Austria-Hungary, France and
+Italy the state expends from 15 to 30 per cent. more for the maintenance
+of the permanent way than the private companies. It is perhaps also true
+that the rank and file of railroad employes fare, on an average, better
+under government than they do under private management; but, as an
+offset to this, it should be remembered that quite a saving is effected
+by the state in the salary account of general officers. The people will
+not consent to pay the manager of a railroad line a salary six times as
+large as that of a cabinet officer, and provide at the same time
+sinecures for his sons, brothers, nephews and cousins.
+
+It is furthermore claimed that, as government is organized, it cannot,
+all other things being equal, respond to the demands of commerce as
+promptly as private companies. This feature, however, may be an
+advantage to the country at large rather than a detriment. But the
+strongest argument that can be produced against state ownership of
+railroads is that under a democratic form of government it might exert a
+demoralizing influence in politics. The 1,700 railroad companies of the
+United States have at present an army of about 800,000 employes. This
+number is constantly increasing, and it is more than probable that
+before the end of the present century it will have reached a million.
+When it is considered what importance is at present attached to the
+political influence of a hundred thousand Federal officers, it is not
+surprising that conservative citizens should hesitate to add to the
+ranks of these officeholders a six or seven times larger force.
+Dangerous as the railroad influence now is in politics, it would be ten
+times more dangerous if under a system of Government management
+considerations of self-interest should induce a million railroad
+employes to act as a political unit and political parties should vie
+with each other in bidding for the railroad vote. Could our civil
+service ever be so organized as to divest it entirely of political
+power, state management of railroads might still offer the best solution
+of the railroad problem.
+
+Mr. T. B. Blackstone, president of the Chicago and Alton Railroad
+Company, has recently created somewhat of a surprise by declaring in
+favor of Government ownership of railroads. That Mr. Blackstone's
+programme will eventually receive the approval of a large number of his
+colleagues there can be but little doubt. With the people wide-awake
+upon this subject, the opportunities for railroad speculation are
+lessening, and the scheme to early unload the railroads of the country
+on the Government at a highly inflated value speaks well for the
+financial farsightedness of its author. Mr. Blackstone proposes to have
+railroad stockholders do here what the former owners of the telegraph
+did in Great Britain, _i. e._, dispose of their property to the
+Government, at a price representing several times its original cost or
+even several times the cost of duplication.
+
+Mr. C. Wood Davis, formerly general freight and passenger agent of one
+of the leading roads east from Chicago, is one of the best informed and
+clearest-headed writers upon the railroad question. He has, after much
+experience and long study, been converted to the advocacy of national
+ownership as a solution of the railroad problem. In a recent article
+published by the Arena Publishing Company, entitled "Should the Nation
+own the Railways?" he presents the objections and advantages of national
+ownership. He says:
+
+      "The objections to national ownership are many, that most
+      frequently advanced, and having the most force, being the
+      possibility that, by reason of its control of a vastly
+      increased number of civil servants, the party in possession
+      of the Federal administration at the time such ownership was
+      assumed would be able to perpetuate its power
+      indefinitely.... This objection would seem to be well taken,
+      and indicates serious and far-reaching results unless some
+      way can be devised to neutralize the political power of such
+      a vast addition to the official army.... In the military
+      service we have a body of men that exerts little or no
+      political power, as the moment a citizen enters the army he
+      divests himself of political functions; and it is not
+      hazardous to say that 700,000 capable and efficient men can
+      be found who, for the sake of employment, to be continued so
+      long as they are capable and well behaved, will forego the
+      right to take part in political affairs. If a sufficient
+      number of such men can be found, this objection would, by
+      proper legislation, be divested of all its force....
+
+      "2. That there would be constant political pressure to make
+      places for the strikers of the party in power, thus adding a
+      vast number of useless men to the force, and rendering it
+      progressively more difficult to effect a change in the
+      political complexion of the administration.
+
+      "That this objection has much less force than is claimed is
+      clear from the conduct of the postal department, which is
+      unquestionably a political adjunct of the administration;
+      yet but few useless men are employed, while its conduct of
+      the mail service is a model of efficiency after which the
+      corporate-managed railways might well pattern. Moreover, if
+      the railways are put under non-partisan control, this
+      objection will lose nearly, if not quite, all its force.
+
+      "3. That the service would be less efficient and cost more
+      than with continued corporate ownership. This appears to be
+      bare assertion, as from the very nature of the case there
+      can be no data outside those furnished by the
+      government-owned railways of the British colonies, and such
+      data negative these assertions; and the advocates of
+      national ownership are justified in asserting that such
+      ownership would materially lessen the cost, as any expert
+      can readily point out many ways in which the enormous costs
+      of corporate management would be lessened. With those
+      familiar with present methods, and not interested in their
+      perpetuation, this objection has no force whatever.
+
+      "4. That with constant political pressure unnecessary lines
+      would be built for political ends. This is also bare
+      assertion, although it is not impossible that such results
+      would follow; yet such has not been the case in the British
+      colonies where the governments have had control of
+      construction....
+
+      "5. That, with the amount of red tape that will be in use,
+      it will be impossible to secure the building of needed
+      lines. While such objection is inconsistent with the fourth,
+      it may have some force, but as the greater part of the
+      country is already provided with all the railways that will
+      be needed for a generation, it is not a very serious
+      objection even if it is as difficult as asserted to procure
+      the building of the new lines. It is not probable, however,
+      that the Government would refuse to build any line that
+      would clearly subserve public, convenience, the conduct of
+      the postal service negativing such a supposition....
+
+      "6. That lines built by the Government would cost much more
+      than if built by corporations. Possibly this would be true,
+      but they would be much better built and cost far less for
+      maintenance and betterments, and would represent no more
+      than actual cost; and such lines as the Kansas Midland,
+      costing but $10,200 per mile, would not, as now, be
+      capitalized at $53,024 per mile, nor would the president of
+      the Union Pacific (as does Sidney Dillon, in the _North
+      American Review_ for April) say that "a citizen, simply as
+      a citizen, commits an impertinence when he questions the
+      right of a corporation to capitalize its properties at any
+      sum whatever," as then there would be no Sidney Dillons who
+      would be presidents of corporations, pretending to own
+      railways built wholly from Government moneys and lands, and
+      who have never invested a dollar in the construction of a
+      property which they have now capitalized at the modest sum
+      of $106,000 per mile....
+
+      "7. That they are incapable of as progressive improvement as
+      are corporate-owned ones, and will not keep pace with the
+      progress of the nation in other respects; and in his _Forum_
+      article Mr. Acworth lays great stress upon this phase of the
+      question and argues that as a result the service would be
+      far less satisfactory.
+
+      "There may be force in this objection, but the evidence
+      points to an opposite conclusion. When the nation owns the
+      railways trains will run into union depots, the equipment
+      will become uniform and of the best character, and so
+      sufficient that the traffic in no part of the country would
+      have to wait while the worthless locomotives of some
+      bankrupt corporation were being patched up, nor would there
+      be the present difficulties in obtaining freight cars
+      growing out of the poverty of corporations which have been
+      plundered by the manipulators, and improvements would not be
+      hindered by the diverse ideas of the managers of various
+      lines in relation to the adoption of devices intended to
+      render life more secure or to add to the public
+      convenience.... Existing evidence all negatives Mr.
+      Acworth's postulate that "state railway systems are
+      incapable of vigorous life."
+
+      "8. An objection to national ownership which the writer has
+      not seen advanced is that States, counties, cities,
+      townships and school districts would lose some $27,000,000
+      of revenue derived from taxes upon railways. While this
+      would be a serious loss to some communities, there would be
+      compensating advantages for the public, as the cost of
+      transportation could be lessened in like measure.
+
+      "Many believe stringent laws, enforced by commissions
+      having judicial power, will serve the desired end, and the
+      writer was long hopeful of the efficacy of regulation by
+      State and National commissions; but close observation of
+      their endeavors and of the constant efforts--too often
+      successful--of the corporations to place their tools on such
+      commissions, and to evade all laws and regulations, have
+      convinced him that such control is and must continue to be
+      ineffective and that the only hope of just and impartial
+      treatment for railway users is to exercise the 'right of
+      eminent domain,' condemn the railways, and pay their owners
+      what it would cost to duplicate them; and in this connection
+      it may be well to state what valuations some of the
+      corporations place upon their properties.
+
+      "Some years since the Santa Fe filed in the counties on its
+      line a statement showing that at the then price of labor and
+      materials--rails were double the present price--their road
+      could be duplicated for $9,685 per mile, and, the materials
+      being much worn, the actual cash value of the road did not
+      exceed $7,725 per mile.
+
+      "In 1885 the superintendent of the St. Louis and Iron
+      Mountain Railway, before the Arkansas State Board of
+      Assessors, swore that he could duplicate such a railway for
+      $11,000 per mile, and yet Mr. Gould has managed to float its
+      securities, notwithstanding a capitalization of five times
+      that amount."
+
+Among the advantages to be derived from Government ownership he names
+the following:
+
+      "First would be the stability and practical uniformity of
+      rates, now impossible, as they are subject to change by
+      hundreds of officials, and are often made for the purpose of
+      enriching such officials....
+
+      "It would place the rate-making power in one body, with no
+      inducement to act otherwise than fairly and impartially, and
+      this would simplify the whole business and relegate an army
+      of traffic managers, general freight agents, soliciting
+      agents, brokers, scalpers and hordes of traffic association
+      officials to more useful callings, while relieving the
+      honest user of the railway of intolerable burdens.
+
+      "Under corporate control, railways and their officials have
+      taken possession of the majority of mines which furnish the
+      fuel so necessary to domestic and industrial life, and there
+      are few coal fields where they do not fix the price at which
+      so essential an article shall be sold, and the whole nation
+      is thus forced to pay undue tribute.
+
+      "Controlling rates and the distribution of cars, railway
+      officials have driven nearly all the mine owners, who have
+      not railways or railway officials for partners, to the wall.
+
+      "With the Government operating the railways, discriminations
+      would cease, as would individual and local oppression; and
+      we may be sure that an instant and absolute divorce would be
+      decreed between railways and their officials on one side,
+      and commercial enterprises of every name and kind on the
+      other.
+
+      "The failure to furnish equipment to do the business of the
+      tributary country promptly is one of the greater evils of
+      corporate administration, enabling officials to practice
+      most injurious and oppressive forms of discrimination, and
+      is one that neither Federal nor State commission pays much
+      attention to. With national ownership a sufficiency of cars
+      would be provided. On many roads the funds that should have
+      been devoted to furnishing the needed equipment, and which
+      the corporations contracted to provide when they accepted
+      their charters, have been divided as construction profits,
+      or, as in the case of the Santa Fe, Union Pacific, and many
+      others, diverted to the payment of unearned dividends, while
+      the public suffers from this failure to comply with charter
+      obligations.
+
+      "There would be such an adjustment of rates that traffic
+      would take the natural short route, and not, as under
+      corporate management, be sent around by the way of Robin
+      Hood's barn, when it might reach its destination by a route
+      but two-thirds as long, and thus save the unnecessary tax to
+      which the industries of the country are subjected. That
+      traffic can be sent by these roundabout routes at the same
+      or less rates than is charged by the shorter ones is _prima
+      facie_ evidence that rates are too high.
+
+      "There would be a great reduction in the number of men
+      employed in towns entered by more than one line. For
+      instance, take a town where there are three or more
+      railways, and we find three or more full-fledged staffs,
+      three or more expensive up-town freight and ticket offices,
+      three or more separate sets of all kinds of officials and
+      employes, and three or more separate depots and yards to be
+      maintained. Under Government control these staffs--except in
+      very large cities--would be reduced to one, and all trains
+      would run into one centrally located depot; freight and
+      passengers be transferred without present cost, annoyance
+      and friction, and public convenience and comfort subserved,
+      and added to in manner and degree almost inconceivable.
+
+      "The great number of expensive attorneys now employed, with
+      all the attendant corruption with the fountains of justice,
+      could be dispensed with, and there would be no corporations
+      to take from the bench the best legal minds, by offering
+      three or four times the Federal salary....
+
+      "Every citizen riding would pay fare, adding immensely to
+      the revenues. Few have any conception of the proportion who
+      travel free, and half a century's experience renders it
+      doubtful if the evil--so much greater than ever was the
+      franking privilege--can be eliminated otherwise than by
+      national ownership. From the experience of the writer, as an
+      auditor of railway accounts, and as an executive officer
+      issuing passes, he is able to say that fully ten per cent.
+      travel free, the result being that the great mass of railway
+      users are yearly mulcted some thirty millions of dollars for
+      the benefit of the favored minority; hence it is evident
+      that if all were required to pay for railway services as
+      they are for mail services, the rates might be reduced ten
+      per cent, or more, and the corporate revenues be no less,
+      and the operating expenses no more. In no other
+      country--unless it be under the same system in Canada--are
+      nine-tenths of the people taxed to pay the traveling
+      expenses of the other tenth. By what right do the
+      corporations tax the public that members of Congress,
+      legislators, judges and other court officials and their
+      families may ride free? Why is it that when a legislature
+      is in session passes are as plentiful as leaves in the
+      forest in autumn?...
+
+      "The corporations have ineffectually wrestled with the
+      commission evil, and any number of agreements have been
+      entered into to do away with it; but it is so thoroughly
+      entrenched, and so many officials have an interest in its
+      perpetuation, that they are utterly powerless in the
+      presence of a system which imposes great and needless
+      burdens upon their patrons, but which will die the day the
+      Government takes possession of the railways, as then there
+      will be no corporations ready to pay for the diversion of
+      traffic.
+
+      "As a rule, American railways pay the highest salaries in
+      the world for those engaged in directing business
+      operations, but such salaries are not paid because
+      transcendent talents are necessary to conduct the ordinary
+      operations of railway administration, but for the purpose of
+      checkmating the chicanery of corporate competitors. In other
+      words, these exceptionally high salaries are paid for the
+      purpose, and because their recipients are believed to have
+      the ability to hold up their end in unscrupulous corporate
+      warfare where, as one railway president expressed it, 'the
+      greatest liar comes out ahead....'
+
+      "Government control will enable railway users to dispense
+      with the services of such high-priced umpires as Mr. Aldace
+      F. Walker, as well as of all the other officials of
+      sixty-eight traffic associations, fruitlessly laboring to
+      prevent each of five hundred corporations from getting the
+      start of its fellows, and trying to prevent each of the five
+      hundred from absorbing an undue share of the traffic. It
+      appears that each of these costly peace-making attachments
+      has an average of seven corporations to watch....
+
+      "With National ownership the expenditures involved in the
+      maintenance of traffic associations would be saved and
+      railway users relieved of a tax that, judging from the
+      reports of a limited number of corporations of their
+      contribution towards the support of such organizations, must
+      annually amount to between $4,000,000 and $5,000,000.
+
+      "Of the six hundred corporations operating railways,
+      probably five hundred maintain costly general offices,
+      where president, secretary and treasurer pass the time
+      surrounded by an expensive staff. The majority of such
+      offices are off the lines of the respective corporations, in
+      the larger cities, where high rents are paid and great
+      expenses entailed, that proper attention may be given to
+      bolstering or depressing the price of the corporation's
+      shares, as the management may be long or short of the
+      market. So far as the utility of the railways is concerned,
+      as instruments of anything but speculation such offices and
+      officers might as well be located in the moon, and their
+      cost saved to the public....
+
+      "Railways spend enormous sums in advertising, the most of
+      which National ownership would save, as it would be no more
+      necessary to advertise the advantages of any particular line
+      than it is to advertise the advantages of any given mail
+      route.... A still greater expense is involved in the
+      maintenance of freight and passenger offices off the
+      respective lines, for the purpose of securing a portion of
+      competitive traffic. In this way vast sums are expended in
+      the payment of rents and the salaries of hordes of agents,
+      solicitors, clerks, etc., etc....
+
+      "Under Government control discriminations against localities
+      would cease, whereas now localities are discriminated
+      against because managers are interested in real estate
+      elsewhere, or are interested in diverting traffic in certain
+      directions....
+
+      "Another, and an incalculable benefit, which would result
+      from National ownership, would be the relief of State and
+      National legislation from the pressure and corrupting
+      practices of railway corporations, which constitute one of
+      the greatest dangers to which republican institutions can be
+      subjected. This alone renders the nationalization of the
+      railways most desirable, and at the same time would have the
+      effect of emancipating a large part of the press from a
+      galling thraldom to the corporations....
+
+      "Estimated net annual saving to the public which would
+      result from Government control:
+
+      From consolidation of depots and staffs           $20,000,000
+      From exclusive use of shortest routes              25,000,000
+      In attorneys' fees and legal expenses              12,000,000
+      From the abrogation of the pass evil               30,000,000
+      From the abrogation of the commission evil         20,000,000
+      By dispensing with  high-priced managers
+        and staffs                                       4,000,000
+      By disbanding traffic associations                  4,000,000
+      By dispensing with presidents, etc                 25,000,000
+      By abolishing all but local offices,
+        solicitors, etc.                                 15,000,000
+      Of five-sevenths of the advertising account         5,000,000
+                                                        -----------
+      Total savings by reason of better administration  $160,000,000
+
+      "It would appear that, after yearly setting aside
+      $50,000,000 as a sinking fund, there are the best reasons
+      for believing that the cost of the railway service would be
+      some $310,000,000 less than under corporate management.
+
+      "That $6,000,000,000 is much more than it would cost to
+      duplicate existing railways will not be questioned by the
+      disinterested familiar with late reductions in the cost of
+      construction, and that such a valuation is excessive is
+      manifest from the fact that it is much more than the market
+      value of all the railway bonds and shares in existence."
+
+The above quotations from Mr. Davis' article hardly do it justice, and
+it should be read in full to appreciate its full force. Many of the
+predictions and estimates are undoubtedly in the main correct, yet upon
+the whole it must be admitted that it is a rather rosy and too hopeful
+view to take of Government ownership of our railroads.
+
+_4. State ownership with private management._
+
+This is a compromise between a public and a private system of railway
+ownership and management. It is claimed by the advocates of this system
+that if the Government would acquire by purchase or through condemnation
+proceedings all of the railroads of the country, pay for them by issuing
+its bonds, and then lease the various lines to the highest responsible
+bidders, prescribing a schedule and rules of management, most of the
+benefits resulting from state ownership of railroads could be secured
+while nearly all its disadvantages would be avoided. It is proposed to
+purchase railroads at their actual value and to issue in payment bonds
+bearing the same rate of interest as other Government securities. This
+would deprive managers of every opportunity to manipulate the railroad
+business for purposes of stock speculation. It would also reduce the
+fixed charges of our railroads at least 50 per cent., the benefits of
+which reduction the public would chiefly share. The acquisition of the
+railroads by the Government would, moreover, afford the conservative
+capitalist a safe and permanent investment, which, with the gradual
+disappearance of our war debt, might become a national desideratum.
+
+It is proposed by the advocates of this system that the Government fix
+rates of transportation for a certain period, to be reviewed at the end
+of that period upon an agreed basis. The operating companies would be
+required to keep their roads in repair and give sufficient bonds for the
+faithful performance of their contracts. If found guilty of persistent
+violations of the terms of their leases or of such laws as Congress
+might enact for their control, their bonds and leases might be declared
+forfeited. A new Government department or bureau would have to be
+established and charged with the duty of exercising the same control
+over railroads which the Government now exercises over national banks,
+and in addition to this complete publicity of the service would have to
+be relied upon to prevent the introduction of abuses.
+
+There are at least two valid objections that can be urged against the
+adoption of such a system. Responsible companies could not be induced to
+lease a line for a valid consideration unless their rates were
+definitely fixed for a series of years. Such a course might, however,
+in time result in great hardship to the commerce of the country, as the
+great and unavoidable difference in the rates of the various railroad
+lines of the country would give to the commercial interests of some
+sections decided advantages over those of others. Besides this it would
+be very difficult to compel the different companies to keep the lines
+leased by them in repair. Controversies would constantly arise between
+the officers charged with the supervision of the roads and the operating
+companies, which could be ultimately determined only by the courts,
+causing to the Government loss, or at least delay in the adjustments.
+
+_5. National control._
+
+Mr. A. B. Stickney, in his work, "The Railway Problem," holds that in
+the interest of uniformity it is desirable to transfer the entire
+control of railroads to the National Government. He assigns two reasons
+for the proposed change; one being that Congress would consider the
+subject of railroad control with more intelligence and greater
+deliberation; the other, that "the problem of regulating railway tolls
+and of managing railways is essentially and practically indivisible by
+the State lines or otherwise," and that the authority of Congress to
+deal with interstate traffic carries with it the right to regulate the
+traffic which is now assumed to be controlled by the several States.
+
+It must be admitted that it is a difficult matter to draw the line of
+demarcation between National and State control, and that Congressional
+regulation of railways would remedy many evils which now affect our
+transportation system; yet there is reason to believe that the proposed
+change would in the end be productive of more evil than good. It is an
+essentially American maxim that the home government only should be
+trusted with the administration of home affairs. The people of each
+State know best their local needs, and it is safe to say that for a
+generation or two no serious effort will be made to amend the Federal
+Constitution in this respect or to secure from the courts an
+interpretation of the interstate commerce clause greatly differing from
+that which now obtains.
+
+It is thus seen that nearly all the methods of railroad management which
+we have discussed are, at the present time at least, more or less
+impracticable on account of the radical changes which they would
+necessitate. It is not likely that for many years to come the American
+people could be induced to try any extensive experiments in state
+ownership of railroads; nor is it any more likely that the present
+generation will undertake the difficult task of separating the ownership
+of railroads from their operation.
+
+A nation is, like the individual, inclined to follow beaten tracks. It
+finds it, as a rule, easier to improve these tracks than to abandon them
+and mark out a new course. Any proposition made for the improvement of
+our system of railroad transportation is in the same proportion likely
+to receive the approval of the masses in which it makes use of existing
+conditions. It will, therefore, be my aim, in making suggestions as to a
+more efficient control of this modern highway, to retain whatever good
+features the present system possesses, and to only propose such changes
+as may seem essential to restore to the railroad the character of a
+highway.
+
+As has been indicated above, any system of railway regulation, to be
+applicable to our circumstances, must recognize the dual sovereignty of
+Nation and State. The great majority of our railroad corporations were
+originally created by the State, and are only responsible to the State
+as long as they do not engage in interstate commerce. Even foreign
+corporations must submit to all police regulations of the State in which
+they may do business, and as long as the American Constitution remains
+intact the individual States will, and should, assert their right to
+regulate local traffic and to exercise police supervision over all
+railroads crossing their boundaries.
+
+All power should be kept as closely to the people as is consistent with
+efficiency in the public service. It may even be questioned whether
+entire transfer to the Federal Government of the supervisory powers now
+exercised by the States in railroad affairs would tend to correct
+existing railroad evils more speedily or more effectually than they can
+be corrected through the agency of local rule. The conditions, and
+therefore the wants, of the different States differ so greatly that
+general legislation must always fail when it attempts to regulate
+matters of merely local concern.
+
+The means employed by the State for the regulation of the roads under
+its jurisdiction should be such as are least likely to lead to a
+conflict with Federal authority, and experience has shown that the
+authority of the General Government and that of an individual State over
+a railroad company, which is incorporated under the laws of the latter,
+but is engaged in interstate commerce, may be so harmonized as to avoid
+conflicts between the two sovereignties without any great sacrifice of
+power on the part of either. Judge Cooley said recently in reference to
+regulation by National and State commissions:
+
+      "There is no good reason in the nature of things why the
+      conformity should not be complete and perfect. It is
+      remarkable that up to this time there has been so little--I
+      will not say of conflict, but even of diversity of action
+      between the National and State commissions. Indeed, I recall
+      no instance at this time when anything done by the one has
+      seemed to me to afford just ground for complaint by the
+      other. This may justly be attributed to the fact that there
+      has been no purpose on the part of either to do any act that
+      could afford ground for just complaint on the part of
+      managers of the business regulated and no desire to do
+      anything else than to apply rules of right and equality for
+      the protection of the general public. The aim of all
+      regulation ought to be justice, and when it is apparent that
+      this is the purpose of the several commissions, the railroad
+      managers of the country may more reasonably be expected to
+      coöperate with them much more generally than they do now. If
+      these managers were to come generally and heartily into more
+      full and complete recognition of the rules of right and
+      justice that the law undertakes to lay down for the
+      performance of their duties in their management of the great
+      interests they represent, there cannot be the least doubt
+      that the general result would be, not only that their
+      service to the public would be more useful than it is now,
+      but that the revenues derived from their business would be
+      materially increased through the cutting off of many of the
+      drains upon them, which now, while affecting injuriously the
+      returns they can make to their stockholders, at the same
+      time have the effect of prejudicing the mind of the general
+      public against railroad management to an extent quite beyond
+      what is generally understood by those who suffer from it.
+      The prejudice is inevitable, and not at all unreasonable
+      when it is seen, as it very often is, that these drains
+      result from an unjust discrimination against the public or
+      some portion thereof, that they are of a character that
+      ought to need no law and no criminal or other penalties to
+      put them under the ban of condemnation in every office of
+      railroad management.
+
+      "I take the liberty of adding one more thought: that the
+      more perfect is railroad legislation, the less we shall hear
+      of transportation by rail being made a Government function,
+      the General Government making purchase of all the roads and
+      entering upon a course which will lead we know not where or
+      into what disasters."
+
+There has been during the past twenty years a tendency in a majority of
+the States to place the local control of railroads in the hands of
+executive boards, usually styled "railroad commissioners." Previous to
+this period the various States relied solely upon legislation for the
+regulation of the transportation business, but in time they became
+convinced that such laws were inoperative for the want of an enforcing
+power. It was found that the individual shipper was unable to cope with
+a powerful company and usually would rather suffer wrong than to enter
+into a contest which nearly always resulted in great pecuniary loss to
+him. On the other hand, it was apparent that if the claim of the
+individual were pressed by a railroad commission, even though such a
+body had but limited powers, it would, under ordinary circumstances, be
+honored, provided it was meritorious; and if the commission was
+compelled to enforce a demand through the courts, it would have the
+support of the State to poise the wealth and power of the corporation.
+
+The term "railroad commissioner" in the United States is nearly as old
+as the railroad itself; but the first officials bearing that title were
+merely successors to the turnpike commissioners of yore; their duties
+consisted chiefly in supervising, passing or reporting upon the
+construction and condition of the highway.
+
+The first railroad commission, in the present acceptation of the term,
+was created in the State of Massachusetts, in 1869. The commission
+consisted of three persons, whose principal duty was to "make an annual
+report to the General Court, including such statements, facts and
+explanations as will disclose the actual working of the system of
+railroad transportation in its bearing upon the business and prosperity
+of the commonwealth, and such suggestions as to its general railroad
+policy, or any part thereof, or the condition, affairs or conduct of any
+railroad corporation, as may seem to it appropriate." This board also
+had the general supervision of all railroads and power to examine the
+same. It was required to give notice in writing to any railroad
+corporation which, in its judgment, was guilty of any violation of the
+railroad laws of the State; and if such company continued the violation,
+after such notice, it became the duty of the commission to present the
+facts to the Attorney-General. It was further made the duty of the board
+to examine, from time to time, the books and accounts of all railroads,
+to see that they were kept in a uniform manner, and upon the system
+prescribed by the board. It was also required to investigate the cause
+of any accident on a railroad resulting in loss of life. These being the
+principal duties of the board, its powers were very limited; but its
+personnel supplied the power which the law had withheld. The success of
+this commission exceeded even the expectations of the advocates of the
+system, who, in view of the limited powers of the commission, had
+anticipated but meager results.
+
+To quiet the Granger movement the railroads favored and finally secured
+the adoption of the commissioner system in the West, and South, in which
+sections it attained its highest development. It was soon found that a
+commission after the Massachusetts model, when composed of men less
+competent or less disposed to do their duty, was liable to dwindle into
+a statistical board or even become a pliant tool in the hands of the
+railroads. Furthermore, the conditions in Massachusetts, where railroad
+owners and railroad patrons lived side by side and were in many
+instances even identical, differed materially from those found in the
+West and South, where railroad patrons were made to pay excessive rates,
+to produce liberal dividends on fictitious stocks for non-resident
+stockholders. Here a conflict between the railroads and such commissions
+as were determined to do their duty became often unavoidable. Railroad
+companies were as a rule disposed to disregard the recommendation of a
+commission to reduce exorbitant rates. This led in those States which
+suffered most from unjust tariffs to a popular demand to endow the
+commission with the power to fix _prima facie_ rates. While the number
+of States which have taken this step is at present still limited, public
+opinion in its favor is growing throughout the nation, and a general
+adoption of this policy is probably only a question of time. There is
+every reason for believing that a commission vested with the right to
+fix local rates, to require full and complete reports from railroad
+companies, and to make proper regulations for their control, aided by
+penal legislation to compel compliance with their orders, will be a
+sufficient aid to the State in exercising such control over the
+companies operating lines within its borders as its dignity and the
+welfare of its people demand.
+
+Viewing the question from a national point of view, we find that, owing
+to the great and constantly increasing importance of interstate traffic,
+improved Federal agencies for railroad control are a pressing need.
+While much has been accomplished by the Interstate Commerce Act, much
+yet remains to be done. Violations of the act are still far too
+frequent, and they have been encouraged by unfriendly decisions by some
+of the inferior Federal courts.
+
+It must be admitted that nearly all the evils connected with interstate
+transportation could soon be remedied were it not for the difficulties
+which the Interstate Commerce Commission encounters in the enforcement
+of the law. On the one hand it is not possible with the machinery at
+present provided to detect and prove a considerable part of the
+violations of which railroad managers are daily guilty; and on the other
+hand, if these violations are brought to light, there would not,
+according to the testimony of a prominent railroad man, be courts enough
+in the country to try the violators. Besides this, such is the
+artfulness of railroad managers that in a majority of cases it would be
+impossible to reach the guilty party, and subordinates would have to
+answer for the transgressions of their superiors.
+
+To provide adequate machinery for the supervision of the transportation
+business, a national bureau of commerce and transportation should be
+established. As its chief a director-general of railroads should be
+appointed by the President, on the recommendation of the Secretary of
+the Interior, by and with the advice and consent of the Senate. This
+officer should hold his office for a term of at least six years, unless
+sooner removed by the President, upon reasons to be communicated by him
+to the Senate. He should not be interested either directly or indirectly
+in railroad securities. The Interstate Commerce Commission should be
+continued as an advisory board. It should upon the whole retain its
+present functions and should be consulted by the director-general in all
+matters requiring expert investigation. A number of divisions or
+sub-bureaus should be established, and each should be entrusted, under
+the supervision of the director-general, with such duties as may be
+deemed necessary to secure the greatest efficiency.
+
+There should be a division charged with the duty of carefully examining
+and compiling the detailed reports which the various companies should by
+law be required to make to the bureau. An inspection service should also
+be established, similar to that now maintained by the Treasury and
+Post-office Departments. Its officers should be empowered to enter all
+railroad offices and examine the companies' books, board trains and
+employ other legal means to detect violations of the railroad law and
+report them to the chief of the bureau.
+
+Railroad companies might be permitted to make interstate rates, but all
+schedules should be submitted to the bureau for approval or revision.
+Legal provision should be made against every sort of speculation in
+railroad stocks on the part of railroad officers, who should, in
+addition, be prohibited from sharing in the profits of favorite rates,
+as at present. All executive officers and directors of railroad
+companies should, like officers of national banks, be required to
+qualify by taking an oath of office, and should be held to strict
+accountability for their official acts. Officers of railroad companies
+should not be allowed to receive and use proxies at stockholders'
+meetings.
+
+The director-general should have the power, when he has proof that a
+railroad manager is persistently violating the law, to remove him and to
+appoint a receiver to take charge of the road until its owners can make
+provision and furnish sufficient guarantee for a more responsible
+management. Such a procedure would not be without analogy in the sphere
+of Federal authority. The Comptroller of the Currency is authorized by
+law to remove the derelict officials of a national bank and place its
+business in charge of a receiver. The beneficial effect of this
+provision is evinced in the extreme rareness of such a step. When
+railroad managers are held responsible for their own official acts, as
+well as for those of their subordinates, and when all railroad
+transgressions are visited upon their source in such a manner as to be
+remembered by the stings of disgrace and of a blighted career,
+unfaithful railroad managers will be extremely rare.
+
+The plan here outlined is of course capable of being greatly improved.
+Experience only is a reliable guide as to the merits of the various
+details of such a system of control. What is needed above all things is
+a beginning, the establishment of the principle of complete control of
+railroad transportation by the State and the Nation. When this step is
+once taken, the friends of railroad reform may safely trust to time for
+the solution of the subordinate questions of this important problem.
+
+By thorough State and Federal supervision of the railroad business many
+of the present abuses can be prevented. But the temptations of railroad
+managers to violate the law will continue to exist as long as the
+speculative element is permitted to remain in railroad securities. To
+remove the fountain-head of the evil eventually, the way should
+gradually be paved for a change in railroad organization and ownership
+which would also greatly increase the responsibility and efficiency of
+railroad management. In the beginning of the railroad era, nearly all,
+and not unfrequently all the capital needed for the construction of a
+new line was supposed to be furnished by the company's stockholders. But
+as it often happened that the cost of construction considerably exceeded
+the original estimate, the State authorized railroad companies to
+mortgage their property for the purpose of raising the money necessary
+to complete the road. In time this provision of the law was taken
+advantage of by speculative stockholders to such an extent that roads
+were often bonded for the full amount necessary to construct them, and
+even for more, while the stock was issued simply as a bonus to the
+promoters and the bondholders of the road. But as the bonds and shares
+scarcely ever remain in the same hands, such a condition was eventually
+brought about that roads were controlled by those who had little or
+nothing invested in the enterprise, and their real owners were deprived
+of all influence in their management, retaining only the right to
+foreclose their mortgages when things came to the worst. It is evident
+that men who have only a speculative interest in property cannot have
+the same concern for its permanent value and prosperity as those who
+hold it as a permanent investment. Many of the railroad abuses of the
+past had their origin in the law permitting the bonding of railroad
+property. Were it desirable to make a property for the sole use and
+convenience of speculators and gamblers, a better scheme could hardly be
+devised than the present system of our railroad organizations. Were
+railroad companies organized like national banks, were each shareholder
+required to pay the full amount of the face value of his shares, and
+were mortgaging railroad property entirely prohibited, it is not likely
+that the proportion of bankrupted railroads would be any larger than
+that of bankrupted banks. Few, if any, railroads would be built for
+purely speculative or blackmailing purposes.
+
+Capital is naturally conservative, and speculation is only invited where
+the chances of gain are greatly out of proportion to the capital
+invested. Were the principle of ownership which applies to national
+banks and other well regulated corporations also applied to the
+railroads, and were bonds entirely abolished, only such persons would
+by the shareholders be placed in charge of their property as could give
+to them the best assurance of honest and conservative management. Such a
+change would greatly increase public confidence in, and the value of,
+railroad securities, and would eventually place them above bank stock as
+desirable investments. With the great fluctuations which under present
+circumstances obtain in railroad stocks, these securities are regarded
+as unsafe and unsatisfactory investments by conservative people. During
+a period of less than twelve months in 1891 and 1892 the stock of the
+Atchison, Topeka and Santa Fe fluctuated from 28-1/2 to 43-1/2, or 53
+per cent.; that of the Chesapeake and Ohio from 15-1/4 to 25-7/8, or 70
+per cent.; of the Chicago and Northwestern from 101 to 118, or 17 per
+cent.; of the Chicago, Saint Paul, Minneapolis and Omaha from 20-1/2 to
+38-1/2, or 88 per cent.; of the Chicago, Milwaukee and St. Paul from
+48-3/4 to 78-1/2, or 61 per cent.; of the Iowa Central from 6-1/2 to 13,
+or 100 per cent.
+
+If we look over the stock quotations of the past ten or twelve years we
+find still greater fluctuations. The following table, taken from the
+_United States Investor_, shows the range of prices of a few of the
+principal stocks during this period:
+
+        Name.                 Lowest.           Highest.
+
+  Central Pacific          26-1/2 (1888)      102-7/8 (1881)
+  Chesapeake and Ohio       1     (1888)       33-7/8 (1881)
+  Erie                      9-1/4 (1885)       52-7/8 (1881)
+  Illinois Central         79-1/4 (1879)      150-1/2 (1882)
+  Lake Erie and Western     1-3/8 (1885)       65-3/4 (1881)
+  Michigan Central         46-1/2 (1885)      130-1/8 (1880)
+  New Jersey Central       31     (1885)      131     (1889)
+  New York Central         81-3/4 (1885)      155-3/8 (1880)
+  Northern Pacific         14     (1884)       54-3/8 (1882)
+  Rock Island              63-3/8 (1891)      204     (1880)
+  C., M. & St. P.          34-3/8 (1879)      129-1/4 (1881)
+  Texas and Pacific         5-1/2 (1884)       73-5/8 (1881)
+  Wabash                    2     (1885)       60     (1881)
+  Atchison and Topeka      23-3/4 (1890)      152-1/2 (1880)
+  Chicago, Burlington and
+    Quincy                 75-7/8 (1891)      182-1/2 (1881)
+  N. Y. & N. E.             9     (1884)       86     (1881)
+  Wisconsin Central         2     (1880)       39     (1881)
+  Union Pacific            28     (1884)      131     (1881)
+
+And such fluctuations have always been rather the rule than the
+exception. It is a gross outrage upon the investing public to let this
+state of affairs continue. It should be corrected without delay.
+
+How many high officials in charge of railroad property will under these
+circumstances resist the temptation to speculate in the stock of their
+companies, and, so long as it is permitted, how many will resist the
+temptation to adopt such policies in the government of their roads as
+will cause such fluctuations? It is a common report that it is not an
+unfrequent occurrence for Senators and members of Congress to receive
+information from railway officials that enables them to raise their
+campaign funds by speculation in Wall Street.
+
+Mr. Henry C. Adams, statistician of the Interstate Commerce Commission,
+says in his third annual report:
+
+      "It certainly appears ... that the motive for ownership in
+      railroad stock is quite different from the ordinary motives
+      which lead men to invest in corporate enterprises, thus
+      presenting an additional proof that railways are a business
+      not subject to ordinary business rules."
+
+There is no safer business in the world than railroad transportation;
+there is none that has less elements of uncertainty; none whose returns
+in the aggregate are less varying. Every other business in the country,
+whether prospering or struggling, pays tribute to it. It rests on a cash
+basis, and suffers probably less from hard times than any business of
+its magnitude. Both the merchant and the manufacturer run large risks in
+doing business largely on a credit basis. The farmer sows in the spring,
+harvests in the fall, and often cannot realize on his products until
+winter; but the railroad company always receives its pay as soon as its
+work is done, and not unfrequently even before it is done. Statistics
+show that railroad revenues are, in the aggregate, remarkably uniform,
+and there is no reason why railroad securities should be less stable
+than bank or insurance stocks. Mr. Jeans says:
+
+      "It is observable, in respect to the net profits from
+      railway working, that they have not fluctuated from year to
+      year in the same way as nearly all other profits have
+      done.... It comes, then, to this, that, next after land and
+      house property, the railway interest is the largest and most
+      important in the country. But it is superior to both of
+      these rival interests in its profit-earning capabilities,
+      yielding, as it does, more than 4 per cent. on the capital
+      expended, against a possible average of 2-1/2 to 3 per cent.
+      in respect to the others."
+
+There may be some arguments in favor of bonding railroads, but this
+practice is, upon the whole, productive of infinitely more evil than
+good. The State should, therefore, compel railroad companies to
+liquidate all of their bonded indebtedness without unnecessary delay. In
+the proportion in which this is accomplished railroad shares will gain
+in stability and value.
+
+Railroad men complain that the small savings of the poor invested in
+railroad securities do not yield adequate returns and are often lost in
+consequence of the foreclosing of the roads in which these investments
+have been made. Others complain that railroads are bankrupted in the
+interest of designing bondholders. Still others charge that rich and
+powerful roads contrive to obtain a controlling interest in the
+depreciated stock of weaker roads and then manage these roads in their
+own interest and greatly to the detriment of other stockholders. All
+these evils would disappear if the law required the identity of actual
+and virtual ownership. "Freezing-out" processes could no longer be
+resorted to by expert directors to obtain without compensation the
+property of their less sophisticated fellow stockholders. One railroad
+could no longer obtain control of another by acquiring an insignificant
+part of the sum total of its securities. There would be no longer any
+clashing between the interests of bondholders and stockholders, and
+railroads would no longer be managed in the interest of a small minority
+of their owners.
+
+In addition to the cancellation of all railroad mortgages the State
+should require that all railroad stocks should, in the future, be paid
+in full. Furthermore, roads should be built only from the proceeds of
+the capital stock, and the expense of repairs should be defrayed from
+the revenues of the road. Dividends should only be paid from surplus
+earnings and should in no case exceed a fair rate of interest on the
+actual present value of the road. The statistician to the Interstate
+Commerce Commission suggests the creation of a special commission
+charged with the duty of converting the actual capitalization of
+railroad lines into a just value of their property. To do justice to
+both the railroads and their patrons in the fixing of rates, it is
+important that the just value of railroad property be ascertained, but
+the work could probably be done with less friction by a coöperation of
+National and State commissions. A number of reforms are needed within
+the province of railroad management. Passenger rates are, as a rule, too
+high, and out of all proportion to freight rates. Many passenger
+tariffs still recognize the old stage-coach principle of fixing the fare
+in an exact proportion to the distance traveled. Thus a passenger who
+takes the train for a five-mile trip pays only fifteen cents for his own
+transportation and that of one hundred pounds of baggage, while the
+passenger who buys a ticket for a journey of one hundred miles pays, on
+most American lines, exactly twenty times the amount paid by the
+five-mile passenger. Here the principle of collecting terminal charges
+is entirely ignored. Sufficient inducements are not held out to the
+passenger to prolong his journey, and as a consequence of this
+short-sighted policy of the railroad companies the average distance
+traveled in the United States by each passenger, instead of having
+gradually increased, has gradually decreased of late years until it is
+now only 24.18 miles. The average freight haul in the United States is
+120 miles, or about five times as long as the average journey per
+passenger. How can such a difference be accounted for except by the
+dissimilarity in the principles which govern the computation of
+passenger and freight charges? The same rule should be adopted in fixing
+passenger rates that is recognized by railroad men in fixing freight
+rates: the rate per mile should decrease with the increase of the number
+of miles traveled.
+
+The principle of arranging passenger tariffs on a sliding scale has
+found recognition in Europe. In Denmark first-class passenger fare is
+3.13 cents for each of the first 47 miles, 2.67 cents for each of the
+next 47 miles, and only 2.22 cents for every additional mile. The
+practical application of this principle is, in fact, only limited by the
+extent of the kingdom. In nearly all European countries a uniform
+reduction, ranging from 20 to 30 per cent., is made from regular rates
+for return trip tickets, and coupon tickets are issued to tourists
+almost everywhere at largely reduced rates.
+
+Hungary recently adopted a new method of making passenger and freight
+tariffs for its state lines. This is now generally called the zone
+system. There are two classes of tickets sold, one for short trips on
+suburban or branch lines, the other for longer journeys on the main
+lines. The distances that can be traveled on short or suburban lines are
+divided into two zones of stations, and those on main lines into
+fourteen zones. The division of the kingdom into zones is made with
+Buda-Pesth as the center. A ticket purchased for a particular zone
+carries the passenger to the end of that zone or any nearer station.
+
+The following table will show the extent of each zone and the fares
+paid:
+
+  --------------+---------------+--------------------+--------------------
+                |               |   LOCAL TRAINS.    |   FAST TRAINS.
+       ZONE     |   DISTANCE    |------+------+------+------+------+------
+                |               |First |Second|Third |First |Second|Third
+                |               |Class.|Class.|Class.|Class.|Class.|Class.
+  --------------+---------------+------+------+------+------+------+------
+    Short Lines.|               |  Fl. |  Fl. |  Fl. |  Fl. |  Fl. |  Fl.
+                |First Station. | 0.30 | 0.15 |  .10 |  -   |  -   |  -
+                |Second Station.|  .40 |  .22 |  .15 |  -   |  -   |  -
+    Main Lines. |               |      |      |      |      |      |
+       1        |    1-25 km.   |  .50 |  .40 |  .25 | 0.60 | 0.50 | 0.30
+       2        |   26-40  "    | 1.00 |  .80 |  .50 | 1.20 | 1.00 |  .60
+       3        |   41-55  "    | 1.50 | 1.20 |  .75 | 1.80 | 1.50 |  .90
+       4        |   56-70  "    | 2.00 | 1.60 | 1.00 | 2.40 | 2.00 | 1.20
+       5        |   71-85  "    | 2.50 | 2.00 | 1.25 | 3.00 | 2.50 | 1.50
+       6        |   86-100 "    | 3.00 | 2.40 | 1.50 | 3.60 | 3.00 | 1.80
+       7        |  101-115 "    | 3.50 | 2.80 | 1.75 | 4.20 | 3.50 | 2.10
+       8        |  116-130 "    | 4.00 | 3.20 | 2.00 | 4.80 | 4.00 | 2.40
+       9        |  131-145 "    | 4.50 | 3.60 | 2.25 | 5.40 | 4.50 | 2.70
+      10        |  146-160 "    | 5.00 | 4.00 | 2.50 | 6.00 | 5.00 | 3.00
+      11        |  161-175 "    | 5.50 | 4.40 | 2.75 | 6.60 | 5.50 | 3.30
+      12        |  176-200 "    | 6.00 | 4.80 | 3.00 | 7.20 | 6.00 | 3.60
+      13        |  201-225 "    | 7.00 | 5.30 | 3.50 | 8.40 | 6.50 | 4.20
+      14        |  225 km.      |      |      |      |      |      |
+                |    and over   | 8.00 | 5.80 | 4.00 | 9.60 | 7.00 | 4.80
+
+(The florin is a little more than one-third of a dollar.)
+
+A ride from a city to the first suburban station costs from 3 to 10
+cents, according to class of car, and to the second station 5 to 13.6
+cents. On through trains a person may travel 15 miles at a cost of from
+8-1/2 to 20 cents, according to kind of train and class of car, a
+hundred miles for from 85 cents to $2.00; 140 miles for from $1.15 to
+$2.80 and any distance above 140 miles for from $1.35 to $3.25. A person
+may thus travel from Buda-Pesth to Predeal, a distance of 472 miles,
+with a third-class ticket for zone 14, purchased at a cost of $1.35, or
+28-100 of a cent per mile.
+
+Our railroad men with much complacency point to the fact that these
+rates do not cover the forwarding of passengers' baggage and that this
+service must be paid for separately. These charges, however, are very
+moderate, being on 120 pounds of baggage 8-1/3 cents a distance of 34
+miles or less, about 17 cents for a distance of more than 34 and less
+than 62 miles, and about 34 cents for any distance over 62 miles. The
+additional charge for carrying 120 pounds of baggage from Buda-Pesth to
+Predeal is therefore about one-fourteenth of one cent per mile. It must
+be admitted that this system of charging separately for passenger and
+baggage is eminently just, for there is no good reason why the passenger
+without baggage should be taxed to pay for the carriage of that of his
+fellow-traveler.
+
+The zone tariff was introduced on the state railways of Hungary by M.
+Barosz, the Hungarian Minister of Commerce, on the 1st of August, 1889.
+The adoption of the new tariff was ridiculed and condemned as visionary
+by road experts, who even went so far as to prove to the satisfaction of
+practical railroad men that the innovation was destined to be a failure.
+For a month or two it almost seemed as if their prediction might be
+fulfilled, the number of passengers carried remaining behind the number
+carried during the corresponding period of previous years. But soon the
+reaction set in. The month of November, 1889, already witnessed an
+increase in the number of passengers as well as in receipts over the
+same month of the year previous. The result of the first year's trial
+demonstrated the wisdom of the "innovation." The number of passengers
+carried, which had been only 5,186,227 in 1888-89, rose to 13,060,751 in
+1889-90, and the total receipts for passengers and baggage rose from
+9,138,715 florins to 11,186,321 florins, a gain of 2,047,606 florins, or
+22 per cent., during the first year. There is a continued increase both
+in the number of passengers and in receipts, and the success of the
+system must be pronounced phenomenal. The railroad experts of Europe,
+who had predicted the signal failure of the zone system, now that the
+unexpected has happened, are trying to discover the particular favorable
+conditions which made the success of the system possible in Hungary. It
+will probably be a decade, or even two, before the railroad experts of
+both hemispheres will be entirely reconciled to this new application of
+the old principle that a reduction in the price of a commodity increases
+the demand for it.
+
+It is strange, indeed, that intelligent men should be so slow in
+recognizing an economic principle for which both history and daily
+experience furnish an unlimited number of illustrations. The post-office
+receipts everywhere have increased with a reduction in postage. The
+Government telegraph in England did not become self-supporting until
+Parliament made a sweeping reduction in its rates. The revenue from the
+Brooklyn bridge never paid a fair interest on the capital expended in
+its construction until its tolls were cut down. Were it necessary,
+hundreds of other examples could be added to these.
+
+Hungary has also applied the zone system to its freight traffic. Three
+zones are fixed for the carrying of goods, viz.: Zone I, for distances
+less than 200 kilometers (124 miles); Zone II, for distances over 200
+and less than 400 kilometers, and Zone III, for distances over 400
+kilometers. A uniform tariff is established for each zone, which is
+one-third less than the average freight rates for equal distances
+formerly in force. American railroads should profit by the wisdom and
+experience of the Hungarian Government, and adopt at an early day such
+features of its system as upon our soil and under our institutions may
+be made practicable. The Hungarian system, with some modifications, is
+now being tried by Austria and a few of the German states, and is
+increasing railroad revenues wherever adopted.
+
+There is a growing demand for lower fares. This demand increases in the
+same proportion in which the desire and the necessity for travel
+increase. European states have not been slow to meet it. Reductions are
+made everywhere, and chiefly favor the lower classes. Thus, when France,
+within the last year, changed her passenger tariff, she reduced
+first-class fare 9 per cent., second-class fare 18 per cent., and
+third-class 27 per cent.
+
+The European passenger reports show the numbers of first and
+second-class passengers are continually falling off, while those of the
+third-class passengers are fast increasing. In England and Wales the
+number of first-class passengers fell between 1875 and 1889 from
+37,000,000 to 24,000,000 while the number of third-class passengers
+increased during that same period from 350,000,000 to 601,000,000, and
+this increase still continues. In the United Kingdom the number of
+third-class passengers for 1891 was over 750,000,000. Furthermore,
+passenger revenue comes chiefly from the third class. In the United
+Kingdom the receipts from first-class passengers were in 1889
+£3,188,000; from second-class passengers, £2,705,000; and from
+third-class passengers, £19,785,000. It is thus seen that receipts from
+third-class passengers are nearly 3-1/2 times as large as those from the
+first and second-class passengers combined. A similar proportion is
+found in nearly every country on the continent. European roads
+discovered some years ago that first and second-class passengers were
+carried at a loss, and all the passenger earnings were derived from
+third-class passengers. The profits from this source show a considerable
+increase every year.
+
+The average fare per mile is 2.15 cents in the United States, and only
+1.17 cents in Germany, 1.67 cents in Austria, 1.18 cents in Belgium,
+1.29 cents in Denmark, 1.45 cents in France, 1.64 cents in Italy, and
+1.45 cents in Russia. It is often claimed by railroad men that we travel
+more luxuriously than the people of any other country in the world, but
+it should not be forgotten that traveling in the United States is also
+more expensive than anywhere else. It is contended that class
+distinctions are odious in America, and that second and third-class cars
+would not be patronized. The same argument might be applied to theaters,
+hotels, clothiers, grocers, etc. It is difficult to see why distinction
+here should be less odious than on the railroad train. The truth is,
+Americans are just like other people and will avail themselves of
+accommodations in keeping with their means if they have the opportunity.
+Many passengers who will not travel in an uncouth smoking-car would, if
+clean second-class cars were provided, gladly dispense with the luxury
+of an upholstered seat if by doing so they could save from $5 to $10 a
+day.
+
+A common laborer in this country earns from a dollar to a dollar and a
+half a day, and in the performance of his labor as a rule suffers
+greater inconvenience than does the traveler who travels the country in
+a second-class car. Is it under these circumstances at all likely that
+the American would hesitate to travel for a day in a plain but clean
+car, if by doing so he could save a week's earnings? We may even go
+further and say that it is a very reasonable assumption that the man who
+earns his bread by the sweat of his brow would choose the cheaper car if
+the difference in one day's fare were equal to one day's wages. It is a
+common saying in Europe that the first-class passengers consist of lords
+and fools, and few of the hundreds of thousands of American tourists
+traveling abroad give the natives occasion to class them with either.
+The first-class car has almost fallen into disuse in Europe, and even
+the patronage of the second-class is less than ten per cent, of that of
+the third.
+
+Reduced rates for return tickets should be provided under rules and
+regulations of commissioners.
+
+The Massachusetts legislature recently passed a law requiring the
+railways of that State to sell interchangeable thousand-mile tickets for
+$20. The State commission is given power to except any company from its
+requirements if the public welfare or the financial condition require or
+demand it. This is a step in the right direction and should be followed
+by other States. Michigan also requires certain roads to carry
+first-class passengers at two cents per mile.
+
+Railroad companies should be compelled to discard the pass as a
+courtesy as well as a consideration. The giving of passes under the
+guise of mileage books, or tickets for pretended or unnecessary
+services, is very pernicious and should be prohibited. Such a reform
+would soon enable them to offer low fares to all. An employe may be
+furnished free transportation while actually engaged in the business of
+his company, and it should be made the duty of the State and National
+commissions to make proper regulations governing such free
+transportation of employes. Half-fare tickets for adults should also be
+abolished. The pauper ticket is given to the minister of the gospel to
+secure for the railroads the influence of the pulpit, though offered
+under the pretense of charity or support of the church. The State should
+not permit the railroad companies to practice this or any other kind of
+charity at the expense of the general public. The railroad is a highway,
+and the company operating it is entitled to rates sufficient to pay
+operating expenses and a fair interest on the value of the property. It
+can therefore easily be seen that the so-called gifts show no liberality
+on the part of the railroad company, but are made at the expense of
+other people. Donations made by railroad companies should be made from
+the pockets of their stockholders and not from the pockets of their
+patrons.
+
+All perquisites of railroad officers should be abolished. When a railway
+official has become so pompous and consequential that he requires a
+special car, it is about time to look about for his successor. If we are
+to have a special-car aristocracy in this country let it be supported at
+the expense of some other interest.
+
+Another railroad reform is needed on this side of the Atlantic. While
+the great majority of railroad officials are courteous and considerate,
+and perform their duties in the most agreeable and acceptable manner,
+there are a few who do not properly appreciate the relation which they
+sustain to the patrons of their companies. They are inclined to forget
+that they are quasi-public servants, and that the public has a right to
+demand courteous treatment at their hands. All railroad employes should
+realize that their first duty is to administer to the welfare and the
+convenience of the public, and each one should have the full protection
+of the law in his efforts to do so. The American public objects much
+less to an inferior car than to rude treatment by the companies' agents.
+Railroad superintendents may justly be blamed for the incivilities of
+their subordinates. It is their duty to know the character of those whom
+they employ, and not to retain in their employ those who are derelict in
+their duty to the public. Nothing offends the feelings of a true
+American more than the display of a bureaucratic spirit on the part of
+public servants. Nothing more commends a line of railroad to the public
+than uniform painstaking kindness and courteous treatment on the part of
+its employes. It is made the duty of railroad employes of France "to so
+treat the public as if they were eager to oblige it," and the very first
+paragraph of the official instructions to the railroad employes of
+Germany enjoins them "to assume a modest and polite demeanor in their
+intercourse with the public." In this connection it might be stated that
+the second paragraph of those instructions positively forbids the
+acceptance of any gratuity by a railroad employe. If our American
+sleeping and dining-car companies would give their employes adequate
+compensation and then adopt and enforce the German rule concerning
+"tipping," their service would gain popularity and their employes
+self-respect.
+
+Entrance into the railway service should be by agreement for a definite
+time, and dismissals and resignations should be governed by rules agreed
+upon by boards of commissioners and the companies.
+
+The use of the corporation has done so much to secure for capital so
+large a share of the profits of industrial enterprises, and large
+salaries also for the officers who manage them, that laborers have been
+led to organize themselves into associations for like purposes, and
+ambitious men have not been slow in availing themselves of the
+advantages afforded them in this new field.
+
+It is right and proper for laborers to organize such associations when
+they can do so under wise and economical management, for the purpose of
+securing greater intelligence, better education, higher culture, higher
+wages, a shorter work-day, and a general ameliorating of their
+condition, all of which will tend to make them more efficient workmen
+and also better enable them to resist the aggression of centralized
+wealth; for, in the absence of organization, the single-handed employe
+of the great modern employer is comparatively helpless. But if these
+organizations are allowed to be controlled by ignorant, unreasonable or
+designing men, who will, at trifling provocations, resort to violent and
+unlawful measures, they are sure to prove harmful, and a great
+detriment, instead of a help, to their members, and the sooner they are
+abandoned the better for all.
+
+Great conflicts are sure to arise between organized capital and
+organized labor, and they must be settled in a reasonable way, or
+anarchy will prevail. They cannot be left for headstrong or
+inconsiderate men representing either side to determine, but the line
+must be drawn by the public authorities.
+
+Each year affords accumulated evidence of the necessity of extending
+legal restrictions over the management of the railway business, and the
+law, as laid down by Judge Ricks to the Ann Arbor strikers last March,
+in the United States Circuit Court, at Toledo, is undoubtedly correct
+and will meet with general approval from the public.
+
+He says:
+
+      "You are engaged in a service of a public character, and the
+      public are interested not only in the way in which you
+      perform your duties while you continue in that service, but
+      are quite as much interested in the time and circumstances
+      under which you quit that employment. You cannot always
+      choose your own time and place for terminating these
+      relations. If you are permitted to do so you might quit your
+      work at a time and place and under circumstances which would
+      involve irreparable damage to your employers and jeopardize
+      the lives of the traveling public."
+
+Mr. Powderly, in commenting upon the above decision, does not complain
+of it, but says:
+
+      "The decision shows, as I have said before, that the
+      principle of Government ownership of the railroads is being
+      recognized by the courts. While the decision is apparently
+      against the men, it emphasizes our position that the
+      Government has the right to supervise the railroads. Now it
+      is a poor rule that won't work both ways.
+
+      "The Interstate Commerce Law was passed for the purpose of
+      controlling the railroads, but up to date no railroad has
+      paid any attention to the law. Anarchy of the worst kind has
+      prevailed. By that I mean a total disregard of the law, and
+      that is what the corporations charge against the anarchists.
+      The courts hold themselves in readiness to obey the will of
+      the corporations when a charge is made against the workmen,
+      but no effort is made to carry out the mandates of the law
+      when the provokers of strikes, the corporations, violate the
+      law."
+
+There is but little doubt, if the judges of the Federal courts would
+show the same zeal in holding railroad managers amenable to the law as
+Judge Ricks has displayed in this case with the employes, they would
+secure increased confidence from the people in the tribunals over which
+they preside.
+
+All fair-minded persons will agree that labor as well as capital must be
+subjected to proper restraints, and that the public will demand nothing
+unreasonable from either.
+
+Accidents are too frequent upon American railroads. The reports of the
+Interstate Commerce Commission give the following as the numbers killed
+and injured during the years named:
+
+  ---------+---------------+---------------+---------------+---------------
+           |      1888     |      1889     |      1890     |      1891
+           |Killed. Injured|Killed. Injured|Killed. Injured|Killed. Injured
+  ---------+-------+-------+-------+-------+-------+-------+-------+-------
+  Employees| 2,070 | 20,148| 1,972 | 20,028| 2,451 | 22,396| 2,660 | 26,140
+  Passeng's|   315 |  2,138|   310 |  2,146|   286 |  2,425|   293 |  2,972
+  Others   | 2,897 |  3,602| 3,541 |  4,135| 3,598 |  4,206|  .... |  ....
+  ---------+-------+-------+-------+-------+-------+-------+-------+-------
+  Total    | 5,282 | 25,888| 5,823 | 26,309| 6,335 | 29,027|  .... |  ....
+  ---------+---------------+-------+-------+-------+-------+-------+-------
+
+For the year ending June 30, 1890, the total number of employes was
+749,801. There was, therefore, one death for every 306 men employed and
+one injury for every 33 men employed. For the previous year one was
+killed for every 357 men employed, and one was injured for every 35 men
+employed. While trainmen represent but 20 per cent, of the total number
+of employes, the casualties among them represent 58 per cent. of the
+total number of casualties.
+
+For the year 1888, one passenger was killed in every 1,523,133
+passengers carried, and one injured in every 220,024 carried.
+
+The corresponding rate in England for the year 1888 is one passenger
+killed for every 6,942,336 carried, and one injured for every 527,577
+carried.
+
+Railroads doing a large business should be compelled to adopt the most
+improved appliances for avoidance of accidents.
+
+The occupation of trainmen is especially hazardous, and too long
+continued service should not be required, but proper intervals of rest
+should be allowed. It is to the want of this, undoubtedly, that a great
+many of the serious accidents are owing.
+
+No more Sunday trains should be run than are absolutely necessary.
+Provision should be made by law to enable trainmen to procure insurance
+at the lowest rate possible, for indemnity against loss of health, life
+or limb.
+
+It was only a few days before the great disaster occurred on the Hudson
+River Railroad at Hastings, over a year ago, that an announcement had
+been made to the public of the extreme prosperity of the road during the
+year. The great slaughter that occurred there is another illustration of
+the disregard of public duty, and another instance of the sacrifice of
+life and limbs of passengers and employes by a railway corporation in
+order to secure large dividends on watered stock. It is not only gross,
+but criminal neglect for a company with such an immense income not to
+provide greater safety appliances, and the coroner's jury in this case
+was too modest when it decided that the management of the road was
+morally responsible for the disaster.
+
+Parliament has compelled the British railways to adopt, in the interest
+of the public safety, the block system and continuous brake, and great
+lines like the New York Central and Hudson River companies should be
+compelled to adopt such improvements.
+
+The traveling public has another grievous cause for complaint. There are
+but few companies that make any efforts to have their trains connect
+with those of rival roads. On the contrary, a good deal of scheming is
+often done by railroad companies to so arrange their time-tables with
+reference to those of their rivals as to inconvenience passengers as
+much as possible by delays at competing points. To remedy this evil the
+State should require that every time-table should have the approval of
+proper authorities, and no change should be permitted without their
+approval.
+
+Railroad companies are chartered for the purpose of promoting the public
+welfare, and every violation of their charter should be punished.
+
+It should be the main object of railroad legislation to compel companies
+to fulfill their public obligations without depriving them of their
+efficiency. Above all things these companies should be stripped of the
+power to use their great wealth for the purposes of corruption or the
+attainment of political influence. Our railroads to-day probably
+represent no less than one-fourth of the personal property of the
+country, and this vast wealth is controlled by a comparatively small
+number of men, many of whom have in the course of time become so
+arrogant and despotic that they have little regard for popular rights or
+the expressed will of a free people.
+
+It is reported that when, a few years ago, a representative of the press
+directed Mr. Vanderbilt's attention to the fact that the public
+disapproved of his railroad policy, the latter gave vent to his contempt
+for public opinion by the no less profane than laconic reply: "The
+public be damned." Ex-Railroad Commissioner Coffin called on one of the
+Goulds to urge the adoption of the automatic car-coupler and other
+safety appliances for the roads controlled by them. He was very curtly
+told that not a cent would be expended by the Gould roads for such a
+purpose until the West had repealed its obnoxious railroad laws. The
+Gould dynasty thus intends to accomplish the repeal of these laws by
+coercion. Railroad magnates and their lieutenants often show still
+greater arrogance in dealing directly with their employes.
+
+It may be difficult for railroad managers of the present school to adapt
+themselves to new conditions; it may be impossible for them to
+understand how any other practices than those which have long been
+established can succeed; yet in spite of them both the law and public
+sentiment have already undergone great changes, and still greater
+changes will follow. It may take years to accomplish this work; to bring
+about any great reform requires time and a deter, mined purpose on the
+part of its advocates. Yet I believe the era is not far off when
+railroads will be limited to their legitimate sphere as common carriers,
+when they will treat all persons and all places as impartially as does
+the Government in the mail service, when their chief factor in
+rate-making will be the cost of service, when they will respect the
+rights of the public and those of their stockholders, insuring perfect
+service to the former and fair profits upon the actual value of the
+lines operated to the latter.
+
+The fact should, finally, not be overlooked that it is in the power of
+the General Government to prevent many railroad abuses, and especially
+excessive freight charges, by the improvement of our rivers and harbors.
+That our water-courses act as levelers of interstate rates is apparent
+from the fact that railroad rates invariably rise with the freezing of
+the water-ways and fall with the opening of river and lake navigation.
+By connecting, wherever feasible, our large Western rivers with the
+great lakes, the Government could greatly extend the reign of
+competition in transportation, and thereby keep freight rates within
+reasonable bounds. Lake transportation even now plays an important role.
+In 1892 it was not less than 20,000,000,000 ton miles during the season
+of eight months' duration, and it is almost equal to one-fourth of the
+total ton mileage of all the railroads in the country for the entire
+year. The average rate of lake transportation has been reduced to 1.3
+mills per ton per mile, which is only about one-seventh of the average
+railroad freight rate in the United States.
+
+Where the masses hold the sovereign power, there, if anywhere, the
+welfare of the people should be the supreme law. Violent political
+commotions never disturb the government whose policy is to secure the
+greatest good to the greatest number. Thorold Rogers justly remarks that
+the strength of communism lies in the misconduct of administrations, the
+sustentation of odious and unjust privileges and the support of what are
+called vested interests. Lord Coleridge, in a remarkable article
+published not long ago, recommended a revision of the laws relating to
+property and contract, in order to facilitate the inevitable transition
+from feudalism to democracy, and laid down the rule that the laws of
+property should be made for the benefit of all, and not for the benefit
+of a class.
+
+During the middle ages, and even up to the beginning of the present
+century, nearly all the laws on the statute books looked towards the
+protection of the rights of the feudal lord. Provision was made for the
+expeditious collection of his dues and a severe punishment of his
+delinquent debtor. The peasant was forced to labor fifteen hours per day
+and three hundred and sixty-five days in the year to pay the baron's
+rentals and sustain life. The law permitted him to be flogged for
+failing to courtesy the feudal lord, and to be executed for injury to
+the lord's person, while to kill a peasant was no worse a misdemeanor
+than to kill his lordship's favorite dog or falcon. In short, all laws
+were made to protect and perpetuate the wealth and power of the few by
+impoverishing, humbling and enslaving the masses.
+
+The age of feudalism has given way to an age of democratic liberty, but
+there is many a feudal feature left in our statutes and many a feudal
+doctrine is enunciated by our judges and learned expounders of modern
+jurisprudence. In his decision in the Iowa tariff case Judge Brewer
+said:
+
+      "I read also in the first section of the Bill of Rights of
+      this State [Iowa] that 'all men are by nature free and equal
+      and have certain inalienable rights, among which are those
+      of enjoying and defending life and liberty, acquiring,
+      possessing and protecting property and pursuing and
+      obtaining safety and happiness,' and I know that while that
+      remains as the supreme law of the State, no legislature can,
+      directly or indirectly, lay its withering or destroying hand
+      on a single dollar invested in the legitimate business of
+      transportation."
+
+Had Judge Brewer taken the pains to read on, he would have found in
+section 2 of the Bill of Rights the following:
+
+      "All political power is inherent in the people; government
+      is instituted for the protection, security and benefit of
+      the people."
+
+It is strange that the learned Judge failed to see the difference
+between "men," the creatures of God, "by nature free and equal," and
+"possessing certain inalienable rights," and corporations, the creatures
+of man, having no rights except those which the State sees fit to give
+them. Had the learned Judge perused the whole of the document to which
+he refers, he would have found in article VIII, section 12, the
+following provision:
+
+      "The General Assembly shall have power to amend or repeal
+      all laws for the organization or creation of corporations,
+      or granting of special or exclusive privileges or
+      immunities, by a vote of two-thirds of each branch of the
+      General Assembly."
+
+It should thus have been plain to the learned Judge that in Iowa
+corporations have not human or inalienable rights, and government was
+not instituted for their special protection, but for the protection,
+security and benefit of her people. Nor should it be otherwise.
+
+The corporation for pecuniary gain has neither body nor soul. Its
+corporeal existence is mythical and ethereal. It suffers neither from
+cold nor from hunger, has neither fear of future punishment nor hope of
+future reward. It takes no interest in schools or in churches. It knows
+neither charity nor love, neither pity nor sympathy, neither justice nor
+patriotism. It is deaf and blind to human woe and human happiness. Its
+only aim is pecuniary gain, to which it subordinates all else.
+
+Should the State sacrifice the welfare of all her people rather than lay
+its "withering or destroying" hand on a single dollar of corporate
+wealth? Are there no human rights, for the protection of which
+government was established, more sacred than the rights of a wealthy
+corporation's dollar? Have the people made the judiciary a coördinate
+branch of the Government in order that it may protect the vested or
+rather usurped rights of corporations against legislative attempts to
+curtail them? If the courts so interpret the power which has been
+delegated to them, they will awake one day to the painful reality that
+popular convictions of right are more potent than judicial decrees.
+
+It is the duty of the State not so much to defend the so-called vested
+rights of corporations as to make such just and beneficial laws as will
+temper inequality, mitigate poverty, protect the weak against the
+strong, preserve life and health, and, in short, promote the welfare and
+the happiness of the masses. Constitutions have been made to accomplish
+these ends, to protect the lives, the liberty and the conscience of
+human beings, while laws have been sufficient to protect the dollars of
+corporations. It is a short-sighted policy on the part of the latter to
+take unfair advantage of their wealth and influence, for "As ye sow, so
+shall ye reap," is the inexorable law of Providence. There is no dynasty
+so mighty, no class so privileged, no interest so influential or wealthy
+as to obtain immunity from its operation.
+
+
+
+
+APPENDIX.
+
+
+TABLE No. 1.
+
+COMPILED FROM THE SIXTH ANNUAL REPORT OF THE INTERSTATE COMMERCE
+COMMISSION.
+
+  Mileage in the United States June 30, 1891           168,402.74
+  Number of men employed                               784,285
+  Number of employes per 100 miles                         486
+  Number of locomotives per 100 miles                       19
+  Number of passenger cars per 100 miles                    17
+  Number of cars per 100 miles                             721
+  Capital                                       $9,829,475,015
+  Capital per mile                                      60,942
+  Gross earnings                                 1,096,761,395
+  Gross earnings per mile                                6,801
+  Operating expenses                               731,887,893
+  Operating expenses per mile                            4,538
+  Net income from operation                        364,873,502
+  Net income per mile                                    2,263
+    Of gross income 67.17 per cent. was earned on freight.
+    Of gross income 25.64 per cent. was earned on passengers.
+  Received for carrying mails                     $ 24,870,015
+  Received rentals from express companies           21,594,349
+  Received from investments                        133,911,126
+  No. of passengers carried                        531,183,988
+  No. of tons freight carried                      675,608,323
+  Average journey per passenger                    24.18 miles
+  Average haul per ton of freight                    120 miles
+  Average number passengers per train                       42
+  Average number tons freight per train                    181.67
+  Average revenue per passenger per mile                     2.142 cents
+  Average revenue per ton per mile of freight                 .895 cents
+  Average revenue per train mile, passenger                 $1.06
+  Average revenue per train mile, freight                    1.64
+
+
+TABLE No. 2.
+
+STATISTICS OF THE RAILWAYS OF THE UNITED KINGDOM FOR THE YEAR ENDING
+DEC. 31, 1891.
+
+From the English Reform Almanac for 1893 and from the Report of
+Commissioners R. Giffen and Courtenay Boyle to the Board of Trade.
+
+  Mileage                                         20,191 miles
+  Double, triple or quadruple                     10,853 miles
+  Capital per mile                                     £45,536
+  Gross income per mile                                  3,873
+  Net income per mile                                    1,818
+  Income from passenger traffic                     35,130,916
+  Income from goods traffic                         43,230,717
+  Income from miscellaneous                          3,498,974
+                                                  ------------
+      Income, total                                £81,860,607
+  Operating expenses, 55 per cent                  £45,144,778
+  Rates and taxes                                    2,246,430
+  Government duty                                      321,260
+  Paid for persons injured                             165,219
+  Paid for damage and loss of goods                    257,804
+  Number of first-class passengers                  30,423,776
+  Number of second-class passengers                 63,378,397
+  Number of third-class passengers                 751,661,495
+    Number of third-class passengers over 88 per cent. of all.
+  Number of employes                                   346,426
+  Number of employes per 100 miles                       1,750
+  Number of locomotives per 100 miles                       80
+  Number of passenger cars per 100 miles                   249
+  Number of freight and other cars                       2,595
+  Revenue per train mile                                    58.37d
+  Expense per train mile                                    30.54d
+  Per cent. of earnings on capital                           4.21
+
+
+TABLE No. 3.
+
+SHOWING SALARIES AND WAGES PAID TO OFFICIALS AND EMPLOYES OF STATE
+RAILWAYS IN EUROPE.
+
+Compiled from Röll's Encyclopädie des Eisenbahnwesens.
+
+  =======================================================================
+     POSITION.     |   AUSTRIA.  |   HUNGARY.  |  PRUSSIA.   |  BELGIUM.
+  -----------------+-------------+-------------+-------------+-----------
+                   |  Fl., equal |  Fl., equal | Mark, equal | Fr., equal
+                   |   to about  |   to about  |  to about   |  to about
+                   |33-1/3 cents.|33-1/3 cents.|  24 cents.  |  20 cents.
+                   |             |             |             |
+  President        | 7,000       |     ---     |10,500       | 9,000
+  Directors and    |             |             |             |
+   Superintendents | 4,000-5,500 | 4,000-4,800 | 4,200-6,000 | 7,000-8,000
+  Chief Engineer   | 1,600-2,000 | 1,900-2,500 | 3,600-4,800 | 2,700-5,500
+  Clerks           |   500-1,200 |   640-1,000 | 1,000-2,700 |   900-3,100
+  Station Agents in|             |             |             |
+   Cities, Division|             |             |             |
+   Superintendents | 2,200-2,600 | 2,600-3,400 |     ---     |     ---
+  Station Agents   |             |             |             |
+   in Towns        |   500-850   |   520-880   | 1,500-3,200 | 1,600-4,000
+  Locomotive       |             |             |             |
+   Engineers       |   500-850   |   520-780   | 1,200-2,000 |     ---
+  Firemen          |   300-350   |   380-480   | 1,000-1,500 |     ---
+  Conductors       |   450-550   |   520-850   | 1,100-1,500 | 2,000-2,400
+  Brakemen         |   300-350   |   380-480   |   800-1,200 | 1,200-2,000
+  Section Men      |   288-336   |   270-370   |   700-900   |     ---
+  ------------------------------------------------------------------------
+
+
+TABLE No. 4.
+
+Compiled from Röll's Encyclopädie des Eisenbahnwesens.
+
+_FREIGHT TARIFFS._--BELGIUM.
+
+All freight is divided into three general classes:
+
+1. _Express Freight_, which is delivered by special messengers. Parcels
+weighing 5 kg. (11 lbs.) and less, if prepaid, are carried for .80 fr.
+(16c.) for all distances. Parcels not prepaid and such as weigh from 6
+to 10 kg. pay .90 fr. for a distance of from 1 to 25 km.; 1 fr. for 26
+to 75 km.; 1.10 fr. for greater distances.
+
+2. _Fast Freight_, which may be made use of for consignments weighing up
+to 200 kg. (440 lbs.) Parcels weighing up to 5 kg. pay .50 fr. for all
+distances. Parcels not prepaid and such as weigh from 5 to 10 kg. pay
+.50 fr. for from 1 to 25 km.;.60 fr. for distances ranging from 26 to 75
+km., and .70 fr. over 75 km.
+
+3. _Common Freight_, which is again sub-divided into four classes: In
+Class I 400 kg., in Classes II and III 5,000 kg., and in Class IV 10,000
+kg. is recognized as the minimum weight.
+
+       *       *       *       *       *
+
+TARIFF FOR THE FOUR DIFFERENT CLASSES OF COMMON FREIGHT.
+
+_Terminal Charges--Franc 1.00._
+
+    I Class--For 1,000 kg. (2,250 lbs.)
+      From 1 to 5 km            Fr. 1.00
+      From 6 to 75 km, per km        .10
+      From 76 to 150 km              .08 (per km. above  75)
+      From 151 to 200 km             .06 (per km. above 150)
+      Above 300 km                   .06 (per km. above 200)
+
+   II Class--For 1,000 kg.
+      From 1 to 5 km.            Fr. 0.40
+      From 6 to 75 km., per km.       .08
+      From 76 to 125 km.              .04 (per km. above  75)
+      Above 125 km.                   .02 (per km. above 125)
+
+  III Class--For 1,000 kg.
+      From 1 to 5 km.            Fr. 0.30
+      From 6 to 75 km., per km.       .06
+      From 76 to 100 km.              .03
+      From 101 to 125 km.             .02
+      Above 125 km.                   .01
+
+   IV Class--For 1,000 kg.
+      From 1 to 24 km., per km.  Fr. 0.06
+      From 25 to 75 km., per km.      .04
+      From 76 to 100 km.              .02
+      From 101 to 350 km.             .01
+      Above 350 km.                   .02
+
+  For distances from 1 to 24 km. the terminal charges are only
+      .5 fr. for Class IV.
+
+
+TABLE No. 5.
+
+GERMANY.
+
+  The tariff recognizes the following distinctions:
+      1. Fast parcel freight.
+      2. Fast carload freight.
+      3. Parcel freight.
+      4. General carload Class A1, for shipments of at least
+           5,000 kg.
+      5. General carload Class B, for shipments of at least
+          10,000 kg.
+      6. Special tariffs.
+
+  _Distance charges per ton per kilometer: (Pfennig, 1/4 c.)_
+      1. For parcel                              11.0 pfennige
+      2. For carload Class A1                     6.7      "
+      3. For carload Class B                      6.0      "
+      4. For Special Tariff A2                    5.0      "
+      5. For Special Tariff I                     4.5      "
+      6. For Special Tariff II                    3.5      "
+      7. For Special Tariff III:
+          For distances up to 100 km              2.6      "
+          For distances above 100 km              2.2      "
+      8. For fast parcel freight                 22.0      "
+      9. For fast carload freight, twice the rate of Classes
+          A1 and B.
+
+  _Terminal Changes._
+
+  1. For parcels and carload Class A1:
+      Up to 10 km                                10 pfennige
+      From 11 to 20 km                           11    "
+      From 21 to 30 km                           12    "
+      From 31 to 40 km                           13    "
+      From 41 to 50 km                           14    "
+      From 51 to 60 km                           15    "
+      From 61 to 70 km                           16    "
+      From 71 to 80 km                           17    "
+      From 81 to 90 km                           18    "
+      From 91 to 100 km                          19    "
+      Above 100 km                               20    "
+
+  2. For carload Class B:
+      Up to 10 km                                 8 pfennige
+      From 11 to 20 km                            9     "
+      From 21 to 30 km                           10     "
+      From 31 to 40 km                           11     "
+      Above 40 km                                12     "
+
+  3. For Special Tariffs A2, I, II and III:
+      Up to 10 km                                 8 pfennige
+      From 11 to 100 km                           9    "
+      Above 100 km                               12    "
+
+  _Charges for Live Stock._
+
+  (a) Horses. Terminal charge per head, 1 m. (24c.)
+      Distance charge per kl. for one head        0.30 mark
+      Charge per kl. for 2 head                    .40  "
+      Charge for each additional head              .10  "
+
+  (b) Cattle.
+      Terminal charge, per head                   0.60 mark
+      Distance charge per kl., for one head        .10  "
+      Distance charge for each additional head     .03  "
+
+  (c) Sheep, Hogs, Calves, etc.:
+      Terminal charge, per head                   0.20 mark
+      Distance charge, per kl., for each of the
+        first 10 heads                             .02  "
+      Distance charge, per kl., for each
+        additional head                            .01  "
+
+  If shipped in carloads the charges for live stock are .03 m.
+      per square meter per kilometer.
+
+
+TABLE No. 6.
+
+FRANCE.
+
+The French railroads divide all freight into six different classes. The
+following is the tariff adopted by a majority of the principal roads:
+
+                _Common Freight._
+  ==================================================
+                      | Centimes per Ton--Kilometer.
+  --------------------+----+----+----+----+----+----
+  Classes             |  1 |  2 |  3 |  4 |  5 |  6
+  --------------------+----+----+----+----+----+----
+  Up to 25 km         | 16 | 14 | 12 | 10 |  8 | 8
+  From 26 to 100 km   | 16 | 14 | 12 | 10 |  8 | 4
+  From 101 to 150 km  | 15 | 13 | 11 |  9 |  8 | 3.5
+  From 151 to 200 km  | 15 | 13 | 11 |  9 |  7 | 3.5
+  From 201 to 300 km  | 15 | 13 | 11 |  9 |  4 | 3.5
+  From 301 to 500 km  | 14 | 12 | 10 |  8 |  4 | 3
+  From 501 to 600 km  | 13 | 11 |  9 |  7 |  4 | 3
+  From 601 to 700 km  | 12 | 10 |  8 |  6 |  4 | 2.5
+  From 701 to 800 km  | 11 |  9 |  7 |  5 |  4 | 2.5
+  From 801 to 900 km  | 10 |  8 |  6 |  4 |  4 | 2.5
+  From 901 to 1000 km |  9 |  7 |  5 |  4 |  4 | 2
+  Above 1,000 km      |  8 |  6 |  5 |  4 |  4 | 2
+  --------------------------------------------------
+
+  The rates for fast parcel freight are, on all roads, for less
+      than 40 kg., per ton, km.:
+      Up to 200 km                            35 centimes
+      From 201 to 300 km                      32    "
+      From 301 to 400 km                      31    "
+      From 401 to 800 km                      30    "
+      From 801 to 1,000 km                    28    "
+      Above 1,000 km                          25    "
+
+  For more than 40 kg.:
+      Up to 100 km                            32 centimes
+      From 101 to 300 km                      30    "
+      From 301 to 500 km                      28    "
+      From 501 to 600 km                      26    "
+      From 601 to 700 km                      24    "
+      From 701 to 800 km                      22    "
+      From 801 to 900 km                      20    "
+      From 901 to 1,000 km                    18    "
+      Above 1,000 km                          16    "
+
+  Express parcels weighing up to 3 kg. (6-3/5 lbs.), pay 1 fr. for
+      all distances, and parcels weighing from 3 to 5 kg. pay
+      fr. 1.20. Delivery to the house, 25 centimes (5c.)
+      additional.
+
+  Live Stock, per piece, per km.:
+      Horses and cattle                       16 centimes
+      Calves and hogs                          6    "
+      Sheep, etc.                              3    "
+
+
+TABLE No. 7.
+
+ITALY.--_Freight Tariff._
+
+  ========================================================================
+                   |                 GENERAL CLASSES.
+        RATES.     |------+------+-----+------+-------+------+-----+------
+                   |  1   |  2   |  3   |   4  |   5  |  6   |  7  |  8
+  -----------------+------+------+------+------+------+------+-----+------
+  For the ton--km  |0.1632|0.1428|0.1224|0.1020|0.0816|0.0714|0.612|0.0510
+  Terminal charges,|      |      |      |      |      |      |     |
+    per ton.       |2.04  |2.04  |2.04  |2.04  |2.04  |1.224 |1.224|1.224
+  ------------------------------------------------------------------------
+  The rate on merchandise sent as fast freight is .452 lire (9c.) per ton
+  kilometer.
+
+                      _Live Stock--(5 Classes.)_
+  =======================================================================
+                  |        | Cattle, |                |        | Cattle,
+     FIRST-CLASS. |Horses. |Swine and|  SECOND-CLASS. |Horses. |Swine and
+                  |        | Sheep.  |                |        | Sheep.
+  ----------------+--------+---------+----------------+--------+---------
+  1 head, per km  | 0.1530 |  0.136  |1 head, per km  | 0.1530 | 0.1326
+  2 heads, per km |  .0918 |  .0765  |2 heads, per km |  .0816 |  .0714
+  3 heads, per km |  .0816 |  .0714  |3 heads, per km |  .0663 |  .0612
+  4 heads, per km |  .0765 |  .0663  |4 heads, per km |  .0612 |  .0561
+  5 heads, per km |  .0714 |  .0612  |5 heads, per km |  .0561 |  .0510
+  6 heads or more,|        |         |6 heads or more,|
+     per km       |  .0663 |  .0561  |   per km       |  .0510 |  .0459
+                  |        |         |III Class       |        |  .02244
+                  |        |         |IV Class        |        |  .01224
+                  |        |         |V Class         |        |  .00612
+  ------------------------------------------------------------------------
+
+
+TABLE No. 8.
+
+_Austrian Tariff (in kreutzers).--July 1, 1891._
+
+  =============================================================================
+               |                |  Parcel |              |   Special    |
+               | Fast Freight.  |   Rate. | Carload Rate.| Tariff Rate. |
+               |--------+-------+----+----+----+----+----+----+----+----|
+               |        |       |    |    |    |    |    |    |    |    |Excep-
+               |Ordinary|Reduced|    |    |    |    |    |    |    |    |tional
+               |  Rate  | Rate  |  I | II |  A |  B |  C |  1 |  2 |  3 |Rate
+  -------------+--------+-------+----+----+----+----+----+----+----+----+------
+  1 to 50 km   |  1.20  |0.60   |0.60|0.50|0.34|0.24|0.18|0.26|0.18|0.15|0.12
+  50 to 150 km |  1.16  | .58   | .58| .46| .29| .22| .15| .23| .15| .13| .10
+  150 to 300 km|  1.12  | .56   | .56| .42| .25| .18| .12| .19| .12| .10| .09
+  For every    |        |       |    |    |    |    |    |    |    |    |
+   addit'n'l km|  1.00  | .50   | .50| .30| .20| .12| .10| .15| .10| .08| .08
+               |        |       |    |    |    |    |    |    |    |    |
+               |              _Terminal Charges._
+  1 to 30 km   |  6.0   |3.0    |3.0 |3.0 |3.0 |2.0 |2.0 |2.0 |2.0 |2.0 |2.0
+  31 to 80 km  |  6     |3      |3   |3   |3   |3   |3   |3   |3   |3   |2
+  Above 80 km  |  8     |4      |4   |4   |4   |4   |4   |4   |4   |4   |2
+  -------------+--------+-------+----+----+----+----+----+----+----+----+------
+
+_Horses_ and _mules_ are placed in Class II, with a minimum weight of
+1,400 kg. for one head and 700 kg. for every additional head.
+
+_Cattle_ are placed in Class II, and are billed at actual weight.
+
+_Potatoes_, hay, straw, wood, coal and coke enjoy the "exceptional rate"
+when shipped in carload lots.
+
+
+TABLE No. 9.
+
+_Hungarian Tariff (in kreutzers).--January 1, 1891._
+
+  =============================================================
+                     |                |  Parcel |             |
+                     | Fast Freight.  |   Rate. |             |
+                     |--------+-------+----+----|             |
+                     |        |       |    |    |             |
+                     |Ordinary|Reduced|  I | II |             |
+                     |  Rate  | Rate  |    |    |"Sperrgüter."|
+  -------------------+--------+-------+----+----+-------------+
+  From 1 to 200 km.  |  1.3   |  0.6  |0.72|0.52|     0.9     |
+                     |        |       |    |    |             |
+  From 201 to 400 km.|  1.    |   .5  | .52| .42|      .8     |
+                     |        |       |    |    |             |
+  Above 400 km.      |  1.    |   .5  | .52| .42|      .8     |
+                     |
+                     |    _Terminal Charges for 100 kg._
+                     |  .10   |  .10  | .10| .10|     .10     |
+  -------------------+--------+-------+----+----+-------------+
+
+  ===============================================================
+                     |                |   Special    |Exceptional
+                     | Carload Rate.  |   Tariff.    |  Tariff.
+                     |----+----+------+----+----+----|-----+-----
+                     |    |    |      |    |    |    |     |
+                     |  A |  B |  C   |  I | II | III|  I  | II
+                     |    |    |Lumber|    |    |    |     |
+  -------------------+----+----+------+----+----+----+-----+-----
+  From 1 to 200 km.  |0.32|0.21| 0.16 |0.27|0.16|0.13|0.13 |0.11
+                     |    |    |      |    |    |    |     |
+  From 201 to 400 km.| .24| .17|  .13 | .15| .13| .10| .10 | .09
+                     |    |    |      |    |    |    |     |
+  Above 400 km.      | .16| .10|  .09 | .10| .09| .07| .07 | .06
+
+
+                     | .06| .06|  .04 | .05| .04| .03| .03 | .03
+  -------------------+----+----+------+----+----+----+-----+------
+
+
+Exceptional Tariff I comprises coal, wood, potatoes, stone, hay and
+straw.
+
+Exceptional Tariff II comprises manure, earth and Hungarian ores.
+
+
+TABLE No. 10.
+
+STATE OF IOWA.
+
+
+                               SCHEDULE
+                                 OF
+                   REASONABLE MAXIMUM RATES OF CHARGES
+
+                        IN EFFECT MARCH 1, 1893,
+                        FOR THE TRANSPORTATION OF
+
+
+ _Freight and Cars on each of the Railroads in the State of Iowa, together
+        with a Classification of Freights, prepared by the Railroad
+                 Commissioners, in accordance with the Laws
+                          of the State of Iowa._
+
+       *       *       *       *       *
+
+Superseding all former schedules on the said railroads, including all
+bridges and ferries used or operated in connection with any railroad;
+and, also, all the roads in use by any corporation, receiver, trustee or
+other person operating a railroad, whether owned or operated under
+contract, agreement, lease or otherwise, or which may hereafter be
+purchased, leased, acquired or operated within the State of Iowa.
+
+The classification of freights applies to all the lines, regardless of
+class. The schedule of maximum rates applies to all Class "A" roads. The
+rates on Class "B" roads will be FIFTEEN per cent. higher, and
+the rates on Class "C" roads THIRTY per cent. higher than the
+rates named for Class "A" roads. The respective roads have been
+classified by the Executive Council of the State as follows, which
+classification is adopted by the Railroad Commissioners, and made part
+of this schedule:
+
+
+CLASSIFICATION OF ROADS.
+
+CLASS "A."
+
+Where gross annual earnings, per mile, shall be $4,000 or
+more.--Burlington, Cedar Rapids and Northern Railway; Chicago and
+Northwestern Railway; Chicago, Burlington and Quincy Railroad; Chicago,
+Milwaukee and St. Paul Railway; Chicago, Rock Island and Pacific
+Railway; Chicago and Great Western Railway (operating the Chicago, St.
+Paul and Kansas City Railway); Dubuque and Sioux City Railroad; Chicago,
+St. Paul, Minneapolis and Omaha Railway; Sioux City and Northern
+Railway; Chicago, Santa Fe and California Railway; Sioux City and
+Pacific Railroad; Toledo, Peoria and Western Railway; Union Pacific
+Railway.
+
+
+CLASS "B."
+
+Where gross earnings are $3,000 or over and less than $4,000 per
+mile.--Iowa Central Railway; Kansas City, St. Joseph and Council Bluffs
+Railroad; Omaha and St. Louis Railway.
+
+
+CLASS "C."
+
+Where annual earnings are less than $3,000 per mile.--Chicago,
+Burlington and Kansas City Railway; Chicago, Ft. Madison and Des Moines
+Railway; Chicago, Iowa and Dakota Railway; Crooked Creek Railroad and
+Coal Company; Des Moines and Kansas City Railway; Des Moines, Northern
+and Western Railway; Humeston and Shenandoah Railroad; Iowa Northern
+Railway; Mason City and Fort Dodge Railroad; Minneapolis and St. Louis
+Railway; St. Louis, Keokuk and Northwestern Railroad; Tabor and Northern
+Railway; Wabash Railroad; Winona and Southwestern Railway; Keokuk and
+Western Railway.
+
+Burlington and Western; Burlington and Northwestern; Ames and College;
+Albia and Centerville.
+
+  ======================================================================
+       |      MERCHANDISE IN CENTS        | SPECIAL CARLOAD CLASSES IN
+       |          PER 100 LBS.            |     CENTS PER 100 LBS.
+  Miles|----------------------------------------------------------------
+       | First|Second|Third |Fourth|Fifth |Class|Class|Class|Class|Class
+       |Class.|Class.|Class.|Class.|Class.|  A. |  B. |  C. |  D. |  E.
+  -----+------+------+------+------+------+-----+-----+-----+-----+-----
+     5 | 14   | 11.9 |  9.34|  7   |  4.9 | 5   | 4.9 | 4.2 | 3.5 | 2.8
+    10 | 14.8 | 12.58| 10.1 |  7.4 |  5.18| 5.3 | 5.18| 4.44| 3.7 | 2.96
+    15 | 15.6 | 13.26| 10.4 |  7.8 |  5.46| 5.6 | 5.46| 4.68| 3.9 | 3.12
+    20 | 16.4 | 13.94| 10.94|  8.2 |  5.74| 5.8 | 5.74| 4.92| 4.1 | 3.25
+    25 | 17   | 14.45| 11.34|  8.5 |  5.95| 6   | 5.95| 5.1 | 4.25| 3.4
+       |      |      |      |      |      |     |     |     |     |
+    30 | 17.6 | 14.96| 11.73|  8.8 |  6.16| 6.2 | 6.16| 5.28| 4.4 | 3.52
+    35 | 18.2 | 15.47| 12.1 |  9.1 |  6.37| 6.4 | 6.37| 5.46| 4.55| 3.64
+    40 | 18.8 | 15.98| 12.5 |  9.4 |  6.58| 6.6 | 6.58| 5.64| 4.7 | 3.76
+    45 | 19.4 | 16.49| 13   |  9.7 |  6.79| 6.8 | 6.79| 5.82| 4.85| 3.88
+    50 | 20   | 17   | 13.34| 10   |  7   | 7.05| 7   | 6   | 5   | 4
+       |      |      |      |      |      |     |     |     |     |
+    55 | 20.4 | 17.34| 13.6 | 10.2 |  7.14| 7.2 | 7.14| 6.12| 5.1 | 4.08
+    60 | 20.8 | 17.68| 13.87| 10.4 |  7.28| 7.4 | 7.28| 6.24| 5.2 | 4.16
+    65 | 21.2 | 18.02| 14.14| 10.6 |  7.42| 7.6 | 7.42| 6.36| 5.3 | 4.25
+    70 | 21.6 | 18.36| 14.4 | 10.8 |  7.56| 7.8 | 7.56| 6.48| 5.4 | 4.32
+    75 | 22   | 18.7 | 14.67| 11   |  7.7 | 8   | 7.7 | 6.6 | 5.5 | 4.4
+       |      |      |      |      |      |     |     |     |     |
+    80 | 22.4 | 19.04| 14.94| 11.2 |  7.84| 8.2 | 7.84| 6.72| 5.6 | 4.48
+    85 | 22.8 | 19.38| 15.2 | 11.4 |  7.98| 8.4 | 7.98| 6.84| 5.7 | 4.56
+    90 | 23.2 | 19.72| 15.47| 11.6 |  8.12| 8.6 | 8.12| 6.96| 5.8 | 4.64
+    95 | 23.6 | 20.06| 15.73| 11.8 |  8.26| 8.8 | 8.26| 7.08| 5.9 | 4.72
+   100 | 24   | 20.4 | 16   | 12   |  8.4 | 9   | 8.4 | 7.2 | 6   | 4.8
+       |      |      |      |      |      |     |     |     |     |
+   105 | 24.8 | 20.89| 16.35| 12.33|  8.69| 9.35| 8.63| 7.4 | 6.17| 4.96
+   110 | 25.6 | 21.38| 16.7 | 12.66|  8.98| 9.7 | 8.86| 7.6 | 6.34| 5.12
+   115 | 26.4 | 21.87| 17.05| 12.99|  9.27|10.05| 9.09| 7.8 | 6.51| 5.28
+   120 | 27.2 | 22.36| 17.4 | 13.32|  9.56|10.4 | 9.32| 8   | 6.68| 5.44
+   125 | 28   | 22.85| 17.75| 13.65|  9.85|10.75| 9.55| 8.2 | 6.85| 5.6
+       |      |      |      |      |      |     |     |     |     |
+   130 | 28.8 | 23.34| 18.1 | 13.98| 10.14|11.1 | 9.78| 8.4 | 7.02| 5.76
+   135 | 29.6 | 23.83| 18.45| 14.31| 10.43|11.45|10.01| 8.6 | 7.19| 5.92
+   140 | 30.4 | 24.32| 18.8 | 14.64| 10.72|11.8 |10.24| 8.8 | 7.36| 6.08
+   145 | 31.2 | 24.81| 19.15| 14.97| 11.01|12.15|10.47| 9   | 7.53| 6.24
+   150 | 32   | 25.3 | 19.5 | 15.3 | 11.3 |12.5 |10.7 | 9.2 | 7.7 | 6.4
+       |      |      |      |      |      |     |     |     |     |
+   155 |32.8  |25.79 | 19.85| 15.63| 11.59|12.84|10.93| 9.39| 7.87| 6.56
+   160 |33.6  |26.28 | 20.2 | 15.96| 11.88|13.18|11.16| 9.58| 8.04| 6.72
+   165 |34.4  |26.77 | 20.55| 16.29| 12.17|13.52|11.39| 9.77| 8.21| 6.88
+   170 |35.2  |27.26 | 20.9 | 16.62| 12.46|13.86|11.62| 9.96| 8.38| 7.04
+   175 |36    |27.75 | 21.25| 16.95| 12.75|14.2 |11.85|10.15| 8.55| 7.2
+       |      |      |      |      |      |     |     |     |     |
+   180 |36.8  |28.24 | 21.6 | 17.28| 13.04|14.54|12.08|10.34| 8.72| 7.36
+   185 |37.6  |28.73 | 21.95| 17.61| 13.33|14.88|12.31|10.53| 8.89| 7.52
+   190 |38.4  |29.22 | 22.3 | 17.94| 13.62|15.22|12.45|10.72| 9.06| 7.68
+   195 |39.2  |29.71 | 22.65| 18.27| 13.91|15.56|12.77|10.91| 9.23| 7.84
+   200 |40    |30.2  | 23   | 18.6 | 14.2 |15.9 |13   |11.1 | 9.39| 8
+       |      |      |      |      |      |     |     |     |     |
+   210 |41.6  |31.18 | 23.7 | 19.24| 14.78|16.56|13.45|11.49| 9.71| 8.3
+   220 |43.2  |32.16 | 24.4 | 19.88| 15.36|17.22|13.9 |11.88|10.03| 8.6
+   230 |44.8  |33.14 | 25.1 | 20.52| 15.94|17.88|14.35|12.27|10.35| 8.9
+   240 |46.4  |34.12 | 25.8 | 21.6 | 16.52|18.54|14.8 |12.66|10.67| 9.2
+   250 |48    |35.1  | 26.5 | 21.8 | 17.1 |19.2 |15.25|13.05|10.99| 9.5
+  260  | 49.6 | 36.08| 27.2 | 22.44| 17.68|19.86|15.7 |13.44|11.31| 9.8
+  270  | 51.2 | 37.06| 27.9 | 23.08| 18.26|20.52|16.15|13.83|11.63|10..
+  280  | 52.8 | 38.4 | 28.6 | 23.72| 18.84|21.18|16.6 |14.22|11.95|10.4
+  290  | 54.4 | 39.02| 29.3 | 24.36| 19.42|21.84|17.05|14.61|12.27|10.7
+  300  | 56   | 40   | 30   | 25   | 20   |22.5 |17.5 |15   |12.5 |11
+       |      |      |      |      |      |     |     |     |     |
+  310  | 56.5 | 40.5 | 30.5 | 25.5 | 20.5 |23   |18   |15.5 |13   |11.5
+  320  | 57   | 41   | 31   | 26   | 21   |23.5 |18.5 |16   |13.5 |12
+  330  | 57.5 | 41.5 | 31.5 | 26.5 | 21.5 |24   |19   |16.5 |14   |12.5
+  340  | 58   | 42   | 32   | 27   | 22   |24.5 |19.5 |17   |14.5 |13
+  350  | 58.5 | 42.5 | 32.5 | 27.5 | 22.5 |25   |20   |17.5 |15   |13.5
+       |      |      |      |      |      |     |     |     |     |
+  360  | 59   | 43   | 33   | 28   | 23   |25.5 |20.5 |18   |15.5 |14
+  370  | 59.5 | 43.5 | 33.5 | 28.5 | 23.5 |26   |21   |18.5 |16   |14.5
+  380  | 60   | 44   | 34   | 29   | 24   |26.5 |21.5 |19   |16.5 |15
+  390  | 60.5 | 44.5 | 34.5 | 29.5 | 24.5 |27   |22   |19.5 |17   |15.5
+  400  | 61   | 45   | 35   | 30   | 25   |27.5 |22.5 |20   |17.5 |16
+       |      |      |      |      |      |     |     |     |     |
+  410  | 61.5 | 45.5 | 35.5 | 30.5 | 25.5 |28   |23   |20.5 |18   |16.5
+  420  | 62   | 46   | 36   | 31   | 26   |28.5 |23.5 |21   |18.5 |17
+  430  | 62.5 | 46.5 | 36.5 | 31.5 | 26.5 |29   |24   |21.5 |19   |17.5
+  440  | 63   | 47   | 37   | 32   | 27   |29.5 |24.5 |22   |19.5 |18
+  450  | 63.5 | 47.5 | 37.5 | 32.5 | 27.5 |30   |25   |22.5 |20   |18.5
+       |      |      |      |      |      |     |     |     |     |
+  460  | 64   | 48   | 38   | 33   | 28   |30.5 |25.5 |23   |20.5 |19
+  470  | 64.5 | 48.5 | 38.5 | 33.5 | 28.5 |31   |26   |23.5 |21   |19.5
+  480  | 65   | 49   | 39   | 34   | 29   |31.5 |26.5 |24   |21.5 |20
+  490  | 65.5 | 49.5 | 39.5 | 34.5 | 29.5 |32   |27   |24.5 |22   |20.5
+  500  | 66   | 50   | 40   | 35   | 30   |32.5 |27.5 |25   |22.5 |21
+  ----------------------------------------------------------------------
+
+NOTE.--When rates are not shown in this table for the exact
+distance, the rates given for the next greater distance will prevail.
+When these rates and the classification conflict, these rates will
+govern.
+
+  A = Wheat, flour, millet, flaxseed.
+  B = Corn, oats, barley, other grain and mill stuffs.
+  C = Hard and soft lumber, lath, shingles, sash, doors and blinds.
+  D = Salt, lime, cement, plaster, stucco.
+  E = Horses and mules in carloads--minimum weight 20,000 lbs.,
+        31-foot cars, inside measurement.
+  F = Fat cattle in carloads--minimum weight 19,000 lbs.,
+        31-foot cars, inside measurement
+  G = Hogs (single deck) in carloads--minimum weight 15,000 lbs.,
+        31-foot cars, inside measurement.
+  H = Sheep (single deck) in carloads--minimum weight 15,000 lbs.,
+        31-foot cars, inside measurement.
+  I = Hard coal.
+  J = Soft coal, lump and nut.
+  K = Soft coal, pea and slack.
+
+  =======================================================================
+       |   CARLOAD CLASSES IN  |  LIVE STOCK IN CENTS  |COAL IN CENTS PER
+       |   CENTS PER 100 LBS.  |     PER 100 LBS.      |TON OF 2,000 LBS.
+  -----+-----------------------+-----------------------+-----------------
+  Miles|  A  |  B  |  C  |  D  |  E  |  F  |  G  |  H  |  I  |  J   |  K
+  -----+-----+-----+-----+-----+-----+-----+-----+-----+-----+------+----
+     5 | 4.5 | 3.75| 3.5 | 3.25| 5.37| 5.13| 5.67| 8.4 |  .60|  .30 | .25
+    10 | 4.7 | 3.92| 3.66| 3.39| 5.75| 5.53| 6   | 8.8 |  .64|  .34 | .28
+    15 | 4.9 | 4.09| 3.82| 3.53| 6.12| 5.92| 6.33| 9.2 |  .68|  .38 | .31
+    20 | 5.1 | 4.26| 3.98| 3.67| 6.5 | 6.32| 6.67| 9.6 |  .72|  .42 | .34
+    25 | 5.3 | 4.43| 4.14| 3.81| 6.87| 6.71| 7   |10   |  .76|  .46 | .37
+       |     |     |     |     |     |     |     |     |     |      |
+    30 | 5.5 | 4.6 | 4.3 | 3.95| 7.25| 7.11| 7.33|10.4 |  .80|  .50 | .40
+    35 | 5.7 | 4.77| 4.45| 4.09| 7.62| 7.5 | 7.67|10.8 |  .84|  .54 | .43
+    40 | 5.9 | 4.93| 4.6 | 4.23| 8   | 7.89| 8   |11.2 |  .88|  .58 | .46
+    45 | 6.1 | 5.09| 4.75| 4.37| 8.37| 8.29| 8.33|11.6 |  .92|  .62 | .49
+    50 | 6.3 | 5.25| 4.9 | 4.51| 8.75| 8.68| 8.67|12   |  .96|  .66 | .52
+       |     |     |     |     |     |     |     |     |     |      |
+    55 | 6.5 | 5.4 | 5.04| 4.65| 9.12| 8.95| 9   |12.4 | 1.00|  .70 | .55
+    60 | 6.7 | 5.55| 5.18| 4.79| 9.5 | 9.21| 9.33|12.8 | 1.04|  .74 | .58
+    65 | 6.9 | 5.7 | 5.32| 4.93| 9.87| 9.47| 9.67|13.2 | 1.08|  .78 | .60
+    70 | 7.1 | 5.85| 5.46| 5.07|10.25| 9.74|10   |13.6 | 1.12|  .82 | .62
+    75 | 7.3 | 6   | 5.6 | 5.2 |10.62|10   |10.16|14   | 1.16|  .85 | .64
+       |     |     |     |     |     |     |     |     |     |      |
+    80 | 7.5 | 6.15| 5.74| 5.33|11   |10.26|10.32|14.4 | 1.20|  .88 | .66
+    85 | 7.7 | 6.3 | 5.88| 5.46|11.37|10.53|10.48|14.8 | 1.24|  .91 | .68
+    90 | 7.9 | 6.45| 6.02| 5.59|11.75|10.79|10.64|15.2 | 1.28|  .94 | .70
+    95 | 8   | 6.6 | 6.16| 5.72|12.12|11.05|10.8 |15.6 | 1.32|  .97 | .72
+   100 | 8.1 | 6.75| 6.3 | 5.85|12.5 |11.32|10.96|16   | 1.36| 1.00 | .74
+       |     |     |     |     |     |     |     |     |     |      |
+   105 | 8.24| 6.87| 6.41| 5.95|12.75|11.53|11.12|16.3 | 1.40| 1.015| .755
+   110 | 8.38| 6.99| 6.52| 6.05|13   |11.74|11.28|16.6 | 1.44| 1.03 | .77
+   115 | 8.52| 7.11| 6.63| 6.15|13.25|11.95|11.44|16.9 | 1.48| 1.045| .785
+   120 | 8.66| 7.23| 6.74| 6.25|13.5 |12.16|11.6 |17.2 | 1.52| 1.06 | .80
+   125 | 8.8 | 7.35| 6.85| 6.35|13.75|12.37|11.8 |17.5 | 1.55| 1.075| .815
+       |     |     |     |     |     |     |     |     |     |      |
+   130 | 8.94| 7.46| 6.96| 6.45|14   |12.58|12   |17.8 | 1.58| 1.09 | .83
+   135 | 9.08| 7.57| 7.07| 6.55|14.25|12.79|12.2 |18.1 | 1.61| 1.105| .845
+   140 | 9.22| 7.69| 7.18| 6.65|14.5 |13   |12.4 |18.4 | 1.64| 1.12 | .86
+   145 | 9.36| 7.79| 7.29| 6.75|14.75|13.21|12.6 |18.7 | 1.67| 1.135| .875
+   150 | 9.5 | 7.9 | 7.4 | 6.85|15   |13.42|12.8 |19   | 1.70| 1.15 | .89
+       |     |     |     |     |     |     |     |     |     |      |
+   155 | 9.63| 8.01| 7.5 | 6.95|15.25|13.63|13   |19.3 | 1.73| 1.165| .905
+   160 | 9.79| 8.12| 7.6 | 7.05|15.5 |13.84|13.2 |19.6 | 1.76| 1.18 | .92
+   165 | 9.89| 8.23| 7.7 | 7.15|15.75|14.05|13.4 |19.9 | 1.79| 1.195| .935
+   170 |10.02| 8.34| 7.8 | 7.25|16   |14.26|13.6 |20.2 | 1.82| 1.21 | .95
+   175 |10.15| 8.45| 7.9 | 7.35|16.25|14.47|13.8 |20.5 | 1.85| 1.225| .965
+   180 |10.28| 8.56| 8   | 7.44|16.5 |14.68|14   |20.8 | 1.88| 1.24 |  .98
+   185 |10.41| 8.67| 8.1 | 7.53|16.75|14.89|14.2 |21.1 | 1.91| 1.255|  .995
+   190 |10.54| 8.78| 8.2 | 7.62|17   |15.11|14.4 |21.4 | 1.94| 1.27 | 1.01
+   195 |10.67| 8.89| 8.3 | 7.71|17.25|15.32|14.6 |21.7 | 1.97| 1.285| 1.025
+   200 |10.8 | 9   | 8.4 | 7.8 |17.5 |15.53|14.8 |22   | 2.00| 1.30 | 1.04
+       |     |     |     |     |     |     |     |     |     |      |
+   210 |11.07| 9.23| 8.61| 8   |17.87|16   |15.22|22.3 | 2.04| 1.32 | 1.06
+   220 |11.34| 9.46| 8.82| 8.2 |18.25|16.47|15.64|22.7 | 2.08| 1.34 | 1.08
+   230 |11.61| 9.69| 9.03| 8.4 |18.62|16.95|16.06|23.1 | 2.12| 1.36 | 1.10
+   240 |11.88| 9.92| 9.24| 8.6 |19   |17.42|16.48|23.5 | 2.16| 1.38 | 1.12
+   250 |12.15|10.15| 9.45| 8.8 |19.37|17.89|16.9 |23.9 | 2.20| 1.40 | 1.14
+       |     |     |     |     |     |     |     |     |     |      |
+   260 |12.42|10.37| 9.66| 8.99|19.75|18.37|17.32|24.3 | 2.24| 1.42 | 1.16
+   270 |12.69|10.59| 9.87| 9.18|20.12|18.84|17.74|24.7 | 2.28| 1.44 | 1.18
+   280 |12.96|10.81|10.08| 9.37|20.5 |19.32|18.16|25.1 | 2.32| 1.46 | 1.20
+   290 |13.26|11.03|10.29| 9.56|20.87|19.79|18.58|25.5 | 2.36| 1.48 | 1.22
+   300 |13.53|11.25|10.5 | 9.75|21.25|20.26|19   |25.9 | 2.40| 1.50 | 1.24
+       |     |     |     |     |     |     |     |     |     |      |
+   310 |13.8 |11.48|10.71| 9.95|21.6 |20.53|19.13|26.7 | 2.44| 1.52 | 1.25
+   320 |14.07|11.71|10.92|10.15|21.95|20.79|19.25|27.1 | 2.48| 1.54 | 1.26
+   330 |14.34|11.94|11.13|10.35|23.3 |21.05|19.37|27.5 | 2.52| 1.56 | 1.27
+   340 |14.61|12.17|11.34|10.55|22.65|21.32|19.5 |27.9 | 2.56| 1.58 | 1.28
+   350 |14.88|12.4 |11.55|10.75|23   |21.58|19.62|28.3 | 2.60| 1.60 | 1.29
+       |     |     |     |     |     |     |     |     |     |      |
+   360 |15.15|12.62|11.76|10.94|23.35|21.84|19.75|28.7 | 2.64| 1.62 | 1.30
+   370 |15.42|12.84|11.97|11.13|23.7 |22.11|19.87|29.1 | 2.68| 1.64 | 1.31
+   380 |15.68|13.06|12.18|11.32|24.05|22.37|20   |29.5 | 2.72| 1.66 | 1.32
+   390 |15.94|13.28|12.39|11.51|24.4 |22.63|20.5 |29.9 | 2.76| 1.68 | 1.33
+   400 |16.2 |13.5 |12.6 |11.7 |24.75|22.89|21   |30.3 | 2.80| 1.70 | 1.34
+       |     |     |     |     |     |     |     |     |     |      |
+   410 |16.47|13.72|12.81|11.89|25.1 |23.15|21.12|30.7 | ....| .... | ....
+   420 |16.73|13.94|13.02|12.08|25.45|23.41|21.25|31.1 | 2.88| 1.74 | 1.36
+   430 |17   |14.16|13.23|12.22|25.80|23.67|21.37|31.5 | ....| .... | ....
+   440 |17.27|14.38|13.44|12.46|26.15|23.93|21.5 |31.9 | 2.96| 1.78 | 1.38
+   450 |17.54|14.60|13.65|12.65|26.5 |24.19|21.62|32.3 | ....| .... | ....
+       |     |     |     |     |     |     |     |     |     |      |
+   460 |17.80|14.82|13.86|12.84|26.85|24.45|21.75|32.7 | 3.04| 1.82 | 1.40
+   470 |18.06|15.04|14.07|13.03|27.2 |24.71|21.87|33.1 | ....| .... | ....
+   480 |18.33|15.26|14.28|13.22|27.55|24.97|22   |33.5 | 3.12| 1.86 | 1.42
+   490 |18.60|15.48|14.49|13.41|27.9 |25.23|22.12|33.9 | ....| .... | ....
+   500 |18.87|15.70|14.70|13.60|28.15|25.49|22.25|34.3 | 3.20| 1.90 | 1.44
+  -------------------------------------------------------------------------
+
+* Stock cattle or feeders and calves take 75 per cent. of fat cattle
+rate; 31-foot car (internal measurement) is adopted as the standard for
+minimum weight, as per heading in table; 28-foot cars, 90 per cent. of
+above; 33-foot 6-inch cars, 108 per cent. of above; other lengths of
+cars to take same proportion as above.
+
+
+
+
+INDEX.
+
+
+  Abbett, Gov., 113
+
+  Absentee ownership, 287
+
+  Abuses, 101
+    cardinal, 134
+    for protection against, must resort to polls and not to courts, 332
+    increased, 129
+    of railroads, 124
+    origin of, 434
+    still practiced, 400
+
+  Accidents, 450
+
+  Acworth, Mr. W. M., 276
+
+  Adams, C. F., Jr., heresy, 260
+    difficulty not in legislation, 258
+    favors pooling, 260
+    on character of railroad men, 257
+    on Iowa law, 332
+    H. C., motive for ownership, 436
+
+  Africa, 61
+    roads constructed, 22
+
+  Agriculture among Babylonians and Assyrians, 19
+
+  Albany _Evening Argus_, 340
+
+  Albia, 324
+
+  Algiers, 62
+
+  Algona, 328
+
+  American colonies, 100
+    experience, 303
+    investments a reproach, 313
+
+  Americans would avail themselves of low rates, 445
+
+  American Transfer Company, 119
+
+  Amsterdam, 97
+    owes to canal, 32
+
+  Ann Arbor Strikers, 449
+
+  Area of land grants, 329
+
+  Argentine Republic, 68
+
+  Arrogance, 453
+
+  Asia, 59
+    early nations of, 18
+
+  Athens connected with Piræns, protected road, 24
+
+  Atkinson, Edward, 248
+    fallacious argument of, 249
+    relies upon a figurehead commission, 249
+
+  Atlantic nurseryman, 148
+
+  Attorney-General held that legislature had not the power to prescribe
+    rates, 330
+
+  Attorney, slow to accept fee, 402
+
+  Augustus instituted postal service, 27
+
+  Australia, 64
+
+  Austria, 54
+
+  Average fares per mile, 444
+
+
+  B. & M. Co., 324
+
+  Baker, C. W., 262
+
+  Balkan Peninsula, 59
+    physical features, important factor, 24
+
+  Ballou, H. S., 139
+
+  Baltimore and Ohio, watered stock, 172
+
+  _Bankers' Magazine_, 301
+
+  Banks and insurance, not private, 403
+
+  Barosz, M., 441
+
+  B., C. R. & N. Railroad Co., increased prosperity of, 344
+
+  Beach, C. F., Jr., 395
+    law of private corporations, 316
+
+  Bering Strait, 89
+
+  Belgium, 56, 409
+    cost of right of way, 370
+
+  Bessemer's invention, 374
+
+  Blackstone, T. B., 413
+
+  Blatchford, Justice, 213, 290
+
+  Blinkensop, 48
+
+  Board of Railroad Commissioners, 428
+
+  Bolles, A. S., 303
+
+  Bonded debt of M. & M. R. R., 322
+
+  Bonham, John M., 268
+
+  Boone, 327
+
+  Boston _Advertiser_, 340
+
+  Bradley, Justice, 213
+
+  Braithwaite, 49
+
+  Branch roads, 306
+
+  Brazil, 69
+
+  Brewer, Justice, 214, 215, 455
+    doctrine, 376
+    opinion of reasonable rates, 360
+    reply to ruling of, 364
+
+  Bridge across the Mississippi, 319
+
+  British railways, cost of right of way, 370
+
+  Brown, Justice, 214
+
+  Bryce, Prof., 391
+    on decadence of bar, 222
+    on lobby, 222
+
+  Budd vs. N. Y., 213, 290, 295
+
+  Buddha, commended roads to care of pious, 18
+
+  Burmah, 61
+
+  Burstall, 49
+
+
+  California railways, 122
+
+  Calmar, 328
+
+  Camden and Amboy charter, 113
+
+  Camden and Amboy Railroad Company, 102
+
+  Canada, 73
+    canals, 43
+
+  Canadian Pacific, 74
+
+  Canal, Erie, 40
+    from Bitter Lake to Red Sea, 23
+    Nicaragua, 44, 174
+
+  Canals, Canadian, 43
+    in Great Britain, 33
+    Italian, 34
+    private companies, 42
+    Spanish, 34
+
+  Candidates, railroad, 226
+    servile to railroads, 206
+
+  Cape Colony, 63
+
+  Capitalization of railroads, 86
+
+  Capital of Standard Oil Company, 121
+
+  Carey, H. C., 110
+
+  Carload lots, 386
+    rates, 140
+
+  Carthage, harbor, fleets, roads, 24
+
+  Carthaginians, 91
+    commerce of, constructed roads, 22
+
+  Cars refused, 120
+
+  Cassat, Mr., testimony of, 121
+
+  C., B. & Q. R. R. strike, 285
+
+  Cedar Rapids and Missouri River R. R. Co., 324
+
+  Central America, 70
+
+  Central Pacific, 175
+    scheme, 347
+
+  Ceylon, 61
+
+  Charlemagne repaired and built roads, 28
+
+  Chicago and Milwaukee system, cost of, 235
+    and Omaha pool, 194
+    convention, 224
+    Iowa    and     Nebraska Railroad, 328
+    third-rate lawyer, 222
+
+  Chile, 68
+
+  Chinese built roads before the Christian era, 21
+
+  Classification, 363
+    rule, 361
+    unjust features, 151
+
+  Clay, Mr., 303
+
+  Clews, Henry, 304
+    pictures evils, 404
+    "Twenty-eight Years in Wall Street," 185
+
+  Clear Lake, 328
+
+  Clerk of U. S. Court, 217
+
+  Cleveland, President, 359
+
+  Clinton, 328
+
+  Club address of C. F. Adams, Jr., 257
+
+  C., M. & St. P. R. R. Co. vs. Minn., 213
+
+  Coal and kindred articles, 386
+
+  Coffin, Mr. L. S., 452
+
+  Colbert, idea of postal service, 30
+
+  Coleridge, Lord, 454
+
+  Combinations, 189
+    regulate, 299
+
+  Commission evil, 420
+
+  Commission received, 119
+
+  Commissioner system, 246
+
+  Commission, Interstate, reviews Judge Brewer's rule, 365
+
+  Commissions acquire expert knowledge, 384
+
+  Commission's decisions, 359
+    acts subject to judicial review, 381
+    become a pliant tool, 429
+    character of, 359
+
+  Commission system adopted in Iowa, 335
+
+  Committee bill passed, 354
+
+  Commodities, character of, 373
+
+  Common law, sufficient in theory but fails in practice, 268
+
+  Competition, 190, 196
+    a great educator, 260
+    and enhanced rates, 352
+    in United States depended upon, 129
+    the death of trade, 298
+    vicious, 300
+
+  Communism, strength of, 454
+
+  Conduit company, 117
+
+  Confiscation of railroads, 293
+
+  Conflicts between labor and capital, 448
+
+  Congress, appropriations for improving rivers, 44
+    in three camps, 352
+    responds to demand of Pacific road, 183
+    to cease futile attempts 299
+
+  Congressmen imposed upon, 17
+
+  Connecticut railroad construction, 288
+
+  Conscientious managers cannot retain business, 399
+
+  Consolidation of C., R. I. & P. R. R. Co., 323
+    tendency to, 262
+
+  Conspiracies should not be legalized, 260
+
+  Conspiracy, 296
+
+  Constitutions made for, 457
+
+  Contests, expense of in Great Britain, 371
+
+  Contributions to Pacific roads, 180
+
+  Control, suggestions for, 425
+
+  Cooley, Judge, 315, 359
+    in reference to State and National Commissions, 426
+
+  Corporations, danger from, 223
+    willing to pay for questionable services, 222
+
+  Corrupt practice act in Mass., 223
+
+  Cost of American roads, 187
+    of building roads at present, 186
+    of existing railway system, 422
+    of operating M. & M. R. R., 322
+    of railroads, 172, 370, 417
+
+  Council Bluffs, 324
+    line completed to, 323
+
+  Courteous employes, 447
+
+  Courts ordered restoration of Erie securities, 170
+    should not aid, 381
+
+  C., R. I. & P. Railroad, 284
+
+  Crosby, J. O., story of tramp, 178
+
+  Crusaders, 92
+
+  Cuba, 70
+
+  Cullom committee report, 131
+    Senator, 353
+
+  Customs laws, 15
+
+
+  Dabney, W. D., drift toward railroad centralization, 261
+    favors pooling, 261
+    favors State control, 261
+
+  Darius I., work on canal, 23
+
+  Dartmouth College case, 315
+    decision, 259
+
+  Davis, C. Wood, 413
+    on cost of roads, 187
+
+  Dows, David, & Co., 138
+
+  Davis, Jefferson, plea, 276
+
+  Delegates to conventions, 224
+
+  Demand in other States for reform, 331
+
+  Denmark, 35, 58
+    first-class passenger rates, 439
+
+  Depew, Mr., 138
+
+  Depew says all railroad men are politicians, 366
+
+  Devices, various, 296
+
+  Differentials, 296
+
+  Discriminations, 118, 137, 143, 156, 147, 160
+    damaging, 248
+    in classifications, 148
+    in Iowa, 337
+    practiced openly, 331
+
+  Dillon, Judge, 411
+    Sidney, 273
+    on cost of Pacific roads, 185
+
+  Directors and officials of corporations, 316
+    character of, 406
+    with personal interests 317
+
+  Director-General, 431
+    should have power to remove managers, 432
+
+  Distance disregarded, 331
+
+  Dividends, 164, 187
+    by fluctuations, 302
+    Standard Oil Company, 121
+
+  Donations, 329
+    for benefit of public, 376
+    made by railroad companies, 446
+    to Pacific roads, 176
+    to railroads, 125
+
+  Donation to road completed, 320
+
+  Doud amendment, 331
+
+  Dual government, 401
+
+  Dual sovereignty must be recognized, 425
+
+  Dubuque & S. C. Co., 324
+
+  Dutch East India Company, 97
+
+  Duties of common carriers, 315
+
+  Duty of state, 456
+
+
+  Earnings diverted, 403
+    of first Iowa railroad, 320
+    gross, larger in United States, 281
+    of C., B. & Q., 175
+    of Iowa roads increased, 264
+    of Massachusetts railroads, 175
+    of Lake Shore, 175
+
+  Earnings of Liverpool and Manchester, 50
+    of Terre Haute, 175
+    of railroads, 86
+    per employe, 372
+    per train mile in the United States and United Kingdom, 270
+    per train mile larger in United States, 281
+
+  East India Company, 99, 303
+
+  Economy of fuel, 375
+
+  Editors, 221, 231
+    controlled by counting-room, 339
+
+  Egyptians, commerce of, constructed roads, 22
+
+  Electoral Commission, 215
+
+  Eminent domain, 314
+    Spelling on, 317
+
+  Employes fare better under Government management, 412
+    in Iowa, compensation, 344
+    in Iowa, number, 344
+    number of, in various countries, 371
+    number of, per mile of road, 269
+    number of, as related to gross earnings, 269
+    organized for political work, 277
+    quasi-public officers, 447
+    should have passes, 209
+
+  England, 99
+    roads maintained by statute and parish labor, 32
+
+  English landlords, 287
+
+  Entrance into railway service regulated, 448
+
+  Ericsson, 449
+
+  Erie Canal, 40
+    Railroad, 170
+
+  European and American investments compared, 371
+
+  European history began in Greece, 24
+
+  Evans, Oliver, 47
+
+  Executive charged with construction and maintenance of roads and
+    canals, 22
+
+  Executives influenced, 225
+
+  Experiments with wooden rail, 46
+
+  Extortion, effects of, 111
+
+
+  Farmers' Alliance, 300
+
+  Farmers' pool, 300
+
+  Federal agencies, need of improved, 430
+
+  Federal courts, influence of, 212
+
+  Ferocity of public opinion in the West, 312
+
+  Feudal features, 455
+
+  Field, Justice, 214, 269
+
+  Fink, Albert, 200
+
+  First rail tracks, 46
+
+  First railroad survey in Iowa, 319
+
+  Fort Dodge, 325
+
+  Fortunes, great, 400
+    made, 301
+
+  France, 54
+    duty of employes, 447
+    first system of roads, first artificial waterways, 30
+    large number of canals, 30
+    rates on freight and passengers, 293
+
+  Frederick the Great built turnpikes and canals, 31
+
+  Frederick William IV., 53
+
+  Free competition, 407
+
+  Freight agents, 383
+
+  Freight carried by railroads in the United States, 292
+
+  Friction under Iowa law, 341
+
+
+  Galena and Chicago Union, 164
+
+  Gallatin advocated roads and canals, 38
+
+  Garfield, President, 224
+    on Dartmouth College case, 316
+
+  Garrett, J. W., 83
+
+  Germany, first mail service, 31
+    first railroad, 53
+
+  German instructions to employes, 447
+
+  Georgia prescribed rates, 289
+
+  Glenwood, 337
+
+  Gibbon, 92
+
+  Gibbon concerning postal service, 27
+
+  Goodman, Mr., testimony of, 138
+
+  Gospel of wealth, 404
+
+  Göta canal, 35
+
+  Gould's bulldozing, 452
+
+  Gould, Jay, 212, 224, 269
+    on cost of Pacific roads, 184
+
+  Governor called extra session of General Assembly, 321
+    importuned, 228
+    of Iowa, 311
+    influenced, 227
+
+  Government ownership drawbacks, 412
+
+  Granger cases, 212
+
+  Granger, Judge, 229
+
+  Granger law did not retard construction, 335
+    of Iowa, 332
+
+  Granger laws, moderate, 322
+    repealed, 246
+
+  Granger movement, 84
+    a necessary one, 258
+    spread, 332
+
+  Granger system in Wisconsin, 245
+
+  Grant and Conkling, 224
+
+  Grant, Judge, 411
+
+  Great Britain, canals, 33
+    crossed by Roman roads, 27
+    recent origin of public roads and postal service, 32
+
+  Great Northern Railroad Co., 185
+
+  Grecian civilization passed to Romans and then to other nations, 24
+
+  Greek geographers, praise of highways of Hindostan, 19
+
+  Gresham, Judge, 212
+
+  Grinnell, Hon. J. B., 411
+
+  Gross and net earnings in Iowa, 344
+    earnings, increase in Iowa, 287, 293
+    earnings of Iowa roads, 265
+
+
+  Hadley, Prof. A. T., 245
+    on passenger rates, 278
+    on State legislation, 286
+
+  Hadley's address before Bankers' Association, 284
+    ignorance, 287
+    mistake, 290
+
+  Hadrian improved postal service, 27
+
+  Hagar, Mr., 109
+
+  Hackworth, 49
+
+  Hale, Lord Chief Justice, 316
+
+  Harrison, President, 214
+    on watered stocks, 174
+    on Nicaragua Canal, 44
+
+  Hanseatic League, 94
+    object, extent, power, 95
+
+  Haul, length of, compared, 372
+
+  Hayes-Tilden contest, 215
+
+  Hayti, 71
+
+  Hepburn committee, 137, 146
+
+  Hindoo culture and broad statesmanship, 18
+
+  Hoe printing-press, 231
+
+  Holland, 98
+    largest canal of, 31
+
+  Hoyt, J., & Co., 138
+
+  Hudson, J. F., 250, 266, 407
+
+  Hudson River Railroad accident, 451
+    Co., 167
+    stock watering, 167
+
+  Humboldt said of roads of Incas, 36
+
+  Hungary, 54
+
+  Hungarian zone system, 282, 440
+
+  Huntington, C. P., 347
+    letter of, 346
+
+
+  Illinois canals, 42
+    Granger laws, 331
+
+  Importance of transportation facilities, 17
+
+  Improved appliances should be used, 450
+
+  Income of railroads, 128
+    per capita, 292
+
+  Increase of traffic under zone system, 442
+
+  India supplied Nineveh and Babylon, Greece and Rome, 18
+
+  Individual entitled to full use, 392
+
+  Inflation, 163
+
+  Influences at work to create public sentiment, 294
+
+  Iniquitous taxation, 307
+
+  Injunction asked for, 323
+
+  Inspection service should be established, 432
+
+  Insurance provided for, 451
+
+  Interchangeable 1,000-mile tickets, 445
+
+  Interstate Commerce Act, 85, 319
+      amended, 358
+      approved, 354
+
+  Interstate Commerce Commission, sixth annual report, 160
+
+  Interstate Commerce law attacked, 162
+
+  Intimidation of railroad employes, 226
+
+  Inventors, 126
+
+  Investments, none pay so well, 248
+
+  Iowa attorney, 210
+    Bill of Rights, 445
+    Central Air Line, 324
+    City, road built to, 319
+    Commissioners enjoined, 343
+    Commissioners' valuable service, 336
+    Falls & S. C. Co., 325
+    General Assembly passed maximum tariff act, 264
+    General Assembly passed act authorizing commissioners to make _prima
+      facie_ rates, 264
+    law, features of, 341
+    misunderstanding of, 342
+    vindicated, 266
+    legislation, 319
+    politics, 311
+    prosperity accelerated, 345
+    railroad construction, 288
+    the queen, 348
+
+  Irish tenants, 287
+
+  Iron strap rail, 46
+
+  Itaki Atabeck, road seen to this day, 19
+
+  Italy, 57
+    canals, 34
+
+
+  Jackson, President, 367
+
+  Japan, 60
+
+  Java, 61
+
+  Jeans, Mr. J. S., 269
+    on railroad revenues, 437
+    on state railroad, 410
+
+  Jefferson's inquiries, 37
+
+  Judges, servile, 162
+    use passes, 208
+
+  Jurists, eminent, 234
+
+
+  Kansas Midland, 187
+
+  Kent, 314
+
+  Kirkman, M. M., 239
+
+
+  Labor organizations, 448
+
+  Labor-saving causes, 375
+
+  Lake transportation, 453
+
+  Land grant policy, wisdom of, 320
+    to Dubuque & S. C. R. R., 325
+
+  Land grants to Iowa railroads, 320
+    value of, 325
+
+  Languedoc Canal, 30
+
+  Lawyer and farmer, 209
+
+  Lawyers, briefless, 219
+    political, 223
+    third-rate, 222
+
+  Legislation, 299
+    of California, 123
+
+  Legislative campaign of 1887, 339
+    reform needed, 405
+    reports, 110
+
+  Lincoln, President, 216
+    story of the Irishman, and the pig, 271
+
+  Lines projected, 288
+
+  Lobbies frowned out of legislative halls, 402
+
+  Lobby, 219
+    formidable, 339
+
+  Locomotive, early inventors, 47
+    reward for, 49
+
+  Long and short haul clause, 297
+    of Iowa law, 341
+
+  Louis XIV., 98
+
+  Louis XI. transferred postal service to state, 30
+
+  Lowest rates in Europe, 409
+
+
+  Mails carried free in France, 373
+
+  Managers arrogant, 331
+    concede necessity of regulation, 369
+    have lost influence, 230
+    make law odious, 333
+    naturally despotical, 151
+    of great parties, 144
+
+  M. & M. R. R. Co., 319
+
+  Marshall, Chief Justice, 350
+
+  Marshalltown, 324
+
+  Massachusetts Commission, 428
+
+  Mathews, Judge Stanley, 269
+
+  Maximilian established postal route, 31
+
+  Maximum charges, 331
+
+  McDill, Hon. J. W., as a lobbyist, 238
+
+  McGregor grant resumed, 326, 327
+
+  McGregor Western R. R. Co., 325
+
+  Means employed to control legislation, 218
+
+  Mesopotamia, inhabitants perfect cart, 19
+
+  Methods for control, 402
+    impracticable, 425
+
+  Mexico, 72
+
+  Mileage of the future, 389
+    to area, 112,389
+    to population, 292
+
+  Minneapolis and Chicago conventions, 224
+
+  Minnesota case, 295
+    Granger laws, 331
+    politics, 311
+
+  Missouri Pacific, 187
+
+  Mitchell, Alexander, 232
+
+  Modern doctrine, Kent's rule, 314
+
+  Monopoly, 317
+    in transportation, 90
+
+  Morgan, Appleton, 250
+
+  Mortgaging prohibited, 434
+
+  Munn vs. Illinois, 213, 290
+
+  Muscatine, branch line to, 319
+
+  Mushroom millionaires, 307
+
+
+  National banking system, 303
+
+  National bureau should be established, 431
+
+  National control, 424
+
+  Nation inclined to follow beaten tracks, 425
+
+  Nations should profit by experience, 367
+
+  Napoleon Company, 108
+
+  Navigation act, 98
+
+  Nebraska maximum tariff, 346
+
+  Net earnings increased in Iowa, 265
+    in 1890 and 1891, 187
+
+  Netherlands, canals, 31
+
+  Net profit of passenger traffic in United Kingdom, 270
+
+  Nevada, 324
+
+  New England railroad construction, 288
+
+  New Orleans Cotton Exchange case, 360
+
+  Newton, 47
+
+  New York canals, 41
+
+  New York Central, gross earnings, 167
+    stock watering, 165
+
+  New York delegation, 224
+
+  Nicaragua, 70
+    Canal, 44, 174
+
+  Nile, canals, roads, people, 23
+
+  Notice given when rates are changed, 388
+
+  Number of employes per mile, 372
+    of hours' work of employes, 372
+
+
+  Office of railroad public, 368
+
+  Officers of railroads should not be allowed to use proxies, 432
+    should take oath, 432
+
+  Officials not likely to resist temptation, 436
+
+  Ohio canals, 42
+
+  Oliver Cromwell, 98
+
+  Operating expenses reduced, 375
+
+
+  Pacific railroad, 81
+    diplomacy, 180
+    prejudice, 45
+
+  Pacific roads before boards of equalization, 186
+    comparative cost, 186
+    cost to duplicate, 185
+    easy grade, 185
+    indebtedness to Government, 184
+
+  Papin, constructed steamboat, 47
+
+  Parliament compelled British railways, 451
+
+  Party organs, 221
+
+  Pass abuse, ruling of commission, 362
+
+  Pass, purposes for which given, 209
+    should be discarded, 446
+
+  Passenger rate-making principle wrong, 439
+
+  Passenger rates not reduced, 375
+
+  Passenger rates too high, 438
+
+  Passengers carried by railroads in the United States, 292
+
+  Passengers, English third-class, 270
+    killed and injured, 450
+    third-class, 269
+
+  Passes, 207, 208
+    plentiful, 420
+    to delegates, 226
+
+  Pauper tickets for the clergy should be abolished, 446
+
+  Pausanias shown well-kept road, 19
+
+  Pedigree of a proverb, 298
+
+  Peik vs. Chicago, 213
+
+  Pennsylvania canals, 41
+
+  Pennsylvania Central R. R. Co., 171
+
+  People prone to believe, 245
+
+  People's parties called into existence, 404
+
+  People will not tolerate, 397
+
+  Perquisites abolished, 446
+
+  Persian Empire, magnitude, 20
+
+  Peru, 67
+    roads, 35
+
+  Phoenicians, 90
+    built great roads,
+    traders of antiquity, 20
+    first great maritime nation, 19
+
+  Pipe line, 116, 119
+
+  Plan capable of being improved, 433
+
+  Policy of delay, 381
+
+  Political campaigns in Iowa, 339
+
+  Politicians as railroad employes, 229
+
+  Pooling, 261, 398
+    committee does not recommend prohibition, 354
+    contracts void, 317
+    grave effects of, 268
+    means of swelling railroad earnings, 267
+    should be prohibited, 203
+
+  Pools, 85, 194, 195, 251, 297
+    defended by Mr. Hadley, 247
+    defended by Mr. Morgan, 250
+    maintained in Iowa, 336
+    suppress competition, 198
+
+  Poor's, H., opinion, 187
+    estimate of cost, 86, 173, 247
+
+  Poor's estimate of watered stock, 186
+
+  Porter, Horace, _North American Review_ article, 290
+
+  Porter, John, 104
+
+  Portugal, 58
+
+  Portuguese, 96
+
+  Postal communication, royal road from Susa to Sardes, 21
+
+  Postal service not carried on by state, 30
+
+  Potential value of interstate law, 367
+
+  Powderly, T. V., 449
+
+  Prediction of Mr. Walker, 299
+
+  Predictions of railroad men, 332
+
+  Press abuse, 221
+
+  Press, efforts of railroads to control, 271
+    servile to railroads, 228
+
+  _Prima facie_ rates, 341
+
+  Prize worth contending for, 380
+
+  Procopius, statement of, concerning Via Appia, 27
+
+  Problem would be solved if abuses, 297
+
+  Providence, 136
+
+  Psammitichus cuts canal, 33
+
+  Ptolemaic kings built canals, 24
+
+  Public at mercy of managers, 381
+    not unreasonable, 450
+
+  Public opinion dormant, 400
+    efforts to influence, 273
+    rules, 400
+
+  Publicity advantageous, 402
+
+  Purchasers of land made the donation, 321
+
+
+  Question not settled until settled right, 377
+
+
+  Railroad attorneys, 214
+
+  Railroad-building after 1873, 246
+
+  Railroad business not private, 403
+    safe, 436
+    changes in Iowa, 393
+    company public agent, 388
+    competition, 190, 338
+    consolidation, 82
+    construction, 287
+    diplomate, 228
+    first line, 77
+    first steam engine, 47
+    improved highway, 339
+    like common road, 391
+    literature, 231
+    magazine literature, 273
+    managers do not do things by halves, 223
+    managers' opportunities to speculate, 399
+    men always oppose reductions of rates, 283
+    officials, 257
+    papers, 340
+    precursor of, 46
+    president's letters, 229
+
+  Railroads, abandoned, 79
+    bonded for more than cost, 175
+    capitalization of, 86
+    but few that do not pay, 52
+    cost to build, 186
+    earnings of, 86
+    in Asia, 59
+    in Austria, 54
+    in Belgium, 56
+    in Denmark, 58
+    in France, 54
+    in Germany, 53
+    in Granger States did not comply with law, 246
+    in Hungary, 54
+    in Italy, 57
+    in politics, 205
+    in Portugal, 58
+    in Russia, 58
+    in Switzerland, 56
+    in Spain, 57
+    in the Balkan Peninsula, 59
+    in the Scandinavian Peninsula, 58
+    in the United States, 76
+    in Turkey, 60
+    land grants to, 80
+    partake of two natures, 392
+    propitiate judiciary, 211
+    public tax collectors, 396
+    rebelled against Iowa law, 344
+
+  Railroad stations, number of, 190
+
+  Railroad tax, amount of, 393
+
+  Railway acts, first in England, 127
+
+  _Railway Age_, 288
+
+  Railway benefits, 231
+    employes in politics, 308
+    first act, 49
+    organs, 229
+    Pan-American, 88
+
+  Railways, highways, 13
+    weakened their arguments, 237
+
+  Railway system, growth of, 87
+    length of in the world, 87
+
+  Rate-making a legislative and not a judicial function, 332
+
+  Rate-making difficult, 244
+    not a judicial question, 378
+
+  Rate of 1870, 248, 249
+    per ton per mile on Camden and Amboy Railroad, 109
+    question, 370
+
+  Rates, fixing of by commission demanded, 430
+    fundamental principles in making, 385
+    in France, 293
+    lower will prevail, 256
+    lower, reason for, 374
+    might be reduced, 417
+    on Milwaukee road, 233
+    reduced by zone tariff in Austria-Hungary, 283
+    should be lower here than in Europe, 373
+    should be referred to National and State boards, 379
+    under Granger laws, 246
+    under Wisconsin Granger laws, 236
+    what are reasonable, 376
+
+  Reagan, John H., bill of, 352
+
+  Reform demanded, 295
+
+  Reasonable rates, 376, 387
+    fixing of, 361
+
+  Rebates Standard Oil Company, 115
+
+  Redfield, J. F., 312
+
+  Reduced rates on Government business in France, 293
+    increased business, 282
+
+  Refineries closed, 116
+
+  Reforms needed, 438
+
+  Remedies, 389
+    proposed by committee, 352
+
+  Remedy proposed by Mr. Hudson of doubtful efficiency, 268
+
+  Reorganization of the M. &. M. R. R., 322
+
+  Report of Cullom committee, 353
+
+  Reports of Interstate Commission, 366
+
+  Revenues increased by Granger law, 246, 332
+    uniform, 437
+
+  Revolution and anarchy, 299
+
+  Rhenish League, 94
+
+  Ricks, Judge, 449
+
+  Ridgeway, Jacob, 106
+
+  Right of control rests upon firmer ground, 318
+
+  Right of way, cost of, 370
+
+  River and harbor improvements, 453
+
+  Rivers, improvement of, 44
+
+  Robber knights, 93, 149
+
+  Robbers and feudal knights, depredations being tax, 29
+
+  Rob Roy, 258
+    policy, 102
+
+  Robinson, H. P., railway in politics, 308
+
+  Rocket, the, 49
+
+  Rogers, Thorold, 454
+
+  Roman Empire, after downfall roads destroyed, 28
+
+  Roman postal service, 27
+
+  Romans learned art of paving roads from Carthaginians, 24
+
+  Rome, 91
+    connecting link between antiquity and mediævalism, 24
+    extent, population, roads, etc., 25
+
+  Roads built from proceeds of stocks and bonds, 373
+
+  Roads built only when immediately profitable, 328
+    early, 37
+    pioneers of enlightenment and political eminence, 17
+    subject to legislative control, 327
+    utility of good, recognized in colonial times, 36
+
+  Russia, 58
+    roads, 35
+
+  Rutter, J. H., agent of New York Central, 116
+
+
+  Salaries, American railways pay the highest, 420
+
+  Saloon men politicians, 366
+
+  San Domingo, 71
+
+  San Salvador, 70
+
+  Sanspareil, the, 49
+
+  Savings under Government management, 422
+
+  Scandinavian Peninsula, 58
+
+  Scandinavian roads and canals, 35
+
+  Schedule rates made by Iowa Commission, 342
+
+  Schedules should be submitted to bureau, 432
+
+  Scriptures, roads of the, 22
+
+  Second-class passenger rates,
+    why not successful, 282
+
+  Secrecy a source of evils, 402
+
+  Select committee, 353
+
+  Select Committee on Transportation, 351
+
+  Senate committee, 172
+
+  Senators and Congressmen raise campaign funds, 436
+
+  Servility of Interstate Commerce Commission, 203
+
+  Sesostris cut canal, 23
+
+  Shippers given favors, 219, 221
+    powerless, 382
+
+  Sioux City, 325
+
+  Smyth Judge, 229
+
+  South America, 66
+
+  Southern Pacific Railroad Company, 122
+
+  Southern pool, 200
+
+  Southern Railway and Steamship Association, 194
+
+  South Sea Company, 303
+
+  Spain, 57
+    canals, 34
+
+  Spain and Gaul, roads of, 27
+
+  Special arrangements, 295
+
+  Special-car aristocracy, 445
+
+  Special contracts, 137
+    rate agreement, 141
+    rates, 120, 138
+
+  Speed of railroads, 279
+
+  Spelling, T. Carl, 317
+
+  Speculative element should be removed, 433
+
+  Speculators and gamblers, 434
+
+  Spirit of Interstate Law, 369
+
+  Standard Oil monopoly, 114
+    discrimination, 160, 362
+
+  State control encourages building, 130
+    in Iowa asserted early, 330
+    Spelling on, 318
+
+  State, duty of, 391
+    management, advantages of, 410
+    ownership and regulation, 409
+    with private management, 422
+    railway system, 277
+
+  States to cease futile attempts, 299
+
+  Steam engine, first account, 47
+
+  Stephenson, 48
+
+  Stevens, Mr., 107
+
+  Stewart, A. T., & Co., 138
+
+  Stickney, A. B., criticises President Mitchell's letter, 23
+    his criticism of Iowa rates, 343
+    his error, 256
+    favors entire control by Nation, 255
+    on interstate law, 255
+    on national control, 424
+
+  Stock a bonus, 434
+
+  Stock and bond inflation, 163
+
+  Stockholders, 131
+    dissatisfied, 112
+    interested in publicity, 403
+
+  Stock market controlled by few, 308
+
+  Stocks, fluctuations of, 435
+    should be paid in full, 438
+    shrinkage of value, 284
+
+  Stockton, R. F., 103
+
+  Stock watered 50 per cent., 307
+
+  Stock-watering, 164, 165
+    in America, 270
+    English, 371
+
+  Stock wiped out, 326
+
+  Stone, Governor, 324
+
+  Subordinates have to suffer for superiors, 203
+
+  Subsidies, 329
+    to press, 271
+
+  Sunday trains restricted, 451
+
+  Superintendents responsible for uncivil subordinates, 447
+
+  Supreme Court, 215, 289
+
+  Switzerland, 56
+
+
+  Taney, Justice, 216
+
+  Tariff, a tax, 135
+    prepared by sworn officials, 381
+
+  Tariffs impeachable, 382
+    official, should stand until proved unreasonable, 382
+
+  Texas legislation, 346
+
+  Text books, 312
+
+  Thiers, M., 51
+
+  Third-class passengers in Europe, 443
+
+  _Times_, New York, 340
+
+  Tipping, 447
+
+  Traffic associations, 149, 300
+
+  Trainmen should be allowed rest, 451
+
+  Train mile earnings, 269
+
+  Trains, number of, per mile, per annum, 281
+    should connect, 451
+
+  Transportation not a commodity, 368
+
+  Trevithick, Richard, 48
+
+  _Tribune_, Chicago, 244
+    New York, 340
+
+  Turkey, 60
+
+  Turnpike, first American, 37
+
+  Turnpikes in Great Britain, 32
+
+  Turnpike tolls, 396
+
+  Twelfth General Assembly, 323, 330
+
+
+  Umpires, high-priced, 420
+
+  Unanimous vote on Iowa law, 341
+
+  Union Pacific, 175
+
+  United States Bank, 303, 366
+
+  Unscrupulous men attracted, 390
+
+
+  Value of land grants, 329
+
+  Vanderbilt, 82, 452
+
+  Vedas, testimony of, 18
+
+  Venetian council, 253
+
+  Venezuela, 66
+
+  Venice, 93
+
+  Via Appia and other roads, 26
+
+  Violations of law encouraged by courts, 430
+
+
+  Wabash Railroad, 212
+
+  Walker, A. F., 294, 295, 311
+
+  Wall Street, defense of, 340
+    managers, 346
+    method, 302
+
+  War, 399
+
+  War rule, 331
+
+  Washington among the first to advocate internal improvements, 39
+
+  Water courses as levelers, 453
+
+  Watering stock, Mr. Jeans on, 270
+    methods of, 174
+
+  Water transportation, 145
+
+  Watered stocks, 172
+    Hadley on, 247
+
+  Watt and Stephenson's inventions, 126
+
+  Watt, James, 47
+
+  Weak roads helped, 344
+
+  Western candidates, 224
+
+  Water classification, 343
+
+  West Indies, 71
+
+  Western politician outwitted, 225
+    pool, failure of, 200
+    Traffic Association, 299
+    Union Telegraph Company, 127
+
+  White House, the, 215
+
+  Whitney, Asa, 81
+
+  Whitney's cotton gin, 231
+
+  Why Western people do not invest in railroad stocks, 308
+
+  Wells, David A., 374
+
+  Windom committee, 351
+
+  Wisconsin Granger laws, 331
+
+  Witnesses recusant, 134
+
+  Wrecking roads, 305
+
+  Wrought-iron rails patented, 47
+
+  _World_, New York, 340
+
+
+  Zone tariff, 409
+    ridiculed, 441
+
+
+
+
+A Standard Book on an Important Subject.
+
+THE
+
+RAILROAD QUESTION.
+
+A HISTORICAL AND PRACTICAL TREATISE
+
+ON
+
+RAILROADS, AND REMEDIES FOR THEIR ABUSES.
+
+BY
+
+=_William Larrabee_=,
+
+Late Governor of Iowa.
+
+12mo, cloth extra, gilt top (488 pages), $1.50.
+
+I.--History of Transportation. II.--The History of Railroads.
+III.--History of Railroads in the United States. IV.--Monopoly in
+Transportation. V.--Railroad Abuses. VI.--Stock and Bond Inflation.
+VII.--Combinations. VIII.--Railroads in Politics. IX., X.--Railroad
+Literature. XI.--Railroads and Railroad Legislation in Iowa. XII.--The
+Inter-State Commerce Act. XIII.--The Rate Question. XIV.--Remedies.
+Appendix:--Tables and Statistics. There is also a bibliography on the
+subject of Railroads, embracing ninety-eight titles, and a carefully
+prepared alphabetical index.
+
+
+Opinions of the Press.
+
+"No work has ever before told so completely and clearly what the public
+want to know, and ought to know, about the secret management and true
+legal status of railroads. What journalists and magazine writers have
+studiously left unsaid, whether from lack of knowledge or from motives
+of 'revenue only,' Governor Larrabee has said, and said it
+well."--_Western Rural._
+
+"This book is evidently the result of long study and experience and much
+thinking. While it is radical in its treatment of the question, no side
+of it has been overlooked. It deserves careful reading by every person
+who is interested in this great question. No subject is more worthy the
+profound study of the statesman, the man of affairs, the scholar and the
+citizen. Surely all who are trying to understand the good and evil of
+railroads can turn to the pages of this book with the certain
+expectation of learning much both in the way of fact and
+suggestion."--_Bankers' Magazine._
+
+"Perhaps the most interesting chapters are the two in which the author
+reviews and criticises former publications on railway questions, and the
+one in which he reviews the various remedies which have been from time
+to time advanced for railway abuses. The book is concisely and clearly
+written."--_Engineering News._
+
+"Ex.-Gov. Larrabee of Iowa has written a highly meaty book on the
+railroad question. It is a topic he is well qualified to handle, viewing
+that he was no small part of the movement in former days to repress
+railroad abuses in the West, and particularly in his own
+State."--_Chicago Tribune._
+
+"A careful study of an important question, fortified by facts and
+figures which are both interesting and valuable."--_New York Recorder._
+
+Hon. Thomas M. Cooley says: "I have read the book with interest,
+especially that part which discusses State ownership and management. I
+have not before seen the side you advocate so clearly and so ably
+presented."
+
+"The book is the most valuable work yet issued on its subject."--_Des
+Moines News._
+
+"Mr. Larrabee is eminently fitted for the task to which he has set
+himself. He is not a mere theorizer. He brings to the discussion the
+ripe knowledge that comes from long experience in dealing with the
+railroad question, not only as a State Senator and Governor, but also
+'as a shipper and as a railroad promoter, owner and stockholder,' and
+likewise as 'a director, president and manager of a railroad company.'
+In his treatment of the railroad problem, moreover, Mr. Larrabee
+displays a breadth of view and an earnestness of purpose that must
+command respect even where they fail to carry conviction."--_Public
+Opinion._
+
+"It is devoid of the animus which usually enters into the works of the
+reformers, but on the contrary is written in admirable style, enhanced
+by happy anecdotes, and altogether is a much more readable book than one
+is accustomed to find upon so practical a question."--_Kansas City
+Journal._
+
+"It justifies a claim to a place among the standard books upon the
+railroad problem. It is particularly in those portions of the work which
+deal with the relations of the Government to the railroads and the
+solution of the difficulties that have arisen between the railways and
+the people that the experience of the author both in guiding and
+executing the railway legislation of Iowa comes into prominent
+play."--_Omaha Bee._
+
+"We commend the book to the careful reading of the railroad
+stockholder."--_Railroad Record and Investor's Guide._
+
+"A thoughtful volume, showing careful research and
+reflection."--_Chicago Inter-Ocean._
+
+"A most interesting, valuable and timely book. Every student of the
+subject will need to read it, and the popular vein of narrative makes it
+very interesting and instructive to the general reader."--_New England
+Home._
+
+"This work will present Governor Larrabee in a new and novel light
+before the public. Heretofore he has been known as the successful man of
+affairs and business; as the earnest and zealous legislator; as the
+persistent and vigorous executive; and now he comes as the laborious
+student upon a great economic and practical question who has aptly and
+clearly put his views into a book."--_Dubuque Herald._
+
+"A thorough treatise by an able mind. The authorities quoted are the
+best in print."--_Coming Nation._
+
+"By far the best work on the popular side of the railroad
+question."--_Gen. M. M. Trumbull in the Open Court._
+
+"Gov. Larrabee's book will rank among the greatest productions of the
+day on that question."--_Cedar Rapids Gazette._
+
+"The book is the result of extraordinary observation, great reading and
+careful study. * * * This element of completeness, of massing so much
+information between the covers of a book of ordinary size, makes it
+invaluable for reference. Of all the many books called out by the
+agitation of the railroad question, this one will be oftenest referred
+to, not so much for its opinions as for its stores of facts."--
+_Davenport Democrat._
+
+"Governor Larrabee has always been a careful and conscientious student
+of the railroad question, and in exposing the abuses to which the
+railroad system has committed itself he renders a service from which the
+public may derive great benefit."--_Good Roads._
+
+"The high character and well known reputation of the author will create
+a demand for this book, aside from the fact that it contains a vast
+amount of information as well as sound reasoning on the railroad
+question."--_American Journal of Politics._
+
+"The author's attitude, while firm, is by no means a sinister or
+fantastic one. He writes obviously from honest conviction, and he writes
+with skill and force."--_Philadelphia Press._
+
+"A temperate and instructive contribution to railroad
+literature."--_Chicago Times._
+
+"A mine of facts gathered by a man who has made a specialty of his
+subject and who is evidently in earnest in his desire to lessen the
+burdens of the American people."--_San Francisco Chronicle._
+
+"In point of authenticity the book is absolutely to be relied
+upon."--_St. Louis Post-Dispatch._
+
+"Governor Larrabee came to Iowa before any railroad had reached the
+Mississippi. Engaging in manufacturing, the inconveniences which he
+suffered from want of transportation facilities instilled liberal
+opinions concerning railroads. He made private donations to new roads
+and he advocated public aid to them. As a legislator he introduced a
+bill authorizing a 5 per cent. tax in aid of railroad construction. He
+believed that the common law and competition could be relied upon to
+correct abuses and to solve the rate problem. It has not been until
+since these efforts were made that he has become convinced, as he says
+in his preface, that 'where combination is possible competition is
+impossible.' The object of this work is explained to be to set forth the
+objections which lie against the management of railroads as private
+property. They are used by their managers for speculative purposes. They
+cannot perform their proper functions so long as they are used only for
+the interests of their stockholders. In order to serve their real
+purpose, 'they must become in fact what they are in theory, highways to
+be controlled by the Government as thoroughly and effectively as the
+common road, the turnpike and the ferry, the post-office and the
+custom-house.'"--_Council Bluffs Nonpareil._
+
+
+  ="THE RAILROAD QUESTION"=
+
+  may be ordered through any bookseller,
+  or will be sent by mail to any address,
+  on receipt of price, by the publishers.
+
+  The Schulte Publishing Company,
+  334 DEARBORN STREET,
+  CHICAGO.
+
+
+
+
+    +-----------------------------------------------+
+    | Transcriber's Note:                           |
+    |                                               |
+    | Inconsistent hyphenation and spelling in the  |
+    | original document have been preserved.        |
+    |                                               |
+    | Roman numeral page numbers in the Appendix    |
+    | have been changed to Arabic numerals.         |
+    |                                               |
+    | Typographical errors corrected in the text:   |
+    |                                               |
+    | Page  13  Ackworth changed to Acworth         |
+    | Page  25  Jerusalen changed to Jerusalem      |
+    | Page  26  Brundusium changed to Brundisium    |
+    | Page  27  af changed to of                    |
+    | Page  27  if changed to of                    |
+    | Page  29  Strasburg changed to Strasbourg     |
+    | Page  37  Pittsburg changed to Pittsburgh     |
+    | Page  45  subsides changed to subsidies       |
+    | Page  65  Williamston changed to Williamstown |
+    | Page  70  Cabello changed to Caballo          |
+    | Page 107  resolulution changed to resolution  |
+    | Page 215  prejudiee changed to prejudice      |
+    | Page 232  aquainted changed to acquainted     |
+    | Page 236  omiting changed to omitting         |
+    | Page 252  Bastile changed to Bastille         |
+    | Page 266  possiple changed to possible        |
+    | Page 342  Is changed to It                    |
+    | Page 346  their changed to there              |
+    | Page 350  cammerce changed to commerce        |
+    | Page 361  upan changed to upon                |
+    | Page 368  iujustice changed to injustice      |
+    | Page 373  Eurpean changed to European         |
+    | Page 407  despatcher changed to dispatcher    |
+    | Page 408  despatcher changed to dispatcher    |
+    | Page 417  Sante changed to Santa              |
+    | Page 422  aquire changed to acquire           |
+    | Page 478  reasonaable changed to reasonable   |
+    | Page 482  addres changed to address           |
+    | Page 485  Potuguese changed to Portuguese     |
+    +-----------------------------------------------+
+
+
+
+
+
+End of Project Gutenberg's The Railroad Question, by William Larrabee
+
+*** END OF THIS PROJECT GUTENBERG EBOOK THE RAILROAD QUESTION ***
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+This and all associated files of various formats will be found in:
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+
+The Project Gutenberg EBook of The Railroad Question, by William Larrabee
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+Title: The Railroad Question
+       A historical and practical treatise on railroads, and
+              remedies for their abuses
+
+Author: William Larrabee
+
+Release Date: July 2, 2009 [EBook #29294]
+
+Language: English
+
+Character set encoding: ISO-8859-1
+
+*** START OF THIS PROJECT GUTENBERG EBOOK THE RAILROAD QUESTION ***
+
+
+
+
+Produced by Peter Vachuska, Barbara Kosker, Chuck Greif
+and the Online Distributed Proofreading Team at
+https://www.pgdp.net
+
+
+
+
+
+
+</pre>
+
+
+<br />
+<br />
+<br />
+<br />
+
+<h1>The Railroad Question.</h1>
+
+<br />
+<br />
+<br />
+<br />
+
+<h1>THE RAILROAD QUESTION</h1>
+
+
+<h3>A HISTORICAL AND PRACTICAL TREATISE ON<br />
+
+RAILROADS, AND REMEDIES FOR THEIR ABUSES</h3>
+
+
+<h4>BY</h4>
+
+<h2>WILLIAM LARRABEE,</h2>
+
+<h4>  LATE GOVERNOR OF IOWA.</h4>
+<br />
+<br />
+<hr style="width: 10%;" />
+<br />
+
+<h3><i>Salus populi suprema lex.</i></h3>
+<br />
+<hr style="width: 10%;" />
+
+
+<h3>NINTH EDITION.</h3>
+<hr style="width: 10%;" />
+<br />
+<br />
+<br />
+<br />
+
+<h4>CHICAGO:<br />
+THE SCHULTE PUBLISHING COMPANY.<br />
+1898.</h4>
+<br />
+<br />
+<br />
+<br />
+
+
+
+<h5>Copyright, 1893,<br />
+BY<br />
+WILLIAM LARRABEE.</h5>
+
+<br />
+<br />
+<br />
+<br />
+
+<hr />
+<br />
+<h2>PREFACE</h2>
+
+
+<p>The people of the United States are engaged in the solution of the
+railroad problem. The main question to be determined is: Shall the
+railroads be owned and operated as public or as private property? Shall
+these great arteries of commerce be owned and controlled by a few
+persons for their own private use and gain, or shall they be made
+highways to be kept under strict government control and to be open for
+the use of all for a fixed, equal and reasonable compensation?</p>
+
+<p>In a new and sparsely settled country which is rich in natural resources
+there may be no great danger in pursuing a <i>laissez-faire</i> policy in
+governmental affairs, but as the population of a commonwealth becomes
+denser, the quickened strife for property and the growing complexity of
+social and industrial interests make an extension of the functions of
+the state absolutely necessary to secure protection to property and
+freedom to the individual.</p>
+
+<p>The American people have shown themselves capable of solving any
+political question yet presented to them, and the author has no doubt
+that with full information upon the subject they will find the proper
+solution of the railroad problem. The masses have an honest purpose and
+a keen sense of right and wrong. With them a question is not settled
+until it is settled right.</p>
+
+<p>It must be conceded that of all the great inventions of modern times
+none has contributed as much to the prosperity and happiness of mankind
+as the railroad.</p>
+
+<p>Our age is under lasting obligations to Watt and Stephenson and many
+other heroes of industry who have aided in bringing the railroad to its
+present state of perfection. Their genius is the product of our
+civilization, and their legacies should be shared by all the people to
+the greatest extent possible. An earnest desire to aid in attaining this
+end has prompted this contribution to the literature on the subject.</p>
+
+<p>The author is not an entire novice in railroad affairs. He has had
+experience as a shipper and as a railroad promoter, owner and
+stockholder, and has even had thrust upon him for a short time the
+responsibility of a director, president and manager of a railroad
+company. He has, moreover, had every opportunity to familiarize himself
+with the various phases of the subject during his more than twenty
+years' connection with active legislation.</p>
+
+<p>He came to the young State of Iowa before any railroad had reached the
+Mississippi. Engaging early in manufacturing, he suffered all the
+inconveniences of pioneer transportation, and his experience instilled
+into him liberal opinions concerning railroads and their promoters. He
+extended to them from the beginning all the assistance in his power,
+making not only private donations to new roads, but advocating also
+public aid upon the ground that railroads are public roads.</p>
+
+<p>As a member of the Iowa Senate he introduced and fathered the bill for
+the act enabling townships, incorporated towns and cities to vote a five
+per cent. tax in aid of railroad construction. He favored always such
+legislation as would most encourage the building of railroads, believing
+that with an increase of competitive lines the common law and
+competition could be relied upon to correct abuses and solve the rate
+problem. He has since become convinced of the falsity of this doctrine,
+and now realizes the truth of Stephenson's saying that where
+combination is possible competition is impossible.</p>
+282
+
+<p>It is the object of this work to show that as long as the railroads are
+permitted to be managed as private property and are used by their
+managers for speculative purposes or other personal gain, or as long
+even as they are used with regard only for the interest of stockholders,
+they are not performing their proper functions; and that they will not
+serve their real purpose until they become in fact what they are in
+theory, highways to be controlled by the government as thoroughly and
+effectually as the common road, the turnpike and the ferry, or the
+post-office and the custom-house.</p>
+
+<p>This book has been written at such odd hours as the author could snatch
+from his time, which is largely occupied with other business. He is
+under obligations to many of our ministers and consuls abroad for
+statistics and other valuable information concerning foreign railroads,
+as well as to a number of personal friends for other assistance,
+consisting chiefly in rendering the railroad literature of Europe
+accessible to him.</p>
+
+<p class="right"><span class="smcap">William Larrabee.</span></p>
+<p><span style="margin-left: 1em;"><i>Clermont, Iowa, May, 1893.</i></span>
+</p>
+
+<br />
+<br />
+<br />
+<br />
+
+<hr />
+<br />
+<h2>CONTENTS.</h2>
+
+<div class="centered">
+<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="Table of Contents">
+  <tr>
+  <td class="tdrp" width="10%">I.</td>
+  <td class="tdl smcap" width="80%">History of Transportation</td>
+  <td class="tdr" width="10%"><a href="#Page_17">17</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">II.</td>
+  <td class="tdl smcap">The History of Railroads</td>
+  <td class="tdr"><a href="#Page_46">46</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">III.</td>
+  <td class="tdl smcap">History of Railroads in the United States</td>
+  <td class="tdr"><a href="#Page_76">76</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">IV.</td>
+  <td class="tdl smcap">Monopoly in Transportation</td>
+  <td class="tdr"><a href="#Page_90">90</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">V.</td>
+  <td class="tdl smcap">Railroad Abuses</td>
+  <td class="tdr"><a href="#Page_124">124</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">VI.</td>
+  <td class="tdl smcap">Stock and Bond Inflation</td>
+  <td class="tdr"><a href="#Page_163">163</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">VII.</td>
+  <td class="tdl smcap">Combinations</td>
+  <td class="tdr"><a href="#Page_189">189</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">VIII.</td>
+  <td class="tdl smcap">Railroads in Politics</td>
+  <td class="tdr"><a href="#Page_205">205</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">IX.</td>
+  <td class="tdl smcap">Railroad Literature</td>
+  <td class="tdr"><a href="#Page_231">231</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">X.</td>
+  <td class="tdl smcap">Railroad Literature&mdash;<i>Continued</i></td>
+  <td class="tdr"><a href="#Page_273">273</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">XI.</td>
+  <td class="tdl smcap">Railroads and Railroad Legislation in Iowa</td>
+  <td class="tdr"><a href="#Page_319">319</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">XII.</td>
+  <td class="tdl smcap">The Interstate Commerce Act</td>
+  <td class="tdr"><a href="#Page_349">349</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">XIII.</td>
+  <td class="tdl smcap">The Rate Question</td>
+  <td class="tdr"><a href="#Page_370">370</a></td>
+  </tr>
+  <tr>
+  <td class="tdrp">XIV.</td>
+  <td class="tdl smcap">Remedies</td>
+  <td class="tdr"><a href="#Page_389">389</a></td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="2">APPENDIX&mdash;<span class="smcap">Tables and Statistics</span></td>
+  <td class="tdr"><a href="#Page_459">459</a></td>
+  </tr>
+</table>
+</div>
+
+<br />
+<br />
+<br />
+<br />
+
+<hr />
+<span class='pagenum'><a name="Page_13" id="Page_13">[Pg 13]</a></span><br />
+<h2><span class="smcap">List of Authors and Works Consulted and Quoted</span></h2>
+
+<div class="centered">
+<table border="0" width="90%" cellpadding="2" cellspacing="0" summary="List of Authors">
+  <tr>
+  <td class="tdl smcap" width="35%">Acworth, W. M.</td>
+  <td class="tdr" width="65%">The Railways of England</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Adams, C. F., Jr.</td>
+  <td class="tdr">Railroads, Their Origin and Problems</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Adams, H. C.</td>
+  <td class="tdr">Public Debts</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Adams, Henry</td>
+  <td class="tdr">History of the United States</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Atkinson, Edward</td>
+  <td class="tdr">The Distribution of Products</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Bagehot, Walter</td>
+  <td class="tdr">The English Constitution</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Baker, C. W.</td>
+  <td class="tdr">Monopolies and the People</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Beach, Charles F., Jr.</td>
+  <td class="tdr">On Private Corporations</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Blackstone, W.</td>
+  <td class="tdr">Commentaries on Laws of England</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Boisted, C. A.</td>
+  <td class="tdr">The Interference Theory of Government</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Bolles, Albert S.</td>
+  <td class="tdr">Bankers' Magazine</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Bonham, John M.</td>
+  <td class="tdr">Railway Secrecy and Trusts</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Bryce, James</td>
+  <td class="tdr">The American Commonwealth</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Buckle, H. T.</td>
+  <td class="tdr">History of Civilization of England</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Carey, H. C.</td>
+  <td class="tdr">Principles of Social Science</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Carey, H. C.</td>
+  <td class="tdr">Unity of Law</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Cary, M.</td>
+  <td class="tdr">View of System of Pennsylvania Internal Improvements.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Cloud, D. C.</td>
+  <td class="tdr">Monopolies and the People</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Clews, Henry</td>
+  <td class="tdr">Twenty-eight Years in Wall Street</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Cooley, Thomas M.</td>
+  <td class="tdr">Constitutional Limitations</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Congressional Record.</td>
+  <td class="tdr">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Compilation of English Laws upon Railways.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Dabney, W. D.</td>
+  <td class="tdr">The Public Regulation of Railways</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Dillon, Sidney</td>
+  <td class="tdr">North American Review</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Dorn, Alexander</td>
+  <td class="tdr">Aufgaben der Eisenbahnpolitik</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Draper, J. W.</td>
+  <td class="tdr">Intellectual Development of Europe</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Encyclopedia, American.</td>
+  <td class="tdr">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Encyclopedia Britannica.</td>
+  <td class="tdr">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Encyclop&auml;die (R&ouml;ll's) des Eisenbahnwesens, 1892.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Findlay, George</td>
+  <td class="tdr">Working and Management of English Railways</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Fink, Albert</td>
+  <td class="tdr">Cost of Railroad Transportation, etc.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Fisher, G. P.</td>
+  <td class="tdr">Outlines of Universal History</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Fisk, John</td>
+  <td class="tdr">American Political Ideas</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Fish, John<span class='pagenum'><a name="Page_14" id="Page_14">[Pg 14]</a></span></td>
+  <td class="tdr">Critical Period of American History</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Foreign Commerce of American Republics and Colonies.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Graham, Wm.</td>
+  <td class="tdr">Socialism Old and New</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Gibbon, Edward</td>
+  <td class="tdr">Decline and Fall of the Roman Empire</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Green, John K.</td>
+  <td class="tdr">History of English People</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Gilpin, Wm.</td>
+  <td class="tdr">The Cosmopolitan Railway</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Grinnell, J. B.</td>
+  <td class="tdr">Men and Events of Forty Years.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Gunton, George</td>
+  <td class="tdr">Wealath and Progress</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Guizot, M.</td>
+  <td class="tdr">History of Civilization</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Habour, Theodor</td>
+  <td class="tdr">Geschichte des Eisenbahnwesens</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Hadley, A. T.</td>
+  <td class="tdr">Railway Transportation</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Hall's Life of Prince Bismarck.</td>
+  <td class="tdr">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Hudson, J. T.</td>
+  <td class="tdr">The Railways and the Republic</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Jeans, J. S.</td>
+  <td class="tdr">Railway Problems</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Jervis, John B.</td>
+  <td class="tdr">Railway Property</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Jevons, W. S.</td>
+  <td class="tdr">Methods of Social Reform</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Kent, James</td>
+  <td class="tdr">Commentaries on American Law</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Kirkman, M. M.</td>
+  <td class="tdr">Railway Rates and Government Control and other works</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Leckey, W. E. H.</td>
+  <td class="tdr">England in Eighteenth Century</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Lieber, Francis</td>
+  <td class="tdr">Political Ethics</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Lieber, Francis</td>
+  <td class="tdr">Civil Liberty and Self-Government</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Lieber, Francis</td>
+  <td class="tdr">Miscellaneous Essays</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Lodge, H. C.</td>
+  <td class="tdr">Life of General Washington</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Martineau, Harriet</td>
+  <td class="tdr">History of England</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">McMaster, J. B.</td>
+  <td class="tdr">History of People of United States</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Macaulay, T. B.</td>
+  <td class="tdr">History of England</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Motley, J. L.</td>
+  <td class="tdr">The Dutch Republic</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Motley, J. L.</td>
+  <td class="tdr">The United Netherlands</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Paine, Charles</td>
+  <td class="tdr">The Elements of Railroading</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Patten, J. H.</td>
+  <td class="tdr">Natural Resources of the United States</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Peffer, W. A.</td>
+  <td class="tdr">The Farmer's Side</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Poor's Railway Manual</td>
+  <td class="tdr">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Porter, Horace</td>
+  <td class="tdr">North American Review</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Rawlinson, George</td>
+  <td class="tdr">Seven Great Monarchies</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Redfield</td>
+  <td class="tdr">On Law of Railways</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Records of Central Iowa Traffic Association, 1886-1887.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Records of Association of General Freight Agents of the West.</td>
+  <td class="tdr">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Records of Joint Western Classification Committees.</td>
+  <td class="tdr">&nbsp;<span class='pagenum'><a name="Page_15" id="Page_15">[Pg 15]</a></span></td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Reports of State Boards of Commissioners.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Report of Hepburn Committee.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Reports of United States Census.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Report of Windom Committee.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Report of Bankers' Association, 1892.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Report of Cullom Committee.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Roemer, Jean</td>
+  <td class="tdr">Origin of English People, etc.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Reubeaux, F.</td>
+  <td class="tdr">Der Weltverkehr und seine Mittel</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Richardson, D. N.</td>
+  <td class="tdr">A Girdle Round the Earth</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Rogers, James E. Thorold</td>
+  <td class="tdr">Economic Interpretation of History</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Roscher, Wm.</td>
+  <td class="tdr">Political Economy</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Schreiber</td>
+  <td class="tdr">Die Preussischen Eisenbahnen</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Schurz, Carl</td>
+  <td class="tdr">Life of Henry Clay</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Smith, Adam</td>
+  <td class="tdr">Wealth of Nations</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Spelling, T. Carl</td>
+  <td class="tdr">On Private Corporations</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Spencer, Herbert</td>
+  <td class="tdr">Synthetic Philosophy</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" style="vertical-align: top;">Stern, Simon</td>
+  <td class="tdr">Constitutional History and Political Development of the United States</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Stickney, A. B.</td>
+  <td class="tdr">The Railroad Problem</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap" colspan="2">Statistiques des Chemins de Fer de l'Europe, 1882.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Taylor, Hannis</td>
+  <td class="tdr">Origin and Growth of the English Constitution</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">The American Railway.</td>
+  <td class="tdr">Published by Charles Scribner's Sons.</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Verschoyle, Rev. J.</td>
+  <td class="tdr">History of Ancient Civilization</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Von Weber, M. M.</td>
+  <td class="tdr">Privat-, Staats- und Reichs-Bahnen</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Von Weber, M. M.</td>
+  <td class="tdr">Nationalit&auml;t und Eisenbahn Politik</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Von der Legen, Alfred</td>
+  <td class="tdr">Die Nordamerikanischen Eisenbahnen</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Walker, Aldace F.</td>
+  <td class="tdr">The Forum</td>
+  </tr>
+  <tr>
+  <td class="tdl smcap">Weeden, W. B.</td>
+  <td class="tdr">Economic and Social History of New England</td>
+  </tr>
+</table>
+</div>
+
+<span class='pagenum'><a name="Page_16" id="Page_16">[Pg 16]</a></span><br />
+<br />
+<br />
+<br />
+
+<hr /><span class='pagenum'><a name="Page_17" id="Page_17">[Pg 17]</a></span>
+<br />
+<h2>THE RAILROAD QUESTION.</h2>
+
+<br />
+<br />
+<br />
+<br />
+
+<hr />
+<h2>CHAPTER I.</h2>
+
+<h2>HISTORY of TRANSPORTATION.</h2>
+<br />
+
+<p>While the prosperity of a country depends largely upon its
+productiveness, the importance of proper facilities for the expeditious
+transportation and ready exchange of its various products can scarcely
+be overrated. The free circulation of commercial commodities is as
+essential to the welfare of a people as is the unimpaired circulation of
+the blood to the human organism.</p>
+
+<p>The interest taken by man in the improvement of the roads over which he
+must travel is one of the chief indications of civilization, and it
+might even be said that the condition of the roads of a country shows
+the degree of enlightenment which its people have reached. The trackless
+though very fertile regions of Central Africa have for thousands of
+years remained the seat of savages; but no nation that established a
+system of public thoroughfares through its dominion ever failed to make
+a distinguished figure in the theater of the world. There are some
+authors who go even so far as to call the high roads of commerce the
+pioneers of enlightenment and political eminence. It is true that as
+roads and canals developed the commerce of Eastern Asia and Europe, the
+attention of their people was turned to those objects which distinguish
+cultured nations and lead to political consequence among the powers of
+the world. The systems of roads <span class='pagenum'><a name="Page_18" id="Page_18">[Pg 18]</a></span>and canals which we find among those
+ancients who achieved an advanced state of civilization might well put
+to shame the roads which disgraced not a few of the European states as
+late as the eighteenth century.</p>
+
+<p>Among the early nations of Asia of whose internal affairs we have any
+historic knowledge are the Hindoos, the Assyrians and Babylonians, the
+Ph&oelig;nicians, the Persians and the Chinese.</p>
+
+<p>The wealth of India was proverbial long before the Christian era. She
+supplied Nineveh and Babylon, and later Greece and Rome, with steel,
+zinc, pearls, precious stones, cotton, silk, sugar-cane, ivory, indigo,
+pepper, cinnamon, incense and other commodities. If we accept the
+testimony of the Vedas, the religious books of the ancient Hindoos, a
+high degree of culture must have prevailed on the shores of the Ganges
+more than three thousand years ago. Highways were constructed by the
+state and connected the interior of the realm with the sea and the
+countries to the northeast and northwest. For this purpose forests were
+cleared, hills leveled, bridges built and tunnels dug. But the broad
+statesmanship of the Hindoo did not pause here. To administer to the
+convenience and comfort of the wayfaring public, and thus still more
+encourage travel and the exchange of commodities, the state proceeded to
+line these public roads with shade trees, to set out mile-stones, and to
+establish stations provided with shady seats of repose, and wells at
+which humane priests watered the thirsty beasts.</p>
+
+<p>At intervals along these routes were also found commodious and
+cleanly-kept inns to give shelter to the traveler at night. Buddha, the
+great religious reformer of the Hindoos, commended the roads and
+mountain passes of the country to the care of the pious, and the <span class='pagenum'><a name="Page_19" id="Page_19">[Pg 19]</a></span>Greek
+geographers speak with high praise of the excellence of the public
+highways of Hindostan.</p>
+
+<p>Among the Babylonians and Assyrians agriculture, trade and commerce
+flourished at an almost equally remote period. The ancient inhabitants
+of Mesopotamia cultivated the soil with the aid of dikes and canals, and
+were experts in the manufacture of delicate fabrics, as linen, muslin
+and silk. To them is attributed the invention, or at least the
+perfection, of the cart, and the first use of domestic animals as beasts
+of burden. Their cities had well-built and commodious streets, and the
+roads which connected them with their dependencies aided to make them
+the busy marts of Southeastern Asia.</p>
+
+<p>During the later Babylonian Empire immense lakes were dug for retaining
+the water of the Euphrates, whence a net-work of canals distributed it
+over the plains to irrigate the land; and quays and breakwaters were
+constructed along the Persian Gulf for the encouragement of commerce.
+While highways among the Babylonians served the development of
+agriculture and the exchange of industrial commodities, they were
+constructed chiefly for strategic purposes by the more warlike
+Assyrians, whose many wars made a system of good roads a necessity. The
+Greek geographer Pausanias was shown a well-kept military road upon
+which Memnon was said to have marched with an Assyrian army from Susa to
+Troy to rescue King Priam. Traces of this road, called by the natives
+"Itaki Atabeck," may be seen to this day.</p>
+
+<p>The Ph&oelig;nicians, who were the first of the great historic maritime
+nations of antiquity, occupied the narrow strip of territory between the
+mountains of Northern Palestine and the Mediterranean Sea. From their
+situation they learned to rely upon the sea as their principal highway.
+<span class='pagenum'><a name="Page_20" id="Page_20">[Pg 20]</a></span>They transported to the islands of the Mediterranean as well as the
+coast of Northern Africa and Southern Europe heavy cargoes consisting of
+the product of their own skill and industry as well as of the manifold
+exports of the east. They sailed even beyond the "Pillars of Hercules"
+into the Atlantic Ocean and the North Sea. Through their hands "passed
+the gold and pearls of the east and the purple of Tyre, slaves, ivory,
+lion and panther skins from the interior of Africa, frankincense from
+Arabia, the linen of Egypt, the pottery and fine wares of Greece, the
+copper of Cyprus, the silver of Spain, tin from England, and iron from
+Elba."</p>
+
+<p>But while the Ph&oelig;nicians for their commercial intercourse with other
+nations relied chiefly upon the sea, the great highway of nature, they
+neglected by no means road-building at home. They connected their great
+cities, Sidon and Tyre, by a coast road, which they extended in time as
+far as the Isthmus of Suez. They also established great commercial
+routes by which their merchants penetrated the interior of Europe and
+Asia. Caravan roads extended south to Arabia and east to Mesopotamia and
+Armenia, penetrating the whole Orient as far as India, and even the
+frontiers of China. The Ph&oelig;nicians thus became the traders of
+antiquity, Tyre being the link between the east and the west.</p>
+
+<p>The Persian Empire, which under Darius stretched from east to west for a
+distance of 3,000 miles and comprised no less than two million square
+miles, with a population of seventy or eighty millions, had, with the
+exception of the Romans, perhaps the best system of roads known to
+ancient history. Indeed, it is doubtful whether without it such a vast
+empire, more than half as large as modern Europe, could have been held
+together. Each <span class='pagenum'><a name="Page_21" id="Page_21">[Pg 21]</a></span>satrap, or prefect of a province, was obliged to make
+regular reports to the king, who was also kept informed by spies of what
+was taking place in every part of the empire. To aid the administration
+of the government, postal communication for the exclusive use of the
+king and his trusted servants connected the capital with the distant
+provinces. This postal service was, four or five centuries later,
+patterned after by the Romans. From Susa to Sardes led a royal road
+along which were erected caravansaries at certain intervals. Over this
+road, 1,700 miles long, the couriers of the king rode in six or seven
+days. Under Darius the roads of the empire were surveyed and distances
+marked by means of mile-stones, many of which are still found on the
+road which led from Ecbatana to Babylon. These roads crossed the wildest
+regions of that great monarchy. They connected the cities of Ionia with
+Sardes in Lydia, with Babylon and with the royal city of Susa; they led
+from Syria into Mesopotamia, from Ecbatana to Persepolis, from Armenia
+into Southern Persia, and thence to Bactria and India.</p>
+
+<p>The Chinese commenced road-building long before the Christian era. They
+graded the roadway and then covered the whole with hewn blocks of stone,
+carefully jointed and cemented together so that the entire surface
+presented a perfectly smooth plane. Such roads, although very costly to
+build, are almost indestructible by time. In China, as well as in
+several other countries of Asia, the executive power has always charged
+itself with both the construction and maintenance of roads and navigable
+canals. In the instructions which are given to the governors of the
+various provinces these objects, it is said, are constantly commanded to
+them, and the judgment which the court forms of the conduct of each is
+very <span class='pagenum'><a name="Page_22" id="Page_22">[Pg 22]</a></span>much regulated by the attention which he appears to have paid to
+this part of his instructions. This solicitude of the sovereign for the
+internal thoroughfares is easily accounted for when it is considered
+that his revenue arises almost entirely from a land-tax, or rent, which
+rises and falls with the increase and decrease of the annual produce of
+the land. The greatest interest of the sovereign, his revenue, is
+therefore directly connected with the cultivation of the land, with the
+extent of its produce and its value. But in order to render that produce
+as great and as valuable as possible, it is necessary to procure for it
+as extensive a market as possible, and, consequently, to establish the
+freest, the easiest and the least expensive communication between all
+the different parts of the country, which can be done only by means of
+the best roads and the best navigable canals.</p>
+
+<p>In Africa the Egyptians and Carthaginians are the only nations of
+antiquity of which we have much historic knowledge. The former kept up a
+very active commerce not only with the south, but also with the tribes
+of Lydia on the west and with Palestine and the adjoining countries on
+the east. To facilitate commerce, they constructed and maintained a
+number of excellent highways leading in all directions. One of the most
+important among these was the old royal road on the coast of the
+Mediterranean Sea, or the "Road of the Philistines" of the Scriptures.
+This road crossed the Isthmus of Suez and led through the land of the
+Philistines and Samaria to Tyre and Sidon. Another road led, in a
+northwesterly direction, from Rameses to Pelusium. This, however,
+crossed marshes, lagoons and a whole system of canals, and was used only
+by travelers without baggage, while the Pharaohs, accompanied by their
+horses, chariots and troops, <span class='pagenum'><a name="Page_23" id="Page_23">[Pg 23]</a></span>preferred the former road. A third road
+led from Coptos, on the Nile, to Berenice, on the Red Sea. There were
+between these two cities ten stations, about twenty-five miles apart
+from each other, where travelers might rest with their camels each day,
+after traveling all night, to avoid the heat. Still another road led
+from the town of Babylon, opposite Memphis, along the east bank of the
+Nile, into Nubia. Much of the commerce of Egypt in ancient times, as in
+our day, was conducted on the Nile and its canals. The boatman and the
+husbandman were, in fact, the founders of the gentle manners of the
+people who flourished four thousand years ago in the blessed valley of
+the Nile. There is one canal among the many which deserves special
+mention. It flowed from the Bitter Lakes into the Red Sea near the city
+of Arsinoe. It was first cut by Sesostris before the Trojan times, or,
+according to other writers, by the son of Psammitichus, who only began
+the work and then died. Darius I. set about to complete it, but gave up
+the undertaking when it was nearly finished, influenced by the erroneous
+opinion that the level of the Red Sea was higher than Egypt, and that if
+the whole of the intervening isthmus were cut through, the country would
+be overflowed by the sea. The Ptolemaic kings, however, did cut it
+through and placed locks upon the canal.</p>
+
+<p>Carthage was a Ph&oelig;nician colony. The city was remarkable for its
+situation. It was surrounded by a very fertile territory and had a
+harbor deep enough for the anchorage of the largest vessels. Two long
+piers reached out into the sea, forming a double harbor, the outer for
+merchant ships and the inner for the navy. This city early became the
+head of a North African empire, and her fleets plied in all navigable
+waters known <span class='pagenum'><a name="Page_24" id="Page_24">[Pg 24]</a></span>to antiquity. Her navy was the largest in the world, and
+in the sea-fight with Regulus comprised three hundred and fifty vessels,
+carrying one hundred and fifty thousand men. Though we have but meager
+accounts of the internal affairs of Carthage, there can be no doubt that
+much attention was given, both at home and in the colonies, to the
+construction of highways, which were distinguished for their solidity.
+It is said that the Romans learned from the Carthaginians the art of
+paving roads.</p>
+
+<p>European history began in Greece, the civilization of whose people
+passed to the Romans and from them to the other Aryan nations which have
+played an important role in the great historical drama of modern times.
+The physical features of the Balkan Peninsula were an important factor
+in the formation of the character of its inhabitants. The coast has a
+large number of well-protected bays, most of which form good harbors.
+Navigation and commerce were greatly stimulated in a country thus
+favored by Nature. Nearly all the principal cities of Hellas could be
+reached by ships, and the need of internal thoroughfares was but little
+felt. Nevertheless, public highways connected all of the larger towns
+with the national sanctuaries and oracles, as Olympia, the Isthmus,
+Delphi and Dodona. Athens, after the Persian wars the metropolis of
+Greece, was by the so-called Long Walls connected with the Pir&aelig;us, its
+harbor. This highway, protected by high walls built two hundred yards
+apart, was over four miles long, and enabled the Athenians, as long as
+they held the command of the sea, to bring supplies to their city, even
+when it was surrounded by an enemy on the land.</p>
+
+<p>Rome is the connecting link between antiquity and medi&aelig;valism. The great
+empire sprang from a single <span class='pagenum'><a name="Page_25" id="Page_25">[Pg 25]</a></span>city, whose power and dominion grew until
+it comprised every civilized nation living upon the three continents
+then known. Under the emperors, the Roman empire extended from the
+Atlantic to the Euphrates, a distance of more than three thousand miles,
+and from the Danube and the English Channel to the cataracts of the Nile
+and the Desert of Sahara. Its population was from eighty to one hundred
+and twenty millions. The empire was covered with a net-work of excellent
+roads, which stimulated, together with the safety and peace which
+followed the civil wars, traffic and intercourse between the different
+regions united under the imperial government. More than 50,000 miles of
+solidly constructed highways connected the various provinces of this
+vast realm. There was one great chain of communication of 4,080 Roman
+miles in length from the Wall of Antoninus in the northwest to Rome, and
+thence to Jerusalem, a southeastern point of the empire. There were
+several thousand miles of road in Italy alone. Rome's highways were
+constructed for the purpose of facilitating military movements, but the
+benefits which commerce derived from them cannot easily be
+overestimated. These military roads were usually laid out in straight
+lines from one station to another. Natural obstacles were frequently
+passed by means of very extensive works, as excavations, bridges, and,
+in some instances, long tunnels. The resources of the Roman Empire were
+almost inexhaustible, and no public expenditures were larger than those
+made on account of the construction of new roads. The fact that many of
+these roads have borne the traffic of almost two thousand years without
+material injury is abundant proof of the unsurpassed solidity of their
+construction. The Roman engineers always secured a firm bottom, which
+was done, when necessary, by <span class='pagenum'><a name="Page_26" id="Page_26">[Pg 26]</a></span>ramming the ground with small stones, or
+fragments of brick. Upon this foundation was placed a pavement of large
+stones, which were firmly set in cement. These stones were sometimes
+square, but more frequently irregular. They were, however, always
+accurately fitted to each other. Many varieties of stone were used, but
+the preference was given to basalt. Where large blocks could not be
+conveniently obtained, small stones of hard quality were sometimes
+cemented together with lime, forming a kind of concrete, of which masses
+extending to a depth of several feet are still in existence. The
+strength of the pavements is illustrated by the fact that the substrata
+of some have been so completely washed away by water, without disturbing
+the surface, that a man may creep under the road from side to side while
+carriages pass over the pavement as over a bridge. The roads were
+generally raised above the ordinary surface of the ground. They
+frequently had two wagon-tracks, which were separated by a raised
+foot-path in the center, and blocks of stone at intervals, to enable
+travelers to mount on horseback. Furthermore, each mile was marked by a
+numbered post, the distance being counted from the gate of the wall of
+Servius. The mile-post was at first a roughly hewn stone, which in time
+was exchanged for a monument, especially in the vicinity of Rome and
+other large cities. The most celebrated road of Italy, which has always
+excited the admiration of the student of antiquity, was the Via Appia,
+the remains of which are still an object of wonder. It was first built
+from Rome to Capua by Appius Claudius C&aelig;cus in the fourth century before
+Christ, and was afterwards continued as far as Brundisium. It was broad
+enough for two carriages to pass each other, and was built of solid
+stone. The stones <span class='pagenum'><a name="Page_27" id="Page_27">[Pg 27]</a></span>were hewn sharp and smooth, and their corners fitted
+into one another without the aid of any connecting material, so that,
+according to Procopius, the whole appeared to be one natural stone. Each
+side of the street had a high border for foot-passengers, on which were
+also placed alternately seats and mile-stones. In spite of its age and
+heavy traffic parts of this road are still in a good state of
+preservation. After the completion of the Via Appia similar roads were
+constructed, so that under the emperors seven great highways started
+from Rome, viz.: the Via Appia and Latina to the south; two, Valeria and
+Salaria, to the Adriatic; two, Cassia and Aurelia, to the northwest; and
+the Via &AElig;milia, serving for both banks of the Po.</p>
+
+<p>Nor were the provinces by any means neglected. During the last Punic war
+a paved road was constructed from Spain through Gaul to the Alps, and
+similar roads were afterwards built in every part of Spain and Gaul,
+through Illyricum, Macedonia and Thrace, to Constantinople, and along
+the Danube to its mouths on the Black Sea. So, likewise, were the
+islands of Sardinia, Corsica, Sicily and Great Britain crossed by them.
+It has justly been said that the roads of the Roman Empire, whose strong
+net-work enlaced the known world, were the architectural glory of its
+people. These military roads caused in the various parts of the empire a
+wonderful social and commercial revolution. They made it possible for
+civilization to penetrate into the most remote retreats and to conquer
+their inhabitants more completely than could C&aelig;sar at the head of his
+legions.</p>
+
+<p>The Romans also had an efficient postal service, which was first
+instituted by Augustus and greatly improved by Hadrian. The former, as
+Gibbon states in his "Decline <span class='pagenum'><a name="Page_28" id="Page_28">[Pg 28]</a></span>and Fall of the Roman Empire," placed
+upon all roads leading away from the golden milestone of the Forum, at
+short distances, relays of young men to serve as couriers, and later
+provided vehicles to hurry information from the provinces. These posts
+facilitated communication through all parts of the empire, and while
+they were originally established in the interest of the government, they
+proved serviceable to individuals as well, for there is no doubt, that,
+together with the official dispatches, every courier carried private
+letters also.</p>
+
+<p>The expenses of the post were largely defrayed by the cities through
+which it passed, these cities being obliged to provide the stations
+established within their territories with the necessary stores. At the
+principal stations were found inns, where the proprietors were held
+responsible for injuries suffered by travelers while in their houses.</p>
+
+<p>The communication of the Roman Empire was scarcely less free and open by
+sea than it was by land. Italy has by nature few safe harbors, but the
+energy and industry of the Romans corrected the deficiencies of nature
+by the construction of several artificial ports.</p>
+
+<p>After the downfall of the Roman Empire its roads were either destroyed
+by the people through whose territories they led or by the conquerors,
+to render more difficult the approach of an enemy.</p>
+
+<p>Civilization and commerce greatly suffered through the downfall of Rome,
+and did not again revive until after the struggles of the Northern
+Christian races with the Southern and Eastern nations, which had become
+Mohammedan. The sixth and seventh centuries were the darkest in the
+history of Europe. Charlemagne, toward the close of the eighth century,
+caused many of the old Roman roads to be repaired and new ones to be
+constructed. He, <span class='pagenum'><a name="Page_29" id="Page_29">[Pg 29]</a></span>as well as several of his immediate successors, made
+use of mounted messengers to send imperial mandates from one part of the
+realm to the other. The rulers of the succeeding centuries did not
+profit, however, by this example, and the roads of the empire again fell
+into decay. Moreover, the public safety was greatly impaired by robbers
+and feudal knights, whose depredations were so heavy a tax upon commerce
+as to greatly discourage it. Trade under these circumstances would have
+been entirely destroyed, had it not been for the merchants' unions which
+were formed by the larger cities for the protection of their interests.
+These organizations maintained the most important thoroughfares, and
+even furnished armed escorts to wayfaring merchants. Commerce thus
+flourished in, and commercial relations were kept up among, the cities
+immediate between Venice and Genoa, as well as the cities on the Rhine
+and Danube. Florence, Verona, Milan, Strasbourg, Mayence, Augsburg, Ulm,
+Ratisbon, Vienna and Nuremberg were flourishing marts, and through them
+flowed the currents of trade between the north and the south. Out of
+these commercial unions grew in time the Hanseatic League, which from
+the thirteenth to the fifteenth century controlled the commerce of the
+northern part of Europe on both the water and the land. The object of
+this league, which at the height of its power included eighty-five
+cities, was to protect its members against the feudal lords on the land
+and against pirates on the sea. Its power extended from Norway to
+Belgium and from England to Russia. In all the principal towns on the
+highways of commerce the flag of the Hansa floated over its counting
+houses. Wherever its influence reached, its members controlled roads,
+mines, agriculture and manufactures. It often dictated terms to kings,
+and <span class='pagenum'><a name="Page_30" id="Page_30">[Pg 30]</a></span>almost succeeded in monopolizing the trade of Europe north of
+Italy.</p>
+
+<p>It is characteristic of the social and political condition of this time
+that the postal service was not carried on by the state, but was in the
+hands of the various municipalities, convents and universities. During
+the fifteenth and sixteenth centuries national power and national life
+made themselves felt, and with a change in the political system the
+system of communication and transportation changed also. Louis XI. of
+France took the first step toward making a nation of the French when he
+transferred the postal service from the cities and other feudal
+authorities to the state. Two or three centuries later, France obtained
+a national system of roads and canals. The idea was largely due to
+Colbert, the minister of Louis XIV. It was, however, not executed in
+detail until the middle of the last century. Many abuses grew up in
+connection with it, but on the whole it was probably the soundest and
+most efficient part of the French administration. A system of lines of
+communication, radiating from Paris, was constructed by skilled
+engineers, and placed under the supervision of men of talent, especially
+trained for the purpose at the Ec&ocirc;le des Fonts et Chauss&eacute;es. The whole
+system was further improved by Napoleon, and has served as a basis for
+the present system of railroad supervision.</p>
+
+<p>The first artificial waterway constructed in France was the Languedoc
+Canal, connecting the Bay of Biscay with the Mediterranean. This
+gigantic work, designed by Riquet, was commenced in 1666, and completed
+in 1681. The canal is 148 miles long and its summit level is 600 feet
+above the sea, the works along its line embracing over one hundred locks
+and fifty aqueducts. A large number of canals have since been
+constructed, and France <span class='pagenum'><a name="Page_31" id="Page_31">[Pg 31]</a></span>has at present over 4,000 miles of artificial
+waterways, or more than any other country of Europe.</p>
+
+<p>Nowhere else was the same completeness of organization possible. The
+regular mail service of Germany dates back to the year of 1516, when
+Emperor Maximilian established a postal route between Brussels and
+Vienna and made Francis Count of Taxis Imperial Postmaster-General. The
+postal service of the empire greatly improved up to the time of the
+Thirty Years' War, which completely demoralized it. After the war the
+individual states and free cities, usurping imperial prerogatives,
+established postal routes of their own and thereby crippled the national
+service. The same war also did great damage to the public thoroughfares,
+and the commercial and manufacturing interests of the German empire were
+until the end of the eighteenth century in a deplorable condition.
+Frederick the Great, recognizing the fact that the industrial paralysis
+of Germany was owing chiefly to its defective means of communication,
+commenced to construct turnpikes and canals in Prussia, and the minor
+German princes one by one imitated his example, until the Napoleonic
+wars again put an end to internal improvements. The good work was
+resumed, however, after the downfall of Napoleon, and in 1830 Germany
+was intercrossed by from three to four thousand miles of turnpike.</p>
+
+<p>In the Netherlands canals were constructed as early as the twelfth
+century. Being particularly well adapted to the flat country of Holland,
+they were rapidly extended until they connected all the cities, towns
+and villages of the country, and to a large extent took the place of
+roads. The largest canal of Holland is the one which connects the city
+of Amsterdam with the North Sea. It <span class='pagenum'><a name="Page_32" id="Page_32">[Pg 32]</a></span>was constructed between the years
+of 1819 and 1825 at an expense of more than four million dollars. The
+city of Amsterdam owes to this canal its present commercial prosperity.</p>
+
+<p>Public roads and the state postal service are of comparatively recent
+origin in Great Britain. The first public postal route was established
+in 1635, during the reign of Charles I. In 1678 a public stage-coach
+route was established between Edinburgh and Glasgow. The distance is
+only forty-four miles, but the roads were so bad that, though the coach
+was drawn by six able horses, the journey took three days. It was
+considered a great improvement when in 1750 it could be completed in
+half the time originally required. In 1763 a mail-coach made only
+monthly trips between London and Edinburgh, eight long days being
+required for the journey, which to-day is made in less than twelve
+hours. The number of stage passengers between these two capitals
+averaged about twenty-five a month, and rose to fifty on extraordinary
+occasions. In those days coaches were very heavy and without springs,
+and travelers not unfrequently cut short their journeys for want of
+conveniences.</p>
+
+<p>Turnpikes in Great Britain do not even date as far back as
+stage-coaches. It is true the first turnpike act was passed as early as
+1653, but the system was not extensively adopted until a century later.
+Previous to that time the roads of England, such as they were, were
+maintained by parish and statute labor. In the latter half of the last
+century, under improved methods of construction, turnpike roads
+multiplied rapidly. Both roads and vehicles attained, previous to the
+advent of the railroads, such a degree of perfection that the
+stage-coach made the journey between London and Manchester, 178 <span class='pagenum'><a name="Page_33" id="Page_33">[Pg 33]</a></span>miles,
+in 19 hours; between London and Liverpool, 203 miles, in less than 21
+hours; and between London and Holyhead, 261 miles, in less than 27
+hours.</p>
+
+<p>In spite of these improved facilities, the transportation of merchandise
+continued to be very expensive. Goods had to be conveyed from town to
+town by heavy wagons, and the cost of land-carriage between Manchester
+and Liverpool, a distance of thirty miles, was at times as high as forty
+shillings per ton.</p>
+
+<p>The various disadvantages of land transportation directed, toward the
+middle of the last century, the attention of the British people to the
+importance of a system of canals. They realized that these water
+highways would open an easier and cheaper communication between distant
+parts of the country, thus enabling manufacturers to collect their
+materials and fuel from remote districts with less labor and expense,
+and to convey their goods to a more distant and more profitable market.
+It would also facilitate the conveyance of farm produce to a greater
+distance and would thereby benefit both the producer and consumer. The
+canal era was formally inaugurated in 1761, when the Duke of Bridgewater
+presented to Parliament a petition for a bill to construct the canal
+which has since borne his name. The canal was commenced in 1767 and was
+completed in 1772. The next forty years were a period of great activity
+in canal building, but it was left to private enterprise, with very
+little aid from the government. Over a hundred canal acts were passed by
+Parliament before the year 1800. The largest canal of the British Isles
+is the Caledonian, extending from Inverness to Fort William, a distance
+of sixty-three miles. It was commenced in 1803 and completed in 1847,
+and cost &pound;1,256,000. Other canals of importance are the Great Canal,
+which connects the North <span class='pagenum'><a name="Page_34" id="Page_34">[Pg 34]</a></span>Sea with the Atlantic Ocean, and the Grand
+Function Canal, which is over one hundred miles long and connects most
+of the water-ways of central England with the Thames River. It is
+estimated that there were over 2,200 miles of navigable canals in Great
+Britain before the introduction of railroads.</p>
+
+<p>Canal-building in Spain dates back to the beginning of the sixteenth
+century, when Charles V. built the Imperial Canal of Aragon, which is
+over sixty miles long. The political and commercial decline of the
+country during the seventeenth and eighteenth centuries, however,
+brought the development of her highways to a standstill, and, with the
+exception of Turkey, probably no European country has at the present
+time more deficient transportation facilities than Spain.</p>
+
+<p>The comparatively high state of civilization which existed in the
+Italian cities during the middle ages, their commercial and industrial
+thrift and the importance of Rome as the metropolis of the Catholic
+Church combined to maintain many of the excellent ancient highways of
+Italy. A number of canals were built in Northern Italy as early as the
+fifteenth century, and it is claimed by some writers that locks were
+first used on the Milanese canals in 1497. But while public
+thoroughfares have always been well maintained in Northern Italy and
+even as far south as Naples, they were during the past two or three
+centuries permitted to greatly deteriorate in the southern part of the
+peninsula, to the great detriment of both agriculture and commerce. The
+condition of the large Italian islands is still more lamentable, Sicily
+and Sardinia being almost entirely devoid of roads. She that was the
+granary of ancient Rome to-day scarcely produces enough grain to supply
+her own people.</p>
+
+<p><span class='pagenum'><a name="Page_35" id="Page_35">[Pg 35]</a></span>Denmark and the Scandinavian peninsula had a good system of highways
+long before the railroad era. Among the many excellent canals of Sweden
+may be mentioned the G&ouml;ta Canal, which was commenced by Charles XII. in
+the early part of the last century, but was not entirely completed until
+1832. It is, inclusive of the lakes, 118 miles long, and its
+construction cost $3,750,000, three-fifths of which was contributed by
+the state. This canal connects the Baltic Sea with Lake Wener, as well
+as, through the G&ouml;ta-Elf, with the North Sea.</p>
+
+<p>Next to Turkey and Spain, no country of Europe has been as slow to
+appreciate the advantages of a system of highways as Russia. At the
+beginning of the nineteenth century the vast empire of the Czar had but
+a few roads connecting its principal cities, and these were almost
+impassable in the spring and fall. Much progress has, however, been made
+since then, and at present Russia has over 75,000 miles of wagon-road
+and artificial waterway, and 19,000 miles of railroad. A road has been
+built through Siberia, extending from the Ural Mountains to the city of
+Jakutsk on the Lena and sending out many branch roads north and south.
+The development of Russia's resources has kept pace with that of her
+system of highways, and the agricultural and mineral products of that
+country are in the markets of the world constantly gaining ground in
+their competition with the products of Western Europe and America.</p>
+
+<p>Passing now to the Western Hemisphere, we find that in ancient Peru the
+Incas built great roads, the remains of which still attest their
+magnificence. Probably the most remarkable were the two which extended
+from Quito to Cuzco, and thence on toward Chile, one passing over the
+great Plateau, the other following the coast, <span class='pagenum'><a name="Page_36" id="Page_36">[Pg 36]</a></span>Humboldt, in his "Aspects
+of Nature," says of this mountain road: "But what above all things
+relieves the severe aspect of the deserts of the Cordilleras are the
+remains, as marvelous as unexpected, of a gigantic road, the work of the
+Incas. In the pass of the Andes between Mausi and Loja we found on the
+plain of Puttal much difficulty in making a way for the mules over a
+marshy piece of ground, while for more than a German mile our sight
+continually rested on the superb remains of a paved road of the Incas,
+twenty feet wide, which we marked resting on its deep foundations, and
+paved with well-cut, dark porphyritic stone. This road was wonderful and
+does not fall behind the most imposing Roman ways which I have seen in
+France, Spain and Italy. By barometrical observation I found that this
+colossal work was at an elevation of 12,440 feet." The length of this
+road, of which only parts remain, is variously estimated at from 1,500
+to 2,000 miles. It was built of stone and was, in some parts at least,
+covered with a bituminous cement, which time had made harder than the
+stone itself. All the difficulties which a mountainous country presents
+to the construction of roads were here overcome. Suspension bridges led
+over mountain torrents, stairways cut in the rock made possible the
+climbing of steep precipices, and mounds of solid masonry facilitated
+the crossing of ravines. Under the rule of the Spaniards the roads of
+the Incas went to ruin. In fact, throughout South America but little, if
+anything, was done by the mother country to aid transportation.</p>
+
+<p>North America, or at least that part of it which was settled by the
+Anglo-Saxon race, fared much better in this respect. The great utility
+of good roads was universally recognized even in the colonial times, but
+the <span class='pagenum'><a name="Page_37" id="Page_37">[Pg 37]</a></span>scarcity of capital, the great extent of territory as compared with
+the population, and the want of harmonious action among the various
+colonies, delayed extensive road and canal building until after the
+establishment of the Union. Mistaken local interests but too often
+wrecked well-advanced plans, and what road-building was done during the
+colonial times was almost entirely left to individual exertion, without
+any direct aid from the government.</p>
+
+<p>The first American turnpike was built in Pennsylvania in 1790. From
+there the system extended into New York and Southern New England. Up to
+1822 more than six million dollars had been expended in Pennsylvania for
+turnpikes, one-third of which sum, or over $1,000 a mile, had been
+contributed by the commonwealth.</p>
+
+<p>In 1800 three wagon-roads connected the Atlantic coast with the country
+west of the Alleghanies, one leading from Philadelphia to Pittsburgh,
+one from the Potomac to the Monongahela, and a third passed through
+Virginia to Knoxville, in Tennessee. Much as was done during this period
+for the improvement of the roads, stage-coach travel remained for years
+comparatively slow. In 1792 Mr. Jefferson, then Secretary of State,
+wrote to the Postmaster-General to know if the post, which was then
+carried at the rate of fifty miles a day, could not be expedited to one
+hundred. Even this latter rate was considered slow on the great
+post-roads forty years later. In the year 1800 one general mail-route
+was extended from Maine to Georgia, the trip being made in twenty days.
+From Philadelphia a line went to Lexington in sixteen and to Nashville
+in twenty-two days. The government of the United States, appreciating
+the importance, for military purposes, of good roads leading to the
+frontiers, commenced the construction of national, or military, <span class='pagenum'><a name="Page_38" id="Page_38">[Pg 38]</a></span>roads.
+A road was thus built from Baltimore through Cincinnati to St. Louis,
+and another from Bangor to Houlton, in Maine. In 1807 Albert Gallatin,
+Secretary of the Treasury, advocated the extensive construction of
+public roads and canals by the general government. Mr. Gallatin took the
+ground that the inconveniences, complaints, and perhaps dangers,
+resulting from a vast extent of territory cannot otherwise be radically
+removed than by opening speedy and easy communications through all its
+parts; that good roads and canals would shorten distances, facilitate
+commercial and personal intercourse, and unite by a still more intimate
+community of interests the most remote quarters of the United States,
+and that no other single operation within the power of the government
+could more effectually tend to strengthen and perpetuate that union
+which secured external independence, domestic peace and internal
+liberty. The principal improvements recommended by Mr. Gallatin were the
+following:</p>
+
+<p>1. Canals opening an inland navigation from Massachusetts to North
+Carolina.</p>
+
+<p>2. Improvement of the navigation of the four great Atlantic rivers,
+including canals parallel to them.</p>
+
+<p>3. Great inland navigation by canals from the North River to Lake
+Ontario.</p>
+
+<p>4. Inland navigation from the North River to Lake Champlain.</p>
+
+<p>5. Canal around the Falls and Rapids of Niagara.</p>
+
+<p>6. A great turnpike road from Maine to Georgia, along the whole extent
+of the Atlantic sea-coast.</p>
+
+<p>7. Four turnpike roads from the four great Atlantic rivers across the
+mountains to the four corresponding Western rivers.</p>
+
+<p><span class='pagenum'><a name="Page_39" id="Page_39">[Pg 39]</a></span>8. Improvement of the roads to Detroit, St. Louis and New Orleans.</p>
+
+<p>Mr. Gallatin also recommended that a sufficient number of local
+improvements, consisting either of roads or canals, be undertaken so as
+to do substantial justice to all parts of the country. The expenditure
+necessary for these improvements was estimated at twenty million
+dollars. Local jealousy and State rights prejudice practically defeated
+this movement, the Cumberland road, or National Pike, being the only
+result of any importance. The failure of the government to provide the
+country with adequate roads left the construction of turnpike roads to
+private enterprise, and these roads, before the general introduction of
+railroads, often yielded much profit to capitalists. Great as were the
+conveniences afforded by the turnpike, they were entirely inadequate for
+the development of the resources of the interior of the country. The
+products of a forest or a mine could not be transported upon them to any
+great extent. The crossing of a single water-shed, owing to the
+necessity for largely increased motive power, would often materially
+decrease the value of the goods to be transported.</p>
+
+<p>These drawbacks of land transportation directed, toward the close of the
+last century, the attention of the people of the United States to the
+necessity of providing for a system of canals that should bind together
+the various parts of their extended country in the interest of commerce.
+General Washington was among the first to urge upon his countrymen the
+introduction of this great highway of interstate traffic, although but
+little was done in this direction until after the War of 1812. The
+people of New York had from an early period of the settlement of their
+State been impressed with the importance of <span class='pagenum'><a name="Page_40" id="Page_40">[Pg 40]</a></span>connecting the Hudson with
+the Western lakes. In 1768 the provincial legislature discussed this
+subject, but the political agitations of the times and the following
+revolutionary struggle arrested further proceedings. After the war the
+project was frequently brought before the legislature, but nothing was
+done until 1808, when the assembly appointed a committee to investigate
+the subject and to solicit the co&ouml;peration of the general government, if
+the project should be found practicable. The report of the committee
+concerning the practicability of the undertaking was in every respect
+favorable, and in 1810 the legislature provided for a survey of the
+entire route from the Hudson River to Lake Erie. The survey was made,
+but, the expected aid from the national government not being
+forthcoming, the matter rested until after the war with England. In 1816
+a new board of commissioners was appointed, and the following year an
+act was passed providing for a system of internal improvements in the
+State. On the 4th day of July next the excavation of the Erie Canal was
+commenced, and on the 26th of October, 1825, the first boat passed from
+Lake Erie to the Hudson. The canal was 378 miles long and four feet
+deep. It had a width of 40 feet at the surface and 28 feet on the
+bottom, and carried boats of 76 tons burden. Owing to the rapid increase
+of trade, the capacity of the canal was found inadequate within ten
+years after its opening, and in 1835 measures were taken to enlarge it
+to a width of 70 and 56 feet by a depth of seven feet, thus allowing the
+passage of boats of 240 tons. The total length of the canal was,
+however, subsequently shortened 12-1/2 miles, making its present length
+365-1/2 miles. This enlargement was completed in 1862, and cost the
+State over $7,000,000, making the total cost <span class='pagenum'><a name="Page_41" id="Page_41">[Pg 41]</a></span>of the canal about
+$50,000,000. New York has, inclusive of branches, some ten other canals
+in operation, among them the Champlain Canal, extending from the head of
+Lake Champlain to its junction with the Erie Canal at Waterford; the
+Oswego Canal, from Lake Ontario at the city of Oswego to the Erie Canal
+at Syracuse; the Black River Canal, from Rome to Lyon Falls; the Cayuga
+and Seneca canals, extending from the Erie Canal to the Seneca and
+Cayuga lakes. The State has expended for the construction of canals not
+less than $70,000,000.</p>
+
+<p>Canal-building in the State of Pennsylvania commenced about the time
+that the original Erie Canal was completed in New York. In 1824 the
+legislature authorized the appointment of commissioners to explore canal
+routes from Philadelphia to Pittsburgh and the West. A year later
+surveys were authorized to be made from Philadelphia to Pittsburgh, from
+Allegheny to Erie, from Philadelphia to the northern boundary of the
+State, and also south to the Potomac River. The construction of the main
+lines of communication between the east and the west and the coal fields
+in the north was soon commenced. Large loans were repeatedly made, and
+the work was vigorously prosecuted. In 1834 Pennsylvania had 589 miles
+of State canals, among them the Central Division Canal, 172 miles long,
+and the Western Division Canal, 104 miles long. Public opinion strongly
+favored an extended system of internal improvements, and it was believed
+that these water-ways would soon become a source of revenue to the
+State. These expectations might have been realized had the State carried
+on enterprises on a less extensive and more economical basis. In 1840
+the financial condition of the State had become such that canal-building
+had to be abandoned. The amount <span class='pagenum'><a name="Page_42" id="Page_42">[Pg 42]</a></span>expended by the State of Pennsylvania
+for canals, including the Columbia Railroad, was about $40,000,000,
+while the difference between net earnings and interest paid by the State
+up to that time is estimated at $30,000,000. In 1857 and 1858 these
+works were sold to the Pennsylvania Railroad Company and the Sunbury and
+Erie Railway Company for $11,375,000, or about one-sixth of their cost
+to the State.</p>
+
+<p>In Ohio the legislature authorized the survey of a canal from Lake Erie
+to the Ohio River. In 1825 an act was passed providing for the
+construction of the Ohio Canal and a number of feeders. In 1831 the
+canal was in operation from Cleveland to Newark, a distance of 176
+miles, and the whole system was finished in 1833.</p>
+
+<p>The State of Illinois completed in 1848 the Illinois and Michigan Canal,
+connecting Chicago with La Salle on the Illinois River. This canal is
+102 miles long, 60 feet wide and six feet deep. The construction by the
+general government of the Hennepin Ship Canal, connecting the
+Mississippi with Lake Michigan, has long been agitated in the Northwest.
+Such a canal would be one of the most important channels of commerce in
+the country, and it is to be hoped that this great project will be
+completed at no distant day.</p>
+
+<p>We have besides in the United States a large number of canals that were
+constructed, and are still operated, by private companies, as the
+Delaware and Hudson in New York and Pennsylvania, the Schuylkill, Lehigh
+and Union canals in Pennsylvania, the Morris Canal in New Jersey, the
+Chesapeake and Ohio and Maryland, etc. A large number of canals, some
+public and others private property, have since the construction of
+railroads been abandoned. Thus in New York 356 miles of canals, <span class='pagenum'><a name="Page_43" id="Page_43">[Pg 43]</a></span>costing
+$10,235,000; in Pennsylvania 477 miles, costing $12,745,000; in Ohio 205
+miles, costing $3,000,000; in Indiana 379 miles, costing $6,325,000, are
+no longer in use. All the canals that were ever built in New England
+have likewise been abandoned for commercial purposes.</p>
+
+<p>Nor was Canada slow in realizing the advantages which a system of canals
+connecting the great lakes with the Atlantic Ocean promised to give her.
+The construction of the Welland and St. Lawrence canals made it possible
+for vessels to clear from Chicago direct for Liverpool, and this has to
+a considerable extent diverted grain shipments to Montreal, giving the
+Canadian dealers a decided advantage in this traffic.</p>
+
+<p>It is a strange fact that, at least in this country, the zenith of the
+canal-building era is found in the decade following the invention of the
+steam railroad. For many years it was not believed that under ordinary
+circumstances the iron horse could ever compete with the canal boat in
+rates. The most sagacious business men had unlimited faith in the
+destiny of the canal as a prime commercial factor and invested largely
+in canal stocks. To many these investments proved a disappointment. The
+marvelous improvements in locomotives and other rolling stock, the
+unprecedented reductions in the prices of iron and steel, and above all
+the fact that in our climate canal carriage is unavailable during five
+months of the year, gave the railroads a decided advantage in their
+competition with canal transportation. There can be no doubt, however,
+that the presence of this competition was one of the chief causes of the
+great reduction of railroad rates on through routes. In this respect
+alone the canals have accomplished a very important mission. In the
+transportation of many of the raw products of the soil and the <span class='pagenum'><a name="Page_44" id="Page_44">[Pg 44]</a></span>mine
+canals still compete successfully with the railroads, and it is still an
+open question whether future inventions may not enable them to regain
+lost ground in the carriage of other goods. It would certainly be a
+short-sighted policy for our people to discourage the construction of
+new canals.</p>
+
+<p>For the improvement of navigable rivers, appropriations have been made
+by Congress ever since the establishment of our national government, and
+these appropriations now amount to millions of dollars annually. Since
+the introduction of railroads the usefulness of these national highways
+of commerce has ceased to depend upon the tonnage carried upon them, but
+the influence which they exert upon the cost of transportation is so
+great that it is not likely that the policy of making annual
+appropriations for the improvement of these water ways will be abandoned
+by the American people for many years to come.</p>
+
+<p>There has recently been a strong agitation in some portions of the
+United States in favor of extending government aid to the Nicaragua Ship
+Canal, and there seem to be indeed many arguments in favor of such a
+policy. President Harrison said in his annual message to Congress in
+December, 1891:</p>
+
+<div class="blockquot"><p>"The annual report of the Maritime Canal Company of
+Nicaragua shows that much costly and necessary preparatory
+work has been done during the past year in the construction
+of shops, railroad tracks and harbor piers and breakwaters,
+and that the work of canal construction has made some
+progress. I deem it to be a matter of the highest concern to
+the United States that this canal, connecting the waters of
+the Atlantic and Pacific oceans, and giving to us a short
+water communication between our ports upon those two great
+seas, should be speedily constructed, and at the smallest
+practical limit of cost. The gain in freights to the people
+and the direct saving to the <span class='pagenum'><a name="Page_45" id="Page_45">[Pg 45]</a></span>government of the United
+States in the use of its naval vessels would pay the entire
+cost of the work within a short series of years. The report
+of the Secretary of the Navy shows the saving in our naval
+expenditures which would result. The Senator from Alabama,
+Mr. Morgan, in his argument upon this subject before the
+Senate of the last session, did not overestimate the
+importance of the work when he said that 'The canal is the
+most important subject now connected with the commercial
+growth and progress of the United States.'"</p></div>
+
+<p>And in his message of 1892 that:</p>
+
+<div class="blockquot"><p>"It is impossible to overestimate the value from every
+standpoint of this great enterprise, and I hope that there
+will be time, even in this Congress, to give it an impetus
+that will insure the early completion of the canal and
+secure to the United States its proper relation to it when
+completed."</p></div>
+
+<p>It is sincerely to be hoped that the people of the United States can be
+convinced of the advisability of extending government aid to this
+enterprise. It must be admitted that the experience of our government
+with the Pacific railroads has created a strong prejudice among the
+masses against such subsidies as were granted to those corporations, but
+it is probable, with the people on the alert, that Congress would not
+again permit great impositions to be practiced against the government.
+When the great advantages to be derived by the people of the United
+States from the use of this canal and the small outlay required are
+considered, it would seem to be a wise policy for our government at once
+to take such steps as are necessary to secure the early completion and
+the future control of this great international highway.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_46" id="Page_46">[Pg 46]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER II.</h2>
+
+<h2>THE HISTORY OF RAILROADS.</h2>
+<br />
+
+<p>In making inquiry into those inventions and improvements which were the
+precursors of the modern railroad, we meet early the desire to render
+the movement of wagons easier by a smooth roadway. Traces of this may be
+found even in ancient times. The Romans constructed tracks consisting of
+two lines of cut stones, and in the older Italian cities stone tracks
+may still be seen in the streets, corresponding to wagon tracks, and
+evidently designed for the purpose of rendering the movement of the
+wheels easier.</p>
+
+<p>The first rail tracks of which we have any knowledge were constructed at
+the end of the sixteenth century. These rails, which were made of wood,
+appear to have been an invention of miners in the Hartz Mountains. They
+were the result of pressing necessity, for, as mines were usually so
+situated that roads could only with great difficulty and expense have
+been built to them, some cheaper sort of communication with the high
+road had to be contrived.</p>
+
+<p>After various experiments the wooden railway was adopted, and the
+product of the mine was carried upon them to the place of shipment by
+means of small cars. Queen Elizabeth had miners brought into England, to
+develop the English mines, and through them the rail track was
+introduced into Great Britain. Later the wooden rail was covered with an
+iron strap to prevent the rapid wear of the wood, and about the year
+1768 cast-iron rails commenced to be used. At the end of the last
+century <span class='pagenum'><a name="Page_47" id="Page_47">[Pg 47]</a></span>wheels were constructed with flanges, to prevent derailing.
+More attention was also paid to the substructure, wood, iron and stone
+being used for this purpose. Wrought-iron rails were patented in 1820.</p>
+
+<p>The first authentic account of heat or steam engines is found in the
+"Pneumatica" of Hero of Alexandria, who lived in the second century
+before Christ. Hero describes a number of contrivances by which steam
+was utilized as a source of power. Although these contrivances were at
+the time of very little practical value, they are interesting as the
+prototypes of the modern steam engine. The attempts to move wheels by
+steam date back to the seventeenth century, when a number of experiments
+were made, but their exact nature is not known, because they were all
+soon abandoned, either on account of unsuccessful results or lack of
+means. At the beginning of the eighteenth century Denis Papin
+constructed a small steamboat, upon which he sailed in 1707 on the Fulda
+River from Cassel to Munden, a distance of about fifteen miles.</p>
+
+<p>The construction of locomotives engaged the attention of ingenious minds
+a century and a half ago. It is claimed that Newton experimented with a
+steam motor in 1680. Dr. Robinson described in 1759, in his "Mechanical
+Philosophy," a steam vehicle. The Glasgow engineer James Watt devoted
+himself from 1769 to 1785, with great energy, to the development of the
+steam engine, and succeeded in inventing the system which became the
+parent of the modern engine. An American, Oliver Evans, constructed at
+the beginning of the present century a carriage propelled by steam, and
+exhibited it, in 1804, in the streets of Philadelphia, before twenty
+thousand spectators. While Evans' invention was never put to any
+practical use, he prophesied that the time would come when steam cars
+<span class='pagenum'><a name="Page_48" id="Page_48">[Pg 48]</a></span>would be considered the most perfect means of transportation. On
+Christmas eve, 1801, Richard Trevithick exhibited at Camborne, England,
+a steam coach, and soon afterwards he and his cousin, A. Vivian,
+obtained an English patent on a "steam engine for propelling carriages."
+Seven years later a Mr. Blinkensop, of Middleton Colliery, near Leeds,
+constructed another locomotive engine, upon which he obtained a patent
+in 1811. These and a number of other inventors of steam engines vainly
+expended great ingenuity in attempting to overcome a purely imaginary
+difficulty. They believed that the adhesion between the face of the
+wheel and the surface of the road was so slight that a considerable
+portion of the propelling power would be lost by the slipping of the
+wheels. It was not until about the year 1813 that the important fact was
+ascertained that the friction of the wheels with the rails was
+sufficient to propel the locomotive and even drag after it a load of
+considerable weight. On the other hand these inventors failed to provide
+in their engines adequate heating-power for the production of steam. In
+1814 George Stephenson commenced to apply himself to the construction of
+an improved locomotive. When, owing to his invention of the tubular
+boiler, he saw, after fifteen years of arduous toil, his labors crowned
+with success, the civilized world entered upon a new era of social,
+industrial and commercial life. The first line upon which Stephenson's
+invention was used was the Liverpool and Manchester Railway. In the year
+1821, a number of Liverpool merchants formulated a plan for the
+construction of a tramway between their city and Manchester. The
+question of motive power was left open as between horses and the steam
+engine, with which Mr. Stephenson was then experimenting. After much
+<span class='pagenum'><a name="Page_49" id="Page_49">[Pg 49]</a></span>opposition on the part of Parliament and the public a charter was
+obtained in 1826. When the construction of the road was nearly
+completed, the directors of the company, after having determined upon
+the use of steam engines, offered a prize of &pound;500 for the best
+locomotive engine to run at a public trial on the Liverpool and
+Manchester Railway. This proposal was announced in the spring of 1829,
+and the trial took place at Rainhill on the 6th of October of that year.
+The competing engines were the Rocket, constructed by Mr. Stephenson;
+the Sanspareil, by Hackworth; the Perseverance, by Burstall, and the
+Novelty, by Messrs. Braithwaite and Ericsson. Both Braithwaite and
+Ericsson became subsequently residents of the United States, and the
+latter achieved immortal fame as the inventor of the screw propeller and
+the builder of the Monitor. The Rocket was the only engine that
+performed the complete journey proposed, and obtained the prize. It is
+claimed by the biographers of John Ericsson that he had really built a
+much faster locomotive than Stephenson, and that, although it had to be
+constructed very hastily and therefore broke down during the trial, the
+superiority of the principle involved in it was universally recognized
+by the engineers of that time. The Stephenson engines became the motive
+power of the Liverpool and Manchester road, which was opened for public
+traffic on the 16th of September, 1830. This line was, however, neither
+the first public railway nor even the first steam railway. The first
+railway or tramway act was passed in England in 1758, and in 1824 no
+less than thirty-three private railway or tramway companies had been
+chartered. In 1824 a charter was granted by Parliament authorizing the
+construction of the Darlington and Stockton Railway, to be worked with
+"men and horses, or otherwise." By <span class='pagenum'><a name="Page_50" id="Page_50">[Pg 50]</a></span>a subsequent act the company was
+empowered to work its railway with locomotive engines. The road was
+opened in September, 1825, and was practically the first public carrier
+of goods and passengers. The Monklands Railway in Scotland, opened in
+1826, and several other small lines soon followed the example of the
+Darlington and Stockton line and adopted steam traction, but the
+Liverpool and Manchester Railway was the first to convince the world
+that a revolution in traveling had taken place.</p>
+
+<p>The road was from the very first successful, its traffic and income
+greatly exceeding the expectations of its managers. It should also be
+noted here that the cost of construction fell largely below the
+elaborate estimates made by several distinguished engineers. The company
+had expected to earn about &pound;10,000 a year from passenger traffic, and
+the very first year the receipts from that source were &pound;101,829. The
+gross annual receipts from freight had been estimated at &pound;50,000, but
+were &pound;80,000 in 1833. From the first the stockholders obtained a
+dividend of eight per cent., which soon rose to nine and to ten per
+cent. It has since been demonstrated that the revenues of new roads
+almost always exceed expectations.</p>
+
+<p>The success of this railway stimulated railway enterprise throughout
+Europe and America. But while railroad projects created much enthusiasm
+on one side, they also met with bitter opposition on the other. The
+prejudice of the short-sighted and the avarice of those whose interests
+were threatened by a change in the mode of transportation used every
+weapon in their power against the proposed innovation. The arguments
+used were often most absurd. It was said that the smoke of the engine
+was injurious to both man and beast, and that the sparks escaping from
+it would set fire to the buildings along the <span class='pagenum'><a name="Page_51" id="Page_51">[Pg 51]</a></span>line of road, the cows
+would be scared and would cease to give their milk, that horses would
+depreciate in value, and that their race would finally become extinct.
+Nor did many of the European governments favor the new system of
+transportation. Some openly opposed it as revolutionary and productive
+of infinitely more evil than good. The Austrian court and statesmen
+especially looked upon the new contrivance with undisguised distrust;
+and from their point of view this distrust was perhaps well founded. The
+rapid movement of the iron horse seemed to savor of dangerous
+radicalism, not to say revolution. When the Emperor finally, in 1836,
+concluded to sign a railroad charter, he based his action upon the
+dubious ground that "the thing cannot maintain itself, anyhow." It may
+be said that the history of the railroad is a conspicuous illustration
+of human short-sightedness. The Prussian Postmaster-General Von Nagler
+opposed the construction of a railroad between Berlin and Potsdam upon
+the ground that the passenger business between those two cities was not
+sufficient to keep even the stage-coach always full. It never occurred
+to the Postmaster-General, as it does not occur to many railroad men of
+to-day, that new and cheaper means of transportation increase the
+traffic. Even so wise a statesman as Thiers said when railroad
+construction was first agitated in France: "I do not see how railroads
+can compete with our stage-coaches." M. Thiers also opposed for years
+the building of a railroad between Paris and Versailles, declaring that
+on account of a railroad not one passenger more would make the journey
+between these two places.</p>
+
+<p>But railroads came whether monarchical governments liked them or not.
+The success of the Liverpool and Manchester Railroad stimulated railroad
+building in <span class='pagenum'><a name="Page_52" id="Page_52">[Pg 52]</a></span>England to a marvelous extent. Between 1830 and 1843 no
+less than seventy-one different companies were organized, representing
+about 2,100 miles. During the next four years 637 more roads, with an
+authorized length of 9,400 miles, were chartered. The construction of
+each new road required a special act of Parliament. These early roads
+averaged only fifteen to thirty miles in length. The competition which
+ensued soon led to the consolidation of roads, which continued until now
+the 14,000 miles of railway in England and Wales are practically owned
+by only a dozen companies. The total number of miles of railroad in
+Great Britain and Ireland is at present over 20,000.</p>
+
+<p>The news of the opening of the first steam railway in England spread
+through Europe comparatively slowly. There were in those days but few
+newspapers printed on the continent, and these were read very sparingly.
+Railroad discussions were confined to merchants and manufacturers. Even
+after the success of the railroad was assured in England, a large number
+of people would not believe that, except between the largest cities,
+railroads on the continent could ever be profitable. But few railroads
+have ever been built which with honest, efficient and economical
+management would not pay a fair rate of interest on actual cost of
+construction. But in spite of this we have to this day a large number of
+otherwise well-informed people who question the financial success of
+every new railroad that is proposed.</p>
+
+<p>In those days it occurred only to the most sagacious minds that with
+increased facilities commerce would expand. The missionaries of railroad
+enterprise found it therefore a difficult matter to interest capital in
+their projects. Railroad committees were in time formed in all cities of
+any importance, but, with capital cowardly, as <span class='pagenum'><a name="Page_53" id="Page_53">[Pg 53]</a></span>usual, and governments
+distrustful, their task was often a thankless one. Railroad projects
+matured very slowly, and, when matured, were often wrecked by jealous
+and short-sighted governments. After the formation of a company five and
+even ten years would often pass away before a charter could be secured
+and the work of construction commenced. It is true, there were some
+laudable exceptions to this rule. Thus the governments of France and
+Belgium led the people in railroad construction; but upon the whole it
+can be said that the railroad forced itself by its intrinsic merit upon
+monarchical governments. It soon became evident even to the most stupid
+of autocratic ministries that it was a choice between the new mode of
+transportation and national atrophy.</p>
+
+<p>The first German line was built between the cities of Nuremberg and
+Furth in 1835. It was only about four miles long, but the success of the
+experiment gave an impetus to railroad building in other parts of
+Germany. The Leipzig and Dresden line followed in 1837, and the
+Berlin-Potsdam and Brunswick-Wolfenbuttel lines in 1838. At the end of
+1840 Germany had 360 miles of railroad. In that year Frederick William
+IV. succeeded to the throne of Prussia and inaugurated a new and
+exceedingly liberal railroad policy in his realm. In 1843 the Prussian
+government concluded to guarantee certain railroad companies a dividend
+of 3-1/2 per cent. on the capital actually invested. The state also
+secured considerable influence in the administration of the roads as
+well as in the right to assume the management of the various lines under
+certain conditions. The governments of the states of Southern Germany
+now commenced to build state roads, and their example was, chiefly for
+<span class='pagenum'><a name="Page_54" id="Page_54">[Pg 54]</a></span>strategic reasons, soon imitated by Prussia. The system has since grown
+to over 26,000 miles, and no less than eighty-seven per cent. of the
+mileage is under state control. In all the states and provinces of the
+empire, except Bavaria, the rates for transportation of passengers and
+freight on all lines are controlled absolutely by the government.</p>
+
+<p>In Austria, as has already been indicated, the building of railways was
+greatly discouraged by the government until 1836. In that year the
+Emperor rather reluctantly granted Baron Rothschild a charter for a
+railway from Vienna into the province of Galicia. Another charter was
+granted to a Baron Sina for a line from Vienna to Raab and Gloggnitz.
+The policy then adopted in Austria guaranteed to each railroad company a
+monopoly in its own district during the period for which the charter was
+granted. Soon after the state also commenced building lines, but the
+growth of the Austrian system was slow until after the war of 1866. An
+era of railroad speculation was then inaugurated, which ended with the
+crisis of 1873. The total length of the railroads of Austria-Hungary was
+10,790 miles in 1875. At present that monarchy has nearly 16,400 miles
+of railway, 8,600 of which are owned by private companies.</p>
+
+<p>It has been the policy of Austria to reduce rates, and several roads,
+especially those built in mountainous districts, have a certain revenue
+guaranteed to them by the government.</p>
+
+<p>The zone system recently adopted in Hungary reduced both the passenger
+and freight rates of the government roads at least one-third, and this
+reduction has, contrary to expectation, greatly increased their net
+revenues.</p>
+
+<p>In France railroad agitation commenced in 1832. A few short lines were
+opened, as those from Paris to St. Germain <span class='pagenum'><a name="Page_55" id="Page_55">[Pg 55]</a></span>and to Versailles; but,
+owing to the conservatism of French capitalists, but little more was
+done until the state took the matter in hand. Thiers proposed a scheme
+by which the state was to furnish about half the cost while private
+companies were to build the lines and operate them. The Western
+Railroad, the first line of any great extent, was opened in 1837 between
+Paris and Rouen, and the Eastern Railroad was opened two years later.
+There were in 1859 six large companies operating their lines with
+profit, but, to induce them to build additional lines that were needed,
+the state guaranteed the interest on the capital required to make their
+improvements. In 1884 there were about 17,000 miles of railroad in
+operation. To bring about the construction of another 7,000 miles of
+road, and to thus complete the railroad system of the country, the
+government now guaranteed each company a dividend equal to the average
+of recent years, but not to exceed seven per cent. It is doubtful
+whether this system of monopoly has in all respects been favorable to
+the encouragement of enterprise in the railroad circles of France. In
+granting charters the state has, however, reserved valuable rights which
+at a future period it will have an opportunity to assert for the public
+benefit. The railroad companies have generally a lease for ninety-nine
+years, and their lines become the property of the state after the
+expiration of that period. To extinguish the bonded debt and stock, a
+sinking fund has been created, from which a certain portion of the
+shares and outstanding bonds is annually paid off and canceled. The
+government requires of the companies the free carriage of the mails and
+the transportation of military and other employes at very low rates.
+Besides this the state levies upon the traffic of the railroads a duty
+of ten per cent. of their gross earnings from passengers <span class='pagenum'><a name="Page_56" id="Page_56">[Pg 56]</a></span>and from all
+goods carried by fast trains. These facts are usually overlooked by our
+railroad men when they indulge in making comparisons between the
+railroad rates of this country and those of France. The French Republic
+had 13,400 miles of road in 1875, and 22,600 in 1890. When all of the
+proposed lines are completed, the total mileage of that country will be
+over 25,000.</p>
+
+<p>Belgium has the best-developed track system on the continent. The state
+commenced the construction of railroads as early as 1834, and the first
+line (Brussels Malines) was opened May 5th, 1835. Four great state lines
+were constructed in different directions, and between these lines
+private roads were permitted to be built. Between 1850 and 1870 the
+private lines increased from 200 to 1,400 miles, and competition between
+them and the state lines became so active as to reduce rates to the
+lowest possible point. In 1870 the government decided to buy a large
+number of competing lines. In 1874 it had acquired more than half, and
+at present, with a few exceptions, they are all owned and controlled by
+the state. The exceptions to this are a few short lines that were built
+in the early days of railroad construction. The total mileage is now
+3,210. Rates have, however, not been increased since this consolidation,
+and they are still lower than any other country in Europe. The
+transportation of mails is free, and troops, military materials and
+prison vans are carried at reduced rates.</p>
+
+<p>Railroads were originally built in Switzerland merely for the
+accommodation of tourists and the local traffic. The first line, between
+Zurich and Aarau, was completed in 1847, but general railroad enterprise
+did not develop until after 1860. The St. Gothard route was then
+projected, which opened a direct through line between Italy <span class='pagenum'><a name="Page_57" id="Page_57">[Pg 57]</a></span>and
+Germany. The roads are all owned by private companies, but are under
+strict government control. Great publicity of their affairs is required.
+The total mileage of Switzerland was 2,043 in 1891.</p>
+
+<p>In Italy railroad enterprises have received attention since 1853. The
+first roads were those of Lombardy, being commenced while that province
+was still under Austrian rule. The treaties of Zurich in 1859 and of
+Vienna in 1866 delivered these roads and the Venetian lines to the
+kingdom of Italy. Between 1860 and 1870 the systematic construction of a
+railroad net was commenced which connected the various lines with each
+other and with Rome. Nearly all the railroads of Italy fell into the
+hands of the government, but in 1885 they were leased for a term of
+sixty years to three companies, terminable at the end of twenty or forty
+years by either party upon two years' notice. Under the lease the state
+received two per cent. of the gross receipts. The tariffs are fixed by
+the state, are uniform and can be reduced by the state. A Council of
+Tariffs, composed of delegates for the government, for agriculture,
+commerce and industry, and for the railroad companies, all elected by
+their own boards, has been instituted to study the wants and best
+interests of the country. The total number of miles of railroad in Italy
+was 8,110 in 1889.</p>
+
+<p>The first road in Spain was opened in 1848 between Barcelona and Mataro.
+The government greatly encouraged railroad construction by subsidies,
+and during the decade following 1855 the development of the railway
+system of the country was rapid. More than thirty companies have been
+formed, which have built about twenty main lines, aggregating 6,200
+miles.</p>
+
+<p><span class='pagenum'><a name="Page_58" id="Page_58">[Pg 58]</a></span>In Portugal very little railroad building was done previous to 1863,
+when a little over three hundred miles of road was constructed. The
+government owns nearly half of the roads of the country, the remaining
+lines being the property of private companies. The total number of miles
+operated in the kingdom in 1889 was 1,280. The service and the financial
+condition of the roads of Portugal are far from being satisfactory.</p>
+
+<p>In Denmark the first railroad was built on the island of Seeland in
+1847. Previous to 1880 the larger part of the roads of the kingdom was
+owned by private companies. Since then several of the most important
+private roads have been purchased by the state, which in 1889 owned 963
+miles, while only 251 miles remained in private control. Only about
+thirty miles more have since been constructed. The roads are well
+managed, but their net earnings are less than two per cent. of the
+capital invested.</p>
+
+<p>On the Scandinavian Peninsula the railroad system has developed rather
+slowly. Norway built the first line from Christiana to Eidsvold in 1854,
+and Sweden commenced railroad building two years later. The narrow-gauge
+system is fully developed here. While in Norway the greater part of the
+lines is owned by the state, the roads of Sweden are chiefly in the
+hands of private companies which on an average control but little more
+than twenty-five miles each. The total mileage of Sweden is 5,970, and
+that of Norway 970.</p>
+
+<p>The first line of railroad in the Russian Empire was constructed from
+St. Petersburg, sixteen miles, to Tsarskoji-Sielo, in 1842. The St.
+Petersburg and Moscow line was opened in 1851. Railroad building then
+stagnated until after the Crimean War, when a large <span class='pagenum'><a name="Page_59" id="Page_59">[Pg 59]</a></span>number of lines
+were constructed at once. The roads were surveyed by the government, but
+constructed and operated by private companies.</p>
+
+<p>State aid was, however, freely given. During the past ten years the
+Russian government has directed its attention to the development of the
+railroad system in its Asiatic possessions. A railway between the Black
+and Caspian seas was completed in 1883, and the Siberian railroad is
+extended as fast as the financial condition of the empire permits. There
+are now about 20,000 miles of road in the Russian Empire operated by
+private companies. The construction of a large number of the Russian
+railways was dictated by military rather than commercial considerations.
+Maximum rates are specified in charter, and every change of rates must
+be approved by the Minister of Finance.</p>
+
+<p>In the Balkan Peninsula railroad facilities are still ill provided for.
+A few lines have been built, but these are, as a rule, badly managed.
+Trains are slow, and rates often so high as to be prohibitory. Roumania
+has undoubtedly the best railroad system of any of the Balkan states,
+the government controlling 1,000 miles of road. Greece is also making
+some progress and has at the present time 610 miles of railway. There is
+reason to believe that through communication will soon be established in
+these countries on a larger scale.</p>
+
+<p>The introduction of the railway into Asia has been, except in the
+Russian and English possessions, a very difficult task. The conservatism
+or ignorance of the governments and the superstition of the people
+combined to throw numberless obstacles before those who proposed to pave
+the way for the iron horse. British India opened her first railway for
+public traffic between Bombay and <span class='pagenum'><a name="Page_60" id="Page_60">[Pg 60]</a></span>Tannah on November 18, 1852. In 1855
+she had 841 miles of road, which increased to 6,515 miles in 1875 and to
+15,828 miles in 1889, of which 8,423 miles were owned and operated by
+the state. The total cost of these roads was $880,000,000.</p>
+
+<p>In Asiatic Turkey the first line was opened between Smyrna and Trianda
+on the 24th day of December, 1860. This line was in 1866 extended to
+Aiden, and in 1882 to Sarakio. There are at present five lines with a
+total extent of 446 miles, all owned by English companies. New lines,
+covering in all 3,952 miles, have recently been projected.</p>
+
+<p>The first line in Persia, only seven miles long, and extending from
+Teheran to Schah-Abdal-Azzim, was opened on the 25th day of June, 1888.
+Another line, from the Caspian Sea to Amol, is now in process of
+construction. A line was opened last September between Joppa and
+Jerusalem. It is 53 miles in length.</p>
+
+<p>Japan may be said to be already thoroughly familiar with the European
+system. The first and principal line was opened on the island of Napon,
+between Tokio and Yokohama, on the 14th of October, 1872. Two other
+short lines followed in 1874 and 1876, when the total extent of the
+Japanese roads was about 135 miles. In 1883 the construction of the
+Grand Trunk Railroad, from Tokio to Kioto, was commenced, which line has
+been in operation for the past five years. Other lines, aggregating over
+400 miles, will soon be opened for traffic. The total extent of road in
+operation in 1888 was 580 miles, 310 of which were controlled by the
+state, and the remainder by private companies. In 1890 the total number
+of miles exceeded 900. The total average cost per mile was $58,000.</p>
+
+<p><span class='pagenum'><a name="Page_61" id="Page_61">[Pg 61]</a></span>No nation has probably opposed the introduction of the railway as
+stubbornly as the Chinese. The first railroad, scarcely seven miles
+long, was built by an English company near Kaiping to facilitate the
+transportation of coal from the mines in that vicinity. In 1886 a
+Chinese company purchased this line and has since extended it to
+Tientsin, making its present length about eighty-four miles. The Chinese
+government has recently authorized the further extension of this line to
+Yangchou, a place but a few miles distant from Pekin.</p>
+
+<p>Of the Asiatic islands Java has the largest and oldest railroad system.
+On the 10th of August, 1867, the first line was opened between Samarang
+and Tangveng. Other coast lines have since been constructed, but
+communication is still sadly neglected in the interior. In 1889 there
+were operated on the island nearly 800 miles of road, the greater part
+being the property of private companies.</p>
+
+<p>A road was opened upon the island of Ceylon between Colombo and Kandy in
+1867, to which several branch lines and extensions have since been
+added. The total system comprises at present about 180 miles.</p>
+
+<p>Short lines have also been built in Burmah (1889); in the Malay
+Peninsula (1885), in Sumatra (1876), and in Cochin China (1885). A line
+from Bangkok to Bianghsen, in Siam, is being projected at the present
+time.</p>
+
+<p>In Africa, if we except its northern coast, the construction of
+railroads has only kept pace with the slow development of the resources
+of that continent. Its European colonies are still but thinly inhabited,
+and their industrial and commercial life still resembles much that of
+the American colonies of the seventeenth century. There can be little
+doubt, however, that with the <span class='pagenum'><a name="Page_62" id="Page_62">[Pg 62]</a></span>increasing immigration the growing demand
+for better transportation facilities will speedily be met by European
+capital.</p>
+
+<p>The first railroad upon African soil was built by the Egyptian
+government from Alexandria to Cairo, and from there through the desert
+to Suez. A part of this line, 130 miles long, was opened to traffic in
+1856, and the remaining ninety miles the year following. Nothing further
+was done until after Ismail Pasha ascended the throne, in 1863. The
+railroad system of Lower Egypt, between Alexandria in the west, Cairo in
+the south, and Ismaila in the east, was then greatly extended and the
+service materially improved.</p>
+
+<p>After the opening of the Suez Canal the line through the desert to Suez
+was abandoned. The railroad system of Egypt comprises at present about
+1,250 miles, all of which belongs to the government except two short
+lines which are private property.</p>
+
+<p>The beginning of the railroad system of Algiers dates back to 1860, when
+the French government gave a charter to the Companie des Chemins de Fer
+Alg&eacute;rians, authorizing it to build a number of lines connecting the
+principal cities of the province with the Mediterranean. The line from
+Algiers to Blidah, thirty-two miles long, was opened on September 8,
+1862. Further construction was then delayed until 1863, when the charter
+of the original company was transferred to the Paris, Lyons and
+Mediterranean Railroad Company. The original plans were then in the main
+carried out, until the disturbances caused by the Franco-Prussian war
+again put an end to railroad enterprises. In 1874 three new companies
+were chartered and railroad building was resumed. In 1888 the Algerian
+railroad system comprised 1,350 miles.</p>
+
+<p><span class='pagenum'><a name="Page_63" id="Page_63">[Pg 63]</a></span>The first road in Tunis was built in 1872 from the city of Tunis to
+Bardo and Gouletta by English capitalists. It was, in 1880, sold to an
+Italian company to which the Italian government for political reasons
+had seen fit to guarantee certain dividends. Other small lines have
+since been constructed, and more important ones have been prospected.
+The number of miles at present in operation is 153.</p>
+
+<p>The French colony on the Senegal River has a number of short lines, of
+which the first was opened in July, 1883. These lines aggregate at
+present about 200 miles. It is now contemplated to extend this system to
+the upper Niger. This would necessitate the construction of 240
+additional miles of road.</p>
+
+<p>The Cape Colony has the largest mileage of any of the European colonies
+in Africa, the absence of navigable rivers rendering railroads here more
+necessary than elsewhere. The first line was opened on the 13th of
+February, 1862. It then extended from Cape Town to Earste River, but was
+extended to Wellington the following year. The number of miles of road
+in operation in 1875 was 906, and in 1891 it had increased to 2,067. All
+the roads of the colony, excepting a line of 93 miles belonging to the
+Cape Copper Mining Company, are operated by the colonial government.
+Their net revenue in 1886 was 2.84 per cent. of the capital actually
+invested.</p>
+
+<p>Port Natal built her first railroad in 1860. It was only two miles long
+and extended from the city of Durban to its harbor. Since then several
+inland lines, aggregating over four hundred miles, have been constructed
+at a cost of twenty-two million dollars. The roads are operated by the
+colonial government and yielded in 1891 a net revenue of 4.4 per cent.
+on the capital expended.</p>
+
+<p><span class='pagenum'><a name="Page_64" id="Page_64">[Pg 64]</a></span>Short lines have also been built on Mauritius and Reunion, and there is
+now every indication that Portuguese Africa and the Congo State will be
+provided with railroad facilities in the near future.</p>
+
+<p>The introduction of railroads into Australia dates back to the sixth
+decade of the present century. The total number of miles of road
+reported in 1889 by the several colonies was 8,883. If we estimate the
+population of the continent at 3,000,000 for that year it will be seen
+that Australia has more miles of road per capita than any other grand
+division of the globe, save North America.</p>
+
+<p>New South Wales, the mother colony of the Australian continent, opened
+its first road on September 26, 1855, between Sydney and Paramalta. This
+road was built by a private company, but was soon after its completion
+purchased by the colonial government, and was in 1869 extended to
+Goulbourn. In 1875 the colony had only 436 miles of road in operation.
+The mountains, however, which separated the wide plains of the interior
+from the coast had been surmounted, and the government commenced to push
+the construction of new roads with great vigor. At the end of the year
+1886 New South Wales had no less than 1,888 miles of road in operation,
+for which the colony had expended $113,000,000. The net revenue during
+that year was 2.9 per cent. on the capital invested. The total number of
+miles of railroad in this colony was 2,247 in 1889.</p>
+
+<p>Victoria, the smallest of the colonies, has made by far the greatest
+progress in railroad building. The first road in the colony, and, in
+fact, the first road upon the Australian continent, was built in 1854
+between the city of Melbourne and its port, a distance of two and
+one-half miles. Within the next five years four other lines were
+<span class='pagenum'><a name="Page_65" id="Page_65">[Pg 65]</a></span>constructed, connecting Melbourne with Williamstown, St. Kilda,
+Brighton and Echuca, respectively. In 1870 there were in the colony 275
+miles of railroad, which had increased to 1,198 miles in 1880, and to
+2,283 miles in 1889. Several of the roads were originally owned by
+private companies, but all of them were in time acquired by the colonial
+government, the last one in 1878. The total capital invested in 1887 was
+$125,000,000, which yielded a net revenue of $5,800,000. All lines are
+under the control of a board so constituted as to be entirely removed
+from political influence.</p>
+
+<p>In South Australia a short line was built in 1856 from the city of
+Adelaide to Port Adelaide. Another line was constructed in 1857 from
+Adelaide to Salisbury, which three years later was extended to Kapunda.
+The colony had then forty miles of road. The increase during the next
+decade was only ninety-three miles. Since then the development has been
+much more rapid, the whole system of railroads comprising 1,752 miles in
+1889. All the roads save a few suburban lines are owned and operated by
+the colony. Their total cost is not far from $60,000,000, and their net
+annual revenue is about two and one-half per cent. of the capital
+invested.</p>
+
+<p>The colony of Queensland has only a system of narrow-gauge roads, with
+the construction of which it commenced in 1865. Up to September, 1887,
+the colonial government had constructed 1,641 miles of road at a total
+cost of $47,700,000. The total number of miles has since been increased
+to 2,058. The net revenue of the roads was a little over one million
+dollars in 1886.</p>
+
+<p>The transportation facilities of West Australia are still far behind
+those of her sister colonies. The first line was opened in 1873, and the
+total number of miles of road <span class='pagenum'><a name="Page_66" id="Page_66">[Pg 66]</a></span>operated in the colony in 1889 was only
+496. The government controls nearly all the railroads of the colony.</p>
+
+<p>Of the islands of Australasia, Tasmania and New Zealand are as yet the
+only ones that have railroad communication. The former built its first
+road in 1870 and had at the end of the year 1890 about 1,900 miles in
+operation. New Zealand opened its first railroad between Christchurch
+and Lyttleton on December 1, 1863. The development of the system was
+slow at first, there being but 25 miles of road in operation in 1870. In
+1891 the number of miles of road had increased to 1,916, all but 92
+miles being operated by the colonial government. The total amount
+expended by the government for railroads is $55,000,000. The net revenue
+in 1887 was about 2-1/2 per cent of the amount invested.</p>
+
+<p>In South America railroad building is of comparatively recent date. The
+first road was built in 1851, but the line was short and remained the
+only one for several years. With thirty million people the South
+American states have at present but little more than 16,000 miles of
+railroad, a condition which must at least in part be ascribed to the
+peculiar conservatism of the Latin race.</p>
+
+<p>The United States of Colombia possesses less than 250 miles of road. Its
+first line was the Panama Railroad, from Colon to Aspinwall. It connects
+the Pacific with the Atlantic ocean, is 48 miles long and was
+constructed in 1855. This, as well as the several other roads of
+Colombia, is the property of private companies. A number of new roads
+have recently been surveyed.</p>
+
+<p>Venezuela opened in 1866 a road, 56 miles long, from Puerto Caballo to
+Palito, which in 1870 was extended to Aroa. A number of other short
+roads, aggregating about 350 miles, have since been constructed. The
+total <span class='pagenum'><a name="Page_67" id="Page_67">[Pg 67]</a></span>extent of railroad in Venezuela was 432 miles in 1889, of which
+the greater part was operated by private companies. Several important
+lines are in the process of construction, and will connect Caracas with
+Carabobo, San Carlos and the port of La Guayra.</p>
+
+<p>The Republic of Ecuador constructed in 1876 a road from Jaguachi to
+Puente de Chimbo, a distance of 43 miles. This line was recently
+extended to Siambe, and has now a total length of 94 miles. In 1886 a
+charter was granted to a North American company, authorizing the
+construction of a road from San Lorenzo to Esmeraldas and guaranteeing
+certain dividends on the investment. At the close of the year 1889
+Ecuador had 167 miles of road.</p>
+
+<p>The first railroad in Peru was built in 1851, connecting the seaport
+Callao with the capital, Lima. After this but little was done for more
+than twenty years. At the beginning of the seventies an extensive
+railroad system was projected at the instigation of President Don Manuel
+Pardo, and the construction of the principal road of the system from
+Mollendo on the Pacific Ocean to Santa Rosa was at once entered upon.
+This road ascends the Western Cordillera, crosses a number of prodigious
+mountain passes, reaches Lake Titicaca, and then proceeds in a
+northwesterly direction to Santa Rosa. It is over 300 miles long, and
+reaches near Puna an altitude of 14,700 feet. An extension of this line
+from Santa Rosa to the old Inca city Cuzco was opened in 1875, but was
+subsequently destroyed in the war with Chile, and has not been reopened.
+Another road, extending from Callao to San Mateo, was opened in 1876. It
+is eighty-seven miles long, and reaches with its enormous grades a
+height of over 13,000 feet. It belongs, with the Santa Rosa road, to the
+<span class='pagenum'><a name="Page_68" id="Page_68">[Pg 68]</a></span>boldest creations of railroad engineering. Since the war with Chile
+railroad enterprise has been checked. The number of miles of road in
+operation rose from 962 in 1875 to 1,615 in 1880, but was, owing to the
+abandonment of certain lines, diminished to 813 in 1884. Since that time
+about 400 miles of new road have been opened.</p>
+
+<p>In the Republic of Bolivia the first railroad was built about twenty
+years ago from Antofogasta to Solar. After the cession of the province
+of Antofogasta to Chile there remained but thirty-five miles of road in
+Bolivia. More than 200 miles have since been added by the construction
+of several short roads, chiefly the property of mining companies.</p>
+
+<p>The Republic of Chile was the first of the South American states to
+initiate the construction of railways. The building of a line from the
+seaport Caldera to Copiapo was commenced in May, 1850, and was completed
+on January 2, 1852. This line was constructed and operated by a private
+company. The first state road, extending from Valparaiso to Santiago,
+was opened on the 15th of September, 1865. To this road has since been
+added an extension to Talcahuana, as well as several branch lines. The
+total amount that has been expended by the Chilean government for the
+construction of railroads is $43,000,000. The total number of miles of
+road operated in Chile in 1887 was 1,674, of which 992 were the property
+of private companies and 682 miles were owned by the state. Two hundred
+and fifty miles of road have since been constructed, and the
+construction of 700 additional miles of railroad has been authorized by
+the government.</p>
+
+<p>The Argentine Republic opened its first road, extending from Buenos
+Ayres to Belgrano, in December, 1862. <span class='pagenum'><a name="Page_69" id="Page_69">[Pg 69]</a></span>Several other lines soon
+followed, and in 1870 over 600 miles of road had been constructed. This
+number had increased to 1,440 in 1880 and to 5,100 in 1889. Since then
+several new lines have been completed, aggregating over 600 miles. Among
+the principal lines of the Argentine Republic is the transcontinental
+road which connects the Atlantic with the Pacific Ocean. The whole line
+is 880 miles long, of which 665 miles are in the Argentine Republic and
+the remaining 115 miles in Chile. Of the 3,705 miles of road which were
+in operation at the beginning of the year 1887 the republic owned 1,148,
+the province of Buenos Ayres 572, the province of Santa Fe 102, and
+private companies 1,888 miles. The total amount invested in railroads
+was $154,000,000 in 1887, which yielded an average dividend of 3.9 per
+cent.</p>
+
+<p>The oldest railroad in Brazil is the Petropolis road. It was built by a
+private company and opened on December 16, 1856. In 1881 the total
+number of miles in operation was 2,422, and in 1889 it had increased to
+5,766. Furthermore charters had been granted for the additional
+construction of 2,271 miles of road. Of the lines in operation about
+1,200 miles are the property of the state, yielding a revenue of nearly
+3 per cent. on the capital invested. The state gives aid, besides, to
+several private roads. The most important road of Brazil is the state
+road Dom Pedro I., which connects the three richest provinces of the
+country, Rio de Janeiro, Minas Gerals and Sao Paolo, with the national
+capital. It was opened in 1883, and has a total extent of 544 miles.</p>
+
+<p>The principal roads of Uruguay were built between 1865 and 1875. In the
+latter year the total number of miles in operation in Uruguay was 190,
+which in 1880 had increased to 230, and in 1889 to 469 miles.</p>
+
+<p><span class='pagenum'><a name="Page_70" id="Page_70">[Pg 70]</a></span>In the remaining political divisions of South America the railroad
+extended its dominion still more slowly. Paraguay opened as early as
+1863 a line 45 miles long from Asuncion to Itangua, and in 1892 her
+railroad system had increased to 159 miles in extent. British Guiana
+completed in 1866 a line from Georgetown to New Amsterdam, but not one
+mile of railroad has been built in that colony since. Of the islands of
+South America Trinidad is the only one into which the railroad has been
+introduced. The island has at present 50 miles of road, to 16 in 1878.</p>
+
+<p>Central America has less than 600 miles of railway. The causes which
+have retarded the development of the railroad system in South America
+are also operative here. Of the five republics of Central America Costa
+Rica has the largest number of miles of railroad, viz.: 161. It has
+three different lines, of which the Limon and Carillo line, seventy
+miles long, is the most important. This road, which connects with a New
+York line of steamers at Limon, has greatly furthered the cultivation of
+bananas in the Santa Clara valley.</p>
+
+<p>Nicaragua completed its first road in 1880 between Corinto and
+Chinandega, and has at present about 100 miles of railway in operation.
+The Nicaragua Canal Company is constructing a road from Juan del Norte
+to Ochoa, a distance of thirty-two miles, to be used in the construction
+of the canal.</p>
+
+<p>Honduras opened in 1871 its only line, thirty-seven miles long, between
+Puerto Caballo and San Jago. In recent years an extension of nine miles
+has been added to it.</p>
+
+<p>San Salvador has, besides a street-car line between the cities of San
+Salvador and Santa Tecla, only one line of <span class='pagenum'><a name="Page_71" id="Page_71">[Pg 71]</a></span>railroad between Acajutla
+and Armea, which was constructed with public funds and opened for
+traffic on July 15, 1882.</p>
+
+<p>Guatemala was the last of the Central American States to introduce the
+railroad. Its first road, seventy-four miles long, and extending from
+San Jose on the Pacific Ocean to the capital, Guatemala, was built by a
+San Francisco company and opened on August 20, 1884. The state has at
+the present time about 100 miles of road, with several short but quite
+important lines under construction.</p>
+
+<p>The West Indies have between 1,200 and 1,400 miles of railway, of which
+more than 1,000 are in Cuba. The first road upon this island, 179 miles
+long and extending from Habana to Guanajay, was opened as early as 1837.
+The next ten years developed almost the whole of the railroad system of
+the western half of Cuba. A number of important roads have since been
+opened in the central and eastern portions of the island, whose railroad
+mileage is at present larger per capita than that of any other political
+division of the Western Hemisphere save that of Canada and the United
+States. The second of the West India islands to construct a railroad was
+Jamaica. A line connecting Kingston and Spanishtown was opened on the
+21st of November, 1845. Two branch lines have since been added, making
+the total number of miles of road on this island seventy-six at the
+present time. About twenty-five miles more are now in the process of
+construction. San Domingo and Hayti have also recently commenced to
+build railroads. In the former republic a line from Sanchez to LaVega,
+sixty-two and one-half miles long, is now open to traffic, and Hayti is
+constructing a line from Gonaives, on the western coast, to Porte de
+Paix, on the eastern coast <span class='pagenum'><a name="Page_72" id="Page_72">[Pg 72]</a></span>of the island. The Spanish government in
+1888 also granted a charter for the construction of a railroad on the
+island of Porto Rica.</p>
+
+<p>Of our neighbors on the North American continent, Mexico and Canada, the
+former has been by far the slower to avail herself of the advantages of
+railroad communication. The slow growth of the railroad system of Mexico
+must be ascribed chiefly to the frequent political disturbances of the
+country as well as to the many topographical obstacles which presented
+themselves to the railroad engineer. The first Mexican railway,
+excepting tramways, was the one which connects the capital with the city
+of Vera Cruz. It was constructed by an English company and was opened on
+the first day of January, 1873. In 1875 the total number of miles of
+road in Mexico was 327, and five years later somewhat less than 700.
+Since then the development of the system has been much more rapid. In
+1880 several companies were formed for the purpose of building a system
+of roads which would connect the Mexican capital with the United States
+as well as with the most important harbors of the gulfs of Mexico and
+California. The projectors of these lines, who were citizens of the
+United States, received the hearty co&ouml;peration of the Mexican
+government, and the work was at once pushed very vigorously. At the end
+of the year 1885 more than 2,500 miles of new road were open for
+traffic, and a thousand miles more at the end of the following year. In
+1889 Mexico had 5,332 miles of road. The principal one of the newly
+constructed roads is the Mexican Central, which connects Paso del Norte
+with the City of Mexico. This line will also, when its branches are
+completed, form a through route between the Gulf of Mexico and the
+Pacific Ocean. Another scarcely less <span class='pagenum'><a name="Page_73" id="Page_73">[Pg 73]</a></span>important through line north and
+south is the National Mexican Railway, which is 722 miles long and
+connects Laredo, on the Rio Grande, with the capital and the southern
+states. Another line has recently been opened from Torreon to Durango.
+The number of miles of road at present in operation in the Republic of
+Mexico is about 6,800, with a number of new lines rapidly nearing
+completion. The development of Mexico's resources has, during the past
+decade, kept pace with the rapid expansion of its railroad system.</p>
+
+<p>In the Dominion of Canada about fifteen miles of railroad line were
+built as early as 1837, but only forty-three miles was added during the
+next ten years. In 1852 there was still only 212 miles of railroad in
+all of the British possessions in North America. At that time the
+construction of the Grand Trunk system was commenced, the first section
+of the system, Portland-Montreal, being opened in 1853. After this
+railroads increased very rapidly in Canada, reaching an extent of 2,087
+miles in 1860, 4,826 miles in 1875, 6,891 miles in 1880, and 10,150
+miles in 1890. The majority of Canadian railroads are in the hands of
+private companies, some of which have been very materially aided by the
+government. One of the conditions upon which the union of the several
+British provinces, except Newfoundland and Prince Edward Island, was
+effected in 1867, was the construction of a railroad by the Dominion
+government connecting the provinces of Ontario, Quebec, Nova Scotia and
+New Brunswick. This road, the main line of which extends from Point
+Levis, opposite Quebec, to Halifax, was accordingly built, and is still
+operated by the Canadian government. Its cost was about 46,000,000.</p>
+
+<p>But the most important enterprise in which the <span class='pagenum'><a name="Page_74" id="Page_74">[Pg 74]</a></span>government is interested
+is the Canadian Pacific Railway. Like the intercolonial railway, this
+line was a result of the political union of the colonies. Its
+construction was commenced by the government, but was subsequently
+assigned to a private corporation, the Canadian Pacific Railway Company,
+all that had been done by the government being turned over to the
+company as a gift. It is estimated that the direct gifts of money, the
+land grant and other privileges conferred by the Dominion government
+upon the Pacific Railway Company exceed $100,000,000 in value, and that,
+with the amount of bonds and stock guaranteed by the government, the par
+value of its various aids amounts to $215,000,000, or $48,000,000 more
+than the cost of the road, as will be shown by the following table,
+taken from the report of the Interstate Commerce Committee of the Senate
+of the Fifty-first Congress:</p>
+
+<div class="centered">
+<table border="0" width="80%" cellpadding="2" cellspacing="0" summary="Subsidy">
+  <tr>
+  <td class="tdl" width="85%">Subsidy granted by the act of Parliament of February 13, 1881</td>
+  <td class="tdr" width="15%">$25,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Seven hundred and fourteen miles of railroad constructed by the Dominion
+    Government, original cost and interest</td>
+  <td class="tdr" style="vertical-align: top;">36,760,785</td>
+  </tr>
+  <tr>
+  <td class="tdl">Capital stock guaranteed</td>
+  <td class="tdr">65,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Loan to the company authorized by Parliament of 1884, in part</td>
+  <td class="tdr">29,880,912</td>
+  </tr>
+  <tr>
+  <td class="tdl">Balance of above loan</td>
+  <td class="tdr">15,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Bonds, interest guaranteed by the Dominion for 50 years at 3-1/2 per cent.</td>
+  <td class="tdr" style="vertical-align: top;">15,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Land grant bonds</td>
+  <td class="tdr">25,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Subsidy of $186,000 a year, for 20 years</td>
+  <td class="tdr" style="border-bottom: .5pt black solid;">3,720,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Total</td>
+  <td class="tdr">$215,361,697</td>
+  </tr>
+  <tr>
+  <td class="tdl">Total cost of road, according to the company's balance sheet of December, 1888</td>
+  <td class="tdr" style="vertical-align: top;">$131,350,019</td>
+  </tr>
+</table>
+</div>
+
+<p>The Dominion Government owns and operates four railways, the cost of
+which up to June 30, 1890, was <span class='pagenum'><a name="Page_75" id="Page_75">[Pg 75]</a></span>$52,800,000. It has also granted to
+railroad companies cash subsidies which to June 30, 1889, amounted to
+over $46,000,000. The total number of miles of railroad in Canada was
+14,004 in 1890. The people of Canada have, since the political union of
+the colonies, pursued an exceedingly liberal policy toward their
+railroads, but it appears that the great indulgence of the government
+only bred license in railroad circles. The evil increased from year to
+year, until the many complaints on the part of the public against
+railroad management caused Parliament in 1886 to appoint a commission to
+examine into the alleged abuses and to report as to the advisability of
+the adoption of a general railroad law, and the appointment of a Board
+of Railroad Commissioners. The committee reported to the
+Governor-General of Canada on the 14th of January, 1888, and, acting
+upon its recommendation, Parliament passed the Railway Act of May 22,
+1888. This act, containing 309 paragraphs, provides for the complete
+regulation of railroad affairs, and for this purpose creates a Board of
+Railroad Commissioners, consisting of the Minister for Railroads and
+Canals, the Minister of Justice and two or more members of the Privy
+Council. The act also repeals all former railroad laws. Though it has
+been in force less than five years, its beneficial effects are already
+extensively felt by the Canadian public.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_76" id="Page_76">[Pg 76]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER III.</h2>
+
+<h2>HISTORY OF RAILROADS IN THE UNITED STATES.</h2>
+<br />
+
+<p>In no country in the world has the growth of railroads been so rapid as
+in the United States. With a population less than one-fifth as large as
+that of Europe this country has a larger number of miles of railroad
+than that continent. While European countries generally opposed the
+introduction of the new system of transportation, our people extended to
+it a hearty welcome. This difference of sentiment can easily be
+accounted for. At the time of the invention of railroads Europe had a
+system of turnpikes and canals which, at least for the time being,
+answered every purpose. It became necessary for the railroads to enter
+into competition with these well-established agencies of transportation,
+which had the test of time, popular prejudice and governmental sanction
+in their favor. Moreover, the railroad as a new and unknown quantity
+caused a feeling of uneasiness in all conservative circles. It seemed to
+make war against time-honored principles of statecraft and society, and
+threatened to bring about a revolution the outcome of which no one could
+foresee.</p>
+
+<p>The condition of things was entirely different in the United States.
+There were but few good roads and still fewer turnpikes and canals. A
+vast territory in the interior awaited cultivation. Excepting the coast
+and a few cities situated on the large navigable rivers, the East and
+the West and the North and the South were practically without commercial
+relations, and were only held together by a community of political
+traditions and the <span class='pagenum'><a name="Page_77" id="Page_77">[Pg 77]</a></span>artificial cement of a common constitution. Even had
+the country had a system of turnpikes and canals, the Mississippi River
+would still have been a forty days', and the extreme Northwest a three
+months' journey distant from New York. It seems extremely doubtful
+whether the different sections of so large a realm, having so little
+community of commercial interests, could long be kept together under a
+republican system of government. The settlement of the central portion
+of the country and the development of its resources seemed to be the
+task of future centuries. The railroad under these circumstances made
+its appearance at a most opportune time for America, and the American
+people were not slow to make the best of the opportunities presented to
+them.</p>
+
+<p>In the United States, as in England, the railroad was preceded by the
+tram-road. The first tram-road in this country was opened in 1826. It
+connected the granite quarries of Quincy with the Neponset River, and
+was operated by horsepower. The second road of this kind was the Mauch
+Chunk tramway, in Pennsylvania, opened in 1826, for the transportation
+of coal. The trains were drawn up an inclined plane by stationary
+engines and were moved down by their own weight. During the same year
+the Delaware and Hudson Canal Company opened the Carbondale and
+Homesdale tramway, connecting their mines with the Delaware and Hudson
+Canal. It appears that an English locomotive was imported for use on
+this line in 1828, but that it did not answer its purpose.</p>
+
+<p>During the same year was commenced the construction of the first line of
+importance in this country, the Baltimore and Ohio. The line was opened
+for traffic in 1830, having then an extent of fourteen miles. In 1831 it
+was extended sixty-one miles, and the year following <span class='pagenum'><a name="Page_78" id="Page_78">[Pg 78]</a></span>sixty-seven miles.
+For a year the road was operated by horsepower, but in 1831 the company
+purchased for its road an American locomotive.</p>
+
+<p>The first road upon which a locomotive engine of American manufacture
+was used was the South Carolina Railroad, which was commenced in 1830.
+The engine was manufactured at West Point and was placed upon the road
+in December of the same year. The line had then an extent of ten miles.
+In 1832 it had increased to sixty-two miles, and in 1833 to 136 miles.
+The construction of the Mohawk and Hudson was commenced in August, 1830,
+and the road was opened in September of the following year. Its first
+locomotive engine was also imported from England, but, being found too
+heavy, was soon replaced by an American engine of half its weight. In
+1831 two other New York roads were commenced, the Saratoga and the New
+York and Harlem. A small portion of the latter was opened during the
+same year, and the former in July, 1832. The Camden and Amboy Railroad
+in New Jersey was likewise commenced in 1831, but its completion was not
+reached till 1834. The New Castle and Frenchtown Railroad was completed
+in 1832, the Philadelphia and Trenton in 1833, and the New Jersey in
+1834. In 1835 the Washington branch of the Baltimore and Ohio was
+opened, and the entire line had at the end of that year attained an
+extent of 115 miles. During the same year three Massachusetts roads,
+connecting Boston with Providence, Worcester and Lowell respectively,
+were opened. In 1836 the New York Central route was opened to Utica. In
+1837 the Richmond, Fredericksburg and Potomac Railroad was completed
+from Richmond to Fredericksburg. In 1838 the Richmond and Petersburg and
+the Philadelphia, Wilmington and Baltimore railroads were opened. The
+<span class='pagenum'><a name="Page_79" id="Page_79">[Pg 79]</a></span>Wilmington and Weldon Railroad was completed in 1840, and the Petersburg
+and Roanoke three years later. There was now a continuous line of
+railway from the Potomac to Wilmington, North Carolina. In 1842 the
+whole line of the Boston and Albany road was completed, which thus
+became the first important through route in America.</p>
+
+<p>The construction of railroads in the United States was from the first
+carried on without a system. Railroads in an early day were purely local
+affairs. Each locality operated its own road in its own interest and
+without any supervision from the State which had granted its charter.
+Acts of incorporation or charters were granted as a matter of course.
+Railroads were looked upon as the natural feeders of canals, and their
+future importance was foreseen by very few men. The early roads were a
+heavy burden on the capital of the country. A number of small roads were
+built that proved unprofitable and had to be abandoned. After the
+financial panic of 1837 there was, except in New England, a very
+perceptible stagnation in railroad enterprise, which lasted until the
+discovery of gold in California, in 1848. The average number of miles of
+road constructed per annum during the ten years preceding 1848 was 380,
+while it was nearly 1,800 per annum during the seven years following.</p>
+
+<p>It may be said that with the discovery of gold in the West ends the
+first or formative period of railroad construction. From the first
+opening of the Baltimore and Ohio to the beginning of the year 1848, a
+period of eighteen years, there were constructed in the United States
+5,205 miles of railroad, or an average of 289 miles per annum. The
+discovery of gold on the Pacific gave a new impetus to railroad
+construction throughout the country. Railroads now ceased to be local
+works and became <span class='pagenum'><a name="Page_80" id="Page_80">[Pg 80]</a></span>interstate or national thoroughfares. Extensive new
+lines were built and through routes were formed by the coalition of
+local roads. It was during this period that railroad companies first
+became conscious of the importance of their mission and that they
+commenced to compete with river and canal carriers. In 1848 a through
+route was completed between Cincinnati and Lake Erie. A more direct
+line, the Cleveland, Columbus and Cincinnati road, was opened in 1851.
+During the same year the Erie Railroad reached Lake Erie and connected
+the lake with the Hudson, and a year later Chicago received railroad
+connection with the East by the completion of the Michigan Central and
+Michigan Southern. In 1854 the Chicago and Rock Island reached the
+Mississippi River, and in 1855 the Chicago and Galena was opened. One
+year later the Illinois Central reached the Mississippi at Cairo, and
+the Chicago, Burlington and Quincy Railroad was opened to Quincy. The
+Ohio and Mississippi, between Cincinnati and St. Louis, was completed at
+about the same time. The Pittsburgh, Fort Wayne and Chicago, an
+extension of the Pennsylvania road, was completed to Chicago in 1858. At
+the beginning of 1859 the Hannibal and St. Joseph Railroad reached the
+Missouri River, and eight years later the Cedar Rapids and Missouri was
+completed to the Missouri at Council Bluffs.</p>
+
+<p>To encourage the extension of railroads into new and thinly settled
+territories, and to thus hasten their settlement and the development of
+their resources, the people of the United States began at the
+commencement of this period to favor the policy of land grants. Such
+grants had repeatedly been made to roads and canals prior to the crisis
+of 1837. The first railroad that received a land grant was the Illinois
+Central. The scheme was proposed <span class='pagenum'><a name="Page_81" id="Page_81">[Pg 81]</a></span>as early as 1836, but the act making
+the grant was not passed until September 20, 1850. Other grants followed
+in 1852 in Missouri, in 1853 in Arkansas, in 1856 in Michigan,
+Wisconsin, Iowa, Florida and Louisiana. As a rule these lands were
+granted by the National Government to the States, and by them to the
+railroads. The land grants made during President Fillmore's
+administration amounted to eight million, and those made during Pierce's
+administration to nineteen million acres. The financial crisis of 1857
+and the War of the Rebellion again checked railroad building, but this
+period developed a new phase of railroad enterprise as well as of the
+land grant policy. In those times of national trial a railroad to the
+Pacific Coast seemed a political necessity. The project of connecting
+the Atlantic and Pacific oceans by a line of railroads was first brought
+prominently before the American people by Asa Whitney of New York. At a
+meeting held under his auspices in Philadelphia on the 23d day of
+December, 1846, a movement was inaugurated for the purpose of
+interesting the people in this enterprise and securing the aid of the
+government for its accomplishment. Various plans were urged, and earnest
+discussions followed, in which the ablest minds of the nation
+participated. The continual agitation of the subject finally led, on the
+1st of July, 1862, to the passage by Congress of an act incorporating
+the Union Pacific Railway Company and the adoption of the central route.
+The Union and the Central Pacific companies received a virtual money
+subsidy of $30,000,000 and a land grant aggregating nearly twenty-three
+million acres, a domain almost equal to the State of Indiana. Other
+direct grants of territorial lands soon followed. The Northern Pacific
+received, just before the close of the war, a grant of forty-seven
+million <span class='pagenum'><a name="Page_82" id="Page_82">[Pg 82]</a></span>acres of land. In the Southwest public lands were also freely
+given to new Pacific lines. The various grants made to railroads
+comprise no less than 300,000 square miles, equal to four and a half
+times the area of New England, or six times that of the State of New
+York, or equal to the total area of Iowa, Wisconsin, Illinois, Indiana,
+Michigan and Ohio. Where these grants were not deemed sufficient
+inducement for the construction of roads, counties, cities and towns
+freely voted subsidies, while private citizens made donations to or
+subscribed for the securities of the new railroads.</p>
+
+<p>As has already been stated, the consolidation of connecting lines and
+their transformation into a few large through routes was one of the
+characteristic features of this period. As through traffic, and
+particularly through freight, grew in importance, it became more and
+more apparent that frequent transhipment was an expense to the railroads
+as well as a burden to the public. The system of railroad ownership and
+management soon adapted itself to the necessities of business. The
+change seems to have been inevitable, for it occurred in all parts of
+the world at about the same time. Sagacious men early recognized the
+importance of railroads as national lines of communication. This idea no
+doubt controlled the projectors of the Baltimore and Ohio, of the Erie,
+and of the Boston and Albany roads. The first consolidation of any
+importance took place in 1853, when eleven different roads between
+Albany and Buffalo were united to form the New York Central. Five branch
+roads were added to the system between 1855 and 1858. In 1864 Cornelius
+Vanderbilt secured control of the Hudson River road, and in 1867 of the
+New York Central, which lines he consolidated in 1869. By gaining soon
+afterward <span class='pagenum'><a name="Page_83" id="Page_83">[Pg 83]</a></span>control of the Lake Shore and Michigan Central and Southern
+Canadian roads, he united under one management over 4,000 miles of
+railroad between New York and Chicago, and thus created the first
+through line between the East and the West.</p>
+
+<p>As has already been stated, the Pennsylvania road gained control of the
+Pittsburgh, Fort Wayne and Chicago in 1858 and thus extended its system
+as far as Chicago. Through the absorption of other lines it reached an
+extent of over 7,000 miles. The creation of this through route was
+chiefly the work of Thomas A. Scott, at that time vice-president, and
+later president, of the Pennsylvania railroad.</p>
+
+<p>In 1874 the Baltimore and Ohio, under the management of John W. Garrett,
+extended its system to Chicago, and became a competitor of the two older
+lines in the transportation of through freight. At about the same time
+two other parallel trunk lines were developed, the Grand Trunk on the
+north, and the Erie, between the Lake Shore and Pennsylvania lines.
+There were, therefore, in 1874 five rival trunk lines competing for the
+business between the West and the seaboard.</p>
+
+<p>During the same period large rival lines developed west of Chicago and
+St. Louis. From the former city radiate the St. Paul and Northwestern
+systems, each with from 6,000 to 8,000 miles; the Atchison, Topeka and
+Santa Fe with over 9,000 miles; then the Rock Island, the Chicago,
+Burlington and Quincy, the Illinois Central, the Chicago Great-Western,
+and the Chicago and Alton, their systems ranging from 1,000 to 6,000
+miles in extent. From St. Louis radiate the various branches of the
+Missouri Pacific and the closely allied Wabash system, controlling
+together some 10,000 miles of road.</p>
+
+<p><span class='pagenum'><a name="Page_84" id="Page_84">[Pg 84]</a></span>This process of consolidation also went on in the Southern States,
+though to a less extent. Their systems do not run parallel, like the
+trunk lines, nor do they radiate from a common center, like the roads of
+the Northwest, but they radiate from the principal ports of the Atlantic
+and the Gulf of Mexico toward the interior.</p>
+
+<p>We now enter upon the third period of the history of American railroads,
+the period of combinations. During the time of great activity in
+railroad construction following the War of the Rebellion many abuses in
+railroad management had been developed, which caused general complaint
+and led to what is known as the Granger movement. Laws were demanded,
+especially in the agricultural States of the West, which should regulate
+the rates, methods of operation, and the political relations of the
+railroads. The friends of this movement were successful in the political
+contests that followed, and Granger legislatures were elected in the
+States of Illinois, Wisconsin, Iowa and Minnesota. Laws were passed
+fixing the rates on different classes of roads and providing penalties
+for their violation. The companies contested these acts in the courts,
+but were defeated at every step, until in 1877 the Supreme Court of the
+United States sustained the constitutionality of the Granger laws. In
+the meantime railroad managers tried their utmost to render, by shrewd
+manipulation, these laws obnoxious, and they finally succeeded in having
+them repealed or so amended as to render them largely ineffectual.</p>
+
+<p>It was the principal object of the Granger movement to do away with the
+many discriminating tariffs which so injuriously affected local points.
+It is true, discriminations between individuals were practiced at
+business centers, but rates upon the whole were low at such points as
+<span class='pagenum'><a name="Page_85" id="Page_85">[Pg 85]</a></span>compared with those which obtained at local stations. While the Granger
+contest was still going on in the West, a new evil developed in the
+East, which became characteristic of the period and finally grew into
+one of the most intolerable abuses of railroad management. Railroad men
+had gradually learned that it was in their power to maintain high rates
+at competitive as well as at non-competitive points, provided all the
+roads centering at such points could be induced to co&ouml;perate, or rather
+to conspire for that purpose. The final solution of the problem was,
+after some experimentation, found in the device to control the prices of
+transportation generally known as the pool. It is doubtful whether any
+contrivance connected with railroad management ever threatened to
+subvert long-established principles of the common law more completely
+than this. Within a few years it extended its dominion over the whole
+country, exacting a heavy tribute from its commerce, until the people's
+patience finally became exhausted and their determined demand for
+railroad reform led to the enactment of the Interstate Commerce Act in
+1887.</p>
+
+<p>When this act passed, dire results were predicted by nearly every
+railroad man in the country. Prophecies were freely made that it would
+ruin half of the roads and seriously cripple and sadly interfere with
+the usefulness of the other half, that it would derange the business of
+the country, greatly depreciate all railroad securities and put an end
+to railroad construction. Nearly seven years have passed since the
+adoption of the law, but not one of these prophecies has come to pass.
+There are at present probably less bankrupt roads in the United States
+than there have been at any time for twenty years, our business
+interests have been improved, the securities of <span class='pagenum'><a name="Page_86" id="Page_86">[Pg 86]</a></span>honestly managed roads
+are in better repute than they were previous to the passage of the law,
+and the railroad mileage of the country is increasing at the rate of
+about 6,000 miles a year. If any branch of business has suffered in
+consequence of the enactment of the law, it is the branch monopolized by
+Wall Street. Since 1885, the time when the Interstate Commerce Bill was
+first seriously agitated, the aggregate of railroad securities has
+increased nearly $2,500,000,000, or about one-third. This certainly does
+not look as if capital had been seriously frightened by the Interstate
+Commerce Act. There are other proofs of railroad prosperity. In 1885 the
+gross earnings of the railroads of the United States were $772,568,833,
+or 9.9 per cent. on their reported capital. In 1886 their gross earnings
+were $829,940,836, or 10.2 per cent. on the reported railroad capital.
+In 1890 the gross earnings had increased to $1,097,847,428, and equaled
+10.8 per cent. on the reported capital. This includes even the
+capitalization of new lines and others not reporting operations. Mr.
+Poor gives the reported cost of the lines actually operated as
+$8,519,670,421, against $10,122,635,900 reported cost of all the
+railroads built. Omitting from the computation the lines not reporting
+operations, the gross earnings of the roads actually operated equaled
+12.7 per cent. and their net earnings 4 per cent. on the actual cost of
+the lines which reported. The gross earnings for 1891 were
+$1,138,024,459, and for the year ending June 30, 1892, $1,222,711,698.</p>
+
+<p>The gross earnings per mile have increased from $6,265 in 1885, and
+$6,570 in 1886, to $6,946 in 1890, and $7,409 in 1892. In 1885 the
+capitalization per mile of road was $55,059 and the net earnings per
+mile were $2,185. In 1890 the capitalization per mile had decreased to
+$53,783, <span class='pagenum'><a name="Page_87" id="Page_87">[Pg 87]</a></span>while the net earnings per mile increased to $2,195. The
+railroad mileage of the country has grown from 128,361 in 1885 to
+166,817 in 1890, to 170,601 in 1891, and to 175,000 in 1892.</p>
+
+<p>The railroad system of the United States has had a phenomenal growth,
+especially since 1870, since which time nearly 120,000 miles of road, or
+more than two-thirds of the total mileage, have been constructed. The
+table below shows the number of miles of railroad constructed and in
+operation, by quinquennial periods from 1830 to the close of 1890,
+inclusive:</p>
+
+<div class="centered">
+<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="Year">
+  <tr>
+  <td class="tdc" width="30%">YEAR.</td>
+  <td class="tdc" width="39%">MILES IN OPERATION.</td>
+  <td class="tdc" width="30%">INCREASE.</td>
+  </tr>
+  <tr>
+  <td class="tdc">1830</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23</td>
+  <td class="tdc">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">1835</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;1,098</td>
+  <td class="tdc">&nbsp;&nbsp;1,075</td>
+  </tr>
+  <tr>
+  <td class="tdc">1840</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;2,818</td>
+  <td class="tdc">&nbsp;&nbsp;1,720</td>
+  </tr>
+  <tr>
+  <td class="tdc">1845</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;4,633</td>
+  <td class="tdc">&nbsp;&nbsp;1,815</td>
+  </tr>
+  <tr>
+  <td class="tdc">1850</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;9,021</td>
+  <td class="tdc">&nbsp;&nbsp;4,388</td>
+  </tr>
+  <tr>
+  <td class="tdc">1855</td>
+  <td class="tdc">&nbsp;&nbsp;18,374</td>
+  <td class="tdc">&nbsp;&nbsp;9,353</td>
+  </tr>
+  <tr>
+  <td class="tdc">1860</td>
+  <td class="tdc">&nbsp;&nbsp;30,626</td>
+  <td class="tdc">12,252</td>
+  </tr>
+  <tr>
+  <td class="tdc">1865</td>
+  <td class="tdc">&nbsp;&nbsp;35,085</td>
+  <td class="tdc">&nbsp;&nbsp;4,459</td>
+  </tr>
+  <tr>
+  <td class="tdc">1870</td>
+  <td class="tdc">&nbsp;&nbsp;52,922</td>
+  <td class="tdc">17,837</td>
+  </tr>
+  <tr>
+  <td class="tdc">1875</td>
+  <td class="tdc">&nbsp;&nbsp;74,096</td>
+  <td class="tdc">21,174</td>
+  </tr>
+  <tr>
+  <td class="tdc">1880</td>
+  <td class="tdc">&nbsp;&nbsp;93,296</td>
+  <td class="tdc">19,200</td>
+  </tr>
+  <tr>
+  <td class="tdc">1885</td>
+  <td class="tdc">128,361</td>
+  <td class="tdc">35,065</td>
+  </tr>
+  <tr>
+  <td class="tdc">1890</td>
+  <td class="tdc">166,817</td>
+  <td class="tdc">38,456</td>
+  </tr>
+</table>
+</div>
+
+<p>It will be noticed that in the sixty years covered by the above table
+there are but two quinquennial periods which show a falling-off in the
+rate of growth, viz.: 1860-65 and 1875-80. During the former period
+railroad construction was partially checked by the War of the Rebellion,
+during the latter by the general financial depression following the
+panic of 1873.</p>
+
+<p>The length of railroads in the world has grown from 206 miles in 1830 to
+about 400,000 miles in 1892. The following table shows the growth of
+railroad mileage by quinquennial periods:</p>
+
+<div class="centered">
+<table border="0" width="40%" cellpadding="2" cellspacing="0" summary="1860">
+  <tr>
+  <td class="tdc" width="50%">YEAR.</td>
+  <td class="tdc" width="50%">MILES.<span class='pagenum'><a name="Page_88" id="Page_88">[Pg 88]</a></span></td>
+  </tr>
+  <tr>
+  <td class="tdc">1830</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;206</td>
+  </tr>
+  <tr>
+  <td class="tdc">1835</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;1,502</td>
+  </tr>
+  <tr>
+  <td class="tdc">1840</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;5,335</td>
+  </tr>
+  <tr>
+  <td class="tdc">1845</td>
+  <td class="tdc">&nbsp;&nbsp;10,825</td>
+  </tr>
+  <tr>
+  <td class="tdc">1850</td>
+  <td class="tdc">&nbsp;&nbsp;23,625</td>
+  </tr>
+  <tr>
+  <td class="tdc">1855</td>
+  <td class="tdc">&nbsp;&nbsp;42,340</td>
+  </tr>
+  <tr>
+  <td class="tdc">1860</td>
+  <td class="tdc">&nbsp;&nbsp;66,413</td>
+  </tr>
+  <tr>
+  <td class="tdc">1865</td>
+  <td class="tdc">&nbsp;&nbsp;90,280</td>
+  </tr>
+  <tr>
+  <td class="tdc">1870</td>
+  <td class="tdc">131,638</td>
+  </tr>
+  <tr>
+  <td class="tdc">1875</td>
+  <td class="tdc">182,927</td>
+  </tr>
+  <tr>
+  <td class="tdc">1880</td>
+  <td class="tdc">231,190</td>
+  </tr>
+  <tr>
+  <td class="tdc">1885</td>
+  <td class="tdc">303,172</td>
+  </tr>
+  <tr>
+  <td class="tdc">1890</td>
+  <td class="tdc">385,000</td>
+  </tr>
+</table>
+</div>
+
+<p>From this table it is seen that the railroad mileage of the world has
+doubled during the past fifteen years, and that its average annual
+increase is at present not far from 17,000 miles. There is no doubt that
+the extent of railroad construction has everywhere exceeded all
+anticipations. So fast has the railroad system expanded in the most
+highly civilized countries that it soon outgrew in nearly all of them
+the laws originally adopted for railroad control. In time an almost
+universal demand arose for reform, and the most progressive governments
+were not slow in heeding it. For the past fifteen years there has been a
+decided drift on the European continent toward state ownership of
+railroads, or to such strict control of the transportation business as
+virtually deprives the operating companies of the power to do injustice
+to the public.</p>
+
+<p>The railroad is assuming more and more the character of an international
+highway. A movement is on foot to connect the railroad systems of the
+United States with those of South America by an intercontinental or
+"Pan-American" railroad. Appropriations have been made by the United
+States and several of the South American republics for a preliminary
+survey of the proposed line. Three different surveying parties are in
+the field, one in Central America and the other two in the United States
+of Colombia and Ecuador. The progress so far reported by them is
+encouraging, and there is now some hope that <span class='pagenum'><a name="Page_89" id="Page_89">[Pg 89]</a></span>before the close of the
+nineteenth century one may be able to travel by railroad from New York
+to Valparaiso without even a change of cars.</p>
+
+<p>It has also been proposed to span Behring Strait and connect North
+America with Asia and Europe by an international railway. This line, if
+constructed, would be simply an extension of the proposed Pan-American
+railroad and would follow the western coast of the United States as far
+as Behring Strait, then cross over into Asia, traverse Siberia and
+finally reach London via St. Petersburg, Berlin and Paris. It is very
+questionable whether such a line is at present feasible either from a
+technical or financial point of view, but the time will probably come
+when the railroad track will connect New York and London.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_90" id="Page_90">[Pg 90]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER IV.</h2>
+
+<h2>MONOPOLY IN TRANSPORTATION.</h2>
+<br />
+
+<p>From time immemorial efforts have been made by designing men to control
+either commerce or its avenues, the highways on the land and on the sea,
+by a power which law, custom, ingenuity, artifice or some other agency
+had placed into their hands.</p>
+
+<p>The ancient Ph&oelig;nicians early aimed at and finally obtained the empire
+of the sea by making themselves masters of the most commodious harbors
+of the Mediterranean Sea and the Arabian Gulf. They established a
+regular intercourse with the countries bordering on the Mediterranean as
+well as with India and the eastern coast of Africa. From these latter
+countries they imported many valuable commodities which were not known
+to the people of other parts of the world, and during a long period they
+held this lucrative branch of commerce without a rival. The character
+and the situation of the Ph&oelig;nicians aided them greatly in acquiring
+this mastery of commerce. Neither their manners and customs nor their
+institutions showed any marked national peculiarity; they had no
+unsocial prejudices and they mingled with the people of other countries
+without the least scruple or repugnance. As their native country was
+small and quite barren, they early learned to rely upon commerce as the
+best source of riches and power. Like the other Semitic tribes, the
+Ph&oelig;nicians were noted for their energy and acumen, and while they
+were not a literary people in the strict sense of the word, ancient
+civilization received probably a more powerful impetus through their
+commercial supremacy than through any other agency.</p>
+
+<p><span class='pagenum'><a name="Page_91" id="Page_91">[Pg 91]</a></span>During the reign of King Solomon the Jews made an attempt to wrest from
+the Ph&oelig;nicians at least a part of the world's trade. Solomon built
+ships and imported Ph&oelig;nician sailors for his fleet. For a time it
+seemed as if the Israelites might become the rivals of their teachers in
+the art of navigation and in the mysteries of trade; but their peculiar
+religious customs in that early day proved a serious impediment to
+commercial ascendancy, as it rendered them incapable of that unreserved
+intercourse with strangers so essential in commerce.</p>
+
+<p>The monopoly of the sea, at least of the Mediterranean, passed to the
+Carthaginians, their descendants. The latter extended their navigation
+toward the west and north. They planted colonies and opened new harbors,
+and up to the time of the Punic wars kept almost the entire trade of the
+countries bordering on the Mediterranean in their hands.</p>
+
+<p>After the downfall of Carthage the control of the commerce of Southern
+Europe and Northern Africa descended to the Romans. When Rome became the
+capital of the world, it gathered the wealth and valuable productions of
+all its provinces. Under the consuls and the earlier emperors the
+vigilance of the Roman magistrates and the spirit of the Roman
+government gave every possible security to commerce and prevented for a
+time the rise of monopoly. Nowhere was national union so complete or
+commercial intercourse so perfect as in the Roman empire. The
+intelligence and the power of Rome stimulated and regulated the industry
+of her people and permitted them to enjoy the fruits of their efforts
+without public or private restrictions.</p>
+
+<p>We have seen that the intercourse of Rome and her provinces was
+facilitated by the construction of roads and <span class='pagenum'><a name="Page_92" id="Page_92">[Pg 92]</a></span>the establishment of
+imperial posts. During the decline of the empire the maintenance of
+these posts led, however, to a grave abuse. We are informed by Gibbon in
+his "Decline and Fall of the Roman Empire":</p>
+
+<p>"But these beneficial establishments were accidentally connected with a
+pernicious and intolerable abuse. Two or three hundred agents or
+messengers were employed, under the jurisdiction of the master of the
+offices, to announce the names of the annual consuls and the edicts or
+victories of the emperors. They insensibly assumed the license of
+reporting whatever they could observe of the conduct either of the
+magistrates or private citizens, and were soon considered as the eyes of
+the monarch and the scourge of the people. Under the warm influence of a
+feeble reign they multiplied to the incredible number of ten thousand,
+disdained the mild though frequent admonitions of the laws, and
+exercised in the profitable management of the posts a rapacious and
+insolent oppression. These official spies, who regularly corresponded
+with the palace, were encouraged by favor and reward anxiously to watch
+the progress of every treasonable design, from the faint and latent
+symptoms of disaffection to the actual preparation of an open revolt.
+Their careless or criminal violation of truth was covered by the
+consecrated mask of zeal; and they might securely aim their poisoned
+arrows at the breast either of the guilty or the innocent, who had
+provoked their resentment."</p>
+
+<p>After the downfall of the Romans, commerce remained paralyzed during the
+period of Gothic ignorance and barbarism. The crusades for the recovery
+of the Holy Land from the Saracens, in the eleventh and following
+centuries, opened again communication between the east and the west by
+leading multitudes from every European country into Asia; and though the
+object of these expeditions was conquest, and not commerce, their
+commercial effects were both beneficial and permanent. The crusades were
+especially favorable to the commercial pursuits of <span class='pagenum'><a name="Page_93" id="Page_93">[Pg 93]</a></span>the Italian states.
+The vast armies which marched from all parts of Europe toward Asia gave
+encouragement to the shipping of Venice, Genoa, and Pisa, which
+sometimes transported them, and always supplied them with provisions and
+military stores. Besides the immense sums which these states received on
+this account, they obtained commercial privileges of great consequence
+in the settlements which the crusaders made in the East. All the
+commodities which they imported or exported were exempted from every
+imposition, the property of entire suburbs in some of the maritime
+towns, and of large streets in others, was vested in them, and all
+questions arising among persons residing within their precincts, or who
+traded under their protection, were decided by their own laws and by
+judges of their own appointment. When the crusaders took Constantinople,
+the Venetians did not neglect to secure to themselves many advantages
+from that event. Nearly all the branches of commerce were in time
+transferred from Constantinople to their city. At the end of the crusade
+period Venice had monopolized nearly all the foreign trade of Europe.
+She supplied the people of Italy, France and Germany with those
+commodities with which the crusaders by their intercourse with more
+refined nations had become acquainted. The possession of many Eastern
+ports and the maintenance of a powerful navy made it possible for the
+Venetians to retain their monopoly for several centuries.</p>
+
+<p>The growth of commerce in Central Europe was but slow, owing to the
+dangers to which it was exposed in those days of feudalism. The mountain
+fastnesses of robber knights, which controlled every road and navigable
+river, were so many toll-gates at which the wayfaring merchant was
+stopped to pay tribute. In time this <span class='pagenum'><a name="Page_94" id="Page_94">[Pg 94]</a></span>system of plunder grew to such an
+extent that hundreds of feudal lords relied upon it for their support.
+Such a tax upon commerce greatly enhanced the value of all commodities,
+and this deplorable state of things lasted until the cities made their
+power felt by forming alliances for mutual protection. One of these
+alliances, the Rhenish League, comprised in time seventy towns, and the
+ruins of the strong castles destroyed by its forces still exist along
+the Rhine, picturesque memorials of these lawless times.</p>
+
+<p>Perhaps the most powerful commercial union of the middle ages was the
+Hanseatic League. To protect their commerce, the cities of Hamburg and
+Lubeck formed about the middle of the thirteenth century an alliance for
+mutual defense. The advantages derived from this union attracted other
+towns to the confederacy. In a short time about eighty of the largest
+cities lying between the Baltic and the Rhine joined this famous league,
+which in time became so formidable that its alliance was courted and its
+enmity was dreaded by the greatest monarchs. The League divided its
+territory into several districts. Its members, like railway associations
+of the present day, made their own laws, and met for this purpose at
+regular intervals in the city of Lubeck. The original object of the
+League, mutual assistance against outside attacks, was soon lost sight
+of, and its constantly growing power was used to obtain still greater
+commercial privileges in the adjoining countries, and even to force
+their rulers to concede to its members a commercial monopoly. In 1361 a
+controversy arose between the League and the King of Denmark, which led
+to a long and bitter war between them. This war was participated in by
+no less than seventy-seven cities on the part of the League. It
+<span class='pagenum'><a name="Page_95" id="Page_95">[Pg 95]</a></span>terminated in 1370, leaving the Hansa master of the situation. For many
+years after this the League exerted its power in Denmark, Sweden and
+Norway, and the rulers of these countries were compelled to respect the
+wishes and even submit to the orders of these proud merchants. The
+countries bordering on the Baltic Sea remained the domain of the League
+for several centuries. They gathered there immense quantities of raw
+material, which they sold in the various ports of Europe. The influence
+of the League even reached as far as Novgorod in the east and London in
+the west. In both cities the League had its quarters, and within them it
+virtually exercised the right of sovereignty. Its main market was at
+Bruges in Flanders, which was then a bee-hive of industry and thrift.
+There the Italian traders came with the products of the east, such as
+spices, perfumes, oil, sugar, cotton and silk, to exchange them for the
+raw materials of the north. While taxes and imposts everywhere else
+harassed merchants, commerce was free in the cities of Flanders, owing
+to the liberality, or rather shrewdness, of her rulers. In Bruges the
+members of the Hansa met the merchants of Venice on equal terms, and the
+exchange of the products of the north for those of the east and south
+could be effected there to the greatest advantage of both.</p>
+
+<p>While it must be admitted that the Hanseatic League developed the
+resources of Northern Europe, and that, even at the time of its greatest
+power, there was always competition among its own members, the fact
+remains that it abused its power by the suppression of all outside
+competition, and that it usurped rights which belong only to the state,
+thus often producing abuses as great as those which it was organized to
+remedy. Its final downfall was caused by the development of national
+power in the <span class='pagenum'><a name="Page_96" id="Page_96">[Pg 96]</a></span>northern kingdoms and the growth of commerce and
+navigation in Great Britain. A stubborn assertion of antiquated
+privileges on the part of the Hansa involved it in a feud with the
+illustrious and lion-hearted Queen Elizabeth of England. In 1589 the
+Queen caused sixty of their vessels to be captured on the Tagus, and
+later even took possession of their hall and wharves in London. After
+this the League's decline was very rapid, though its organization was
+kept up till 1669, when its delegates held their last session.</p>
+
+<p>Contemporary with the decline of the Hanseatic commerce in the north was
+that of the Italian cities, especially Venice, in the south. They had
+prospered by their commerce with the Levant until Vasco de Gama
+discovered the sea route to East India in 1497. His countrymen, the
+Portuguese, soon utilized this discovery. They took possession of the
+coast of India and of the islands to the south of it. They also
+succeeded in excluding the Arabs from the commerce with that country, of
+which up to that time they had had exclusive control. For this purpose
+they built fortresses and factories on the west coast of Hindostan, took
+possession of the island of Socotra in the Arabian, and of Ormus in the
+Persian Gulf, and forced the Indian princes to grant them the exclusive
+privilege of trading with their subjects. They also captured the city of
+Malacca, where the trade between China, Japan, the Philippine Islands,
+the Moluccas and India had concentrated itself. In this way they got in
+a comparatively short time control of the commerce of India, Arabia, and
+even Egypt. By forcing the Venetians and their commercial allies out of
+those markets, they secured for themselves a monopoly of the commerce
+between Europe and the east. The political ascendancy of the Turks in
+<span class='pagenum'><a name="Page_97" id="Page_97">[Pg 97]</a></span>the islands situated in, and in the countries bordering on, the Eastern
+Mediterranean, caused the loss of Cyprus, Crete (Candia) and Morea to
+the Venetians and greatly aided the Portuguese in establishing their
+commercial supremacy. Less profitable for the latter was the possession
+of their American colonies. They, as well as the Spaniards, adopted here
+a policy which ultimately brought commercial and industrial ruin upon
+both. Entirely neglecting agriculture and relying on the mineral
+resources of their transatlantic colonies, which were believed to be
+inexhaustible, they strove to amass riches by reserving for themselves
+the exclusive privilege of supplying them with the manufactures of
+Europe in exchange for American gold. Neglecting home industries, they
+bought their supplies as well as those of their colonies in France,
+Holland and England. A spirit of speculation and adventure enervated
+their people, and led in time to commercial bankruptcy and political
+disaster.</p>
+
+<p>Spain also drained her treasury by her wars with her Dutch dependencies,
+and the loss of her northern provinces was a serious blow to her
+commerce. Antwerp, which had become the successor of Bruges as the
+commercial emporium of the north, began to decline, and Amsterdam, the
+metropolis of the new Dutch republic, became heir to its glory and its
+riches. The young republic at once commenced to compete in the carrying
+trade with Spain and Portugal, and to make inroads into the eastern
+commerce of the latter.</p>
+
+<p>The Dutch East India Company, which was organized in 1602, sent a fleet
+of fourteen vessels into the Indian Archipelago to found colonies in
+Java, Sumatra and the Moluccas. In a short time they had monopolized the
+entire spice trade, which immediately became a source of <span class='pagenum'><a name="Page_98" id="Page_98">[Pg 98]</a></span>great wealth.
+A cargo of five vessels, which returned to Amsterdam in 1603, consisted
+of over two million pounds of spices. This cargo was purchased for
+588,874 florins and was sold for 2,000,000 florins. It is under these
+circumstances not surprising that the dividends of the company's
+stockholders often amounted to 75 per cent., and never went below 12-1/2
+per cent. previous to 1720. Holland's colonial trade made Amsterdam the
+commercial metropolis of Europe. It became the grain market from which
+Spain, Italy and other countries drew their supplies. All the products
+of the world found purchasers here, and a well-developed banking system
+greatly facilitated the exchange. The rapid accumulation of fortunes by
+the Dutch merchants and bankers was without precedent in Europe. Besides
+this, the progress which Holland made in ship-building and navigation
+and the advantages which she derived from her colonial trade placed her
+in a position to outstrip all other nations in the carrying trade of
+Europe. During the first half of the seventeenth century the Dutch were
+justly called the freighters of Europe. But the injury which their
+policy did to the commercial and manufacturing interests of other
+European nations led both England and France to adopt measures well
+calculated to accomplish, in a short time, their commercial
+emancipation. Louis XIV., in order to build up French shipping,
+collected a tonnage from every foreign ship which entered a French
+harbor. England went still further. In 1651 Oliver Cromwell promulgated
+the Navigation Act, by which foreign ships were prohibited from
+importing into England any goods except such as were produced or
+manufactured in their own countries. This was a heavy blow at the Dutch,
+who were thus deprived of the privilege of effecting the exchange of
+commercial <span class='pagenum'><a name="Page_99" id="Page_99">[Pg 99]</a></span>commodities between England and her colonies as well as the
+continent. The war which the Dutch Republic waged against England, to
+force her to revoke this act, resulted in favor of the latter and ended
+the commercial supremacy of the Dutch in Europe.</p>
+
+<p>England, which before this time had played but a secondary role as a
+commercial power, rose fast to prominence after her successful struggle
+with the Dutch. She commenced to strengthen her industries by the
+adoption of a high tariff policy, and her merchants were encouraged to
+enter into commercial relations with colonists and foreigners. The
+privileges which had been given to foreign tradesmen were revoked, while
+ship-building and navigation were greatly favored by the government. As
+England gained greater strength as a naval power, her foreign policy
+became more aggressive.</p>
+
+<p>In 1600 the "Company of Merchants of London Trading to the East Indies"
+obtained a charter, and, in spite of Dutch and Portuguese opposition,
+soon gained a foothold on the Moluccas and the coast of Malabar, whence
+it extended in time its dominion to Surat, Bombay, Madras and Calcutta.
+Here they built forts and established their commerce. From these places
+the company pushed into the interior, until finally, after repeated
+struggles with the natives and European rivals, the whole of Hindostan
+came under English dominion. As its power increased, the company
+commenced to abuse shamefully the monopoly which it had been granted, by
+inaugurating a system of plunder and oppression which is perhaps without
+its equal in the annals of history. These growing abuses led to frequent
+revolts and seriously imperiled England's dominion in these territories.</p>
+
+<p>To remedy these evils, Parliament at the close of the <span class='pagenum'><a name="Page_100" id="Page_100">[Pg 100]</a></span>seventeenth
+century annulled the charter of the company and declared the commerce
+with the East Indies open to all of the King's subjects. A number of
+small companies were formed, but in 1702 they all combined and organized
+the East India Company. Monopoly was again established, but the patience
+of the natives was exhausted, and England's interests in Hindostan were
+in a critical condition. At this juncture the East India Company adopted
+a policy of moderation, and this, together with the aid which the
+government gave to the company, enabled it to strengthen again its
+weakened commercial relations and to further enlarge its territory. But
+the temptation to abuse its power was too great for this strong
+corporation to be long resisted. Abuses again crept into its management
+and continued to grow until its charter was finally repealed.</p>
+
+<p>The policy adopted by Great Britain for the government of her American
+colonies during the eighteenth century was less rapacious, but scarcely
+more just than that pursued in her eastern possessions. To retain those
+colonies as commercial no less than as political dependencies,
+Parliament enacted laws compelling their people to trade with the mother
+country exclusively and laying restraint on their manufactures. But the
+American pioneers felt that they had brought with them across the ocean
+the rights of Englishmen; they objected to taxation without
+representation, and the men who for opinion's sake had left comfortable
+homes to brave upon a distant shore the dangers of frontier life were
+prepared, if necessary, to emphasize their objection by armed
+resistance. England, intent upon maintaining her barbaric system of
+discriminative duties and commercial monopolies, blindly attempted
+coercion, but the war which resulted wrested <span class='pagenum'><a name="Page_101" id="Page_101">[Pg 101]</a></span>from the English crown its
+brightest jewel, and the War of 1812 established upon American soil the
+principle of industrial and commercial liberty.</p>
+
+<p>It must not be supposed, however, that America and the United States in
+particular have been free from monopolies growing out of the
+transportation business. Nothing would be farther from the truth. There
+is no law so stringent but that it will be violated; there is no
+government so vigilant but that it will at times be imposed upon. It is
+true, our government sanctions no monopoly, but the very liberty of
+action which exists here among corporations as well as individuals
+offers to organized wealth and power a wide field for abuses.</p>
+
+<p>We have seen in the foregoing that almost from time immemorial efforts
+have been made to monopolize transportation and trade, and that these
+efforts were successful whenever either from ignorance or weakness the
+masses fell into political apathy. There is a natural tendency among men
+to utilize commercial advantages to the detriment of others. In modern
+times the opportunities for building up large monopolies have greatly
+increased and have been turned to the most profitable account by
+designing men. Great and even unbearable abuses have always followed
+where the greed and ambition of such men have not been checked by
+governmental agencies. In this respect the people of the United States
+have had about the same experience as the rest of mankind. Ever since
+the introduction of railroads into this country there has been a
+well-marked drift toward monopolizing the transportation business.</p>
+
+<p>As long as the dangers of monopoly remained unknown to the American
+people, legislation for the control of railroads and other public
+carriers was both scarce and crude, <span class='pagenum'><a name="Page_102" id="Page_102">[Pg 102]</a></span>and shrewd railroad men were not
+slow in taking advantage of the situation. It is foreign to the design
+of this treatise to give a complete history of railroad monopoly in the
+United States. The author will therefore confine himself to showing that
+transportation companies will, like the great commercial organizations
+of the past, when left to follow their instincts, invariably use their
+power to oppress the public by exacting excessive charges for their
+services, or to discriminate against the many by extending special
+privileges to the few. Hundreds of cases might be given to illustrate
+the above rule, but a history of two of these corporations will suffice
+to show to what extent corporate abuses can be carried, and to serve as
+a warning against the adoption of any "<i>laissez faire</i>" policy in the
+railroad legislation of the future. The corporations selected for this
+purpose are the Camden and Amboy Railroad and the Standard Oil
+Companies, both typical representatives of the Rob Roy policy which
+organized wealth has pursued since the dawn of civilization, when not
+prevented by the wisdom and strength of a good government.</p>
+<br />
+
+<p class="cen">THE CAMDEN AND AMBOY RAILROAD COMPANY.</p>
+
+<p>For almost forty years the Camden and Amboy Railroad was the only direct
+route between the cities of New York and Philadelphia. It is doubtful
+whether previous to the war a more important or a more remunerative road
+existed in the United States, for, besides connecting the two largest
+cities in the Union, it formed part of the direct land route from the
+East to the South.</p>
+
+<p>The efforts to open a direct through route between New York and
+Philadelphia date back to the year 1812, when the construction of a
+canal between the Hudson and the <span class='pagenum'><a name="Page_103" id="Page_103">[Pg 103]</a></span>Delaware was proposed, but an
+ill-advised jealousy of the State of Pennsylvania delayed for many years
+the realization of the project. When this obstacle was finally overcome,
+a change of sentiment had taken place in New Jersey. Railroads had just
+made their appearance in the United States, and a large number of the
+people of New Jersey preferred a railroad to a canal.</p>
+
+<p>The matter was finally compromised in the legislature of New Jersey,
+which on the 4th of February, 1830, simultaneously granted charters to
+the Delaware and Raritan Canal Company and the Camden and Amboy
+Transportation Company, fixing the capital stock of each company at
+$1,000,000, with the right to increase it to $1,500,000. The charter
+further stipulated what taxes should be paid to the State, and also
+contained the provision that within five miles of the starting-point and
+within three miles of the terminus of each line no other railroad or
+canal should be built. It was believed the existence of both a water and
+a land route would be sufficient to maintain competition on this
+important thoroughfare of interstate traffic. The construction of the
+railroad, which had been surveyed in almost a straight line between its
+termini, was at once commenced. A number of well-to-do and practical men
+took hold of the enterprise, among them one John Stevens, who together
+with his three sons took one-half of the capital stock. The canal
+project did not do so well at first. At the middle of the year 1830 only
+about one-twelfth of its capital stock had been sold, and there was
+great danger that the company might forfeit its charter, as the time
+allowed for the subscription of its stock was nearing its end. At this
+juncture Robert Field Stockton, a young man of ability, enthusiasm and
+wealth, came to the rescue of the canal company. He not only bought <span class='pagenum'><a name="Page_104" id="Page_104">[Pg 104]</a></span>for
+himself a goodly share of the canal stock, but also prevailed on his
+rich father-in-law, Mr. John Porter, to invest $400,000 in the
+enterprise. The financial difficulties of the company were thus removed.
+At the next session of the legislature Mr. Stockton secured an amendment
+to their charter which apparently only authorized the enlargement of the
+canal, but in reality empowered the canal company to construct a second
+railway.</p>
+
+<p>It was from the beginning Mr. Stockton's object to share with the
+railroad company the advantages which their line promised to give them.
+The enlargement of his company's franchise placed him in a position to
+dictate terms to the Camden and Amboy Transportation Company. The latter
+was given the choice, to prepare for competition with a rival railroad
+line, or to consolidate with the Delaware and Raritan Canal Company. It
+chose the latter alternative, and on the 15th day of February, 1831, the
+two companies became one. The consolidation still required the sanction
+of the legislature. This was obtained in consideration of the transfer
+of 2,000 shares of the capital stock of the company to the State. It was
+further stipulated that the new company should pay to the State a tax of
+10 cents for each passenger and of 15 cents for each ton of freight
+carried over its line through the State, as well as an annual tax of
+$30,000, and that the State in return should protect the company against
+any and all competition in the direct passenger and freight traffic
+between the cities of New York and Philadelphia. Serious doubts were at
+the time entertained by many, whether the State of New Jersey under the
+Federal Constitution possessed the right to thus create a monopoly in
+transportation facilities, and to regulate arbitrarily the commerce
+between sister States.</p>
+
+<p><span class='pagenum'><a name="Page_105" id="Page_105">[Pg 105]</a></span>Five days after it had granted this charter to the Camden and Amboy
+Company, the legislature granted another charter authorizing the
+construction of a railroad from Jersey City to New Brunswick on the
+Raritan River. On the 23d of February of the same year a charter had
+been granted by the legislature of the State of Pennsylvania to a
+company which had been formed for the purpose of constructing a railroad
+from Philadelphia to Trenton. This company had likewise been authorized
+by its charter to buy the right of way for a railroad from Trenton to
+New York, which it proceeded at once to do. It was evident that as soon
+as the two new roads would meet at New Brunswick, an understanding would
+be reached between them, by which another through line would be created
+between New York and Philadelphia, which would have the advantage over
+the Camden and Amboy road that it touched the capital of New Jersey and
+could thus make itself serviceable to members of the legislature,
+officers of State and influential politicians.</p>
+
+<p>The Camden and Amboy Freight Company soon arrived at the conclusion that
+it could not permit such rivalry. It appealed to the legislature for
+protection. Resolutions were passed in its favor, but the Philadelphia
+and Trenton Railroad Company paid no attention to those resolutions, but
+quietly continued to lay its track. Mr. Stockton and his friends did not
+dare to invoke the aid of the courts, because a judicial investigation
+might have resulted in the destruction of their own charter. The
+situation was critical, but Mr. Stockton was equal to the occasion. He
+bought quietly a sufficient number of shares to control the management
+of the Philadelphia and Trenton road, and, in April, 1836, secured the
+consolidation of the Philadelphia and Trenton and the Camden and Amboy
+railroad companies.</p>
+
+<p><span class='pagenum'><a name="Page_106" id="Page_106">[Pg 106]</a></span>The canal of the company was not completed until 1838. It had consumed a
+sum of money largely in excess of the original estimate. To connect the
+two lines of the consolidated company, a branch road was constructed
+from Trenton to Bordentown. Later the road from Trenton to Brunswick was
+completed and an agreement entered into with the Jersey City company for
+a division of the traffic of the two roads. The large cost of these
+improvements suggested to the company the advisability of increasing its
+revenues and of decreasing its expenditures. Its charter provided for a
+payment to the State of 10 cents for each through passenger. By an
+artifice the company avoided the payment of this tax. It compelled its
+through passengers to walk over the bridge at Trenton and then continue
+their journey by rail via Bordentown to Jersey City.</p>
+
+<p>The company's charter also stipulated, that the fare between New York
+and Philadelphia should not exceed $3 per passenger. Its officers
+interpreted this stipulation to apply only to the intermediate traffic
+and proceeded to collect $2.50 for the trip from New York to Trenton,
+and $1.50 from there to Philadelphia, thus increasing the fare for the
+entire journey to $4.00, one dollar above the maximum allowed by law.
+One Jacob Ridgway, who was the owner of a ferry-boat at Camden, saw here
+an opportunity for starting a lucrative business. He bought a steamer
+and carried passengers from Philadelphia to Trenton for one-third of the
+fare demanded by the railroad. After the Camden and Amboy Company had
+made several unsuccessful attempts to intimidate Mr. Ridgway and his
+force, one of which even brought Mr. Stockton in contact with the
+criminal courts, it purchased the boat with all terminal facilities at
+Philadelphia and Trenton. The <span class='pagenum'><a name="Page_107" id="Page_107">[Pg 107]</a></span>attention of the legislature of New
+Jersey was repeatedly called to the company's failure to comply with the
+provisions of its charter, but these appeals were on the whole of no
+avail. In 1842, after a long discussion, a resolution was carried
+declaring the charge of $4 for the through journey illegal, but the
+company entirely ignored this legislative reminder and continued its old
+tariff.</p>
+
+<p>The company's charter also reserved for the State the right to acquire
+the Camden and Amboy road under certain conditions upon the payment of a
+reasonable compensation. In 1844, through Mr. Stockton's engineering,
+the constitution of New Jersey was so amended as to practically deprive
+the State of the power to acquire the company's property.</p>
+
+<p>During the first few years of the existence of the Camden and Amboy
+Transportation Company its business was managed in the interest of its
+owners, but soon a few of its leading stockholders managed to turn its
+enormous profits into their own pockets. The Stevens and Stockton
+families, together with two other directors of the Camden and Amboy
+Company, had come into possession of a line of steamers that plied on
+the Raritan, between New Brunswick and New York. The enterprise, in
+spite of its largely watered capital, had been made to pay dividends
+ranging from 30 to 40 per cent. Its owners saw an opportunity for a
+larger field of usefulness and larger dividends. In 1834 a majority of
+the board of directors of the Camden and Amboy Company proposed that the
+company rid itself of the responsibility connected with the
+transportation business and lease its railroad and canal. Mr. Stevens,
+as representative of the Camden and Amboy Company, then negotiated with
+Mr. Stevens, the representative of the Napoleon Steamer Company, and the
+<span class='pagenum'><a name="Page_108" id="Page_108">[Pg 108]</a></span>negotiations soon resulted in an agreement between the two companies by
+which the latter leased the railroad and canal lines of the former and
+agreed to pay it a fixed toll of $7.64 per ton upon all freights carried
+by rail, and one-quarter of all its revenues derived from the canal.
+Soon afterward the Napoleon Company entered into a similar contract with
+the Camden Ferry Company and now had a complete monopoly of the
+transportation business between New York and Philadelphia. It at once
+commenced to develop a system of organized plunder. Instead of the
+maximum charter tariff of 8 cents per ton per mile, it charged 10, 12,
+and even 15 cents. The through rates charged were several times as high
+as those fixed by the charter. Canal rates were raised to such an extent
+as to make them prohibitory and to compel the public to ship by rail. It
+is difficult even to estimate the total annual profits of the
+directorial syndicate. Their accounts, if any were kept, were not
+accessible, and surmises can only be based upon such data as
+occasionally found their way to the public. In 1845 the share of the
+canal tolls paid to the company's stockholders was $359,000. The
+directors' share under the terms of their lease is thus found not to
+have been less than $1,077,000. Another item of $170,000, tolls
+collected for the transportation of 27,000 tons of freight, was so
+divided that the Camden Ferry Company, or its other self, the
+directorial syndicate, received $32,000 for one mile, while the Camden
+and Amboy Railroad Company received $63,000, or less than twice as much,
+for ninety-two miles. The directors under their lease were entitled to
+the remaining $75,000.</p>
+
+<p>The service of the company was as bad as it was expensive; its trains
+were slow and irregular, and its employes arrogant. The syndicate which
+controlled the <span class='pagenum'><a name="Page_109" id="Page_109">[Pg 109]</a></span>company defied its stockholders, the public and the
+courts alike. When one of the stockholders, a Trenton merchant by the
+name of Hagar, applied to the courts for an order to compel the
+directors to produce their books and render an account, the syndicate
+bought Mr. Hagar's shares, for which he had paid $125 a share, at the
+price of $1,456 a share. The suit was then withdrawn and the matter
+hushed up.</p>
+
+<p>In 1848 a number of articles appeared in a paper published at
+Burlington, Pa., which were signed by "A Citizen of Burlington" and
+contained much surprising information concerning the Camden and Amboy
+Transportation Company. It was charged that the directors had defrauded
+both the State and the company's stockholders of large sums of money,
+that they had grossly violated their charter by charging illegal and
+extortionate rates, oppressive to both commerce and travel. It was shown
+that while the average rate per ton per mile of thirty-five neighboring
+roads was 2.85 cents, that of the Camden and Amboy Company was 4.54
+cents. It was also shown that neither the stockholders nor the State had
+received the share of the company's revenues to which they were
+entitled. These articles were extensively reprinted and caused a great
+commotion wherever they appeared. After the first storm had subsided the
+directors issued an address to the people of New Jersey, in which they
+bitterly complained of the people's loss of confidence in their
+integrity, and declared that the charges preferred against them were
+founded on falsehoods.</p>
+
+<p>The "Citizen of Burlington" replied by accusing the directors of
+defalcation and falsifying their books. He charged that from 1840 to
+1847 no account had been <span class='pagenum'><a name="Page_110" id="Page_110">[Pg 110]</a></span>rendered of the receipt of no less than
+$5,266,431, on which $493,066 was due to the State. As soon as the
+legislature convened, a resolution was introduced that a commission be
+appointed to investigate the charges preferred against the Camden and
+Amboy Transportation Company. The resolution was adopted, but it was
+virtually left to the accused to select the members of the commission.
+That the directors had a guilty conscience appeared from the fact that
+the last annual report of the company, which had just been printed, was
+withdrawn and destroyed. To silence their unknown accuser, they
+threatened him with criminal prosecution. He now gave his name. It was
+Henry C. Carey, the noted writer and authority on political economy. Mr.
+Carey did not give up the contest. He proceeded to show how the policy
+of the managers of the Camden and Amboy Transportation Company depressed
+commerce, manufactures and agriculture alike. He showed how the company
+as a public carrier discriminated in favor of industries which they
+carried on as private individuals. He claimed that the company had
+forfeited its charter, and that it was the duty of the State to
+authorize the construction of another road. In the meantime, early in
+1849, the legislative investigation committee submitted its report. It
+was perhaps as shameless a document as was ever placed before a
+legislative assembly. It lauded the directors, to whose influence the
+members of the commission owed their selection, and whitewashed their
+past management of the company's affairs.</p>
+
+<p>But the people of New Jersey were far from being satisfied with this
+report and demanded the appointment of another committee. Another
+investigation was ordered, and this time the company, or rather its
+directors, found <span class='pagenum'><a name="Page_111" id="Page_111">[Pg 111]</a></span>it impossible to control the selection of its members.
+Soon after their appointment the committee asked Mr. Carey to lend them
+his assistance in their labors, and he readily consented. During the
+summer of 1849 the members of the committee had occasion to go to
+Bordentown, to inspect the company's books. From that time on a
+wonderful change seemed to have come over the committee. They found they
+could dispense with Mr. Carey's further services. What had previously
+appeared to them a ring of rapacious monopolists seemed now an
+association of worthy philanthropical gentlemen. In their report to the
+legislature they completely exonerated the company's managers. They
+admitted that the State had not been paid all that was due to it, but
+they asserted that this difference in the company's accounts was due
+solely to clerical errors, for which the management were in no wise
+responsible. The report was accepted, although not even the annexed
+testimony supported it, and thus the matter was dropped.</p>
+
+<p>This was a great victory for Mr. Stockton and his friends. It
+demonstrated the success of their methods of dealing with public
+servants. Mr. Carey repeated his charges, but the directors failed to
+prosecute him for libel as they had threatened. He asked that he be
+permitted to inspect the company's books, but was met with a peremptory
+refusal. Public opinion was defied, and the old methods were continued.</p>
+
+<p>The extortionate and discriminating tariff of the only through route of
+New Jersey affected seriously the agricultural as well as the commercial
+interests of that State. The Camden and Amboy monopoly kept the State of
+New Jersey for many years far behind the New England States in railroad
+facilities. In 1860 New Jersey had only one <span class='pagenum'><a name="Page_112" id="Page_112">[Pg 112]</a></span>mile of railroad for every
+17.6 square miles of territory, while the proportion of miles of
+railroad to square miles of territory for the same year was 1 to 7.9 in
+Connecticut, 1 to 7.6 in Rhode Island, and 1 to 6 in Massachusetts. At
+present New Jersey has one mile of railroad to every 3.79 square miles,
+and therefore leads all the States in the Union in density of railroad
+track.</p>
+
+<p>The question may be asked how the Camden and Amboy Transportation
+Company, or rather the syndicate which controlled it, contrived to
+maintain its power for so many years, to the great detriment of industry
+and commerce. The only answer that can be given is that the men for whom
+the maintenance of the monopoly was a source of great wealth were
+constantly using a part of this wealth for the corruption of those who
+were in a position to influence public opinion or to direct the policy
+of the State. Prominent politicians were favored with passes, attorneys
+were retained by the company as local solicitors, corrupt and servile
+legislators were bribed by money or the promise of lucrative positions,
+and newspapers were given large subsidies. In addition to this public
+men were constantly made to realize the political power of the company,
+whose many employes had always been trained to do the bidding of their
+masters. If the opposition, in spite of this, was ever successful at
+legislative elections, the company's managers found it less expensive to
+gain the good will of a few members of the legislature after election
+than it would have been to gain the good will of their constituents
+before election. Dissatisfied stockholders who threatened with judicial
+investigation were quietly bought out or impressed with the danger of
+inviting public discussion in regard to the validity of the company's
+charter, as it might lead to its <span class='pagenum'><a name="Page_113" id="Page_113">[Pg 113]</a></span>annihilation. The good people of New
+Jersey made several attempts to rid the State of the despotism of the
+company by making the question a political issue, but they were each
+time defeated through the lavish and scandalous expenditure of the
+company's money.</p>
+
+<p>The original charter of the Camden and Amboy Railroad Company was
+granted for a period of twenty years, and should have expired in 1853,
+but its managers succeeded in having it extended to January 1, 1859. In
+1854 another extension was asked for, and after a long and bitter debate
+the company was again triumphant. An act was passed on the 16th of
+March, 1854, making it illegal to build previous to the first day of
+January, 1869, without the consent of the Camden and Amboy
+Transportation Company, a railroad in the State of New Jersey for the
+transportation of passengers and freight between New York and
+Philadelphia. At the end of this period even a third extension was
+granted, and the company, though after January 1, 1867, under a new
+name, maintained its monopoly until it consolidated, in 1871, with the
+Pennsylvania Railroad Company.</p>
+
+<p>That the spirit of the past is still at work was shown by the recent act
+of the legislature of New Jersey legalizing the consolidation of the
+coal roads. The coal barons found the legislature as servile as the
+managers of the Camden and Amboy Railroad Company had found them of
+yore, and their well-planned scheme would probably have been successful
+had it not been for Governor Abbot's courageous veto of the disgraceful
+act, and it is more than probable that they will yet succeed. They have,
+in fact, during the last year advanced the price of coal about one
+dollar per ton.</p>
+<br />
+
+<p class="cen"><span class='pagenum'><a name="Page_114" id="Page_114">[Pg 114]</a></span>THE STANDARD OIL MONOPOLY.</p>
+
+<p>The Standard Oil monopoly may be said to be the crowning monument of
+corporation conspiracy. It is, indeed, doubtful whether the combined
+brotherhoods of medi&aelig;val knights ever were guilty of such acts of
+plunder and oppression as the Standard Oil Company and its railroad
+allies stand convicted of before the American people. The facts that
+have been unearthed by official investigations show a frightful
+prevalence of corporate lawlessness and official corruption, and there
+can be no doubt that, could certain high railroad dignitaries have been
+compelled to testify, and could the truth have been fathomed, it would
+have been found that not only the public, but railroad stockholders as
+well, were victimized by those transactions.</p>
+
+<p>The founder of the Standard Oil monopoly was some twenty years ago part
+owner of a petroleum refinery at Cleveland, Ohio. His fertile brain
+conceived the thought that with the co&ouml;peration of the railroad
+companies a few men of means could control the petroleum business of the
+United States. With this end in view he approached the managers of the
+New York Central, the Erie and the Pennsylvania Central railroad
+companies, and on January 18, 1872, entered with them into a secret
+compact by which they agreed to co&ouml;perate with the South Improvement
+Company (an organization formed by that gentleman to aid in the
+accomplishment of his designs) to grant to said companies certain
+rebates and to secure it against loss or injury by competition. The
+South Improvement Company, in consideration of these favors, guaranteed
+to the railroad companies a fair division of its freights. The existence
+of this contract soon became known and caused a violent protest among
+the oil-producers. An <span class='pagenum'><a name="Page_115" id="Page_115">[Pg 115]</a></span>indignation meeting was held and a committee was
+appointed to wait on the railroad managers and demand fair treatment for
+all.</p>
+
+<p>The railroad companies yielded and promised to give equal rates to all
+shippers and to grant to no person either rebates or any other advantage
+whatever. New rates were fixed for the transportation of both crude and
+refined oil, and it was agreed on the part of the railroad companies
+that at least ninety days' notice should be given of any change that
+might be made in the rates. Steps were also taken to have the charter of
+the South Improvement Company canceled because it had been found that it
+was neither the owner of a refinery nor of an oil well, and could
+therefore not comply with the legal requirements concerning the
+organization of stock companies. While the South Improvement Company
+thus came to a sudden and rather inglorious end, its founders soon
+contrived other means to carry out their ingenious plans. They bought a
+refinery, reorganized by taking the prepossessing title of Standard Oil
+Company, and were now prepared to resume their operations under the
+guise of legal authority.</p>
+
+<p>The railroad companies seemed to have relished their novel business
+connections, for, without paying the least attention to the agreement
+into which they had entered with the other producers and refiners of
+oil, they extended the privileges of the defunct South Improvement
+Company to its successors. The new company received secret rebates
+ranging from 50 cents to $1.32 per barrel. The agreement also contained
+the stipulation that if lower rates should ever be granted to their
+competitors, an additional rebate should be given to the Standard Oil
+Company. Endowed with these privileges, the favored company proceeded to
+unite under its banner, by <span class='pagenum'><a name="Page_116" id="Page_116">[Pg 116]</a></span>consolidation, purchase or lease, the
+leading refineries of Cleveland.</p>
+
+<p>The effect of the discriminations practiced against independent
+refineries soon became apparent. In less than two years there were
+closed in Pittsburgh twenty-one refineries, that represented an
+aggregate capital of $2,000,000 and had given employment to over 3,000
+people. A large number of the remaining refineries were forced to
+consolidate with the Standard Oil Company.</p>
+
+<p>The next step toward the entire suppression of competition was an attack
+planned against the independent pipe lines. The Standard had early
+secured control of the United Pipe Line. To exterminate competing lines,
+they again appealed to the railroad companies, and on the 9th day of
+September, 1874, J. H. Rutter, general freight agent of the New York
+Central, issued a new oil tariff which discriminated greatly in favor of
+the oil brought by the United Pipe Line to the refineries. Up to that
+time this company had done from 25 to 30 per cent. of the total business
+of the various pipe lines. Within one year after the adoption of the new
+tariff it did fully 80 per cent. of the entire business. This forced the
+independent lines either to sell out to the Standard or to suspend
+business, for the latter's rebate was larger than their toll. The oil
+tariff of the Pennsylvania Central compelled the independent Pittsburgh
+refiners to ship their refined oil over that company's line, if they
+would avail themselves of the rebate which it granted on the rates for
+the transportation of crude oil to Pittsburgh. The evident purpose and
+the effect of such a tariff was to prohibit oil shipments over the
+Baltimore and Ohio. Had this road made ever so reasonable a tariff, the
+combined charges for the transportation of the crude petroleum from the
+oil <span class='pagenum'><a name="Page_117" id="Page_117">[Pg 117]</a></span>regions to Pittsburgh by the Pennsylvania Central, and for that of
+the refined oil to the sea coast by the Baltimore and Ohio, would still
+have been prohibitive in competition with the special transit rates
+granted to the Standard Oil Company. As a remedy it was proposed to
+organize a new pipe line, it being believed that the crude oil could be
+brought to Pittsburgh by that line, refined there, shipped to the
+seaboard by the Baltimore and Ohio, and sold there at as good or even a
+better profit than the product of the Standard, notwithstanding the
+favors received by the latter from the allied trunk lines. This movement
+resulted in the creation of the Columbia Conduit Company, which at once
+proceeded to lay its pipes from the oil wells to Pittsburgh. Under the
+laws of the State of Pennsylvania it became necessary for this company
+to obtain the permission of property-holders to lay the pipes through
+their lands. Consent was everywhere readily given, and the pipes were
+laid without hindrance until the track of the Pennsylvania Railroad was
+reached, within a few miles of the Pittsburgh refineries. This company
+peremptorily refused to let the pipes be laid under its track. The pipe
+line company after some delay contrived a way to obviate the difficulty.
+It laid its pipes on each side of the road as close to the track as it
+could without trespassing against the legal rights of the Pennsylvania
+Central, and then conveyed the oil from one side of the track to the
+other by means of large oil tanks on wheels, which could not be
+prevented from passing over the railroad track at the public crossing.
+After several months the railroad company allowed the pipes to be laid
+under its track, but it soon appeared that another combination had been
+effected to destroy the value of this concession. A railroad war had
+given the three <span class='pagenum'><a name="Page_118" id="Page_118">[Pg 118]</a></span>trunk lines an opportunity to force the Baltimore and
+Ohio into the pool. A uniform rate of $1.15 was established for
+shipments of refined petroleum from any point to the seaboard. While
+this was in itself an unjust discrimination against Pittsburgh, which is
+250 miles nearer tidewater than Cleveland, the railroads in addition
+granted the Standard secret rebates which enabled it to sell its oil on
+the coast for less than the sum of its first cost at the refineries and
+the open rate of transportation to the points of export. The independent
+refiners of Pittsburgh found themselves again cut off from the market,
+but necessity soon made them discover another outlet. Shipping their oil
+down the Ohio River to Huntington, W. Va., they had it taken by the
+Chesapeake and Ohio Railroad to Richmond. In spite of the fact that this
+route was more than twice as long as the direct line from Pittsburgh to
+the seaboard, and in spite of the further fact that it necessitated an
+expensive transfer, a rate equal to about two-thirds of the trunk line
+rate for the direct shipment proved remunerative to the Chesapeake and
+Ohio. The independent refiners kept up their competition for some time,
+but the great disadvantage of river travel and the insufficient export
+facilities of Richmond finally forced them to give up the contest.</p>
+
+<p>Until the year 1877 the Standard Oil Company had worked hand in hand
+with the railroads. It had obtained all its privileges by asking for
+them and by holding out inducements to railroad managers to grant them.
+It now commenced to dictate terms to refractory railroad companies.</p>
+
+<p>The Pennsylvania road ventured to carry oil not the property of the
+Standard on terms which that company did not approve. The latter ordered
+the road to refuse to <span class='pagenum'><a name="Page_119" id="Page_119">[Pg 119]</a></span>carry the product of their competitors. This the
+railroad company declined to do, and the Standard at once withdrew its
+custom. The Pennsylvania retaliated by carrying the oil of the
+independent refineries at merely nominal rates and even went so far as
+to make its rates dependent upon the profits realized by the shippers. A
+fierce freight war was thus precipitated, in which the Erie and New York
+Central supported the Standard Company. The Pennsylvania road was soon
+forced to surrender and sign an ignominious treaty.</p>
+
+<p>The Baltimore and Ohio, which had again commenced to carry the product
+of those Pittsburgh refineries which received their crude oil through
+the Columbia Conduit Company, was in a similar manner forced to reject
+their freights. The pipe line, whose value was thus almost entirely
+destroyed, was soon after sold to the Standard Oil Company. This company
+had now an almost complete monopoly of the oil business of the United
+States, and still it was not satisfied. It appears that some of the
+producers of crude oil had been in the habit of shipping a part of their
+product in spite of the advantages which the Standard had through its
+rebates. To prevent even these shipments, or rather to exact another
+tribute from railroad stockholders, the American Transfer Company, one
+of the auxiliaries of the Standard Oil Trust, in 1878, demanded and
+received from the Pennsylvania road a "commission" of 20 cents a barrel
+on all shipments of petroleum <i>made by any</i> shipper. It had been shown
+to the satisfaction of the Pennsylvania Railroad Company that similar
+commissions, ranging from 20 to 35 cents a barrel, were being paid by
+the New York Central and Erie roads.</p>
+
+<p>When, in 1879, an effort was made to establish a pipe <span class='pagenum'><a name="Page_120" id="Page_120">[Pg 120]</a></span>line from the oil
+regions to the seaboard, nothing was left undone by the trunk lines to
+thwart the enterprise. The new company finally succeeded in making
+connection with a railway which had no part in the pool, and there was
+some hope that under this arrangement competition might at least be
+maintained at some points. The Standard Company again appealed to the
+trunk lines to protect it against injury by competition and obtained
+from them a special rate of 20 cents per barrel, which rate was even
+reduced to 15 cents per barrel two months later. Against such a rate it
+was impossible to compete, and after a short struggle the new line found
+itself compelled to sell its works to the Standard.</p>
+
+<p>To crown its monopoly, the Standard Oil Company finally bought of the
+New York Central and Erie roads their terminal facilities for the
+transportation of oil, and thereby made it virtually impossible for them
+to transport oil for any of its few remaining competitors. Mr. Josiah
+Lombard, part owner of the New York refinery, stated in 1879 before the
+investigating committee of the legislature of New York that in 1878 he
+had requested the Erie Company to transport for him 100 cars of crude
+oil from Carrollton to New York; that he had called upon Mr. Vilas, the
+general freight agent of the company, in person, but had never been able
+to obtain the cars, though the oil had been held in Carrollton three or
+four months ready to be loaded. This gentleman also testified that he
+had found it impossible to obtain cars from the New York Central, and
+that the company's general freight agent had informed him that the road
+did not own and could not furnish any oil cars.</p>
+
+<p>After the Standard Oil Company had secured control of the various pipe
+lines of the oil regions, it frequently <span class='pagenum'><a name="Page_121" id="Page_121">[Pg 121]</a></span>lowered the price of crude oil
+to such an extent as to make its production unprofitable. It even
+refused to buy oil, basing its refusal upon the ground that the railroad
+companies failed to furnish cars for its transportation. When the
+well-owners had their tanks filled, they had the choice to let the oil
+run away or to be at the expense of closing up their wells. In one
+instance, however, when their ruse threatened to cause a riot, several
+hundred cars were brought to the wells within a few hours.</p>
+
+<p>The Standard Oil Trust, not satisfied with the monopoly of the wholesale
+trade, even tried in places to control the retail trade by peddling oil
+at private houses. This method of destroying competition was chiefly
+resorted to where independent dealers obtained their supply by a water
+route.</p>
+
+<p>That many of the deeds of the Standard are dark is evident from the fact
+that its members, when summoned by the Hepburn committee, declined to
+testify, lest their testimony be used to convict them of crime.
+Officials of the trust have bribed or attempted to bribe employes of
+rival firms, for the purpose of ruining their business. By its peculiar
+methods the company has been successful in courts of justice and
+legislative halls, and has enjoyed an impunity for its conspiracy
+against the public that is without precedent in America. It has
+accumulated a capital of more than $100,000,000, and it is even claimed
+that for years its annual dividends have exceeded in amount the capital
+actually invested. This is not at all strange when it is considered that
+they have levied upon the producers, consumers and transporters alike.
+Mr. Cassat testified before the New York investigating committee that in
+eighteen months the railroads had paid the Standard in rebates no less
+than $10,000,000. And the <span class='pagenum'><a name="Page_122" id="Page_122">[Pg 122]</a></span>very payment of these enormous rebates
+enabled the Standard to decrease the price of oil to the producer and to
+increase it to the consumer.</p>
+
+<p>It is claimed by the defenders of the Standard monopoly that under the
+trust the price of petroleum has been constantly decreased to the
+consumer. That the price of kerosene is lower now than it was fifteen
+years ago is undoubtedly true, but the reductions were brought about not
+by the trust, but in spite of the trust. The price now maintained is an
+unnatural one. The Standard Oil Company never lowered the price of its
+oil except when compelled to do so by competition. The largely increased
+output of crude oil, the improved methods of refining, the greatly
+lowered cost of transportation would have lowered the price of coal oil
+without the philanthropy of the Standard Oil Company. Iron, steel,
+calico, woolen goods and a thousand other commodities have within almost
+the same period suffered much larger reductions than coal oil. But even
+if the Standard monopoly had voluntarily lowered the price of its
+products, the American people could never approve of its methods. They
+can never be made to believe that the end sanctifies the means,
+especially when those means are railroad favors, secret combinations,
+bribery, intimidation and lawless arrogance.</p>
+
+<p>Many other interesting cases might be given. The Southern Pacific
+Railway Company, for instance, owns nearly all of the railways of
+California, and enjoys at the present time almost a complete monopoly of
+the transportation business of that State and much more of the Pacific
+Coast. Perhaps no set of managers would be more considerate of the
+people's rights in the absence of legal restraint than those in charge
+of this company, yet there is not a business man on the Pacific Coast
+who comes in <span class='pagenum'><a name="Page_123" id="Page_123">[Pg 123]</a></span>contact with this company who does not realize and feel
+the power of its iron hand, unless it be those who for various reasons
+are recipients of its special favors. It has become notorious that the
+legislature, Board of Railroad Commissioners and some of the judges of
+the courts of that State are as servile to the demands of this railway
+company as are its own employes.</p>
+
+<p>The railway company is a closely organized body of shrewd, active men,
+while those who furnish business for it are not organized, and they will
+never be able to properly protect their own interests until they control
+the machinery of their State government.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_124" id="Page_124">[Pg 124]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER V.</h2>
+
+<h2>RAILROAD ABUSES.</h2>
+<br />
+
+<p>As has already been shown, railroad enterprise met with comparatively
+little opposition in the United States, for, as compared with the
+interests certain to be benefited by the introduction of the new mode of
+transportation, those likely to be injured by it were insignificant. It
+is true, the innate conservatism of man even here recorded its
+objections to the innovation. It viewed with distrust the new power
+which threatened to revolutionize well-established systems of
+transportation and time-honored customs and to force upon the people
+economic factors the exact nature and value of which could only be
+ascertained by practical tests. But the progressive portion of the
+community was so decidedly predominant that these protests were soon
+drowned in the general demand for improved facilities of transportation.
+The farmer who had to haul his produce a great distance to reach a
+market appreciated the advantages to be derived from the location of a
+railroad station nearer home. The manufacturer who heretofore had, had a
+very limited territory for the sale of his products well realized that
+he could with the aid of a railroad enlarge his territory and increase
+his output, and with it his profits. The pioneer merchant found that he
+could no longer compete with former rivals in adjoining towns, since the
+iron horse had reached them and lowered their freights, and he also
+became a convert to the new order of things and clamored loud for
+railroad facilities. Railroads seemed the panacea for industrial <span class='pagenum'><a name="Page_125" id="Page_125">[Pg 125]</a></span>and
+commercial ills, and every inducement was held out and every sacrifice
+made by communities to become participants of their blessings. So great
+was the estimate of the conveniences afforded by them and so strongly
+was public opinion prejudiced in their favor that it is no exaggeration
+to say that railroad companies as a rule were permitted to prepare their
+own charters, and that these charters almost invariably received
+legislative sanction.</p>
+
+<p>To such an extent was the public mind prepossessed in favor of railroads
+that any legislator who would have been instrumental in delaying the
+granting of a railroad charter for the purpose of perfecting it, to
+protect the people against possible abuses, would have been denounced as
+a short-sighted stickler and obstructor of public improvements. Anxious
+for railroad facilities, the people were deaf to the warnings of
+history. Their liberality knew no bounds. National, State and county aid
+was freely extended to new railroad enterprises. Communities taxed
+themselves heavily for their benefit, and municipalities and individuals
+vied with each other in donating money, rights of way and station
+buildings. This was especially true of the West, whose undeveloped
+resources had most to gain by railroad extension. So large were the
+public and private donations in several of the Western States that their
+value was equal to one-fifth of the total cost of all the roads
+constructed. To still more encourage promoters of railroad enterprises,
+general incorporation laws were passed which permitted companies to be
+formed and roads to be built practically without State supervision. In
+their admiration for the bright side of the picture, the people entirely
+overlooked the shady side.</p>
+
+<p>Besides this, there was virtually an absence of all law regulating the
+operation of railroads. It was, under these <span class='pagenum'><a name="Page_126" id="Page_126">[Pg 126]</a></span>circumstances, not strange
+that abuses early crept into railroad management which, long tolerated
+by the people and unchecked and even encouraged by public officers,
+finally assumed such proportions as to threaten the very foundation of
+free government. Great discoveries that add rapidly to the wealth of a
+country tend to overthrow a settled condition of things, and organized
+capital and power, if not restrained by wholesome laws and public
+watchfulness, will ever take advantage of the unorganized masses. The
+people of those regions which the railroad stimulus had caused to be
+settled thrived for years so well upon a virgin soil that they gladly
+divided their surplus with the railroad companies. They looked upon the
+railroads as the source of their prosperity and upon railroad managers
+as high-minded philanthropists and public benefactors, with whom to
+quarrel would be an act of sordid ingratitude, and they paid but little
+attention to the means employed by them to exact an undue share of their
+earnings. Railroad men did whatever they could to foster through their
+emissaries this misplaced adoration. They posed before the public as the
+rightful heirs of the laurels of Watt and Stephenson, insisting that
+their genius, capital and enterprise had built up vast cities and opened
+for settlement and civilization the boundless prairies of the West.
+These claims have been persistently repeated by railroad men, though
+they are so preposterous that they scarcely deserve refutation. The
+railroad, gradually developed by active minds of the past, and greatly
+improved by the inventions of hundreds of men in the humbler walks of
+life, is the common inheritance of all mankind, though no class of
+people have derived greater benefits from it than railroad constructors,
+managers and manipulators. Railroad managers are no more entitled to
+<span class='pagenum'><a name="Page_127" id="Page_127">[Pg 127]</a></span>the special gratitude of the public for dispensing railroad
+transportation at much more than remunerative rates than is the Western
+Union monopoly for maintaining among us an expensive and inefficient
+telegraph service. No one believes that the disbanding of the Western
+Union would leave us long without telegraphic communication. In like
+manner railroads will be built whenever and wherever they promise to be
+profitable. If one company does not take advantage of the opportunities
+offered, another will. That large cities have been built up by the
+railroads is true, but it is equally true that these cities by their
+commerce and manufactures administer to the prosperity of the railroads
+as much as the railroads administer to theirs. Commercial centers in
+days gone by existed without railroads, but railroads could not long
+exist without the stimulating influence of these busy marts of trade.
+The same argument applies with still greater force to the agricultural
+sections of our country, especially the great Northwest. The dry-goods
+merchant might as well boast of having clad the public as the railroad
+manager of having built up farming communities by selling to them
+transportation.</p>
+
+<p>And yet the American people have never ceased to be mindful of the
+conveniences afforded to them by this modern mode of transportation. On
+the contrary, they have been but too prone to credit railroad men with
+being benefactors, when they were but beneficiaries, and this liberality
+of spirit made them overlook, or at least tolerate, the abuses which
+grew proportionately with the wealth and power of the companies.</p>
+
+<p>The first railroad acts of England had contemplated to make the roads
+highways, like turnpikes and canals. These roads were established by the
+power of eminent domain. Companies were empowered to build and <span class='pagenum'><a name="Page_128" id="Page_128">[Pg 128]</a></span>maintain
+them and to reimburse themselves by the collection of fixed tolls. Had
+the owners of the roads from the beginning been deprived of the
+privilege of becoming carriers over their own lines, the system might
+have so adjusted itself as to become entirely practicable; but as they
+were allowed to compete with other carriers in the transportation of
+passengers and merchandise, they were soon able to demonstrate, at least
+to the satisfaction of Parliament, that the use of the track by
+different carriers was impracticable and unsafe. A number of
+circumstances combined to aid the railroad companies in their efforts to
+monopolize the trade on their lines. In the first place, when the early
+railroad charters were granted, but few persons had any conception of
+the enormous growth of commerce which was destined to follow everywhere
+the introduction of railways. The tolls as fixed in the charters soon
+yielded an income out of proportion to the cost of the construction and
+maintenance of the roads. Their large margins of profit enabled the
+owners of the roads to transport goods at lower rates than other
+carriers and to thus compel the latter to abandon their business.
+Another defect of the original charters worked greatly to the
+disadvantage of independent carriers. They contained no provision as to
+the use of terminal facilities. The railroad companies claimed that
+these facilities were not affected by the public franchise and were
+therefore their personal property. This placed independent carriers at a
+great disadvantage and made in itself competition on a large scale
+impossible. These carriers were thus at the mercy of the railroad
+companies for the transportation of their cars, and the companies never
+permitted their business to become lucrative enough to induce many to
+engage in it. It soon became apparent that under the charters granted
+<span class='pagenum'><a name="Page_129" id="Page_129">[Pg 129]</a></span>to the railroad companies such competition as existed on turnpikes and
+canals was out of the question on their roads. In England the great
+abundance of water-ways exercised for many years a wholesome control
+over the rates of railway companies, until these companies, greatly
+annoyed by such restraint, absorbed many of the larger canals by
+purchase and made them tributary to their systems. These companies have
+also acquired complete control over many important harbors.</p>
+
+<p>In the United States the people depended from the beginning of the
+railroad era on free competition for the regulation of railroad charges.
+This desire to maintain free competition led to the adoption of general
+incorporation acts, it being quite generally believed that such
+competition as obtains between merchants, manufacturers and mechanics
+was possible among railroads and would, when allowed to be operative,
+regulate prices and prevent abuses. The remedy was applied freely
+throughout the country, but for once it did not prove successful.
+Stephenson's saying, that where combination was possible competition was
+impossible, was here fully verified. The great ingenuity of the class of
+men usually engaged in railroad enterprises succeeded in thwarting this
+policy of commercial freedom. The opportunities for those in control of
+railroads to operate them in their own interest, regardless of the
+interests of their patrons or stockholders, were so great that men of a
+speculative turn of mind were attracted to this business, which indeed
+soon proved a most productive field for them. One road after another
+fell into the control of men who had learned rapidly the methods
+employed to make large fortunes in a short time.</p>
+
+<p>As the roads multiplied, transportation abuses increased. A considerable
+number of people early favored State <span class='pagenum'><a name="Page_130" id="Page_130">[Pg 130]</a></span>control of railroads as the best
+means of regulating transportation, but a majority looked upon the
+existing abuses as being merely incidental to the formative period, and
+hoped that with a greater expansion of the railroad system they would
+correct themselves. And this doctrine was industriously disseminated by
+railroad managers and their allies. They lost no opportunity to impress
+upon the people that State regulation was an undue interference with
+private business and that such a policy would soon react against those
+who hoped to profit by it, inasmuch as it would prevent the building of
+new roads and would thus hinder, rather than aid, in bringing about the
+right solution of the railway question, viz., regulation by competition.
+They contended, in short, that State regulation would be destructive to
+railroads as well as to every other class of property.</p>
+
+<p>Railroad sophistry for many years succeeded in preventing the masses
+from realizing that an increased supply of transportation does not
+necessarily lower its price, or, in other words, that railroad abuses do
+not necessarily correct themselves through the influence of competition.
+A large capital is required to build and maintain a railroad, which must
+necessarily be managed by a few persons. Besides this, the construction
+of a railroad practically banishes at once from its field all other
+means of land transportation. The railroad has thus a practical monopoly
+within its territory, and its managers, if left to follow their
+instinct, will despotically control all the business tributary to it,
+with unlimited power to build up and tear down, to punish its enemies
+and to reward its friends.</p>
+
+<p>It is not true that State control checks railroad building. While it may
+prevent the construction of useless lines and discourage speculation, it
+will encourage the building of <span class='pagenum'><a name="Page_131" id="Page_131">[Pg 131]</a></span>roads for which there is a legitimate
+demand. Stockholders as a whole do not participate in the management of
+the roads and do not profit by railroad abuses, the origin of which may
+almost invariably be traced to selfish designs on the part of a few
+entrusted with the management of the property. Where through wise
+legislation these abuses are prevented, the roads are managed in the
+interest of all the stockholders, develop business and enjoy lasting
+prosperity.</p>
+
+<p>It may be laid down as a general rule that the policy which best
+subserves the interests of the patrons of a road is always the best
+policy for its owners. Injustice to a railroad will interfere with its
+usefulness; injustice to shippers depresses production and consumption;
+and in either case both the road and its patrons will suffer. State
+control is therefore as much needed in the interest of the owners of
+railroads as in the interest of their patrons. What should be the nature
+of such control will be discussed hereafter. A full understanding of the
+question at issue, however, makes necessary an inquiry into the various
+abuses which unrestrained railroad management of the past has developed.
+Perhaps no better presentation of the evils and abuses of railroads and
+their consequences can be found than that contained in the report of the
+Senate Committee on Interstate Commerce, submitted by Senator Cullom, in
+1886. This report charges:</p>
+
+<p>1. That local rates are unreasonably high, as compared with through
+rates.</p>
+
+<p>2. That local and through rates are unreasonably high at non-competing
+points, either from the absence of competition or in consequence of
+pooling agreements that restrict its operation.</p>
+
+<p><span class='pagenum'><a name="Page_132" id="Page_132">[Pg 132]</a></span>3. That rates are established without apparent regard to the actual cost
+of the service performed, and are based largely on "what the traffic
+will bear."</p>
+
+<p>4. That unjustifiable discriminations are constantly made between
+individuals in the rates charged for like service under similar
+circumstances.</p>
+
+<p>5. That improper discriminations are constantly made between articles of
+freight and branches of business of a like character, and between
+different quantities of the same class of freight.</p>
+
+<p>6. That unreasonable discriminations are made between localities
+similarly situated.</p>
+
+<p>7. That the effect of the prevailing policy of railroad management is,
+by an elaborate system of secret special rates, rebates, drawbacks and
+concessions, to foster monopoly, to enrich favored shippers, and to
+prevent free competition in many lines of trade in which the item of
+transportation is an important factor.</p>
+
+<p>8. That such favoritism and secrecy introduce an element of uncertainty
+into legitimate business that greatly retards the development of our
+industries and commerce.</p>
+
+<p>9. That the secret cutting of rates and the sudden fluctuations that
+constantly take place are demoralizing to all business except that of a
+purely speculative character, and frequently occasion great injustice
+and heavy losses.</p>
+
+<p>10. That, in the absence of national and uniform legislation, the
+railroads are able by various devices to avoid their responsibility as
+carriers, especially on shipments over more than one road, or from one
+State to another, and that shippers find great difficulty in recovering
+damages for the loss of property or for injury therefor.</p>
+
+<p>11. That railroads refuse to be bound by their own contracts, and
+arbitrarily collect large sums in the shape <span class='pagenum'><a name="Page_133" id="Page_133">[Pg 133]</a></span>of overcharges in addition
+to the rates agreed upon at the time of shipment.</p>
+
+<p>12. That railroads often refuse to recognize or to be responsible for
+the acts of dishonest agents acting under their authority.</p>
+
+<p>13. That the common law fails to afford a remedy for such grievances,
+and that in cases of dispute the shipper is compelled to submit to the
+decision of the railroad manager or pool commissioner, or run the risk
+of incurring further losses by greater discriminations.</p>
+
+<p>14. That the differences, in the classifications in use in various parts
+of the country, and sometimes for shipments over the same roads in
+different directions, are a fruitful source of misunderstandings, and
+are often made a means of extortion.</p>
+
+<p>15. That a privileged class is created by the granting of passes, and
+that the cost of the passenger service is largely increased by the
+extent of this abuse.</p>
+
+<p>16. That the capitalization and bonded indebtedness of the roads largely
+exceed the actual cost of their construction or their present value, and
+that unreasonable rates are charged in the effort to pay dividends on
+watered stock and interest on bonds improperly issued.</p>
+
+<p>17. That railroad corporations have improperly engaged in lines of
+business entirely distinct from that of transportation, and that undue
+advantages have been afforded to business enterprises where railroad
+officials were interested.</p>
+
+<p>18. That the management of the railroad business is extravagant and
+wasteful, and that a needless tax is imposed upon the shipping and
+traveling public by the necessary expenditure of large sums in the
+maintenance of a costly force of agents engaged in a reckless strife for
+competitive business.</p>
+
+<p><span class='pagenum'><a name="Page_134" id="Page_134">[Pg 134]</a></span>Under the operation of the Interstate Commerce Law some of these evils
+have, so far at least as interstate commerce is concerned, disappeared,
+and others have been considerably mitigated. It cannot be expected,
+however, that a bad system of railroad management, to the development of
+which the ingenuity of railroad managers has contributed for two
+generations, could be entirely reformed in a few years. It is a
+comparatively easy task for shrewd and unscrupulous men, assisted by
+able counsel and unlimited wealth, to evade the spirit of the law and to
+obey its letter, or to violate even both its letter and spirit, and
+escape punishment by making it impossible for the State to obtain proof
+of their guilt.</p>
+
+<p>It is a humiliating spectacle to see the self-debased railroad officials
+confessing their own guilt by refusing to testify before the Interstate
+Commerce Commission on the ground that they would thereby criminate
+themselves. Congress should have sufficient respect for this commission
+and for itself to provide a way to punish such recusant witnesses who
+are willing to degrade themselves in so base a manner. Whether the law
+will eventually be respected by all depends upon the vigilance and
+courage of the people.</p>
+
+<p>That our railroad legislation is not yet perfect even its friends will
+admit; and as under a free government the demand of an enlightened
+public opinion is the first step toward the enactment of a law, it
+behooves the intelligent citizen to study the various railroad problems
+and to then exert his influence toward bringing about such a solution of
+them as justice and wisdom demand.</p>
+
+<p>In discussing the various evils of railroad management, the author will
+commence with and dwell more particularly upon those abuses which maybe
+said to be the cardinal ones, <span class='pagenum'><a name="Page_135" id="Page_135">[Pg 135]</a></span>viz., discrimination, extortion,
+combinations and stock and bond inflation. When these are once
+effectually eradicated, other abuses of railroad management which have
+been the subject of public complaint will not long survive them.</p>
+
+<p>One of the strongest arguments that could be adduced by the founders of
+the American Constitution in favor of the establishment of a more
+perfect union was that the inequality of taxes placed upon commerce by
+the various States was a serious obstacle to its free development. Much
+as the individual States dislike to give up a part of their sovereignty
+to a central or national power, the demand for a common and uniform
+system of commercial taxation was so great that they were forced to
+yield and ratify the new Constitution. Our forefathers thus considered
+it a dangerous policy to permit a single State to lay any imposts upon
+the commercial commodities which passed over its borders. They were
+rightly of the opinion that industrial and commercial liberty was as
+essential to the welfare of the nation as political freedom and that
+therefore interstate commerce should not be hemmed in or controlled
+within State lines, but that the power to regulate it should be lodged
+in the supreme legislative authority of the nation, the Congress of the
+United States. For over half a century Congress alone exercised the
+power thus conferred upon it by the people. After the introduction of
+railroads, however, their managers gradually assumed the right to
+regulate the commerce of the country in their own interest through the
+adoption of arbitrary freight tariffs. Freight charges are practically a
+tax which follows the commodity from the producer to the consumer. An
+arbitrary and unjust charge is therefore an arbitrary and unjust tax
+imposed upon the public <span class='pagenum'><a name="Page_136" id="Page_136">[Pg 136]</a></span>without its consent. It is a well-established
+rule of society that laws should be equitable and just to all citizens.
+Congress never assumed the role of Providence by attempting to equalize
+those differences among individuals which superior intellect, greater
+industry and a thousand other uncontrollable forces have ever created
+and will ever create. It has been reserved to railroad managers to
+demonstrate to the public that a power has been allowed to grow up which
+has assumed the right to counteract the dispensations of Providence, to
+enrich the slothful, to impoverish the industrious, to curtail the
+profits of remunerative industries and revive by bounties those
+languishing for want of vitality, to humble proud and self-reliant marts
+of trade and to build up cities in the desert. It will scarcely be
+claimed even by railroad managers that their policy of thus arbitrarily
+regulating commerce originated in philanthropic motives. They are forced
+to admit that it grew out of an attempt to increase the income of
+railroads by the extension of favors to naturally weak enterprises and
+to recoup by overtaxing stronger ones.</p>
+
+<p>The practical operation of this system soon showed to railroad managers
+their power and to the patrons of railroads their dependence upon those
+who dispensed railroad favors. The former soon discovered that their
+power might be used to further their private interests as well as those
+of the roads, and unscrupulous patrons were not slow to offer
+considerations for favors which they coveted. When such favors were once
+granted by the officials of one road, rival roads would grant similar
+ones in self-protection. Thus this vicious system grew until the payment
+of a regular tariff rate was rather the exception than the rule, and
+special rates became an indispensable condition of success in business.</p>
+
+<p><span class='pagenum'><a name="Page_137" id="Page_137">[Pg 137]</a></span>We may distinguish three classes of railroad discriminations, viz.:</p>
+
+<p>1. Those which affect certain individuals.</p>
+
+<p>2. Those which affect certain localities.</p>
+
+<p>3. Those which affect certain branches of business.</p>
+
+<p>Discrimination between individuals is the most objectionable, because it
+is the most demoralizing of all. Where such discrimination obtains,
+every shipper is in the power of the railroad corporation. It makes of
+independent citizens of a free country fawning parasites and obsequious
+sycophants who accept favors from railroad managers and in return do
+their bidding, however humiliating this may be. The shipper, realizing
+that the manager's displeasure or good will toward him finds practical
+expression in his daily freight bills, finally loses, like the serf, all
+self-esteem in his efforts to propitiate an overbearing master. He is
+intimidated to such an extent that he never speaks openly of existing
+abuses, lest he lose the special rates which have been given him, or, if
+he is not a participant of such privileges, lest additional favors be
+given to his rivals and they be thus enabled to crush him. Intimidation
+of shippers prevailed to such an extent previous to the enactment of the
+Interstate Commerce Law that when, in 1879, the special committee on
+railroads appointed by the legislature of New York invited all persons
+having grievances against railroads to come before them to testify, not
+one shipper testified voluntarily. On the contrary, they all insisted
+upon being subp&oelig;naed, hoping that the railroad managers would not
+hold them responsible for any statement which they might be compelled to
+make under such circumstances. The report of that committee stated that
+the number of special contracts in force within the period of one year
+on the New York <span class='pagenum'><a name="Page_138" id="Page_138">[Pg 138]</a></span>Central and Hudson River Railroad alone was estimated
+by the railroad people at 6,000. Mr. Depew, when he made the statement:
+"In territories comparatively new, and with little responsibility on the
+part of the managers to distant owners, they became in many cases very
+arbitrary and exercised favoritism and discriminations, which led to
+popular indignation and legislation," had probably not heard of this.
+The committee's report further stated that these special rates conformed
+to no system and varied without rule, that every application for a
+special rate was judged by itself and with reference to its own peculiar
+circumstances, and that it depended upon the judgment, or rather
+caprice, of the officer to whom the application was made, whether and to
+what extent a special rate should be granted. The reductions made to
+privileged merchants often amounted to more than what would be a fair
+profit to the dealer on the commodities shipped. The privileged dealer
+was thus enabled to undersell his rivals and eventually force them out
+of business or into bankruptcy. It was not at all uncommon for railroad
+companies to allow discounts amounting to 50, 60, 70 and even 80 per
+cent. of the regular rates. The New York Central gave a Utica dry-goods
+merchant a special rate of 9 cents while the regular rate was 33 cents
+on first-class freights. The lowest special rate granted at Syracuse was
+as low as 20 per cent. of the regular tariff rate on first-class goods.
+David Dows &amp; Company and Jesse Hoyt &amp; Company, by means of a grain rate
+from 2-1/2 to 5 cents lower than those given to other firms, were
+enabled to control in the winter of 1877 the grain trade of New York.
+The railroad even extended its fostering aid to A. T. Stewart &amp; Co.,
+giving them a special rate "to build up and develop their business." The
+testimony given by Mr. Goodman, <span class='pagenum'><a name="Page_139" id="Page_139">[Pg 139]</a></span>assistant general freight agent of the
+New York Central, in reference to the principle by which he was guided
+in granting special rates, is of sufficient interest to be given a place
+here:</p>
+
+<p>Question. You made the rate for A. T. Stewart &amp; Company? Answer. Yes,
+sir.</p>
+
+<p>Q. Was that to build up and develop their business? A. Yes, sir.</p>
+
+<p>Q. That was the object? A. That was one of the objects.</p>
+
+<p>Q. January 11th, 1879? A. Yes, sir.</p>
+
+<p>Q. You thought that business was not yet sufficiently built up and
+developed? A. No, sir; not the manufacturing part of it.</p>
+
+<p>Q. How long had the factories of A. T. Stewart &amp; Company been in
+existence? A. The one at Duchess Junction about three years, I think; it
+isn't completed yet.</p>
+
+<p>Q. And they were languishing and suffering? A. To a great extent; yes,
+sir.</p>
+
+<p>Q. And you acted as a fostering mother to A. T. Stewart &amp; Company to
+build it up? A. Yes, sir; I added my mite to develop their traffic; we
+wanted to carry the freight; boats might have carried it in the summer.</p>
+
+<p>Q. Do you know anything of G. C. Buell &amp; Company? A. Yes, sir.</p>
+
+<p>Q. You wanted to develop their business? A. Yes, sir; they are at
+Rochester&mdash;wholesale dealers.</p>
+
+<p>Q. Do you know H. S. Ballou, of Rochester? A. I do not.</p>
+
+<p>Q. He seems to be a grocer there? A. A small concern, perhaps.</p>
+
+<p>Q. Small concerns are not worth developing, according to your opinion?
+A. Our tariff rates are low enough for them at Rochester.</p>
+
+<p>Q. That is to say, a small concern ought to pay 40, 30, 25 and 20, as
+against a large concern, 13; that is your rule? A. Well, if he is a
+grocer, most of his business is fourth-class freight.</p>
+
+<p><span class='pagenum'><a name="Page_140" id="Page_140">[Pg 140]</a></span>Q. And he ought to pay 20, as against 13? A. Yes, sir.</p>
+
+<p>Q. That small man has no right to develop? A. He has the same chance
+that the other man has.</p>
+
+<p>Q. At 20 against 13? A. Oh, yes.</p>
+
+<p>Q. Do you call that the same chance? A. About the same chance, yes, sir.</p>
+
+<p>Q. You consider it the same chance? A. Yes, sir.</p>
+
+<p>Many reasons were assigned by railroad men in justification of their
+practices. It was claimed that special rates were given to regular
+shippers, but it has been proved that not all regular shippers had
+special rates, and that persons who made only single shipments were
+often fortunate enough to obtain special favors. It was further claimed
+that special rates were given to those who, starting out new in business
+or developing new enterprises, needed aid and encouragement. But it was
+shown on the other hand that the aid and encouragement thus given to
+some bankrupted others, and in the end deprived the companies of more
+business than their policy of discrimination brought them. Railroad
+managers also argued that they could afford to make lower rates on large
+shipments than on small ones for the same reasons that the wholesale
+merchant can sell his goods for less than the retailer. But while this
+may be a good reason why rates on car-load shipments should be lower
+than rates on shipments in less than car-load lots, it is certainly no
+good reason why five car-loads belonging to one shipper should be
+transported the same distance for less than five carloads belonging to
+five shippers. In the case of local shipments the car is scarcely ever
+loaded to its full capacity; one shipment after another is taken from it
+as the train moves along, and the car perhaps reaches its final
+destination nearly, if not entirely, empty. The <span class='pagenum'><a name="Page_141" id="Page_141">[Pg 141]</a></span>terminal charges are
+here also largely increased, and it is but just that the shipper should
+pay the additional cost of carrying and handling the goods. The case is
+entirely different when the railroad company carries five full carloads
+from one station of its line to another. Whether they have been loaded
+by one or five persons, whether they are consigned to one or five
+persons, matters little to the railroad company. It merely transports
+the cars, and in either case its responsibility and its services are the
+same. The car-load must therefore be accepted and is now generally
+accepted by the best railroad men as the unit of wholesale shipments,
+and any discrimination made in favor of large wholesale shippers is
+arbitrary and unjust. In the shipment of some commodities, such as
+wheat, flour and coal, a small advantage in rates is sufficient to
+enable the favored shipper to "freeze out" all competitors. It is
+certainly not to the interest of any railroad company to pursue such a
+policy; for by driving small establishments out of the business it
+encourages monopoly, which almost invariably enhances prices and
+decreases consumption. The railroad thus suffers in common with the
+public the consequences of its short-sighted policy. That even railroad
+managers realize that these practices cannot be defended upon any
+principle of justice or equity is apparent from the fact that one of the
+never-varying conditions of special rates is that they be kept secret. A
+specimen of a special rate agreement which was placed before the New
+York investigating committee is here presented to the reader:</p>
+
+<div class="blockquot"><p>"This agreement, made and entered into this eighteenth day of March,
+1878, by and between the New York Central and Hudson River Railroad
+Company, party of the first part, and Schoellkopf &amp; Mathews, of the city
+of Buffalo, N.Y., party of the second part:</p>
+
+<p><span class='pagenum'><a name="Page_142" id="Page_142">[Pg 142]</a></span>"Witnesseth, That said party of the first part hath promised and agreed,
+and by these presents does promise and agree to transport wheat from the
+elevator in Buffalo, reached directly by said first party's tracks,
+except at such mills as time said tracks may be obstructed by snow or
+ice, to the which said second party may erect or operate at Niagara
+Falls, N. Y., at and for the rate of one and a quarter cents per bushel.</p>
+
+<p>"And further, that said first party shall and will at all times give,
+grant and allow to said second parties as low rate of transportation on
+all property shipped by them from their said mills at Niagara Falls, and
+as favorable facilities and accommodation in all respects as are
+afforded by the party of the first part to the millers of Buffalo and
+Black Rock. And also that the said party of the first part will
+transport for said second party all of their east-bound New York freight
+at and for the price or rate of forty-seven per cent. of the current
+all-rail through rates, via the route of party of the first part, from
+Chicago to New York, at the times of shipment, adding thereto three
+cents per barrel for flour and one and one-half cents per hundred pounds
+for mill feed or grain, as a terminal charge, to provide for the
+incidental expenses attending local transportation.</p>
+
+<p>"And will transport their freight to Boston and all points in New
+England, taking Boston rates at the same rate as to New York, with ten
+cents per barrel added for flour and five cents per hundred pounds added
+for mill feed or grain.</p>
+
+<p>"Provided, however, and this agreement is made upon the express
+understanding and consideration, that said second party shall regard and
+treat this agreement as confidential, and will use all reasonable
+precaution to keep the same secret.</p>
+
+<p>"And upon condition also that said second party shall ship by the first
+party's road all the product from their mill at Niagara Falls destined
+to all points in New York, Pennsylvania and New England, reached by said
+first party, directly or by connections with other routes.</p>
+
+<p>"And this agreement shall be and remain in force for <span class='pagenum'><a name="Page_143" id="Page_143">[Pg 143]</a></span>the term of five
+years from and following the first day of September, 1878, after which
+period it may be terminated by sixty days' written notice from either
+party.</p>
+
+<p>"In witness whereof, the parties hereto have signed these presents the
+day and year first above written.</p></div>
+
+<p><span style="margin-left: 23em;">"N. Y. C. &amp; H. R. R. R. Co.,</span><br />
+By <span class="smcap">J. H. Rutler</span>,<br />
+General Traffic Manager.<br />
+<span class="smcap">Schoellkopf &amp; Mathews</span>."</p>
+
+
+<p>It will be noticed that this agreement was based upon the expressed
+condition that Schoellkopf &amp; Mathews treat it as "confidential," and use
+all reasonable precaution to keep it secret. It is difficult to account
+for this strong injunction of secrecy except upon the assumption that
+the managers of the road, conscious of the great wrong which they
+inflicted upon the body of the people by their discriminations, hoped to
+escape public criticism by adopting a policy of secret dealing. Much as
+special rates were sought after, but few shippers to whom they had been
+granted were contented with their lot, for none was confident that his
+rivals did not have better rates than himself.</p>
+
+<p>Discriminations between localities had their origin in the natural
+desire of competing roads to increase their business at the expense of
+their rivals. When two or more railroads touched the same point each
+would attempt to secure the largest possible share of the through
+business by holding out every possible inducement in rates to the
+shippers of that place. Indeed, the freight rates at competitive points
+were often so low that railroad managers found themselves placed in a
+rather unpleasant dilemma. They either had to admit that the rates
+charged by them at non-competitive places were exorbitant or that they
+were carrying the freights of competitive points at a loss and were thus
+squandering the money of their <span class='pagenum'><a name="Page_144" id="Page_144">[Pg 144]</a></span>stockholders. They preferred as a rule
+to admit that they were doing competitive business at a loss, but
+asserted that, inasmuch as they were compelled to run their trains, they
+could better afford to do competitive business temporarily at a loss
+than not to do it at all. The same logic might with equal propriety be
+employed by the grocer. To draw to him distant customers, he might offer
+to sell to them at cost or even at a loss; and then, to recuperate, he
+might advance the prices of his goods for his regular customers. If
+there is any difference between the grocer and the railroad company, it
+lies in the fact that the former's old customers would soon find relief
+at a rival store, while the patrons of the railroad at non-competitive
+points are like the traveler in the hands of a highwayman, without
+immediate redress. The railway company which discriminates between
+competitive and non-competitive points forgets that its line is a common
+highway for all points tributary to it; that all have equal rights, and
+that the only differences in tariff which the principles of the common
+law permit are those which arise from a difference of service and cost.
+All other differences that railroad companies may make are unjust
+discriminations in violation of their charter and expose them to a
+forfeiture of the franchises conferred upon them.</p>
+
+<p>The nature and extent of the discrimination practiced between different
+places are often such that no interest of the company can possibly be
+subserved by them, and the conclusion is forced upon us that the
+advantages granted by railroad managers to certain places are designed
+to serve chiefly personal and selfish interests. The great fortunes
+amassed in a brief period of time by railroad managers can in almost
+every case be traced to stock, real estate, commercial and other
+speculations directly or <span class='pagenum'><a name="Page_145" id="Page_145">[Pg 145]</a></span>indirectly connected with railroad
+construction or management. And where other than personal interest
+cannot be shown, this is the only basis upon which the many apparent
+absurdities of railroad discrimination can be harmonized.</p>
+
+<p>It is claimed by railroad men that transportation by water is a
+regulator of railway rates which they must respect. It is contended, for
+instance, that, although the cities situated on our large lakes enjoy
+superior commercial advantages which are mainly due to their having at
+their disposal water communication with the Atlantic Ocean, inland towns
+have no cause to complain against the railroads for not equalizing those
+differences which nature has largely created. It might be more difficult
+to meet this argument if, owing to peculiar combinations, these water
+rates were not made to extend their influence to almost every inland
+city north, east and south in the Union, and if those cities were not
+given much lower rates than hundreds of places much nearer the lakes.
+The teamster who, half a century ago, found it impossible to compete
+with the canal, river or lake boats, simply surrendered the field to
+them and confined his operations to such a territory as could give him
+assurance of a profitable business. Let the railroads do likewise. No
+company has a right to destroy a rival route, water or rail, by adopting
+special tariffs for competing points. There are at points accessible to
+water transportation certain freights requiring speedy carriage which
+will go to the railroads at profitable rates, but the heavier freights,
+as coal, lumber and even certain kinds of grain, should go to the
+carrier by water if he can afford to transport them at lower cost.</p>
+
+<p>There have been but few legislative investigations of railroad abuses in
+this country, but the disclosures which <span class='pagenum'><a name="Page_146" id="Page_146">[Pg 146]</a></span>they have made to the public
+are astounding. The most noteworthy of these were made by the Hepburn
+committee, of New York, to which reference has already been made. It is
+difficult to understand how a free and enlightened community could so
+long and so patiently bear railroad despotism. Individual discrimination
+might, under the veil of secrecy, long escape notice, but that a system
+of open and widespread discrimination affecting every non-competitive
+and even many a competitive point in the State, doing visible and
+irreparable injury to thousands of shippers, and infringing upon the
+rights of millions, should long be borne by a free and enlightened
+people, is a strange phenomenon of democratic endurance.</p>
+
+<p>It would lead us too far from our subject to review in detail the many
+and glaring instances of local discrimination which the report
+enumerates. A few will suffice to show their scope and nature.</p>
+
+<p>William W. Mack, of Rochester, a manufacturer of edged tools, testified
+that, in order to save fourteen cents per hundredweight on his freights
+to Cincinnati, he shipped his goods to New York and had them shipped
+from there to their destination, via Rochester; and that he availed
+himself of the same roundabout route for his St. Louis shipments, and
+saved thereby eighteen cents per hundredweight. In both of these cases
+the railroad company carried the goods 700 miles farther than the direct
+distance for a less charge.</p>
+
+<p>Port Jervis millers had their grain shipped from the West to Newburgh, a
+point fifty miles to the east of them, and then had it returned to Port
+Jervis on the same line, at a less rate than that charged for a direct
+shipment.</p>
+
+<p>The grain rates from Chicago to Pittsburgh were 25 cents per hundred in
+March, 1878, and only 15 cents from Chicago to New York.</p>
+
+<p><span class='pagenum'><a name="Page_147" id="Page_147">[Pg 147]</a></span>Flour was carried from Milwaukee to New York for 20 cents, while the
+rate from Rochester to New York was 30 cents at the same time. It was
+also carried from East St. Louis to Troy at the same rate as from
+Rochester to Troy. The rate on butter from St. Lawrence County, N.Y., to
+Boston, over the Ogdensburg and Lake Champlain and Vermont Central, was
+60 cents per hundred; from the nearer county of Franklin, 70 cents; it
+then continued to increase as the distance decreased, until it reached
+90 cents at St. Albans, Vermont.</p>
+
+<p>Soap shipped by Babbit &amp; Co., of New York, to Crouse &amp; Co., of Syracuse,
+paid 8 cents per box when the freight was paid in Syracuse, but 12 cents
+per box when paid by the shipper in New York.</p>
+
+<p>It cannot even be said that New York fared worse than any of her sister
+States. There is hardly a business man in any community in the United
+States who cannot cite many cases of similar discrimination. Hundreds of
+well authenticated cases have been reported from every part of the
+country. A few striking ones may be given space here:</p>
+
+<p>The Illinois Central Company hauled cotton from Memphis to New Orleans,
+a distance of 450 miles, at $1.00 a bale, while the rate from Winona,
+Miss., to New Orleans, about two-thirds of the distance, was $3.25 a
+bale. The same company charged for fourth-class freight from Chicago to
+Kankakee, a distance of 56 miles, 16 cents per hundred, and only 10
+cents to Mattoon, 116 miles farther. The rate from New York to Ogden was
+$4.65 per hundred, and only $2.25 per hundred from New York to San
+Francisco. The car-load rate on the Northern Pacific was $200 from New
+York to Portland and just twice as much to a number of points from 100
+to 125 miles east of Portland. The Chicago, Burlington and Quincy hauled
+stock from <span class='pagenum'><a name="Page_148" id="Page_148">[Pg 148]</a></span>points beyond the Missouri River to Chicago for $30 per
+car-load, while it exacted $70 per car in Southwestern Iowa for a much
+shorter haul.</p>
+
+<p>To what extent local discrimination has been carried by railroad
+companies is well illustrated by the following incident: A nurseryman
+residing at Atlantic, Iowa, a station on the Chicago, Rock Island and
+Pacific Railroad, 60 miles east of Council Bluffs, bought a car-load of
+grapevines at Fredonia, New York. Finding that the through rate from
+Fredonia to Council Bluffs, plus the local rate from the latter place to
+Atlantic, was less than the rate for the direct shipment from Fredonia
+to Atlantic, he caused the car to be consigned to Council Bluffs,
+intending to have it thence hauled back to Atlantic. Being short of
+stock at the time the train containing his car passed through his town
+on its way to Council Bluffs, the consignee prevailed upon the station
+agent to set out his car. In due time he received a request from the
+general office of the railroad to pay an amount equal to the rate per
+car-load from Council Bluffs to Atlantic. The request was promptly
+complied with by the appreciative nurseryman, who after all had been
+saved an annoying delay by the courtesy of the company's agent.</p>
+
+<p>An infinite number of similar discriminations might be cited. They all
+show the same violation of the fundamental principles of justice and
+equity, the same despotical assertion of the power of the railroads to
+regulate the commerce of the country as the caprice or selfish interests
+of their managers might direct.</p>
+
+<p>Discriminations between commodities, or, as they might also be called,
+discriminations in classification, are probably the most common of
+unjust railroad practices. For the purpose of establishing as near as
+may be uniform <span class='pagenum'><a name="Page_149" id="Page_149">[Pg 149]</a></span>rules in all matters pertaining to rates, the various
+roads operating in a certain territory usually form traffic
+associations. The general freight agents of the roads that are members
+of the association in turn form a select body known as the rate
+committee. These committees of freight agents have for more than twenty
+years constituted the supreme authority in all matters pertaining to
+freight classification. The trunk line classification recognizes six
+regular and two special classes, and every article known to commerce is
+placed in one of these classes. One whom Providence has not favored with
+the mysterious wisdom of a general freight agent might suppose that
+considerations of bulk, weight, insurance and similar factors formed a
+basis of railroad classification. Nothing, however, is farther from the
+truth. Freight charges, when permitted to be fixed by railroad
+companies, are invariably such as the traffic will bear, and freight
+classifications are arranged on this principle, provided competition by
+water, rail or other land transportation does not demand a modification.
+It is, as a rule, not to the advantage of a railroad to entirely starve
+out any commercial or industrial concern along its line. Hence tariffs
+are scarcely ever made entirely prohibitory. Railroads proceed here upon
+the principle of the robber knight of medi&aelig;val times, who simply
+plundered the wayfaring trader to such an extent as to reduce his
+profits to a minimum. He never stripped him, for by doing so he would
+have prevented his return and would have destroyed his own source of
+revenue. In like manner a railroad will never annihilate any weak branch
+of business along its line, nor will it, if it is in its power, permit
+any business to prosper without paying to it heavy tributes out of its
+profits. Every commodity is therefore made to pay a <span class='pagenum'><a name="Page_150" id="Page_150">[Pg 150]</a></span>transportation tax
+based chiefly on its value and the profit which it yields, and all
+classifications are prepared with this object in view.</p>
+
+<p>The protection which, through exceptionally low rates, is extended by
+the railroad companies to certain industries, may not be objectionable
+<i>per se</i>, but the question arises whether the railroad companies or the
+people should exercise the right to determine when and where such
+protection is necessary. Moreover, to tax one branch of commerce for the
+benefits bestowed upon another is a practice of extremely doubtful
+propriety, and the power to do so should certainly never be conferred
+upon a private corporation. When customs laws are proposed in Congress
+ample opportunity is given to the representatives of the various
+industries of the country to be heard upon the subject. No hasty step is
+taken. Members of Congress have every opportunity to ascertain the
+sentiment of their constituents, through the public press, petitions and
+private correspondence. The subject is discussed in all its phases, both
+in the committee-rooms and upon the floors of both houses of Congress.
+Every detail is fully considered, and many compromises are often
+necessary to secure for a bill the support of the majority. When it
+finally passes it represents the will of the people, or at least the
+will of their legal representatives, who may be expected to know their
+wants and are accountable to them for their acts. Freight
+classifications, however, while they are fully as far-reaching as
+customs laws, are made by a few freight agents meeting in secret
+session, listening to no advice and acknowledging no higher authority.</p>
+
+<p>It is claimed by the railroad men that it is to the interest of railroad
+companies to do justice to all, and that <span class='pagenum'><a name="Page_151" id="Page_151">[Pg 151]</a></span>the best classification for
+the largest number of people is also the best for the roads. If this be
+true, it is difficult to see why railroads should fail to consult their
+patrons in the arrangement of their freight classifications. Intelligent
+shippers may certainly be supposed to know as well as the railroad
+companies what classification is to their common interest. Railroad
+managers are naturally despotical. They do not wish and do not tolerate
+any outside interference with what they obstinately term their private
+business. Even if the general policy of the companies designed the
+greatest good to the greatest number, the opportunities and temptations
+of their agents to pursue selfish ends or take advantage of individuals
+in the preparation or application of their tariffs are such that in the
+practical execution the evil will always outweigh the good.</p>
+
+<p>It is not within the scope of the present inquiry to review in detail
+the various classifications in force, or to point out the unjust
+features. The author will confine himself to showing by a few
+characteristic examples that the power now in the hands of the railroad
+companies to classify the various commodities of commerce for the
+purpose of rating is greatly abused and is a potent means of railroad
+extortion. And that it may not be charged that abuses have been cited
+which are a thing of the past, the examples will chiefly be taken from
+cases which have come before the Interstate Commission for adjudication.</p>
+
+<p>A complaint was filed with the commission in 1887 by T. J. Reynolds
+against the Western New York and Pennsylvania Railroad Company, from
+which it appeared that that company charged a greater price for the
+transportation of railroad ties from points in the State of Pennsylvania
+to points in the State of New York than was <span class='pagenum'><a name="Page_152" id="Page_152">[Pg 152]</a></span>charged at the same time
+for the transportation of lumber between the same points. The commission
+held that this was a case of unjustifiable discrimination and ordered
+the company to place railroad ties in the same class with other rough
+lumber. Many Western roads for years have been guilty of the same
+discrimination. The reasons for such a policy are obvious. A high tariff
+on railroad ties prevents their being shipped, depreciates their market
+price at home, to the sole benefit of the discriminating company, which
+is thus enabled to buy ties at a low price. Prohibitory rates on ties
+and rails are also often maintained by railroad companies to either
+delay or render more costly the construction of new lines which threaten
+to become their competitors. The Union Pacific Railroad Company several
+years ago even went so far as to make prohibitory rates on steel rails
+intended for the construction of a road which promised to become a
+competitor of one of its connecting lines.</p>
+
+<p>From another case decided by the Interstate Commerce Commission it
+appeared that the Lake Shore and Michigan Southern Railway Company
+charged for blocks intended for wagon-hubs, and upon which only so much
+labor had been expended as was necessary to put them in condition, a
+higher rate than for lumber, claiming that such blocks were unfinished
+wagon material and were therefore, as articles of manufacture, subject
+to higher charges than raw material. The commission justly held that
+these blocks were as much to be regarded as raw material as the boards
+from which wagon-boxes are made.</p>
+
+<p>In the classification of the Southern Railway and Steamship Association
+pearline was placed in the fourth class, with a rate of 73 cents per
+hundred pounds, and common soap in the sixth class, with a rate of 49
+cents per hundred pounds. <span class='pagenum'><a name="Page_153" id="Page_153">[Pg 153]</a></span>This latter article, when shipped by large
+manufacturers, enjoyed besides a special rate of 33 cents per
+hundredweight. Pearline and soap are competitive; there is no
+appreciable difference between them as regards the cost of
+transportation; but one commands a higher price in the market than the
+other, and upon this fact solely did the railroad company base its
+alleged right to levy upon pearline a transportation tax 120 per cent.
+in excess of that levied upon soap, though the service rendered by the
+company was the same in either case. The commission held that the
+discrimination made by the "special rate" of the Southern Railway and
+Steamship Association between pearline and common soap was unjust, and
+ordered that it be discontinued and that, with common soap in the sixth
+class, pearline be placed in the fifth.</p>
+
+<p>For years the rate from Indianapolis to New York was the same for corn
+as for its direct products, such as ground corn, cracked corn, corn
+meal, hominy and corn feed. Such a tariff made it possible for Western
+mills to compete with similar mills that had been established in the
+East, since a discrimination of 5 per cent. was sufficient to absorb
+three or four times the profits of any Western mill. It was shown by the
+evidence produced that the actual cost of transportation was
+substantially the same for direct corn products as for the raw corn. The
+only defense which the railroad company could make for this
+discrimination was that in the carriage of raw corn they had to meet
+lake competition. The weakness of this argument will be perceived when
+it is remembered that Indianapolis is 154 miles from the nearest
+lake-shipping point. There is but little doubt that this discrimination
+was made by the railroad company because it was to its interest to haul
+the raw corn from the West to the <span class='pagenum'><a name="Page_154" id="Page_154">[Pg 154]</a></span>East and to return it in altered
+form. Railroads care, as a rule, little for a waste of force, if such
+waste is to their own advantage.</p>
+
+<p>In another case brought before the commission in 1889 it was shown that
+the "Official Classification" placed common soap in carload lots in
+Class V, while such articles as coffee, pickles, salted and smoked fish
+in boxes or packages, rice, starch in barrels or boxes, sugar, cereal
+line and cracked wheat are placed in Class VI. The chief reply of the
+railroad companies to this complaint was that soap was justly placed in
+Class V because the components from which it is in part made stood in
+Class V.</p>
+
+<p>In another case it was shown that one kind of soap was burdened with a
+higher transportation tax than another, irrespective even of cost,
+because one had been advertised as toilet and the other as laundry soap.</p>
+
+<p>The principle of charging what the traffic will bear is well illustrated
+by the relative rates on patent medicines and ale and beer, as
+maintained by the Official Classification.</p>
+
+<p>In a complaint made by a prominent manufacturer of proprietary medicines
+against the New York Central and other roads, it was shown that the
+complainant's products were shipped at owner's risk, and that they were
+in bulk and intrinsic value similar to ale and beer, but that in spite
+of these analogies the former were rated as first-class and the latter
+as third-class goods, simply because they retailed at a higher price.</p>
+
+<p>Another unwarrantable discrimination is that in favor of live stock and
+against dressed beef. While Mr. Fink, the commissioner of the Trunk Line
+Pool, himself admitted that the cost of carrying dressed beef from
+Chicago to <span class='pagenum'><a name="Page_155" id="Page_155">[Pg 155]</a></span>New York was only 6-1/4 cents per 100 pounds in excess of
+the cost of hauling live stock, the trunk lines maintained on dressed
+beef a rate 75 per cent. higher than that on live cattle. The railroad
+companies asserted that this was due to those people in the East whose
+living depended on the live-stock interest. The railroads have in this
+assumed a paternalism which would not be tolerated even in the
+Government. To protect the East, railroads will not permit the West to
+engage in new industries.</p>
+
+<p>The position which the Interstate Commerce Commission has assumed in
+interpreting the rights of shippers under the law which railroad
+companies are bound to respect in the preparation of their tariff sheets
+and classifications cannot but be most gratifying to the people. In a
+decision relating to the classification and rates for car-loads and less
+than car-loads, filed March 14, 1890, the commission laid down the
+following rules for the guidance of railroad companies:</p>
+
+<div class="blockquot"><p>"1. Classification of freight for transportation purposes is
+in terms recognized by the act to regulate commerce, and is
+therefore lawful. It is also a valuable convenience both to
+shippers and carriers.</p>
+
+<p>"2. A classification of freight designating different
+classes for car-load quantities and for less than car-load
+quantities for transportation at a lower rate in car-loads
+than in less than car-loads is not in contravention of the
+act to regulate commerce. The circumstances and conditions
+of the transportation in respect to the work done by the
+carrier and the revenue earned are dissimilar, and may
+justify a reasonable difference in rate. The public
+interests are subserved by car-load classification of
+property that, on account of the volume transported to reach
+markets or supply the demands of trade throughout the
+country, legitimately or usually moves in such quantities.</p>
+
+<p>"3. Carriers are not at liberty to classify property as a
+basis of transportation rates and impose charges for its
+<span class='pagenum'><a name="Page_156" id="Page_156">[Pg 156]</a></span>carriage with exclusive regard to their own interests, but
+they must respect the interests of those who may have
+occasion to employ their services, and conform their charges
+to the rules of relative equality and justice which the act
+prescribes.</p>
+
+<p>"4. Cost of service is an important element in fixing
+transportation charges and entitled to fair consideration,
+but is not alone controlling nor so applied in practice by
+carriers, and the value of the service to the property
+carried is an essential factor to be recognized in
+connection with other considerations. The public interests
+are not to be subordinated to those of carriers, and require
+proper regard for the value of the service in the
+apportionment of all charges upon traffic.</p>
+
+<p>"5. A difference in rates upon car-loads and less than
+car-loads of the same merchandise, between the same points
+of carriage, so wide as to be destructive to competition
+between large and small dealers, especially upon articles of
+general and necessary use, and which, under existing
+conditions of trade furnish a large volume of business to
+carriers, is unjust and violates the provisions and
+principles of the act.</p>
+
+<p>"6. A difference in rate for a solid car-load of one kind of
+freight from one consignor to one consignee, and a carload
+quantity from the same point of shipment to the same
+destination, consisting of like freight or freight of like
+character, from more than one consignor to one consignee or
+from one consignor to more than one consignee, is not
+justified by the difference in cost of handling.</p>
+
+<p>"7. Under the official classification the articles known in
+trade as grocery articles are so classified as to
+discriminate unjustly in rates between car-loads and less
+than car-loads upon many articles, and a revision of the
+classification and rates to correct unjust differences and
+give these respective modes of shipment more relatively
+reasonable rates is necessary and is so ordered."</p></div>
+
+<p>The efforts which the commission has made to bring about a uniform
+classification throughout the country are in the right direction, while
+the results of its labor are not yet satisfactory.</p>
+
+<p><span class='pagenum'><a name="Page_157" id="Page_157">[Pg 157]</a></span>In their fifth annual report, the Commissioners, after giving an account
+of their efforts and the shuffling and double-dealing of the railroad
+companies with them upon this matter of uniform classification, said:</p>
+
+<div class="blockquot"><p>"Its conviction remains unchanged that the necessities of
+commerce require that the existing classifications be
+consolidated, and that this result should be accomplished as
+speedily as may be found practicable; and it does not feel
+justified in asking for the further efforts of the carriers
+the same measure of indulgence which from time to time it
+has heretofore suggested should be extended to them, and
+which was thought to be required in the public interest.</p>
+
+<p>"The commission can not but think that if legislation to
+that end be enacted by Congress the carriers will speedily
+consummate the reform already begun in this direction. It is
+therefore recommended that an act be passed requiring the
+adoption within one year from the date of its passage of a
+uniform classification of freight by all the carriers,
+subject to the act to regulate commerce, and providing that
+if the same be not adopted within the time limited, either
+this commission or some other public authority be required
+to adopt and enforce a uniform classification."</p></div>
+
+<p>The present confusion which exists in the classification and rates of
+the seventeen hundred railroad organizations of the country makes it
+difficult for the commission to do justice to all interests and
+localities. With the adoption of a uniform classification it is to be
+hoped that in time many of the present inequalities will be adjusted,
+especially if an intelligent public sentiment upon the subject of
+railroad regulation is maintained. A prominent railroad manager in the
+East, whose devotion to corporate interest is only equaled by his
+political ambition, has recently made repeated efforts to convince the
+people that railroad abuses are things of the past and that, if any such
+abuses still linger in isolated districts, <span class='pagenum'><a name="Page_158" id="Page_158">[Pg 158]</a></span>they are simply unavoidable
+exceptions to the rule which will soon have to yield to the general
+spirit of fairness and amity for which, in his opinion, the railroads
+have of late been distinguished. He reasons that the law has fulfilled
+its mission, that the railroads have reformed, and that it now behooves
+the people to relent and to extend to the much persecuted corporations
+the hand of friendship and good will. The postprandial eloquence of this
+gentleman has often suavely intimated that the repeal of the Interstate
+Commerce Act would be the most opportune recognition of restored
+confidence.</p>
+
+<p>Still bolder champions of the railroad cause do not hesitate to demand
+the repeal of the law. It is not likely that the sophistry of railroad
+hirelings will triumph over the practical logic of an intelligent
+public. No law, be it ever so wise, can in the space of a few years
+correct all the abuses which half a century of unbridled railroad
+domination has developed. Yet, since both the friends and the enemies of
+the law agree that it has been partially successful in its operation, it
+should be continued and improved to keep it in harmony with new
+conditions and a progressive public sentiment. It is claimed by railroad
+managers that the adoption of a uniform classification will remove the
+only vestige of discrimination still left. This is not true, for by far
+the largest number of complaints that have recently been brought before
+the Interstate Commerce Commission charged personal and local
+discrimination independent of any question of classification.</p>
+
+<p>It is shown by the reports of the commission that discriminations are
+still practiced by various companies, that annual passes are still
+illegally issued to bribe or appease men of influence, that discounts
+are still given to favor <span class='pagenum'><a name="Page_159" id="Page_159">[Pg 159]</a></span>shippers under various pretexts, that some
+large railroad centers still enjoy more favorable rates than smaller
+towns, and that the long and short haul clause of the Interstate
+Commerce Act is still violated by railroad companies. There are besides
+these scores of other devices in vogue among railroad managers to
+subvert the principles of the common law. No doubt discriminations are
+now much less frequent, and are possibly the exception where but a few
+years ago they were the rule, but the fact that such abuses still exist
+is a strong argument for the retention of the law as well as for the
+necessity of continued vigilance on the part of the people and those
+especially charged with the execution of the laws. The railroad acts of
+Congress and the various States ask nothing of common carriers but just
+and equitable treatment for all their patrons. If this is freely
+accorded, these laws are no burden to the railroads. If, on the other
+hand, there is a tendency on the part of the railroads to resort to
+subterfuges and evasions, the wholesome restraint of the statute is
+absolutely necessary for the protection of the shipper.</p>
+
+<p>The repeal of the Interstate Commerce Law, or the adoption of such
+amendments as are demanded by railroad men, would be interpreted by them
+as an abandonment of all its principles and would inaugurate an era of
+unprecedented railroad oppression. History ever repeats itself.
+Unchecked license will always lead to arrogance and despotism, and any
+power which is long permitted to defy the state will in time control it.
+It is not likely that the people of the United States can be induced to
+demonstrate to the world that democratic government is incapable of
+profiting in the dear school of experience.</p>
+
+<p>Our railroad legislation contains no principle that is not found in the
+common law. Its maxims are our <span class='pagenum'><a name="Page_160" id="Page_160">[Pg 160]</a></span>birthright and will be the birthright of
+our children and children's children, and while railroad companies may
+be able in the future, as they have been in the past, to violate the law
+temporarily with impunity, they will never be able to prevail upon the
+American people to abandon the policy of railroad reform which the
+passage of the Interstate Commerce Law inaugurated.</p>
+
+<p>The Interstate Commerce Commissioners say in their sixth annual report:</p>
+
+<div class="blockquot"><p>"Whoever will read the report of the special committee of
+the United States Senate, commonly called the 'Cullom
+Committee,' will be astounded at the magnitude and extent of
+railroad abuses brought to light by their investigation.
+Those unfamiliar with the facts made public at that time can
+hardly believe the outrages which were proven to exist and
+the manifold devices by which the most flagrant injustice
+was perpetrated. A single illustration will furnish a better
+reminder than extended comment.</p>
+
+<p>"It appears from that report that the Standard Oil Company,
+in one instance at least, boldly demanded from a certain
+railroad that its shipments should be carried for 10 cents a
+barrel; that all other shippers should be charged 35 cents a
+barrel on the same article, and that 25 cents of the 35 paid
+by such other shippers should be handed over by the railroad
+to the Standard Oil Company, and the penalty threatened for
+non-compliance with this impudent extortion was a withdrawal
+of its entire business.</p>
+
+<p>"The foregoing statements but imperfectly describe the
+situation which existed when the Interstate Commerce Law was
+enacted. In any reasonable view of the case it was too much
+to expect that the common and long continued abuses of
+railroad management could be corrected in less than half a
+dozen years, or that the first scheme of legislative
+regulation would prove adequate to that end. It would be
+contrary to all experience if so great and radical a reform
+could be thus speedily accomplished, or <span class='pagenum'><a name="Page_161" id="Page_161">[Pg 161]</a></span>if the initial
+statute should be found sufficient to bring it about. The
+law was the outgrowth of an aroused and determined public
+sentiment, which, while united in demanding Government
+interference, was divided and uncertain as to the best
+methods of affording relief. Like all attempts in a new
+field of legislation, the statute was a compromise between
+divergent theories and conflicting interests. It was
+scarcely possible that it should be so complete and
+comprehensive at the outset as to require no alteration or
+amendment. Those who are familiar with the practices which
+obtained prior to the passage of this law and contrast them
+with the methods and conditions now existing will accord to
+the present statute great influence in the direction of
+necessary reforms and a high degree of usefulness in
+promoting the public interest.</p>
+
+<p>"Whoever will candidly examine the reports of the commission
+from year to year, and thus become acquainted with the work
+which has been done and is now going on, will have no doubt
+of the potential value of this enactment in correcting
+public sentiment, restraining injustice and enforcing the
+principle of reasonable charges and equal treatment.
+Imperfections and weaknesses which could not be anticipated
+at the time of its passage have since been disclosed by the
+effort to give it effective administration. The test of
+experience, so far from condemning the policy of public
+regulation, has established its importance and intensified
+its necessity. The very respects in which the existing law
+has failed to meet public expectation point out the
+advantages and demonstrate the utility of Government
+supervision.</p>
+
+<p>"Moreover, it may be fairly claimed that much greater
+benefits would have been realized had the statute as enacted
+expressed the evident purpose of those who framed it, and
+received a construction according to its apparent import. It
+is not too much to say that judicial interpretation has
+limited its scope and ascribed to it an intent not
+contemplated when it was passed. If its supposed meaning, as
+understood at the time of its passage, had been upheld by
+the courts, it is believed that its operation would have
+been much more effective and its <span class='pagenum'><a name="Page_162" id="Page_162">[Pg 162]</a></span>usefulness greatly
+increased. So far as failure has attended the efforts to
+give it proper administration, that failure can be mainly
+attributed to differences between its apparent meaning and
+the judicial interpretation which some of its provisions
+have received; and the commission is of the opinion that if
+the present law could be so altered as to express clearly
+and beyond doubt what it was evidently intended to express
+at the time of its enactment, it would prove, even without
+other amendment, an instrumentality of the highest value in
+removing the evils against which it is aimed.</p>
+
+<p>"The specific instances in which the statute has received
+judicial construction, and the limitations upon its scope
+and meaning which the courts have imposed, will be alluded
+to at greater length in another part of this report.</p>
+
+<p>"It seems proper, however, to observe in this connection
+that the effect of these decisions in weakening the law and
+preventing its enforcement has been greatly exaggerated. The
+impression has been created in many directions that judicial
+construction has invalidated the essential feature of the
+statute and condemned the general principle which lies at
+its foundation. That impression cannot be too speedily
+corrected, for nothing has been decided which permits such
+an inference. On the contrary, neither the power of the
+national legislature to regulate the transportation of
+interstate commerce nor the general policy of the existing
+law has been questioned by any tribunal."</p></div>
+
+<p>Probably no law in the United States has ever before been so fiercely
+attacked at all of its vital points as has this law. It is not strange
+that among the great number of National and State courts the railroad
+companies have found occasionally a judge ready and willing to assist
+them in breaking it down, but upon the whole the judiciary has been
+disposed to co-operate with other departments of the Government in their
+efforts to secure effective regulation of the transportation business.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_163" id="Page_163">[Pg 163]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER VI.</h2>
+
+<h2>STOCK AND BOND INFLATION.</h2>
+<br />
+
+<p>The complaint is frequently heard from railroad men that our freight
+rates are too low, and in support of it the statement is usually made
+that the greater part of the railroad stocks of the United States pays
+dividends considerably smaller than the average interest realized by
+capitalists on money loaned or invested in other enterprises.</p>
+
+<p>This statement may be true, and yet it is valueless as an argument for
+higher rates. It may be admitted that the dividends declared upon the
+face values of railroad stocks are quite moderate, but it is a fact too
+well authenticated to be contradicted that railroad securities represent
+to a considerable extent only fictitious capital. The public concedes
+that liberal returns should be allowed to railroad companies on money
+actually invested, but it naturally objects to being taxed for the
+purpose of making dividends on watered stock. The evil referred to is a
+serious one, and has contributed much to the general demand for railroad
+reform. Most of the early roads of this country were built for the
+accommodation of local traffic. They were constructed and managed by
+business men upon business principles. The stock issued by the companies
+was in most cases paid for in full and was not unfrequently sufficient
+for the completion of the entire road, and no incumbrance was permitted
+by the owners to be placed upon the property. These enterprises as a
+rule proved very profitable. One of the first roads <span class='pagenum'><a name="Page_164" id="Page_164">[Pg 164]</a></span>running west of
+Chicago will serve as an illustration. The Galena and Chicago Union
+Railroad Company paid a 10 per cent. dividend within a year after being
+opened to traffic, and gradually increased its dividends to 15, 20 and
+22 per cent. During the first two years of the road's operation its
+expenses were only 38-1/2 per cent. of its earnings. During the second
+year the company, after paying a 15 per cent. dividend, diminished its
+debt nearly $60,000 and increased its surplus $11,700. In 1856 the road
+had a length of 232 miles, on which the gross earnings amounted to
+$2,315,787. This revenue exceeded the estimate made by the company's
+officers the year previous by $300,000. In his annual report for 1856
+the president of the company said: "This result shows an <i>increased
+surplus</i> of $65,000, after paying 22 per cent. in dividends and all
+expenses and interests chargeable to income account." The report also
+shows that expensive improvements, such as large permanent bridges and
+stone culverts, displacing as a rule wooden ones, were charged to
+current expenses.</p>
+
+<p>The financial success of railroads soon attracted the cupidity of
+financial adventurers&mdash;men of great energy, but small means&mdash;whose aim
+was to secure the greatest possible returns with the least possible
+outlay of money. With the introduction of these elements into railroad
+circles the era of speculation commenced. Take the line just referred
+to. In 1852 the average number of miles operated was 62, and the year
+following, 90. But while the number of miles operated increased less
+than 50 per cent., the capital stock of the company grew from $444,193
+to $1,362,559, and its debt from $60,145 to $542,287. The capitalization
+of the road was thereby increased from $8,000 to $21,000 per mile, and
+this was done for the purpose of making the capital appear <span class='pagenum'><a name="Page_165" id="Page_165">[Pg 165]</a></span>adequate to
+its earnings. Nearly all railroads became in time the foot-balls of
+shrewd manipulators. They were bonded before they were constructed, and
+often for more than the value of the completed road. Stocks at the best
+only represented nominal values and were given as premiums to the
+bondholders or promoters of the road.</p>
+
+<p>But the science of stock-watering did not reach its fullest development
+until during the period of railroad consolidation. Fictitious values
+were now created as often as a new consolidation took place. Watered
+stocks and bonds were watered again and again, until they represented
+little more than a purely imaginary capital upon the basis of which
+dividends might be declared. Take the case of the New York Central and
+Hudson River Railroad companies, which consolidated in 1869 with a
+capital of $103,110,137.31. The former of these roads was organized in
+1853 by the consolidation of ten smaller roads connecting the cities of
+Albany and Buffalo. The capital stock of these companies amounted to
+$20,799,800, of which $16,852,870 was claimed to have been paid in.
+Their funded debt was $2,497,526. It is impossible at this day to
+ascertain the original cost of all these roads, but it is certain that
+the above sums represent about three times the amount actually expended
+for their construction.</p>
+
+<p>One of the roads entering into the consolidation was the Utica and
+Schenectady. It was 78 miles long and formed about one-fourth of the
+consolidated line. It had the heaviest grading and rock-cutting, was the
+best-equipped and undoubtedly the most expensive, in proportion to its
+extent, of the ten roads out of which the New York Central was created.
+The original cost of this line was $2,000,000. Bonds were never issued
+by the <span class='pagenum'><a name="Page_166" id="Page_166">[Pg 166]</a></span>company. The line was profitable from the very beginning, paid
+regularly ten per cent. dividends,&mdash;the limit to which railroad
+companies were then restricted,&mdash;and had a large surplus, which it
+expended mainly for improvements. No assessment was ever made on the
+stock beyond the $1,500,000 which was originally paid in by the
+shareholders and upon which they had drawn regular and liberal
+dividends. Taking the original cost of this line as a basis, it is but
+fair to presume that the entire line from Albany to Buffalo, covering a
+distance of 297 miles, did not cost to exceed $6,000,000. These roads,
+however, entered into the consolidation with a capital stock of
+$15,274,800 and a bonded indebtedness of $1,696,326.</p>
+
+<p>Estimating the cost of the branches upon the same basis upon which we
+have estimated that of the main line, we shall find that the total
+original cost of the consolidated lines cannot have exceeded $8,000,000.
+The Mohawk Valley road was put in at $2,000,000 and the Syracuse and
+Utica direct at $600,000, though the roads only existed on paper and did
+not represent any value whatever. The Schenectady and Troy road, which
+went into the consolidation with $650,000 stock and $90,000 bonds, had
+been bought for less than $100,000 two months previous to the
+consolidation.</p>
+
+<p>It will thus be seen that already nearly one-third of the stocks and
+bonds of the consolidated companies was water. The consolidation
+agreement fixed the capital stock of the New York Central at $23,085,600
+and its funded debt at $11,564,033.62, increasing the stock over
+$2,000,000, and the bonded debt over $9,000,000. The latter was more
+than quadrupled, and $8,000,000 worth of bonds were, under the name of
+consolidation certificates, <span class='pagenum'><a name="Page_167" id="Page_167">[Pg 167]</a></span>given as a present to the stockholders of
+the new road. The capital stock of the New York Central grew steadily up
+to the time of its consolidation with the Hudson River road, when it was
+$28,795,000. All improvements made during this time were paid for out of
+its surplus earnings, with the single exception of the Athens branch,
+for which the company issued $2,000,000 of its stock.</p>
+
+<p>The gross earnings of the New York Central in 1854 were $5,000,000, and
+its net earnings $2,830,000. In 1863 its gross earnings were in round
+numbers $10,000,000, and in 1869 they reached $15,000,000. The dividends
+paid during that year amounted to $4,300,000, and the interest to
+$894,000. In view of the fact that the bonded indebtedness of the road
+was from two to three million dollars more than the original cost, this
+dividend of 15 per cent. upon a wholly fictitious capital must be
+regarded as an unwarranted tribute levied upon the commerce of the
+country. But we shall soon see that in railroad hydraulics, as well as
+in other branches of human industry, success stimulates to still greater
+energy.</p>
+
+<p>The Hudson River Railroad Company was organized in 1847. It extended
+from New York City to East Albany and was 144 miles long. There are no
+data extant upon which could be based a reliable estimate of its
+original cost. Estimating it upon the basis of that of the Utica and
+Schenectady, we should have to place it somewhat below $3,000,000. While
+such an estimate may be too low, the amount of its funded indebtedness
+in 1851, which was $5,640,000, probably more than covers the amount
+actually expended in the construction of the road. In 1851 the capital
+stock of the Hudson River road was $4,000,000. In 1853 the funded debt
+had increased to $7,000,000, and in 1862 to $9,000,000. In 1869 the
+<span class='pagenum'><a name="Page_168" id="Page_168">[Pg 168]</a></span>bonded indebtedness had decreased to $4,309,000, but the capital stock
+had grown to over $16,000,000. Between 1853 and 1869 the company
+increased its stock and bonded indebtedness nearly $11,000,000, while
+the assessments paid by its stock and bondholders during this time did
+not exceed $1,000,000. Improvements were made, but these were chiefly
+paid for out of the surplus earnings of the road. It has been shown by
+experts that $6,640,000 is a high estimate of the actual original cost
+of the Hudson River road to its stock-and bondholders, and that
+securities to the amount of more than $13,000,000 represented surplus
+earnings and water. At the time of the consolidation of the Hudson River
+and New York Central railroads the capital stock of the two roads had
+grown to $44,800,000. Under the consolidation agreement the stock was
+fixed at $45,000,000. The new company also assumed all the bonded and
+other indebtedness of both roads. If the consolidation manipulators had
+paused here, the capital of the new company would have been somewhat
+less than $60,000,000, or more than three times the cost of the
+property. But the road was, under existing rates, capable of earning
+dividends on a much larger capital, and this emergency was met by the
+issuance of consolidation certificates to the amount of $45,000,000. The
+total capital of the road was thus increased to and made to pay
+dividends on over $103,000,000, while the total cost of the road and its
+equipment, as claimed by the company in 1870, was less than $60,000,000,
+their estimate being based upon assumed consolidation values and the
+expenditures made from surplus earnings. During the same year the gross
+earnings of the company were $22,363,320, and their net earnings
+$8,295,240. In 1880 the gross earnings had <span class='pagenum'><a name="Page_169" id="Page_169">[Pg 169]</a></span>increased to $33,175,913,
+and the net earnings to $15,326,019. The company was able to declare in
+that year 11.82 per cent. dividend on its $89,500,000 of fictitious
+stock. In 1890 its gross earnings were $37,008,403, or $26,050 per mile,
+while its total net earnings were $12,516,273. The gross earnings have
+largely increased during the years 1891 and 1892. It is safe to say that
+$2,000,000 per annum would pay very liberal interest and dividends on
+the amount of money expended upon the construction of the New York
+Central and Hudson River Railroad from the proceeds of its bonds and
+stocks. By the creation of fictitious values the managers of the company
+have attempted to impose an exorbitant tax upon the commerce and travel
+of the country for all time to come. The Government guarantees an
+inventor a monopoly only for a limited space of time, upon the
+expiration of which his invention becomes the common property of the
+people; but railroad managers endeavor to collect, under the protection
+of our laws, an exorbitant royalty from our people forever.</p>
+
+<p>The case of the New York Central and Hudson River Railroad Company is
+only one of the innumerable instances of stock watering in the history
+of American railroads. Indeed, it can be shown that stock-watering
+reached a still higher degree of development in the case of the Erie
+road. It has been demonstrated that the actual original cost to the
+stock-and bondholders of the New York Central Railroad Company, which
+was, with its branch lines, 593 miles long, did not, including the
+Athens branch, exceed $10,000,000. Its cost to its owners, in 1869,
+including the bonuses, premiums, commissions and fictitious equalization
+values of several transfers, was reported by them to be only
+$37,600,000, or about $63,400 per mile. <span class='pagenum'><a name="Page_170" id="Page_170">[Pg 170]</a></span>At about the same time the main
+stem of the Erie Railway, extending from New York to Dunkirk, a distance
+of 459 miles, was represented by a capital of $108,807,687, or $237,000
+per mile. Considering the inferiority of this road to the New York
+Central, we are forced to the conclusion that nearly 85 per cent. of the
+capital of the road represented water, or, in other words, that the
+commerce of the United States was taxed to pay dividends on about
+$90,000,000 of watered securities. In 1863 the Erie Railroad had
+outstanding $11,437,500 of common stock. In 1864 this had been increased
+to $15,693,000, in 1868 to $37,765,000, and in 1869 to $70,000,000. Not
+one-tenth of this enormous increase of capital was ever expended on the
+property of the road. The stock was sold at from 20 to 40 cents on the
+dollar, and the proceeds disappeared in the hands of its managers. To
+what extent this freebootery was carried will probably never be known.
+An idea of the rottenness of the Erie management may be had from the
+fact that the courts at one time ordered its president to restore to the
+company $9,000,000 of diverted securities, which order was complied
+with. Vast private fortunes were amassed by nearly all the men who
+directed the affairs of the road, and the mismanagement became in time
+so notorious that the legislature of the State of New York was appealed
+to, to remove the directors of the road for the protection of its
+stockholders, and to reduce the capital stock of the company to the
+amount actually paid for it. This movement failed, however, because it
+was opposed by the very stockholders whose interests were supposed to
+have suffered by directorial mismanagement. They preferred to continue
+to draw dividends on the face value of stocks which they had purchased
+at 20 cents on the dollar. <span class='pagenum'><a name="Page_171" id="Page_171">[Pg 171]</a></span>The capitalization of the company has since
+been increased to $163,679,825, and it is by no means a secret among
+those familiar with railroad values that the bonded indebtedness of the
+Erie road represents alone many millions more than the total amount that
+was ever invested in the property.</p>
+
+<p>The principal competitor for through traffic of the two companies whose
+financial operations we have just reviewed is the Pennsylvania Central
+Company. It has often been asserted by the managers and friends of this
+company that its capital is free from water; but this is not true. In
+1864 a dividend of $4,130,760 was made out of the surplus earnings of
+the road. This dividend was payable in capital stock and was equal to 30
+per cent. of the then outstanding capital. Similar surplus dividends,
+each equal to 5 per cent. of the company's outstanding stock, were
+declared in 1867 and 1868. The people were thus taxed to pay dividends
+on a capitalized surplus which had been derived from excessive charges
+previously imposed on them. I shall not attempt here to determine
+whether the capital represented by the Pennsylvania Railroad Company has
+been honestly invested. A committee of Congress has expressed the
+opinion that the capitalization of its main line exceeds the amount of
+the actual cost of the property by more than eleven million dollars.
+There is, however, a system of inflation practiced by the Pennsylvania
+Railroad Company which is simply a new form of bond and stock watering.
+More than one-half of the capital of this company has been invested in
+the stocks and bonds of other corporations. In 1891 the amount so
+invested was $154,319,240, and the income derived from it $4,852,181.
+This does not only cause the stocks and bonds of certain companies to be
+counted twice, but <span class='pagenum'><a name="Page_172" id="Page_172">[Pg 172]</a></span>exacts a double tax from the commerce of the
+country, interests and dividends upon the same capital being paid both
+to the bond- and stockholders of the Pennsylvania Central and to the
+bond-and stockholders of the roads in whose securities it has made
+investments. The income of the company is thus swelled far beyond the
+amount which the traffic reports indicate. It will be seen that, to
+perpetuate extortionate rates, this process of manifolding securities
+might be continued indefinitely.</p>
+
+<p>The cost to its stock-and bondholders of the Baltimore and Chicago line
+of the Baltimore and Ohio Railroad, which has a length of 795 miles, was
+estimated by the company's officers at about $57,000,000. The actual
+cost of this road, owing to its expensive mountain grades, was probably
+greater than that of any of the other through lines between the
+sea-coast and Chicago, but there can be no doubt that the capitalization
+of this road represents from one-half to one-third pure water. At the
+time of the completion of this road to Chicago the surplus earnings of
+the company, after the payment of interest and dividends, amounted to
+over $29,000,000. This had been charged to "profit and loss" and used in
+the construction of branch lines. Thus an amount equal to more than half
+of the reported cost of this line had at the time of its completion been
+returned to its owners in other railroad values.</p>
+
+<p>The Select Senate Committee on Transportation Routes to the Seaboard in
+1874 estimated the excess of the capital over actual cost of the Erie
+road, from New York to Dunkirk, at $68,807,000; that of the New York,
+Lake Shore and Michigan Southern line to Chicago at $115,188,137, and
+that of the Pennsylvania and Fort Wayne line to Chicago at $11,290,374.
+If this estimate was correct <span class='pagenum'><a name="Page_173" id="Page_173">[Pg 173]</a></span>the entire over-capitalization of these
+lines, on which the commerce between the West and the East was forced to
+pay a dividend of 8 and 10 per cent. per annum, was no less than
+$195,000,000. The committee assumed the actual cost of these roads to be
+$182,000,000, or about $78,000 per mile. They based their estimate upon
+the cost of the main branch of the Baltimore and Ohio, as reported by
+their officers, supposing it to represent the actual outlay made by its
+stock-and bondholders. Various revelations which have since been made to
+the public, as to the real cost of railway construction, justify the
+belief that the estimated cost of $78,000 per mile for those roads is
+far too high. Mr. Henry Poor, several years ago, estimated the average
+cost of the roads of the United States at $30,000 a mile. Making
+allowance on one hand for Mr. Poor's tendency to favor the railroad side
+of the question, and on the other hand for the more expensive grades,
+double tracks and better terminal facilities of these trunk lines,
+$50,000 per mile may be considered a fair estimate of their average
+cost. Upon this basis the total cost of the three lines in question
+would amount to $116,450,000, and the excess of their capital over
+actual cost would be the enormous sum of $261,000,000, or 325 per cent.
+of their actual cost, and probably not less than 400 per cent. of the
+original cost to their stock-and bondholders. The capital of these
+companies has since been considerably increased, to enable their
+managers to increase their dividends, and with it the tax levied upon
+the commerce of the country.</p>
+
+<p>These are only a few of the many instances of stock watering that might
+be mentioned. In fact, there are to-day very few railroads in the United
+States that are entirely free from it. It is a notorious fact that the
+<span class='pagenum'><a name="Page_174" id="Page_174">[Pg 174]</a></span>stock of a large number of railroad companies represents little or no
+value, having either been sold at a mere nominal price or been donated
+as a premium or bonus to those who purchased a large amount of the
+company's bonds. In recommending, in his December, 1891, annual message,
+Government aid for the Nicaragua Canal, President Harrison said: "But if
+its bonds are to be marketed at heavy discounts and every bond sold is
+to be accompanied by a gift of stock, as has come to be expected by
+investors in such enterprises, the traffic will be seriously burdened to
+pay interest and dividends." It is not difficult to surmise to what
+enterprises the President referred. It has for many years been a
+well-settled principle among railroad incorporators that no larger
+assessments should be made upon the stockholders than is necessary to
+float the company's bonds. A company, for instance, is organized with a
+capital stock of, say, $1,000,000. Five per cent. of this sum, or
+$50,000, is paid into defray preliminary expenses. The road is then
+bonded for perhaps $2,000,000, but as the bonds are sold for only 80 per
+cent. of their face value and as the incorporators allow themselves 5
+per cent. for the negotiation of the bonds, only $1,500,000 is realized
+for the construction of the road. The incorporators now vote to
+themselves a contract to construct the road for $1,500,000 and at once
+sublet it to a contractor who is ready and anxious to build the road for
+$1,200,000. The incorporators thus realize $1,000,000 worth of stock, a
+portion of which is unloaded upon unsophisticated investors, and
+$300,000 in cash, at an outlay of $50,000; and the road, which cost
+$1,200,000, is made to pay interest and dividends on a total capital of
+$3,000,000, and this is subsequently watered indefinitely if the road
+proves profitable or a consolidation with some other road justifies <span class='pagenum'><a name="Page_175" id="Page_175">[Pg 175]</a></span>the
+belief that its earning capacity might be increased. Nor is this an
+overdrawn picture. On the contrary, instances might be cited where only
+one-half of one per cent. of the company's stock was paid in by the
+shareholders.</p>
+
+<p>In the days of inflation such transactions did not seem to seriously
+affect railroad securities. Even when they were no longer a secret to
+the public, stocks and bonds sold readily, because, owing to the large
+earnings of the roads, this class of investments was unusually
+productive.</p>
+
+<p>In 1868 the earnings of the railroads of Massachusetts averaged $15,400
+a mile, and were equal to 38 per cent. of the total reported cost of all
+the lines of the State. The Chicago, Burlington and Quincy earned
+$15,386 per mile in 1867, and paid a 15 per cent. dividend. Its stocks
+were quoted 100 per cent. above par. In 1867 the Lake Shore Railroad
+earned more than 50 per cent., and the Terre Haute and Indianapolis even
+as much as 57.2 per cent. of the amount of its cost. Previous to the war
+the inflation of railroad securities was, as a rule, confined to the
+stock. Where roads were bonded for more than the cost of construction it
+was, with but very few exceptions, done to make their capital to
+correspond with their earning capacity, or rather to divert public
+attention from the fact that the rates in force had outlived their
+reasonableness. It was reserved to the Union Pacific and the Central
+Pacific companies to bond their roads from the beginning to an amount
+equal to twice their actual cost, or, in other words, to virtually
+receive them as a present from the Federal Government, bond them for all
+they were worth, and, in addition, issue stock to an amount largely in
+excess of the cost of construction, and then try to earn interest and
+dividends on the whole amount of securities <span class='pagenum'><a name="Page_176" id="Page_176">[Pg 176]</a></span>issued. The history of
+these companies forms so interesting and instructive a chapter in the
+railroad annals of America that a short synopsis of it may not seem out
+of place here.</p>
+
+<p>The charter of the Union Pacific Railroad Company was granted by
+Congress on the first day of July, 1862. Shortly after the beginning of
+the War of the Rebellion it was made to appear to the country that a
+transcontinental road was a national necessity; that without it we could
+not hope to retain long the Pacific Coast. It was also very plausibly
+argued that the political benefits to be derived by the country from the
+construction of such a road, as well as its great length and
+extraordinary cost, made it the duty of the nation to aid liberally its
+enterprising and patriotic promoters in the prosecution of their
+gigantic task. In those stirring times few people were inclined to
+question the motives of those who advocated what appeared to be
+patriotic measures, or to be penurious in the expenditure of public
+funds when the public weal seemed to demand such expenditure.</p>
+
+<p>The Union Pacific Railroad charter, which in substance was passed by
+Congress as it had been drafted by the promoters of the enterprise, gave
+to the new company the right of way through the public lands, and
+authorized it to take, from the lands adjacent to the line of its road,
+earth, stone, timber and other materials for its construction. It
+further granted to the company every alternate section of land to the
+amount of five alternate sections per mile on each side of its line,
+excepting only those lands to which pre&euml;mption or homestead claims
+attached at the time when the line of the road should be definitely
+fixed. In addition to these donations the United States issued to the
+company subsidy bonds in an amount equal to $16,000 <span class='pagenum'><a name="Page_177" id="Page_177">[Pg 177]</a></span>per mile for the
+distance from the Missouri River to the eastern line of the Rocky
+Mountains, $48,000 per mile for a distance of 150 miles through the
+Rocky Mountains, and $32,000 per mile from the western base of the Rocky
+Mountains to the terminus of the road. Similar franchises were at the
+same time given to the Central Pacific Railroad Company, a corporation
+which had previously been chartered by the State of California. Besides
+its grant of right of way, land, timber, etc., this company received
+subsidy bonds at the rate of $16,000 a mile for a distance of 7.18 miles
+east of Sacramento, of $48,000 a mile for 150 miles through the Sierra
+Nevada, and of $32,000 a mile for the distance from the eastern base of
+that mountain range to its junction with the Union Pacific. The charters
+of the two companies provided that, to secure the repayment to the
+United States of the amount of those bonds, they should <i>ipso facto</i>
+constitute a first mortgage on the entire lines of the road, together
+with their rolling stock, fixtures and other property. The franchises
+and donations thus granted by Congress were most valuable; in fact, the
+latter were alone sufficient to build and equip the roads. In spite,
+however, of the liberal grants and in spite of the urgent necessity of
+the roads in those years of national trial, both of these enterprises
+made very slow progress. Their promoters were men of small means, and
+the capitalists to whom they appealed for help failed to realize the
+value of the franchises. No doubt when these men first engaged in their
+cause they expected to encounter serious obstacles in Congress,
+supposing that that august body would consider the proposed measure with
+much deliberation and to act upon it with still more circumspection.
+Their success greatly surprised them. They made the discovery that
+members of Congress could be <span class='pagenum'><a name="Page_178" id="Page_178">[Pg 178]</a></span>imposed upon as easily as private
+citizens, and when they fully realized how readily their demands had
+been granted, they were greatly provoked at themselves because they had
+not asked for more.</p>
+
+<p>According to a story told by my old friend Mr. J. O. Crosby, an
+experienced member of the brotherhood of tramps late one afternoon
+chanced to stroll into the city of Alton. Having no visible means of
+support, he was picked up by the police and brought before the Mayor to
+give an account of himself and to be dealt with as that dignitary might
+see fit. The tramp, a printer by profession, and by no means a tyro in
+meeting such emergencies, so managed to impress the Mayor with his
+superior accomplishments that the latter concluded it would be a good
+investment, both for himself and the city over which he presided, to
+offer the genial stranger a contribution to his traveling fund, upon the
+condition that he would no longer than absolutely necessary molest the
+city with his presence. He accordingly told the intercepted tourist that
+while it had been for years the policy of the city and its officials to
+entertain all tramps found within the limits of Alton for thirty days at
+the city jail in exchange for a fair amount of labor, he would, in
+consideration of the apparent fact that he was of better metal than the
+average tramp, make an exception in his case, and would, even at the
+risk of being censured for it by his constituents, hand over to him five
+dollars from the municipal funds if he would agree to leave the city
+early next morning. The tramp gladly accepted the proposition,
+replenished his empty purse with the proffered bounty and withdrew from
+the City Hall, to take a stroll through Main Street. The city seemed to
+him as prosperous as the Mayor had shown himself liberal. It occurred to
+the <span class='pagenum'><a name="Page_179" id="Page_179">[Pg 179]</a></span>itinerant typographer that its treasury would not have been the
+worse off for a ten-dollar levy, and he hastily returned to the Mayor's
+office to plead for a larger donation. The Mayor, not disposed to argue
+the question, handed him another five-dollar bill and improved the
+opportunity to remind him of his previous promise and to give expression
+to the hope that as a gentleman of honor he would now discharge his
+obligation. The tramp fairly overwhelmed His Honor with assurances of
+good faith and bade him an affectionate good-by. The next rising sun
+found him on his onward journey. His route led through Alton on the
+Hill, a portion of the city which he had not seen before. He viewed with
+surprise the many fine residences and other evidences of opulence which
+this part of the city contained. He passed on in a pensive mood until he
+reached the summit of the hill, which commanded a fine view of the
+entire city. Here he turned to cast a farewell glance over the town
+ruled over by the most generous mayor that it had ever been his
+privilege to meet. As he beheld before him the fine homes and beautiful
+yards, and below in the valley the lofty church-steeples, the many
+school-houses, the massive business blocks, the long and well-paved
+streets and the spacious and shady parks, an expression of mingled
+surprise and disappointment stole over his face. He thrice slapped his
+wrinkled brow and then hurriedly retraced his steps down the hill. When
+the chief magistrate of Alton came to his office that morning, he met
+the irrepressible tramp anxiously waiting for him at the door. "Mr.
+Mayor," said the wily extortioner, "I acted very hastily yesterday when
+I accepted your second proposition. You have here a much larger town
+than I ever supposed. I have been constrained to take our last agreement
+into reconsideration, and I shall not <span class='pagenum'><a name="Page_180" id="Page_180">[Pg 180]</a></span>leave this point until you add
+another five dollars to your consideration. You can certainly better
+afford to do that than to throw away thirty days' board and the ten
+dollars which you have already paid me besides."</p>
+
+<p>The diplomacy of the Union Pacific and Central Pacific railway companies
+was the same as that of the Alton tramp. They had found Congress as
+generous as the tramp had found the Mayor of Alton, and now reproached
+themselves for their modesty and resolved to bring the pliability of
+Congress to a severer test. They again appeared before that body in 1864
+and asked that their charter be so amended as to grant to them ten
+alternate sections instead of five on each side of the road, and also
+all the iron and coal found within ten miles of their track, which had
+previously been reserved by Congress. And in addition to this they asked
+that they be authorized to issue their own mortgage bonds on their
+respective roads to an amount equal to the bonds of the United States,
+and that the lien of the United States bonds be made subordinate to the
+lien created by the companies' bonds. By the act of Congress, July 2,
+1864, all these demands were granted, and the two companies were thus
+virtually presented with their roads and were at the same time given
+permission to mortgage this gift of the people and divide the proceeds
+among their shareholders, many of whom had received their stock chiefly
+in consideration of their influence in and out of Congress. The
+contribution of the United States to these companies on account of their
+main lines has not been far from $80,000,000, of which over $52,000,000
+was paid in bonds, and the remainder in lands, which aggregated about
+23,000,000 acres. The whole line from Council Bluffs to Sacramento is
+1,780 miles long. It will thus be seen that the national <span class='pagenum'><a name="Page_181" id="Page_181">[Pg 181]</a></span>contribution
+was about $45,000 per mile, besides the right of way and all timber,
+iron and coal found within ten miles of the road. There is no doubt that
+this contribution was equal to, if it did not exceed, the actual cost of
+the road. There has been an erroneous impression abroad which has
+likened the Pacific road to those wonderful and very expensive lines
+which cross the Andes and the Alps. Those who have not crossed the
+continent can hardly believe that the construction of this line was
+neither more difficult nor more expensive than that of any of the
+numerous railroads crossing the mountain ranges of the East, but such is
+the fact.</p>
+
+<p>Starting from Omaha, the Union Pacific follows for nearly 500 miles, or
+almost half of its entire length, the valley of the Platte River. A
+better route for a railroad cannot be found upon the western continent.
+There are between Omaha and Cheyenne but three bridges worthy of the
+name. The Platte Valley is almost straight, rising toward the west at a
+nearly uniform rate of about 10 feet to the mile. Grading was
+practically unnecessary, and the work of construction consisted of
+little more than the laying of the ties and track. From the base of the
+mountains at Cheyenne to their summit is a distance of about thirty-two
+miles, the difference in altitude between the two points being less than
+2,200 feet. The average grade is therefore about 68 feet to the mile,
+and nowhere are the grades heavier than 80 feet to the mile. There are
+heavier grades than these in the prairie State of Iowa, and the mountain
+grades of a number of Eastern roads exceed those of the Union Pacific by
+from 30 to 40 feet to the mile. The rise is, if not uniform, at least
+gradual, and the construction of even this portion of the road required,
+therefore, neither great engineering skill nor any unusual <span class='pagenum'><a name="Page_182" id="Page_182">[Pg 182]</a></span>expenditure
+of money. The road now crosses a plateau which extends almost to the
+terminus of the Union Pacific at Ogden, and a very large portion of this
+is as favorable for a roadbed as the average railroad territory of the
+country.</p>
+
+<p>The route of the Central Pacific presented to the engineer no great
+obstacles between Ogden and the State line of California, the only
+elevation of any note to be surmounted being the Humboldt Mountains in
+Nevada. Their highest point, Humboldt Wells, is 221 miles west of Ogden,
+and has an elevation of 5,650 feet above the level of the sea, while
+that of Ogden is 4,320 feet. Upon an average the grades of this portion
+of the road do not differ from those found in the Mississippi Valley.
+The portion of the Central Pacific Railroad which traverses the Sierra
+Nevada is the most expensive of the whole line, but the cost of
+construction did not, even on this division, exceed the amount
+contributed for it by the Federal Government; for the statement is made
+upon good authority that a few of the leading promoters of the road
+built the first western section of twenty miles with their own capital,
+of less than $200,000, and a loan from the city of Sacramento and Placer
+County, amounting to $550,000, and then drew $848,000 Government
+subsidy, or more than enough to build the second section and draw
+another installment of the subsidy; and that they repeated the operation
+until the whole line was completed. These men were in such haste to
+realize the profits which their undertaking promised them that they did
+not even take sufficient time to make a proper survey of their line. Had
+they done so, a great saving, both in the construction and in the
+subsequent operation of the road, might have been effected. It is now
+well known that a route could have been found <span class='pagenum'><a name="Page_183" id="Page_183">[Pg 183]</a></span>through the Sierra Nevada
+Mountains, not far distant from the route chosen, which would have saved
+800 feet in elevation and at least 25 per cent. in the expense of
+grading.</p>
+
+<p>It is certainly safe to say that if less than forty thousand dollars a
+mile was sufficient to construct the road through the Sierra Nevadas the
+Federal contribution of $50,000,000 for the entire line, from Omaha to
+San Francisco, left, after the completion, a respectable surplus, either
+to the companies or those of their members who had the construction
+contract, and that the $75,000,000 of capital stock and the $55,000,000
+of first mortgage bonds which the two companies issued were a gigantic
+dividend to the stockholders, for which, practically, no consideration
+was given.</p>
+
+<p>The companies might well have been satisfied with the Government's
+generosity, but their success in imposing upon Congress stimulated their
+greed. The act of 1864 provided that the charge for Government
+transportation over these roads should be applied to the liquidation of
+its bonds, and that after the completion of the lines five per cent. of
+their net earnings should likewise be so applied. When the Secretary of
+the Treasury, under the law, refused to pay them the amount earned by
+Government transportation, and in addition to this demanded the five per
+cent. of their net earnings in liquidation of their debt, the companies
+applied to Congress to again amend their charters so as to relieve them
+for the time being from any direct payment of either principal or
+interest of the Government bonds, and to make it the duty of the
+Secretary of the Treasury to pay to the companies in money one-half of
+the compensation allowed to them by law for services performed for the
+Government. And again Congress responded to their demands, <span class='pagenum'><a name="Page_184" id="Page_184">[Pg 184]</a></span>granting
+them, by a rider to the army appropriation bill, passed March 3, 1871,
+all the relief asked for. Owing to the policy of the managers of the
+Pacific line to pay as little of the interest on the Government subsidy
+debt as is absolutely necessary to prevent foreclosure proceedings, the
+unpaid interest has accumulated until it now almost equals the amount of
+the original indebtedness. The last report of the Commissioner of
+Railroads shows that the total indebtedness, principal and interest, to
+the United States of the Pacific railroad companies, was $114,490,000 on
+July 1, 1892. The Commissioner seems to be of the opinion that the Union
+Pacific Company will not be able to pay the subsidy bonds at maturity,
+and he urges that some step be taken in the matter by Congress, whether
+it be to extend the loan, which will mature within the next six years,
+or to sell the road. The managers of the Pacific roads and their friends
+ask an extension of the Government subsidy bonds for fifty years, and a
+reduction of interest from 6 to 2 per cent. If Congress continues to be
+servile to these interests, the Pacific railroad lobby will secure just
+such legislation as they demand.</p>
+
+<p>At the time the Pacific roads were built the people of the United States
+had no adequate knowledge of the topography of the Territories, and the
+promoters of the road for a while found it a difficult task to convince
+capitalists that the investment would be a safe one. That they knew the
+value of the projected road was shown by the contest between the Central
+Pacific and the Union Pacific for mileage. For a distance of over 200
+miles the two companies graded roads side by side in contest for the
+Government subsidy.</p>
+
+<p>The promoters were even disappointed in the cost of the roads, as Mr.
+Sidney Dillon states in an article <span class='pagenum'><a name="Page_185" id="Page_185">[Pg 185]</a></span>published in the August number of
+<i>Scribner's Magazine</i>, 1892, in which he says:</p>
+
+<div class="blockquot"><p>"At the end of 1867 the road was completed to the top of the
+mountains and nearly half way to Salt Lake City. The cost of
+building over the mountains was so much less than we had
+expected that the construction company found itself with a
+surplus from the proceeds of the subsidy bonds. This was
+imprudently distributed in dividends."</p></div>
+
+<p>The United States Government could parallel to-day the line of either
+road for less than the amount of its first mortgage bonds, and its
+subsidy bonds are therefore nearly worthless.</p>
+
+<p>Mr. Clews, in his "Twenty-Eight Years in Wall Street," says:</p>
+
+<div class="blockquot"><p>"After the Thurman bill had been sustained by the Supreme
+Court Mr. Gould had a plan to build a road from Omaha to
+Ogden, just outside the right of way of the Union Pacific,
+and give that road back to the Government. It would give
+others 'a chance to walk.' The Government tried to squeeze
+more out of the turnip than was in it. For $15,000,000 a
+road could be built where it had cost the Union Pacific
+$75,000,000."</p></div>
+
+<p>It may be admitted that the Pacific roads, even at an extravagant cost,
+have proved a good investment for the country, yet their history
+reflects severely on the statesmanship of those members of Congress
+whose duty it was to properly protect the interests of the nation at
+that time. They were unequal to their task.</p>
+
+<p>The Great Northern Railway Company has just completed its road to the
+Pacific Coast. Its line is very direct, and it has unusually light
+curvature and low grades, which will enable it to be operated more
+cheaply than any Pacific line yet constructed. Much of its route is
+through a rich and productive country, insuring to it a heavy local
+business.</p>
+
+<p><span class='pagenum'><a name="Page_186" id="Page_186">[Pg 186]</a></span>The following statistics concerning it are given in the <i>Railway Age</i>:</p>
+
+<div class="centered">
+<table border="0" width="60%" cellpadding="2" cellspacing="0" summary="Mileage">
+  <tr>
+  <td class="tdl" width="85%">Total mileage, December 18, 1890</td>
+  <td class="tdc" width="15%">&nbsp;&nbsp;&nbsp;&nbsp;2,850&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average bonded debt per mile</td>
+  <td class="tdc">$18,636 75</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average stock per mile</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;7,015 67</td>
+  </tr>
+  <tr>
+  <td class="tdl">Total</td>
+  <td class="tdc">&nbsp;&nbsp;25,652 42</td>
+  </tr>
+  <tr>
+  <td class="tdl">Interest charges per mile</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;1,005 76</td>
+  </tr>
+  <tr>
+  <td class="tdl">Dividend charges per mile</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;420 94</td>
+  </tr>
+</table>
+</div>
+
+<p>A comparison of these figures with those corresponding of other
+transcontinental lines is instructive, and is commended to Congressmen
+who have to deal with the Union Pacific and Central Pacific questions.</p>
+
+<p>Stock and bond inflation, it may confidently be asserted, has created
+from five to six thousand millions of dollars of fictitious railroad
+capital. In 1890 the average liabilities of the railroads in the United
+States, including the capital stock and the funded and unfunded debt,
+were $63,600 per mile. According to Mr. Poor's estimate of the average
+cost of American railroads per mile, more than 50 per cent. of this vast
+sum is pure water. But, as has been stated before, Mr. Poor is partial
+to the railroad interest, and his estimate of $30,000 a mile is too high
+for the time at which it was made. Furthermore, railroad building has
+since then been materially cheapened. Tens of thousands of miles of road
+have been built in recent years that did not cost to exceed $10,000 a
+mile. Very recently the Union Pacific Railroad Company proved, before
+the Board of Equalization at Salt Lake City, by the testimony of
+engineers, that the average cost per mile of the Utah Central line was
+only $7,298.20, itemized as follows:</p>
+
+<div class="centered">
+<table border="0" width="60%" cellpadding="2" cellspacing="0" summary="Engineeering">
+  <tr>
+  <td class="tdl" width="80%">Engineering</td>
+  <td class="tdc" width="20%">$&nbsp;&nbsp;&nbsp;300 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">Grading 5-ft. fill, 18,480 yds.</td>
+  <td class="tdc">&nbsp;&nbsp;2,310 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">Ties, 2,640, at 30 cts.</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;792 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">Rails, 82 tons</td>
+  <td class="tdc">&nbsp;&nbsp;1,845 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">Splices</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12 00<span class='pagenum'><a name="Page_187" id="Page_187">[Pg 187]</a></span></td>
+  </tr>
+  <tr>
+  <td class="tdl">Bolts</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">Spikes</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;142 20</td>
+  </tr>
+  <tr>
+  <td class="tdl">Track-laying</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;600 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">Bridges</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;200 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">Station-building</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">Fences</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;150 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">Right of way</td>
+  <td class="tdc" style="border-bottom: .5pt black solid;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;720 00</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdc">$7,298 20</td>
+  </tr>
+</table>
+</div>
+
+<p>In a recent article Mr. C. Wood Davis states that "many auxiliary lines
+have been built at costs ranging from $8,000 to $15,000 per mile, and
+capitalized at two, three, four, and even five times their cost, as in
+the case of the 107 miles of the Kansas Midland, costing, including a
+small equipment, but $10,200 per mile, of which 30 per cent. was
+furnished by the municipalities along its line. Yet, with construction
+profits and other devices, this road shows a capitalization of $53,000
+per mile."</p>
+
+<p>And that "the Missouri Pacific line from Eldora to McPherson, Kansas, a
+comparatively expensive prairie road, being located across the line of
+drainage, cost much less than $10,000 per mile, as have thousands of
+miles of other prairie roads."</p>
+
+<p>It is safe to say that $25,000 is a liberal estimate of the average cost
+per mile of American roads to the stock-and bondholders, and that their
+capitalization represents $38,000 of water per mile. The total net
+earnings of the railroads of the country were $341,666,639 in 1890, and
+$356,227,883 in 1891, upon an actual investment of only about
+$4,250,000,000. This is a return of about 8-1/2 per cent. and shows the
+force of Mr. Poor's statement that, if the water were squeezed out of
+railroad securities, no better-paying investment could be found in the
+country.</p>
+
+<p>We often see references to the fact that no dividends <span class='pagenum'><a name="Page_188" id="Page_188">[Pg 188]</a></span>are paid upon a
+large portion of railroad stocks, but there is no reason why dividends
+should be paid upon many of them, as they represent no capital whatever
+that has gone into the road. It is probable that not to exceed ten cents
+on the dollar upon an average was originally paid for these stocks, and
+the $80,000,000 distributed annually as dividends upon them does not
+vary much from fifteen to twenty-five per cent. upon the amount actually
+invested in them.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_189" id="Page_189">[Pg 189]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER VII.</h2>
+
+<h2>COMBINATIONS.</h2>
+<br />
+
+<p>It is the favorite argument of railroad men, and the writer must confess
+that he himself formerly believed, that if all legal restraints were
+removed from railroad business, the laws of trade would regulate it more
+successfully and more satisfactorily, both to the railroad companies and
+their patrons, than the wisest statutes could ever regulate it. To give
+force to their argument, they cite the old Democratic maxim that that
+State is governed best which is ruled the least. They also assert that
+it is the province of the State to guarantee to each of its citizens
+industrial freedom; to permit him to transact any legitimate business
+according to his best judgment; to buy and to sell where and at what
+price he pleases; in short, to earn without restriction the reward of
+his intelligence and his industry. They further contend that under a
+free government the law of supply and demand should be allowed free
+sway, and that he who buys or sells transportation should not be
+hampered in his transactions any more than the grocer and his customer.</p>
+
+<p>The reply to this is that, while the grocer is a natural person, the
+railroad company is an artificial person, and that, while the business
+of the former is purely private, that of the latter is quasi-public. The
+grocer must rely solely upon his personal rights and private resources,
+but the railroad company accepts from the State the franchises which
+enable it to do business. And yet, if the public had any assurance that
+the laws of trade would regulate both <span class='pagenum'><a name="Page_190" id="Page_190">[Pg 190]</a></span>kinds of business alike, it is
+not likely that the State would distinguish between the two. They claim
+that their business is like other private business, and therefore they
+should be let alone; that competition can be relied upon to correct
+abuses; and where competition does actually exist they forget, and then
+claim that their business is not like other private business, and they
+should be allowed to make pools and combinations, because in their
+business competition is ruinous. Experience has certainly demonstrated
+that competition is only possible where combination is impossible. Where
+the same commodity is supplied by a large number of individuals, there
+is but little danger for the public from those who supply it, for an
+agreement among many cannot easily be effected; and even if an
+understanding could be reached, it would not long be satisfactory to all
+parties. Disagreements would arise which would end in the dissolution of
+the combination. Where, however, the number of competitors is small,
+agreements can be easily effected and successfully maintained.</p>
+
+<p>It is doubtful whether there is at present any interest in the
+commercial world which has a greater tendency to monopoly and
+combination than the railroad interest. There are in the United States
+some 40,000 railroad stations. Not more than 4,000 of these are
+junctions of two or more roads. At 90 per cent. of these stations
+shippers are therefore confined to one line of railroad, and are, in
+absence of State regulation, compelled to pay for transportation
+whatever price the companies may be disposed to charge, subject only to
+such restrictions as the proximity of competing points may impose. If
+competition obtained at all points where two or more roads meet, many
+railroad companies could not afford to charge excessive rates at
+<span class='pagenum'><a name="Page_191" id="Page_191">[Pg 191]</a></span>non-competitive points along their lines of road, for such a policy
+would slowly but surely drive a large volume of their legitimate
+business to rival roads, to whose interest it would be to encourage by
+every means in their power such diversion of traffic. Railroads early
+recognized this fact and took steps to enable each line to control its
+local business. The first combinations among railroad companies to
+control prices at competitive points were rather crude; in fact, much
+cruder than the first Granger legislation. They were simple agreements
+among the various roads touching a common point to maintain certain
+fixed rates. But while each road was anxious to have the rates agreed
+upon maintained by all of its rivals, it cared but little about
+maintaining its own good faith, and it improved every opportunity to get
+business at reduced rates so long as it could reasonably hope to escape
+detection. As soon as any of the competing roads, through the
+falling-off of its business, became convinced that it was the victim of
+overreaching rivals, it retaliated by offering still lower rates to
+close-tongued shippers. This tricky rivalry would be continued until the
+animosity engendered by it would lead to an open rupture, and what
+railroad men are pleased to term a rate war would follow. As the
+schedule rates had before been unreasonably high, so they became now
+unreasonably low. Hostilities would be continued until all belligerents
+became exhausted and manifested a disposition to negotiate a treaty of
+peace. The former high rates would then be restored; the compact was
+carried out for a short time, to be again violated and finally annulled.
+These rate agreements were in vogue in New England before the War of the
+Rebellion and gradually found their way to the Middle States and the
+West. Wherever they were tried they were violated, until even among the
+most <span class='pagenum'><a name="Page_192" id="Page_192">[Pg 192]</a></span>unsophisticated of freight agents a rate agreement was looked upon
+as a farce.</p>
+
+<p>The statement is often made by railroad managers that excesses in
+railroad competition are the result of the peculiar conditions of their
+business, which has heavy fixed charges on one hand and a fickle
+patronage on the other; that the uncertainty of through business compels
+them to rely upon the local business for such revenue as is necessary to
+meet these fixed charges; and that, inasmuch as their trains <i>must</i> run,
+and any through freight hauled by them is so much business taken from
+the enemy, they can better afford to take it at any price than to have
+one of their competitors take it.</p>
+
+<p>It is difficult to see why this reasoning should not be applied to other
+branches of business; for instance, to milling. The mill-owner, like the
+railroad company, has heavy fixed charges. He has to earn the interest
+on his capital, he has to keep his mill in repair, he now and then has
+to meet the demands of the times and purchase improved appliances, and
+he has to keep a certain number of employes, whether business is brisk
+or slack. He might, therefore, if he saw fit to employ the logic of
+railroad managers, earn revenue enough to meet his fixed charges from
+the business which his regular customers give him, and then do any
+business coming from beyond this circle at any price rather than
+surrender it to a rival.</p>
+
+<p>It will readily be conceded that any enterprise conducted on such
+principles could, at the best, flourish only temporarily, for it would
+soon encounter difficulties from two sources. Its local customers, thus
+discriminated against, would withdraw their patronage, while its
+competitors, finding their territory encroached upon, would, in
+self-defense, offer still better terms to the public to <span class='pagenum'><a name="Page_193" id="Page_193">[Pg 193]</a></span>regain their
+lost customers. Such ruinous competition, if long persisted in, must
+necessarily cripple, if it does not bankrupt, a majority of those who
+engage in it. It is fortunately as rare in industrial and commercial
+circles as it is common among public carriers.</p>
+
+<p>This difference can easily be accounted for. Where there are a large
+number of competitors the prices of the commodities supplied by them are
+leveled down until they reach a point where they will afford only a
+reasonable margin of profit, and beyond which they will cease to be
+profitable, and will therefore cease to be supplied until the
+equilibrium is again established. Where, however, the number of
+competitors is small, the price of the commodities supplied by them
+will, by agreement, for a time at least, be maintained at a point where
+it affords considerable more than a reasonable profit. Here the large
+gain presents to the various competitors such a temptation to outstrip
+their rivals and increase their business at the expense of good faith,
+that but few, if any, of them will, in the long run, resist it. The
+tendency to underbid rivals will always be strong where profits are
+large, and it may safely be asserted that efforts to maintain, through
+combinations, excessive rates are the most fruitful source of ruinous
+competition.</p>
+
+<p>In time railroad managers became convinced that, unless it was possible
+to radically reform railroad ethics, rate agreements could never be
+relied upon for the maintenance of excessive rates at competing points.
+The combined roads found it an easy matter to agree upon excessive
+rates, but were powerless to enforce them. Experience convinced their
+managers that to make their tariffs effective it was necessary to
+deprive individual roads of the power or the inducement to cut below the
+<span class='pagenum'><a name="Page_194" id="Page_194">[Pg 194]</a></span>agreed rates. Their ingenuity in time developed a system which promised
+to remove from individual roads every temptation to take business at
+less than schedule prices. This device consists in a division of
+railroad business and is commonly called a pool. There are various ways
+in which such a division is made. Either the traffic is divided among
+the various companies meeting at a common point, or each road is allowed
+to carry all freights that it may receive, and then the earnings of the
+different roads are divided, each road being paid the actual cost of
+such service as it has performed. There is still a third pooling
+arrangement, consisting in a division of territory, but this has been
+found less satisfactory and is now but rarely resorted to.</p>
+
+<p>It is said that the first regular pool organized in the United States
+was the Chicago-Omaha pool, formed in 1870 by the Chicago, Burlington
+and Quincy, the Chicago, Rock Island and Pacific, and the Chicago and
+Northwestern railroad companies, then the only three lines connecting
+the cities of Chicago and Omaha. This pool, which was subsequently
+joined by other lines, made an equal division of the traffic, and was so
+well organized that it lasted fourteen years "without a break." The
+abuses practiced by the companies belonging to this pool were one of the
+chief causes of the Granger movement in Iowa. It is indeed doubtful
+whether any other railroad combination ever maintained itself longer or
+pursued its ends with greater pertinacity than this pool. Another pool
+of national notoriety was the Southern Railway and Steamship
+Association, which was organized, though at first under a different
+name, in the State of Georgia, in 1875. It was probably the first money
+pool formed in the United States. Each member was awarded a certain
+percentage of the <span class='pagenum'><a name="Page_195" id="Page_195">[Pg 195]</a></span>total business between the various competitive points
+along its line. If a company carried more than its share, it was
+compelled to turn over the receipts from such additional traffic to its
+rivals, which paid it a nominal price for carriage. This allowance was
+always made so low that there was no inducement for any company to seek
+to carry more than its allotment. The pool had its own executive,
+legislative and judicial departments, and it enforced its decrees with
+an iron hand. It maintained a strong centralized government, and
+rebellious members had but little mercy to expect from it. It provided
+that if any officer or representative of any company should authorize or
+promise, directly or indirectly, any variation from established tariffs,
+he should be discharged from the service, with the reason stated. The
+strong sentiment which we to-day find in the South in favor of State
+control of railways is the direct result of the many evils which this
+powerful pool introduced into the railway business of that section of
+the country.</p>
+
+<p>Other pools followed, as the Southwestern Association, organized in
+1876, to control the traffic between Chicago and St. Louis, and the
+Minnesota and the Colorado pools. Within a few years railroad pools
+covered the whole country. All pursued the same object, viz., the
+control of rates at competitive points, which enabled the companies to
+maintain excessive schedule rates at local points.</p>
+
+<p>Between 1875 and 1880 the pooling system rapidly spread all over the
+Union. Wherever competition promised to regulate rates by the
+application of the law of supply and demand, the pool was resorted to as
+the never-failing remedy to preserve dividends on watered stock. As long
+as lake and canal navigation controlled the <span class='pagenum'><a name="Page_196" id="Page_196">[Pg 196]</a></span>carriage of heavy freights
+between Chicago and New York by means of rates so low that railroads
+found it, or at least thought it, impossible to compete with them in the
+transportation of agricultural products during the greater part of the
+year, railroad pools between Chicago and New York could not be
+successfully maintained. In 1873 the railroads transported only about 30
+per cent. of this kind of freight from the West to Eastern ports.</p>
+
+<p>Owing, however, to the rapid decrease of the cost of transportation,
+railroad companies from this time on were enabled to encroach rapidly
+upon the business of water routes, so that in 1876 they carried over 52
+per cent. of the entire volume of agricultural products that were moved
+from the West to the East. As long as these products were carried almost
+entirely by water from lake ports to the East, New York, as the terminus
+of this route, enjoyed decided advantages over the other Atlantic ports.
+When, however, the railroads commenced to successfully compete with the
+water routes in the transportation of these commodities, a considerable
+share of this business was diverted to Boston, Philadelphia and
+Baltimore, and it soon became apparent that these ports, in some
+respects, enjoyed advantages for the export trade not possessed by New
+York. It was, therefore, not surprising that the business men of these
+cities, together with the railroads terminating in them, made every
+effort to come in for their share of the traffic which was drifting away
+from New York.</p>
+
+<p>Competition between the New York Central and the Pennsylvania Railroad
+for the Western through traffic dated back as far as 1869, the year in
+which both systems secured, through consolidation with connecting roads,
+through lines to Chicago. Rates fell in one year from $1.80 to 25 cents
+per hundred pounds. After a time the <span class='pagenum'><a name="Page_197" id="Page_197">[Pg 197]</a></span>managers of the two companies met,
+and schedule rates were restored. Rates were, at least outwardly,
+maintained until the Baltimore and Ohio and the Erie system entered
+Chicago, and the Grand Trunk made connections with Milwaukee and other
+lake points, and thus disturbed through rates. All efforts to maintain
+the level of the old tariffs, through agreements, proved now fruitless,
+for both the Baltimore and Ohio and the Grand Trunk found it to their
+interest to pursue independent policies, and refused to have their hands
+tied by an agreement with roads that were interested in continuing, if
+possible, the commercial supremacy of New York.</p>
+
+<p>Rate skirmishing finally developed into open war in 1876, when
+fourth-class rates between Chicago and the Atlantic fell as low as 16
+cents per hundred. This rate, however, was eclipsed in July, 1878, when
+wheat was carried from Chicago to New York for 10 cents per hundred. The
+existing conditions left no doubt in the minds of those familiar with
+railroad tactics that this war was simply the precursor of a gigantic
+combination between the trunk lines. An unsuccessful attempt to effect
+such a combination had been made before. In 1874 the managers of the
+Erie, Pennsylvania and New York Central met at Saratoga for the purpose
+of devising means for the suppression of competition in the trunk line
+traffic. This meeting, however, known in railroad history as the
+Saratoga Conference, was the first step toward the organization of a
+trunk line pool, although the conference did not lead to any immediate
+results, the Grand Trunk and the Baltimore and Ohio refusing to be bound
+by its decision. It was certainly no easy task to devise means to bring
+about an effective and permanent combination among five large through
+lines with greatly conflicting interests.</p>
+
+<p><span class='pagenum'><a name="Page_198" id="Page_198">[Pg 198]</a></span>So far pools had never failed to suppress competition wherever they were
+organized. But in the past pools had, almost without exception, only
+attempted to control rates between common points. They accomplished
+their object by a division of the entire traffic or earnings from the
+traffic between common points. The schedule rates remained the same for
+all. But the traffic of the trunk lines brought a new factor into the
+problem. Here the rival routes did not terminate at the same points. It
+was contended by the Baltimore and Ohio that, whatever might be the
+facilities of Baltimore for exporting agricultural products, that port
+was at a disadvantage as compared with the more northern ports on
+account of the longer voyage and higher ocean rates to Liverpool, and
+that it could therefore not enter into a combination with the roads
+leading directly to New York and Philadelphia upon equal terms, since
+this would divert its legitimate share of the through business to those
+ports. The Grand Trunk, on the other hand, refused to enter the
+combination because, not having any direct Chicago connection, it feared
+that the enforcement of pool rates would materially diminish the volume
+of its business. As yet the railroad wiseacres did not seem to be equal
+to the emergency, and matters drifted along in the old channel. The rate
+war of 1876 gradually brought about an understanding among the
+belligerents. The competing roads accepted the terms offered, and with
+this a new principle entered into the science of pooling. Rates between
+Chicago and Baltimore were fixed somewhat lower than those between
+Chicago and Philadelphia, and in turn Philadelphia was allowed a small
+advantage over New York. This concession was made to equalize the
+difference in the ocean rates of the competing ports. These equalizing
+<span class='pagenum'><a name="Page_199" id="Page_199">[Pg 199]</a></span>or&mdash;to use railroad nomenclature&mdash;differential rates were subsequently
+granted by pools to such roads as, on account of some disadvantage,
+could not compete with other members of the pool on equal terms. Thus
+the longest route was usually permitted to charge the lowest, and the
+shortest route the highest rate. This practice is in conformity with the
+principle of charging whatever the traffic will bear, but it is
+certainly devoid of every consideration of justice and equity. If the
+longer line can afford to carry freight at rates lower than schedule
+prices, no further proof is needed under ordinary circumstances that the
+regular schedule rates of the shorter line are exorbitant.</p>
+
+<p>The concession of differential rates settled, at least temporarily, the
+difficulties that had arisen out of the east-bound traffic of the trunk
+lines. This arrangement did not, however, in any way affect the traffic
+moving in the opposite direction. The volume of west-bound freight is
+very much larger at New York than at any other of the Atlantic ports. In
+order to get its share of the business, each trunk line maintained an
+office in New York. These offices eagerly solicited business for their
+respective roads, and the freights which they received for
+transportation to the West would be forwarded either directly or by a
+circuitous route; but, the longer the route, the lower as a rule was the
+compensation asked for the service. Under these circumstances
+competition was brisk, and the profits realized were far from satisfying
+the cupidity of the competing lines. It was apparent to their managers
+that the competition in the west-bound traffic was similar to that
+formerly existing between Chicago and Mississippi and Missouri River
+points, which had promptly yielded to pools. The temporary adjustment of
+the more perplexing <span class='pagenum'><a name="Page_200" id="Page_200">[Pg 200]</a></span>questions which had arisen out of the east-bound
+traffic now paved the way for a pooling arrangement for the west-bound
+freight. The Southern Pool, under the management of Albert Fink, had
+long attracted the attention of the trunk line managers. Its system of
+dividing the traffic, of reporting to a central office and of hearing
+and deciding complaints had enabled it to exert an almost absolute
+control over its members, to compel them to make honest returns and to
+prevent rupture and rebellion. It was believed that a pool of the trunk
+lines could not be effective or permanent unless organized upon the
+Southern basis and presided over by a trunk expert. Accordingly, when in
+1877 an agreement for the pooling of the west-bound traffic was reached
+by the trunk lines, Mr. Fink was tendered the position of pool
+commissioner. Under the agreement reached the total tonnage of the
+west-bound business was divided in such a way that the Erie and New York
+Central roads each received 33 per cent., the Pennsylvania 25 per cent.,
+and the Baltimore and Ohio 9 per cent. of it. If any road received more
+freight than was allotted to it by the pool, it delivered such surplus
+to the pool, or rather to such a road as the pool commissioner
+designated as not having received its allotment. The success of this
+pool from a railroad point of view made the trunk lines anxious to
+organize a similar pool for the whole east-bound traffic. It was
+proposed to control by such a combination the rates on all the
+east-bound traffic of the Northwest, by making Chicago the pooling
+center, fixing for it a schedule of rates and making the rates of all
+the railroad centers in the West and Northwest dependent upon it. The
+combination was to comprise more than forty companies, controlling over
+25,000 miles of road. The scheme was tried for three <span class='pagenum'><a name="Page_201" id="Page_201">[Pg 201]</a></span>months in 1878,
+but proved a failure, owing to the fact that nearly all of the many
+diverging interests sought their own advantage. The Eastern and Western
+trunk line pools were, through the efforts of their commissioner,
+successfully maintained, though even their harmony was occasionally
+marred by a short war precipitated by such members as would think
+themselves entitled to larger shares of the spoils. But a readjustment
+would invariably follow, and the expenditures of the war would be taxed
+up to the public.</p>
+
+<p>After the failure of the gigantic Western pool which had been organized
+under the protectorate of the trunk lines, the companies which had
+composed it formed such local combinations as their individual interests
+dictated. It is doubtful whether during the five years immediately
+preceding the passage of the Interstate Commerce Law there was any
+junction of two or more roads in the United States which, except during
+the period of an occasional railroad war, had any competition in the
+transportation business. As has been shown before, discriminations
+without number were practiced between places and persons; goods were not
+unfrequently carried at a loss; but the general public was, as a rule,
+compelled to pay what the traffic would bear, or rather what the pooling
+roads thought it could bear.</p>
+
+<p>It is claimed by railroad managers that pools are the only effective
+contrivances for checking ruinous competition among railroad carriers,
+and that they are therefore justifiable as a means of self-protection.
+This might perhaps be a valid argument if any attack were made upon the
+railroads which encroached upon their rights or endangered their
+existence, but if railroad companies are disposed to cut each other's
+throats, the public should not <span class='pagenum'><a name="Page_202" id="Page_202">[Pg 202]</a></span>be made to pay the penalty of their
+depravity. As long as schedule rates are unreasonably high, railroads
+will be tempted to offer to certain shippers low secret rates; but as
+soon as all rates have been leveled down to a point where they will
+yield only a fair profit with good management, the inducement to cut
+below them is largely taken away. Pools, far from being a remedy for the
+evils of excessive competition, will in the end only aggravate the
+disease which they attempt to cure. The high rates which they maintain
+attract the attention of speculative men and lead to the construction of
+rival roads. While the traffic remains the same, the proceeds must then
+be divided among a larger number of carriers. Thus the construction of
+unnecessary roads, which has often been the subject of bitter complaint
+on the part of the older roads, is chargeable directly to their wrong
+policies.</p>
+
+<p>One of the principal objections to industrial and commercial
+combinations is that they paralyze trade. Competition stimulates every
+competitor to offer the best at the lowest possible price. This
+increases the demand for the commodity, and both the producer and the
+consumer are in the end benefited by the operation of this law. On the
+other hand, combinations, or, what is the same, monopolies, increase the
+price, remove the stimulus to excellence, and reduce the demand, and
+thereby affect injuriously the producer and consumer alike. Competition
+in the railway service would mean an improved service and lower rates
+and would speedily be followed by a large increase of business.</p>
+
+<p>Another serious objection to pooling is that it invariably leads to
+periodic wars, which unsettle all business, and but too often introduce
+into legitimate trade the element of chance. These wars give, moreover,
+to designing railroad managers an opportunity to enrich themselves by
+<span class='pagenum'><a name="Page_203" id="Page_203">[Pg 203]</a></span>stock speculations at the expense of the stockholders, whose interests
+they use as a football for the accomplishment of their selfish ends.
+When rates are reduced to a right level, and are properly adjusted, and
+are equal to all, even railroad men will find no necessity for pools.
+The desire for such a combination is a desire to impose upon somebody,
+or some locality, or the public at large. The proposition to give legal
+sanction to pools, made by railroad managers, is preposterous; and even
+a pool to be approved by the Interstate Commerce Commission is out of
+the question, as it would cause the railroads to increase their efforts
+to control the appointment of the commission. However honest it may look
+on its face, however plausible may be the arguments produced in its
+favor, it should not be permitted.</p>
+
+<p>There is no doubt but under the proposed pooling arrangement railroad
+interests, watered stocks and all, would be cared for, but there is
+every reason to believe that public interests would not be properly
+protected.</p>
+
+<p>So long as servility by a member of the Interstate Commerce Commission
+to railroad influences serves as a stepping-stone to a high position in
+the employ of railroad combinations, with a salary of three or four
+times that of an Interstate Commerce Commissioner, so long will it be
+unsafe to permit such powers to be vested in that commission.</p>
+
+<p>Pooling by railroads should not be permitted, if permitted at all, so
+long as representatives of speculative interests have a voice in their
+management, and not until all fictitious valuations are altogether
+banished from the equation, and until the roads are brought under
+complete Government control. There is no more necessity for pools among
+railroads than there is among merchants and <span class='pagenum'><a name="Page_204" id="Page_204">[Pg 204]</a></span>manufacturers. The capital
+actually invested in railroads is now receiving larger returns than
+investments in other lines of business, and their incomes are increasing
+from year to year.</p>
+
+<p>Every pooling combination of railroad companies for the maintenance of
+rates is a violation of common law. From time immemorial the law has
+stamped as a conspiracy any agreement between individuals to support
+each other in an undertaking to injure public trade. The Interstate
+Commerce Act reasserts this principle, and provides penalties for the
+maintenance of such combinations among railroad companies. If, in spite
+of this act, the evil still exists, it is no argument against the merits
+of the law, but it does prove that the machinery provided for its
+enforcement is insufficient. That railroad companies can be made to
+respect the law there can be no doubt; but much cannot be accomplished
+unless the people fully realize the magnitude of the undertaking and
+vest the Government with sufficient power to cope with an organized
+force whose total annual revenue is nearly three times as large as that
+of the United States. The discussion of the question how this may be
+done will be reserved for a subsequent chapter.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_205" id="Page_205">[Pg 205]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER VIII.</h2>
+
+<h2>RAILROADS IN POLITICS.</h2>
+<br />
+
+<p>The question might be asked how the railroad companies for many years in
+succession have been able to prevent State control and pursue a policy
+so detrimental to the best interests of the public. One might think that
+in a republic where the people are the source of all power, and where
+all officers are directly or indirectly selected by the people to carry
+out their wishes and to administer the government in their interest, a
+coterie of men bent on pecuniary gain would not be permitted to subvert
+those principles of the common law and public economy which from time
+immemorial have been the recognized anchors of the liberty of the
+Anglo-Saxon race.</p>
+
+<p>The statement that under a free government it is possible for a few to
+suppress the many might almost sound absurd to a monarchist, and yet is
+it true that for the past twenty-five years the public affairs of this
+country have been unduly controlled by a few hundred railroad managers.</p>
+
+<p>To perpetuate without molestation their unjust practices and prevent any
+approach to an assertion of the principle of State control of railroad
+transportation, railroad managers have secured, wherever possible, the
+co-operation of public officials, and, in fact, of every semi-public and
+private agency capable of affecting public opinion. Their great wealth
+and power has made it possible for them to influence to a greater or
+less extent every department of the National and State governments.
+Their influence <span class='pagenum'><a name="Page_206" id="Page_206">[Pg 206]</a></span>extends from the township assessor's office to the
+national capital, from the publisher of the small cross-roads paper to
+the editorial staff of the metropolitan daily. It is felt in every
+caucus, in every nominating convention and at every election. Typical
+railroad men draw no party lines, advocate no principles, and take
+little interest in any but their own cause; they are, as Mr. Gould
+expressed it, Democrats in Democratic and Republicans in Republican
+districts. The large means at the command of railroad companies, their
+favors, their vast armies of employes and attorneys and their almost
+equally large force of special retainers are freely employed to carry
+into execution their political designs, and the standard of ethics
+recognized by railroad managers in these exploits is an exceedingly low
+one.</p>
+
+<p>It is a settled principle of these men that, if they can prevent it, no
+person not known to be friendly to their cause must be placed into any
+public office where he might have an opportunity to aid or injure their
+interests. The records of the various candidates of the principal
+parties for city, county, State and national offices are therefore
+carefully canvassed previous to the primaries, the most acceptable among
+the candidates of each party are selected as the railroad candidates,
+and the local representatives of the railroad interest in each party are
+instructed to use all means in their power to secure their nomination.</p>
+
+<p>If none but candidates who are servile to the railroad interest are
+nominated by the principal parties, the election is permitted to take
+its own course, for, whichever side is successful, the railroad interest
+is safe. If, however, there is reason to believe that a nominee is not
+as devoted to their interests as the nominee of an opposing party, the
+latter is sure to receive at the polls whatever support <span class='pagenum'><a name="Page_207" id="Page_207">[Pg 207]</a></span>railroad
+influence can give him. That a public official elected by the grace of a
+railroad manager is but too apt to become a tool in his hands needs no
+proof. Both gratitude and fear tie the average politician to the
+powerful forces which can control his political destiny.</p>
+
+<p>The railroad manager, on the other hand, always kindly remembers his
+officeholding friends as long as they are loyal and in a position to
+serve him. Before the enactment of the Interstate Commerce Act there was
+every year a wholesale distribution of railroad passes among public
+officeholders and other prominent politicians. The pass was the token of
+the continued good will of the railroad dignitaries as the withholding
+of the "courtesy" was a certain indication of their displeasure. If the
+officeholder had personal or political friends whom he desired to have
+recognized, an intimation of this desire was generally sufficient to
+have the pass privilege even extended to them. And yet these favors were
+not bestowed indiscriminately. Thus the pass credit of a county official
+was more limited than that of an officer of the State, and the latter
+class were again rated according to their influence and rank.
+Furthermore, while annual passes were thus freely distributed among one
+class of officials, others could obtain them only by making special
+application for them. Members of the legislature would not unfrequently
+receive their supply of railroad passes before their certificates of
+election were issued, but legislative committee clerks and employes in
+the various departments of the State government were required to satisfy
+the railroad authorities that they were in a position to aid or to
+injure the railroad cause before their names were placed on the list of
+persons "entitled to the courtesy".</p>
+
+<p><span class='pagenum'><a name="Page_208" id="Page_208">[Pg 208]</a></span>Of course the judiciary, as a co&ouml;rdinate branch of the government, could
+not well be slighted. Indeed, previous to the enactment of the
+Interstate Commerce Law, a judge would have regarded it an affront if he
+had not been furnished with passes by the various companies operating
+railroads in his district. It appears that the law has not entirely
+corrected this abuse, for only about two years ago the Chicago <i>News</i>
+made the discovery that nearly every judge in the city of Chicago
+traveled on passes. It is strange to what extent the pass often debased
+the judiciary. It was not unfrequent for judges to solicit passes for
+family and friends, and instances might be named where they demanded
+them in a wholesale way.</p>
+
+<p>The impudent demands were usually honored by the railroad authorities,
+who reasoned that they could better afford to bear the shameless
+effrontery of the ermined extortioner than the damage which might result
+to them from adverse decisions.</p>
+
+<p>A railroad pass, when presented by a public official or even by any
+public man, is now, in nine cases out of ten, a certificate of dishonor
+and a token of servility, and is so recognized by railroad officials.
+What equivalent railroad companies expect for the pass "courtesy" is
+well illustrated by the experience of an Iowa judge. This gentleman, who
+had been on the bench for years and always had been favored with passes
+by the various companies operating lines in his district, at the
+beginning of a new year failed to receive the customary pass from a
+leading road. Meeting its chief attorney, he took occasion to call his
+attention to what he supposed to have been an oversight on the part of
+the officer charged with the distribution of the passes. The attorney
+seemed to take in the situation at once. "Judge," said he, "did you not
+recently <span class='pagenum'><a name="Page_209" id="Page_209">[Pg 209]</a></span>decide an important case against our company?" "And was my
+decision," replied the Judge, "not in accordance with law as well as
+with justice?" The attorney did not answer this question, but in the
+course of a few days the Judge received the desired pass. A few months
+later it again became the Judge's unpleasant duty to render a decision
+adverse to the same company. This second act of judicial independence
+was not forgiven, and the next time he presented his pass it was
+unceremoniously taken up by the conductor in the presence of a large
+number of passengers, and he was required to pay his fare.</p>
+
+<p>Employes, while engaged in the legitimate business of their companies,
+should, of course, be transported free, but a great many persons receive
+passes and are classed as employes who never render any legitimate
+service for the company giving the pass, and by far the greater portion
+of passes are not granted from pure motives, but are given for the
+purpose of corrupting their holders. It arouses antagonism, because as a
+rule passes are given to people who are fully able to pay their fare and
+are denied to those who are least able to pay it. The passenger who pays
+his fare and then finds that a large number of his fellow-passengers
+travel on passes realizes that he is compelled to pay a higher fare that
+others may be carried free. He feels that he is unjustly discriminated
+against, and wonders why such discrimination is tolerated in a country
+whose institutions are founded upon the very principle of equal rights
+to all. A good anecdote is related which well illustrates this feeling.
+A farmer and a lawyer occupied the same seat in a railroad car. When the
+conductor came the farmer presented his ticket, and the lawyer a pass.
+The farmer's features did not conceal his disgust when he discovered
+that his seat-mate was a <span class='pagenum'><a name="Page_210" id="Page_210">[Pg 210]</a></span>deadhead. The lawyer, trying to assuage the
+indignation of the observing granger, said to him: "My friend, you
+travel very cheaply on this road." "I think so myself," replied the
+farmer, "considering the fact that I have to pay fare for both of us."</p>
+
+<p>But what must be a passenger's surprise when he finds that the judge who
+to-morrow is to preside at the trial of a case in which the railroad
+company is a party to-day accepts free transportation at its hands. A
+judge may scorn the charge that he is influenced by a railroad pass, but
+his fellow-passenger who has paid his fare cannot understand why the
+railroad company should give passes to one class of people and refuse
+them to others, if it does not consider one more than others to be in a
+position to reciprocate its favors.</p>
+
+<p>In their endeavor to win over the courts, however, the railroads do by
+no means confine their attention to the judges. They are well aware that
+a biased jury is often more useful to them than a biased judge, and
+efforts are made by them to contaminate juries, or at least prejudice
+them in their favor. A prominent Iowa attorney, the legal and political
+factotum of a large railroad corporation, for years made it a practice
+to supply jurors with passes. In one instance, when it was shown in
+court by the opposing counsel that all jurors in the case on trial had
+accepted passes from the railroad company which was the defendant in the
+case, the judge found himself compelled to discharge the whole jury. The
+argument made by this counsel, in support of his motion that the jury be
+discharged, was certainly to the point. He showed that in order to have
+an equal chance for justice it would be necessary for his client to give
+each juror at least fifty dollars to offset the bribes given to them by
+the railroad company.</p>
+
+<p><span class='pagenum'><a name="Page_211" id="Page_211">[Pg 211]</a></span>That it has always been the policy of railroad managers to propitiate
+the judiciary is a fact too generally known among public men to admit of
+contradiction. If a judge owes his nomination or election to railroad
+influences, railroad managers feel that they have in this a guarantee of
+loyalty. If, however, he acquires the ermine in spite of railroad
+opposition, every effort is made to conciliate the new dispenser of the
+laws. The bestowal of unusual favors, flattery, simulated friendship and
+a thousand other strategies are brought into requisition to capture the
+wayward jurist. If he proves docile, if his decisions improve with time
+and show a gradual appreciation of the particular sacredness of
+corporate rights, the railroad manager will even forgive him his former
+heresy and rally to his support in the future. But if he asserts his
+convictions, if he attempts to discharge the duties of his responsible
+office without fear or favor, if he can neither be corrupted nor
+intimidated, all available railroad forces will be marshaled against him
+in the future.</p>
+
+<p>It cannot be surprising that, under such circumstances, there always has
+been a tendency among judges to be conservative and to give the
+railroads the benefit of the doubt in their decisions. Judges well know
+that railroad companies appeal almost invariably when the decision of a
+lower court is adverse to them, but private citizens only in exceptional
+cases. They also know that railroads never forgive adverse decisions,
+whether right or wrong, while private citizens, as a rule, accept the
+decision of the court as justice, and do not hold the judge responsible
+for its being adverse to them. Our judiciary is, and probably always has
+been, as incorruptible as the judiciary of any country in the world; but
+our judges are made of no better material than our legislative or
+executive officers. Weak <span class='pagenum'><a name="Page_212" id="Page_212">[Pg 212]</a></span>men, in all stations, are influenced by wealth
+and power, and weak judges can always be found who will be led or forced
+from the path of duty so long as corrupt men are permitted to manage
+railroads and to remain in possession of a power only inferior to that
+of an autocratic ruler.</p>
+
+<p>The influence which railroads exert extends from the lowest to the
+highest court of the land. Federal courts have more than once been
+successfully appealed to to give legal sanction to the perpetuation of
+gigantic frauds, or to frustrate attempts made by the individual States
+to place restrictions upon roads operated within their respective
+borders. Twenty years ago a Federal judge aided Mr. Gould in his
+notorious Erie transactions, and in more recent years a Federal circuit
+judge in the West threw the property of the Wabash Railroad Company,
+upon the application of its own directors, into the hands of receivers
+selected by its former managers without the knowledge or notice of its
+creditors, and issued orders for the management of the property which
+greatly discriminated in favor of certain bondholders and were so
+manifestly unjust that Judge Gresham, before whom the case was
+subsequently brought, did not hesitate to say to them that "the boldness
+of this scheme to aid the purchasing committee, by denying equal right
+to all bondholders secured by the same mortgages, is equaled only by its
+injustice." At the same time one of the counsel for the dissenting
+bondholders characterized these strange orders as "the highwayman's
+clutch on our throat, the robber's demand, 'Your money or your life.'"</p>
+
+<p>The decision which the Supreme Court of the United States rendered in
+the Granger cases in 1876, affirming the right of a State to control
+railroad charges for the transportation of passengers and freight wholly
+within the <span class='pagenum'><a name="Page_213" id="Page_213">[Pg 213]</a></span>State, was a serious disappointment to railroad men, for it
+was the first step toward wresting from them the power to arbitrarily
+control the commerce of the country. Ever since that time it has been
+their determined purpose to bring about, if possible, a reconstruction
+of the Federal Supreme Court, in order to secure a reversal or
+modification of the Granger decision. In the case of Peik vs. Chicago,
+94th U. S., 176, the Supreme Court laid down the following broad
+principle of law: "Where property has been clothed with the public
+interest, the legislature may fix a limit to that which shall in law be
+reasonable for its use. This limit binds the courts as well as the
+people. If it has been improperly fixed, the legislature, not the
+courts, must be appealed to for a change." In one of the Granger cases
+the same court used the following language: "We know that this is a
+power which may be abused, but that is no argument against its
+existence. For protection against abuses by legislatures, the people
+must resort to the polls."</p>
+
+<p>Fourteen years later, in the case of C. M. &amp; St. P. R. Co. vs. Minn.,
+decided in October, 1890, the same court rendered a decision so
+indefinite that the lawyers differed much in their opinions as to its
+meaning, and it appears that the members of the court who made the
+decision also differed in their opinions as to the meaning of the
+decision; for Justice Bradley said in his dissenting opinion, in which
+Justice Gray and Justice Lamar concurred, that the decision practically
+overruled Munn vs. Illinois; but the same court, in a case entitled Budd
+vs. New York, submitted in October, 1891, and decision rendered February
+29, 1892, and opinion delivered by Justice Blatchford, in referring to
+the Minnesota case, after quoting the above statement from Justice
+Bradley, said: "But the <span class='pagenum'><a name="Page_214" id="Page_214">[Pg 214]</a></span>opinion of the court did not say so, nor did it
+refer to Munn vs. Illinois, and we are of opinion that the decision in
+that case is, as will be hereafter shown, quite distinguishable from the
+present case."</p>
+
+<p>It is thus apparent that this court has adhered to the decision in Munn
+vs. Illinois, and to the doctrines announced in the opinion of the court
+in that case, and those doctrines have since been repeatedly enforced in
+the decisions of the courts of the States.</p>
+
+<p>Judge Brewer, whose zeal for the defense of corporate interests seems to
+amount almost to a craze, dissented. He said: "I dissent from the
+opinion and judgment in these cases. The main proposition upon which
+they rest is, in my judgment, radically unsound. It is the doctrine of
+Munn vs. Illinois reaffirmed. The paternal theory of government is to me
+odious. Justice Field and Justice Brown concur with me in this dissent."</p>
+
+<p>It should be remembered that Justices Brewer and Brown were both
+appointed to the Supreme bench by President Harrison.</p>
+
+<p>We have every reason to believe that, unless the people of the United
+States are on the alert, as railroad managers always are, there is, with
+further changes in the personnel of the court, danger of its deviating
+from the sound principles of law laid down in its decision in the
+Granger cases. Railroad attorneys have repeatedly been raised to seats
+in the highest tribunal in the land. So great is the power of the
+railroad interests, and so persistent are they in their demands, that,
+unless a strong public sentiment records its protest, their candidates
+for appointive offices are but too apt to be successful. Representatives
+of the railroads sit in the Congress of the United States, others are
+members of the national campaign committees of both <span class='pagenum'><a name="Page_215" id="Page_215">[Pg 215]</a></span>of the great
+political parties, others control the politics of the States, and their
+influence reaches to the White House, whether its occupant is aware of
+it or not. Other interests in the past have succeeded in securing the
+appointment of biased men as judges of the Supreme Court who afterwards
+could always be relied upon to render decisions in their favor. Will the
+people profit by their experience, or will they be indifferent to the
+danger which surrounds them, until nothing short of a political upheaval
+can restore to them these rights of sovereignty, of which they have so
+insidiously been deprived?</p>
+
+<p>Human gratitude is such that even high-minded men who, through the
+influence of the railroad interest, have been placed upon the Federal
+bench, find it impossible to divest themselves of all bias when called
+upon to decide a case in which their benefactors are interested. Such is
+the human mind that, when clouded by prejudice, it will forever be blind
+to its own fault. Even the members of so high a tribunal as the
+Electoral Commission which decided the presidential contest between
+Hayes and Tilden could not divest themselves of their prejudices; each
+one, Republican or Democrat, voted for the candidate of the party with
+which he had cast his political fortune.</p>
+
+<p>Last January, in an address delivered before the New York State Bar
+Association at Albany, Mr. Justice Brewer reminded his hearers that the
+rights of the railroads "stand as secure in the eye and in the custody
+of the law as the purposes of justice in the thought of God." And
+further on they were told that "there are to-day $11,000,000,000
+invested in railroad property, whose owners in this country number less
+than two million persons. Can it be that whether that immense sum shall
+earn a dollar or bring the slightest recompense to those who have
+invested <span class='pagenum'><a name="Page_216" id="Page_216">[Pg 216]</a></span>perhaps their all in that business, and are thus aiding in the
+development of the country, depends wholly upon the whim and greed of
+that great majority of sixty millions who do not own a dollar? It may be
+said that that majority will not be so foolish, selfish and cruel as to
+strip that property of its earning capacity. I say that so long as
+constitutional guarantees lift on American soil their buttresses and
+bulwarks against wrong, and so long as the American judiciary breathes
+the free air of courage, it cannot."</p>
+
+<p>Unfortunately judicial buttresses and bulwarks have not always been
+lifted against wrong. Judge Taney, like Brewer, supposed that it was
+left at his time for his court to preserve the peace and provide for the
+safety of the nation; but history has shown that we cannot depend upon
+that high tribunal for safety when it is controlled by weak or
+inefficient men.</p>
+
+<p>When we consider what "that great majority" has done for this country in
+the past, and is doing for it at the present time, and especially when
+we contrast its sense of justice and right with the weakness and
+inability of some of its public servants, does it not seem to be a
+little presumptuous for them to assume that "the danger is from the
+multitudes&mdash;the majority, with whom is the power," and that, were it not
+for their superior wisdom and patriotic action, this great government of
+the people, by the people and for the people would be a failure?</p>
+
+<p>Mr. Lincoln never feared "the whim and greed" of "that great majority,"
+but he had at all times implicit confidence in the great mass of the
+people, and they in return had full confidence that no temptation of
+wealth or power was sufficient to seduce his integrity.</p>
+
+<p>We cannot dismiss this subject without referring to a <span class='pagenum'><a name="Page_217" id="Page_217">[Pg 217]</a></span>stratagem which
+railroads have in the past repeatedly resorted to for the purpose of
+removing from the bench judges of independent minds whom they found it
+impossible to control. This stratagem consists of a well-disguised
+bribe, by which a Federal judge is changed into a railroad attorney with
+a princely salary. The railroad thus gets rid of an undesirable judge
+and gains a desirable solicitor at a price at which they could well have
+afforded to pension the judge.</p>
+
+<p>The following is a copy of a broker's circular letter sent to prominent
+bankers of Iowa, and shows that even the Clerk of the United States
+Court is not overlooked:</p>
+
+<div class="blockquot"><p class="right">"&mdash;&mdash;, June 30th, 1892.</p>
+
+<p>"Mr. &mdash;&mdash;,</p>
+
+<p>"We offer, subject to sale at par and interest, note $2,500.
+Date, July 5th, 1892. Time, six months; rate, 6 per cent.
+Payable where desired. Maker, &mdash;&mdash; Endorser, Judge &mdash;&mdash; Mr.
+&mdash;&mdash;, the maker, is clerk of the United States Circuit Court
+at &mdash;&mdash; Judge &mdash;&mdash; the well known attorney of the &mdash;&mdash; and
+&mdash;&mdash; Railway Co., of &mdash;&mdash;, stated to us to be worth $150,000
+to $200,000. Can you use it?"</p></div>
+
+<p>While railroad managers rely upon servile courts as a last resort to
+defeat the will of the sovereign people, they are far from losing sight
+of the importance of controlling the legislative branch of the
+government. By preventing what they are pleased to call unfriendly
+legislation they are more likely to prevent friction with public
+opinion, and they avoid at the same time the risk of permanently
+prejudicing their cause by an adverse opinion upon a constitutional
+question which they may find it necessary to raise in order to nullify a
+legislative act. There are three distinct means employed by them to
+control legislative <span class='pagenum'><a name="Page_218" id="Page_218">[Pg 218]</a></span>action. First, the election to legislative offices
+of men who are, for some personal reason, adherents to the railroad
+cause. Second, the delusion, or even corruption, of weak or unscrupulous
+members of legislative bodies. Third, the employment of professional and
+incidental lobbyists and the subsidizing of newspapers, or their
+representatives, for the purpose of influencing members of legislative
+bodies and their constituencies.</p>
+
+<p>There are probably in every legislative body a number of members who are
+in some way or other connected with railroad corporations. No doubt, a
+majority of these are personally irreproachable and even so high-minded
+as to always postpone private for public interest; yet there are also
+those whose political advancement was brought about by railroad managers
+for the very purpose of having in the legislative body servile members
+who could always be relied upon to serve their corporate masters.
+Nevertheless, were railroad interests restricted to the votes of these
+men for their support, the public would probably have no cause for alarm
+on account of the presence of railroad representatives in legislative
+bodies, but, as many other interests seek favorable legislation,
+railroad men are often enabled to gain support for their cause by a
+corrupt bargain for votes, and it is thus possible for them to double,
+triple, and even quadruple, their original strength, by a policy of
+reciprocity.</p>
+
+<p>As in Congress and State legislatures, so these representatives of the
+railroads may be found in our city councils. The leaders of the
+railroads in Congress and in the legislatures of the various States
+usually rely upon discretion for obtaining their end, but railroad
+aldermen with but few exceptions seek to demonstrate their loyalty to
+the cause to which they are committed by a zealous <span class='pagenum'><a name="Page_219" id="Page_219">[Pg 219]</a></span>advocacy of extreme
+measures, and will not unfrequently even gain their end through the most
+unscrupulous combinations. If their votes, together with such support as
+they obtain by making trades, are not sufficient to carry out or defeat
+a measure which the railroad interests may favor or oppose, even more
+questionable means are employed to gain a sufficient number of votes to
+command a majority.</p>
+
+<p>Outright bribery is probably the means least often employed by
+corporations to carry their measures. While it may be true that the vote
+of every weak and unscrupulous legislator is a subject of barter, money
+is not often the compensation for which it is obtained. It is the policy
+of the political corruption committees of corporations to ascertain the
+weakness and wants of every man whose services they are likely to need,
+and to attack him, if his surrender should be essential to their
+victory, at his weakest point. Men with political ambition are
+encouraged to aspire to preferment and are assured of corporate support
+to bring it about. Briefless lawyers are promised corporate business or
+salaried attorneyships. Those in financial straits are accommodated with
+loans. Vain men are flattered and given newspaper notoriety. Others are
+given passes for their families and their friends. Shippers are given
+advantages in rates over their competitors; in fact, every legislator
+disposed to barter his vote away receives for it compensation which
+combines the maximum of desirability with the minimum of violence to his
+self-respect.</p>
+
+<p>Those who attempt to influence or control legislative bodies in behalf
+of interested parties are collectively called the lobby. As a rule, the
+lobby consists of prominent politicians likely to have influence with
+members of their own party; of men of good address and easy <span class='pagenum'><a name="Page_220" id="Page_220">[Pg 220]</a></span>conscience,
+familiar alike with the subject under consideration and legislative
+procedure, and last, but not least, of confidential agents authorized
+and prepared to enter into secret negotiations with venal members. The
+lobby which represents the railroad companies at legislative sessions is
+usually the largest, the most sagacious and the most unscrupulous of
+all. Its work is systematic and thorough, its methods are unscrupulous
+and its resources great. Yet all the members of a legislative body
+cannot be bribed, either by money, or position, or favors. Some of them
+will not vote for any proposed measure unless they can be convinced that
+it is for the public welfare. These legislators, if their votes are
+needed, are turned over to the persuasive eloquence of those members of
+the lobby who, apparently, have come to the capital moved by a patriotic
+impulse to set erring legislators right on public questions. Their
+familiarity with public matters, their success in public life, their
+high standing in political circles, their apparent disinterestedness and
+their plausible arguments all combine to give them great influence over
+new and inexperienced members. In extreme cases influential constituents
+of doubtful members are sent for at the last moment to labor with their
+representatives, and to assure them that the sentiment of their
+districts is in favor of the measure advocated by the railroads.
+Telegrams pour in upon the unsuspecting members. Petitions in favor of
+the proposed measure are also hastily circulated among the more
+unsophisticated constituents of members sensitive to public opinion, and
+are then presented to them as an unmistakable indication of the popular
+will, although the total number of signers forms a very small percentage
+of the total number of voters of the districts in which these petitions
+were circulated. A common method employed <span class='pagenum'><a name="Page_221" id="Page_221">[Pg 221]</a></span>by the railroad lobby in Iowa
+has been to arouse, by ingenious arguments, the prejudices of the people
+of one part of the State against those of another, or of one class
+against those of another class; for instance, the East against the West,
+or that portion of the State the least supplied with railroad facilities
+against that which is best supplied; or the river cities against the
+interior cities; or the country people against the city people; or the
+farmer against the merchant, and always artfully keeping in view the
+opportunity to utilize one side or the other in their own interest.</p>
+
+<p>Another powerful reinforcement of the railroad lobby is not unfrequently
+a subsidized press and its correspondents. The party organs at the
+capital are especially selected to defend as sound measures, either from
+a partisan or non-partisan standpoint, legislation of questionable
+propriety desired by the railroads. When such measures are advocated by
+party organs, partisan members, either from fear or prejudice, are apt
+to "fall into line," and then to rely upon these organs to defend their
+action. Editors, reporters and correspondents are even retained as
+active lobbyists and give the railroad managers' cause the benefit of
+their prestige. To such an extent has the abuse of the press been
+carried that a considerable number of its unworthy representatives look
+upon railroad subsidies as legitimate perquisites which they will exact
+through blackmailing and other means of compulsion if they are not
+offered. A case may be cited here to illustrate their mode of operation,
+as well as the ethics of railroad lobbies. During one of the sessions of
+the Iowa legislature a newspaper correspondent came in possession of
+some information which reflected severely on the railroad lobby. He made
+his information the subject of a spicy article and <span class='pagenum'><a name="Page_222" id="Page_222">[Pg 222]</a></span>showed it to a
+friend who stood close to the gentleman chiefly implicated, with the
+remark that nothing but a hundred dollar bill would prevent the
+transmission of the article by the evening mail to the paper which he
+represented. Before sundown the stipulated price for the correspondent's
+silence was paid, and an enemy was turned into a friend.</p>
+
+<p>Professor Bryce says of the American lobby system: "All legislative
+bodies which control important pecuniary interests are as sure to have a
+lobby as an army to have its camp followers. Where the body is, there
+will the vultures be gathered together." To such an extent is the lobby
+abuse carried that some large corporations select their regular
+solicitors more for their qualifications as lobbyists than for their
+legal lore. It is a common remark among lawyers that a great company in
+Chicago pays a third-class lawyer, who has the reputation of being a
+first-class lobbyist, an extravagant salary and calls him general
+solicitor, while it relies upon other lawyers to attend to its important
+legal business. The readiness of members of the bar to serve wealthy
+corporations is fast bringing the legal profession of America into
+disrepute abroad. The author just quoted, in speaking of its moral
+standard, says: "But I am bound to add that some judicious American
+observers hold that the last thirty years have witnessed a certain
+decadence in the bar of the great cities. They say that the growth of
+enormously rich and powerful corporations, willing to pay vast sums for
+questionable services, has seduced the virtue of some counsel whose
+eminence makes their example important, and that in a few States the
+degradation of the bench has led to secret understandings between judges
+and counsel for the perversion of justice."</p>
+
+<p><span class='pagenum'><a name="Page_223" id="Page_223">[Pg 223]</a></span>There are, of course, able and honorable attorneys employed by railroad
+companies, but often railroad lawyers are selected more for their
+political influence, tact and ingenuity than for legal ability, and, as
+a rule, the political lawyer receives much better compensation for his
+services than does the lawyer who attends strictly to legitimate legal
+work.</p>
+
+<p>The danger from railroad corporations lies in their great wealth,
+controlled by so few persons, and the want of publicity in their
+business. Were they required to render accounts of their expenditures to
+the public, legislative corruption funds would soon be numbered with the
+defunct abuses of railroad corporations, and, with bribes wanting in the
+balance of legislative equivalents, the representatives of the people
+could be trusted to enact laws just alike to the corporations and the
+public, while asserting the right of the people to control the public
+highway and to make it subservient to the welfare of the many instead of
+the enrichment of the few. A wise law regulating lobbies exists in
+Massachusetts. Every lobbyist is required to register, as soon as he
+appears at the Capitol, to state in whose interest and in what capacity
+he attends the legislative session, to keep a faithful account of his
+expenses and to file a copy of the same with the Secretary of State.
+Were a similar law enacted and enforced by every State legislature, as
+well as by Congress, the power of railroad lobbies would be curtailed.</p>
+
+<p>Railroad managers never do things by halves. Well realizing that it is
+in the power of a fearless executive, by his veto, to render futile the
+achievements of a costly lobby and to injure or benefit their interests
+by pursuing an aggressive or conservative policy in the enforcement of
+the laws, they never fail to make their influence felt in <span class='pagenum'><a name="Page_224" id="Page_224">[Pg 224]</a></span>the selection
+of a chief magistrate, either of the Nation or of an individual State.
+No delegate, with their permission, ever attends a national convention,
+Republican or Democratic, if he is not known to favor the selection of a
+man as the presidential candidate of his party whose conservatism in all
+matters pertaining to railroad interests is well established. At these
+conventions the railroad companies are always represented, and their
+representatives do not hesitate to inform the delegates that this or
+that candidate is not acceptable to their corporations and cannot
+receive their support at the polls. During the Chicago convention of
+1888 the statement was openly made that two of the Western candidates
+lost Eastern support because they were not acceptable to a prominent New
+York delegate who had come to Chicago in a threefold capacity&mdash;that of a
+delegate, a presidential possibility, and special representative of one
+of the most powerful railroad interests in the country. This same man
+appeared again last year at the Minneapolis convention as chief
+organizer of the forces of a leading candidate. His counterpart was in
+attendance at the Chicago convention looking after the same interests
+there.</p>
+
+<p>It is the boast of prominent railroad men that their influence elected
+President Garfield, and the statement has been made upon good authority
+that "not until a few days before the election did the Garfield managers
+feel secure," and that "when the secret history of that campaign comes
+to be written it will be seen that Jay Gould had more influence upon the
+election than Grant and Conkling." It cannot be said that railroad
+managers, as a class, have often openly supported a presidential
+candidate. This may be due to the fact that with the uncertainty which
+has for years attended national politics they <span class='pagenum'><a name="Page_225" id="Page_225">[Pg 225]</a></span>deem it the part of
+discretion to pretend friendship for either party and then shout with
+the victor. In conformity with this policy, a well-known New York
+railroad millionaire has for years made large and secret contributions
+to the campaign funds of both political parties. He thereby places both
+parties under political obligations, and believes his interests safe,
+whichever turn the political wheel may take. After the contest he is
+usually the first to congratulate the successful candidate. In the
+national campaign of 1884 this railroad king completely outwitted a
+prominent Western politician and member of the Republican national
+campaign committee who has always prided himself on his political
+sagacity. This gentleman had taken it upon himself to enlist the rich
+and powerful New Yorker in the Republican cause, and to obtain from him,
+as a token of his sincerity, a large contribution to the Blaine campaign
+fund. He succeeded, at least so far as the contribution was concerned;
+but when the struggle was over and the opposition, in the exuberance of
+joy over their victory, told tales out of school, he was not a little
+chagrined to find that the managers of the Cleveland campaign had
+received from the astute railroad millionaire a campaign contribution
+twice as large as that which he had obtained from him. The diatribes
+which for weeks after the election filled the columns of his paper
+reflected in every line the injured pride of the outwitted general.</p>
+
+<p>Judging from the laxity with which the railroad laws have been enforced
+in a considerable number of States, their executive departments are as
+much under the influence of railroad managers as are the legislative
+departments of others. This cannot be surprising to those who know how
+often governors of States are nominated and elected <span class='pagenum'><a name="Page_226" id="Page_226">[Pg 226]</a></span>through railroad
+influences, and what efforts are made by corporations to humor servile
+and to propitiate independent executives. The time is not far remote
+when nearly every delegate to a State convention had free transportation
+for the round trip. This transportation was furnished to delegates by
+railroad managers through their local attorneys, or through favored
+candidates and their confidants. It was only offered to those who were
+supposed to be friendly to candidates approved by the railroad managers;
+and as free passage was looked upon as the legitimate perquisite of a
+delegate, but few persons could be induced to attend a State convention
+and pay their fare. As a consequence, the railroad managers found it too
+often an easy matter to dictate the nomination of candidates.</p>
+
+<p>Since the adoption of the Interstate Commerce Law convention passes, as
+such, have largely disappeared; but many a prominent politician in going
+to and returning from political conventions travels as a railroad
+employe, though the only service which he renders to the railroad
+companies consists in manipulating conventions in their favor. If all
+the railroad candidates&mdash;and the companies usually take the precaution
+to support more than one candidate&mdash;are defeated in the convention of
+one party, and a railroad candidate is nominated by the other party, the
+latter is certain to receive at the polls every vote which railroad and
+allied corporate influence can command.</p>
+
+<p>One might suppose that an attempt would at least be made to hide from
+the general public the interference of such a power with the politics of
+a State; but railroad managers seem to rely for success as much upon
+intimidating political parties as upon gaining the good will of
+individual citizens. To influence party action, the boast has in recent
+years repeatedly and boldly been made in <span class='pagenum'><a name="Page_227" id="Page_227">[Pg 227]</a></span>Iowa that 30,000 railroad
+employes would vote as a unit against any party or individual daring to
+legislate or otherwise take official action against their demands, and
+forgetting that, with the same means used in opposition to them, a few
+hundred thousand farmers and business men could be easily organized to
+oppose them. Unscrupulous employers often endeavor to control the votes
+of their employes. This is particularly true of railroad companies, and
+they use many ingenious plans to accomplish it. In the Northwest, and
+especially in Iowa, they have for several years organized their employes
+as a political force for the purpose of defeating such candidates for
+State offices as were known to favor State control of the transportation
+business. They have even paid the expenses of the organization, although
+they have made every effort to make it appear as if the movement was a
+voluntary one on the part of their employes. They are employing this
+method in Texas and other States at the present time, in opposition to
+the effort that is being made by the people to secure just and
+reasonable treatment from the railroads.</p>
+
+<p>That the chief executive of a State should be influenced in the
+discharge of his official duties by such favors as passes, the freedom
+of the dining- and sleeping-car, by the free use of a special car, or
+even a special train, one is loath to believe; yet it is a fact, and
+especially during political campaigns, that such favors are frequently
+offered to, and accepted by, the highest executive officers, and it is
+equally true that many of these officers often connive at the continued
+and defiant violations of law by railroad officials. While the men who
+manage large railroad interests do not always possess that wisdom which
+popular reverence attributes to them, they certainly possess great
+cunning, <span class='pagenum'><a name="Page_228" id="Page_228">[Pg 228]</a></span>and expend much of their artfulness in efforts to win over
+scrupulous, and to render still more servile unscrupulous executives.
+The general railroad diplomate never omits to pay homage to the man in
+power, to flatter him, to impress him with the political influence of
+his company, to intimate plainly that, as it has been in the past, so it
+will be in the future its determined policy to reward its friends and to
+punish its enemies. If the executive proves intractable, if he can
+neither be flattered, nor coaxed, nor bribed into submission, he does
+not hesitate to resort to intimidation to accomplish his purpose. This
+is by no means a rare occurrence. There are few public men who, if
+determined to do their duty, have not been subjected to railroad insult
+and intimidation. The author may be permitted to give an instance from
+his personal experience. Soon after his inauguration as Governor of Iowa
+a general officer of one of the oldest and strongest Western railroads
+called at his office and importuned him with unreasonable requests. When
+he found that he had utterly failed to impress the author with his
+arguments, he left abruptly, with the curt remark that these matters
+could be settled on election day, and he emphasized his statement by
+slamming the door behind him.</p>
+
+<p>A servile railroad press has always been ready to misrepresent and
+malign executive officers who have refused to acknowledge any higher
+authority than the law, the expressed public will and their own
+conception of duty. This abuse has even been carried so far that the
+editorial columns of leading dailies have been prostituted by the
+insertion of malicious tirades written by railroad managers and railroad
+attorneys; and the fact that public opinion has not been more seriously
+influenced by these venal sheets must be solely attributed to the good
+judgment and safe instinct of the masses of the people.</p>
+
+<p><span class='pagenum'><a name="Page_229" id="Page_229">[Pg 229]</a></span>However persistently railway organs deny it, it is a matter of general
+notoriety that railway officials take an active part in political
+campaigns. Hundreds of communications might be produced to show their
+work in Iowa, but the following two letters, written by a prominent
+railroad manager to an associate, will suffice for the purpose. It will
+be noticed that one was written before and the other after election.
+Comments upon their contents are unnecessary:</p>
+
+<div class="blockquot"><p class="right">"&mdash;&mdash;, Iowa, Nov. 2nd, 1888.</p>
+
+<p>"<span class="smcap">Dear Sir</span>: I have just discovered this P. M. that
+the Central Committee have sent electrotypes to all the
+printing offices in the State of the State ticket, with the
+names of the Railway Commissioners and Supreme Judge in so
+small a space as to make it very difficult, if not
+impossible, to write in the names. I am having slips made
+with Commissioners' names and Judge written on them, and
+they will be sent to all agents, not later than to-morrow,
+to paste over the printed names on the ticket, and thus beat
+this scheme. Have you seen any tickets yet? And what do you
+think of this plan?</p>
+
+<p class="noin" style="margin-left: 16em;">"Yours truly,<br /> "&mdash;&mdash;"</p></div>
+<br />
+<div class="blockquot"><p class="right">"&mdash;&mdash;, Iowa, Nov. 11, 1888.</p>
+
+<p>"<span class="smcap">Dear Sir</span>: Repeating the old and time-honored
+saying: 'We have met the enemy and we are theirs.' The
+Democratic Granger and the largely increased Republican vote
+was too much for us. Many friends voted with the railway
+men, but to no purpose. The comparison between Granger and
+Smyth will tell more than anything else the strength of the
+railway vote. But we are badly used up, and may as well take
+our dose.</p>
+
+<p class="noin" style="margin-left: 16em;">"Yours truly,<br /> "&mdash;&mdash;"</p></div>
+
+<p>While the result of this election was indeed a bad dose for speculating
+railway managers, it is the opinion of the <span class='pagenum'><a name="Page_230" id="Page_230">[Pg 230]</a></span>masses and of railway
+stockholders, who are more interested in the general welfare of the
+roads than in speculation in their stocks, that the dose was well
+administered, and should be repeated whenever the necessity for it may
+again arise.</p>
+
+<p>It is probably true that railroad managers have lost much of their
+former influence in politics. As their means of corruption have become
+generally known they have become less effective. The public is more on
+the alert, and corrupt politicians often find themselves unable to carry
+out their discreditable compacts.</p>
+
+<p>But it is unreasonable to expect the evil to cease until the cause is
+removed. The trouble is inherent in the system, and the fault is there
+more than in the men who manage the business, and not till the great
+power exercised by them is restrained within proper limits will the evil
+disappear. All this can be accomplished when there shall be established
+a most thorough and efficient system of State and National control over
+the railroad business of the whole country.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_231" id="Page_231">[Pg 231]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER X.</h2>
+
+<h2>RAILROAD LITERATURE.</h2>
+<br />
+
+<p>The cause of the railroad manager has never been without time-servers.
+Not to speak of those newspaper editors who, for some consideration or
+another, defend every policy and every practice inaugurated or approved
+by railroad authorities, there has always been a school of literati who
+felt it their duty to enlighten, from a railroad standpoint, their
+fellow-men by book or pamphlet upon the transportation question, to
+correct what they supposed to be false impressions, and to round up with
+an apology or defense for the railroad manager, who is invariably
+represented by them as the most abused and at the same time most
+patriotic and most progressive man of the age.</p>
+
+<p>The benefits derived from the railroad are great. It has been an
+important factor in the development of our country's resources and the
+advancement of our civilization. Its value is fully appreciated, but
+there is no reason why the men who have utilized the inventions of
+Stephenson and others, and have grown rich by doing so, should be
+eulogized any more than those who are ministering to the wants of the
+public by the use of the Hoe printing press, McCormick's reaper,
+Whitney's cotton gin, or any of the thousands of other modern
+inventions.</p>
+
+<p>These authors doubtless are prompted by various motives. Some have been
+educated in the railroad school and are therefore blind to railroad
+evils. Others naturally <span class='pagenum'><a name="Page_232" id="Page_232">[Pg 232]</a></span>worship plutocrats, because they hold the
+opinion that capital is entitled to a larger reward than brains and
+muscle, for the reason that the latter is more plentiful than the
+former.</p>
+
+<p>But there is a third class of railroad authors, who, there is reason to
+believe, enter the literary arena in defense of railroad evils not
+solely for the love they bear the cause, but as the paid advocates of a
+class of men who feel that their cause is in need of a strong defense at
+the bar of public sentiment. It would be difficult to account in any
+other way for the extravagant statements and one-sided arguments made by
+this class of writers. Yet railroad literature has not confined itself
+to the retrospective field. Its scope has grown with the significance of
+its contributors. In more than one instance have men at the head of
+large railroad corporations, influenced by temporary interest, become
+the authors of documents containing assertions and prophecies highly
+pathetic at the time, but subsequently shown to be so replete with
+falsehoods and absurdities that few railroad managers would to-day be
+willing to father them. Thus Alexander Mitchell, the late president of
+the Chicago, Milwaukee and St. Paul Railroad Company, addressed on the
+28th of April, 1874, shortly after the passage of the Wisconsin Granger
+Law, a letter to Governor Taylor, containing the following passages:</p>
+
+<div class="blockquot"><p>"That it [the Wisconsin law] has effectually destroyed all
+future railroad enterprises, no one who is acquainted with
+its effect in money centers will for a moment doubt.... The
+whole amount received on the investment [Chicago, Milwaukee
+and St. Paul Railroad] for interest and cash and stock
+dividends, amounts to only six per cent. per annum of the
+actual cost of the property. I submit to your Excellency,
+and through you to the people of the <span class='pagenum'><a name="Page_233" id="Page_233">[Pg 233]</a></span>State, whether this is
+more than a fair and reasonable return for the capital
+invested in these improvements. Is it not far below such
+reasonable amount? The best and most careful economists
+admit that no less than ten per cent. per annum should be
+allowed on such investments.... The directors of this
+company have at all times had a due regard to the interests
+of the public, and a desire to furnish transportation at the
+lowest possible figures, and, although not receiving a fair
+and reasonable return on their investments, they have for
+the last four years prior to 1873 steadily reduced their
+rates of freight and passengers from year to year, as will
+be seen from the following tables, showing the charge for
+freight per mile, and the average per mile for passengers
+for each year, from 1868 to 1873 inclusive:</p>
+
+<div class="centered">
+<table border="0" width="80%" cellpadding="2" cellspacing="0" summary="Charges">
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdc" colspan="2">&nbsp;&nbsp;&nbsp;Charges per ton<br /> &nbsp;&nbsp;&nbsp;per mile&mdash;cents.</td>
+  <td class="tdc" colspan="2">Average passenger rate<br /> per mile&mdash;cents.</td>
+  </tr>
+  <tr>
+  <td class="tdc" width="20%">1864</td>
+  <td class="tdc" width="20%">&nbsp;</td>
+  <td class="tdc" width="20%">&nbsp;</td>
+  <td class="tdc" width="20%">.04</td>
+  <td class="tdc" width="20%">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">1868</td>
+  <td class="tdc">.03</td>
+  <td class="tdc">40-100</td>
+  <td class="tdc">.03</td>
+  <td class="tdc">86-100</td>
+  </tr>
+  <tr>
+  <td class="tdc">1869</td>
+  <td class="tdc">.03</td>
+  <td class="tdc">10-100</td>
+  <td class="tdc">.03</td>
+  <td class="tdc">92-100</td>
+  </tr>
+  <tr>
+  <td class="tdc">1870</td>
+  <td class="tdc">.02</td>
+  <td class="tdc">82-109</td>
+  <td class="tdc">.03</td>
+  <td class="tdc">85-100</td>
+  </tr>
+  <tr>
+  <td class="tdc">1871</td>
+  <td class="tdc">.02</td>
+  <td class="tdc">54-100</td>
+  <td class="tdc">.03</td>
+  <td class="tdc">75-100</td>
+  </tr>
+  <tr>
+  <td class="tdc">1872</td>
+  <td class="tdc">.02</td>
+  <td class="tdc">43-100</td>
+  <td class="tdc">.03</td>
+  <td class="tdc">54-100</td>
+  </tr>
+  <tr>
+  <td class="tdc">1873</td>
+  <td class="tdc">.02</td>
+  <td class="tdc">50-100</td>
+  <td class="tdc">.03</td>
+  <td class="tdc">42-100</td>
+  </tr>
+</table>
+</div>
+
+<p>"The law in question proposes to reduce our passenger rates
+twenty-five per cent. and our freight rates about the same,
+thus deducting from our present tariff about twenty-five per
+cent. of our gross earnings.... This act, as we have seen,
+proposes to take from us twenty-five per cent. of our
+passenger and freight earnings, and the additional tax of
+one per cent. of our gross earnings, all of which is
+equivalent to taking from us twenty-six per cent. of our
+gross earnings. Therefore, deducting this amount, equal to
+twenty-six per cent. of our entire gross earnings, from
+thirty-three per cent., our average net earnings on
+business, would leave us only seven per cent. of our gross
+earnings as the entire net earnings of the road, out of
+which must be paid the interest on the bonds and the
+dividends to our stockholders. It is therefore manifest that
+this law will take from us over three-fourths of the net
+income received under our present tariff.... The <span class='pagenum'><a name="Page_234" id="Page_234">[Pg 234]</a></span>board of
+directors have caused this act to be carefully examined and
+considered by their own counsel, and by some of the most
+eminent jurists in the land, and after such examination they
+are unanimous in their opinion that it is unconstitutional
+and void.... The board of directors are trustees of this
+property, and are bound faithfully to discharge their trust,
+and to the best of their ability to protect it from
+spoliation and ruin. They have sought the advice of able
+counsel, and, after mature consideration, believe it their
+duty to disregard so much of said law as attempts
+arbitrarily to fix rates of compensation for freight and
+passengers.... Being fully conscious that the enforcement of
+this law will ruin the property of the company, and feeling
+assured of the correctness of the opinions of the eminent
+counsel who have examined the question, the directors feel
+compelled to disregard the provisions of the law so far as
+it fixes a tariff of rates for the company, until the courts
+have finally passed upon the question of its validity."</p></div>
+
+<p>The letter was at the time regarded by railroad men as a very strong
+document, and the railroad journals were filled with lengthy editorials
+in praise of the soundness of the doctrines and arguments which it
+contained. The disinterested of the enlightened portion of the community
+even then realized that the "eminent jurists" whom the company had
+consulted were hired attorneys and greatly biased in their views as to
+the constitutional rights of corporations, and that President Mitchell
+on his part had painted by far too dark a picture of the situation. It
+is now quite generally admitted that many of Mr. Mitchell's statements
+were as false as his counsel's interpretation of the Constitution and
+the law was erroneous. From the assertions made in this letter one is
+led to infer that the then stock-and bondholders of the Milwaukee road
+had paid in full every dollar of the capitalized value of the road, and
+that they derived from their <span class='pagenum'><a name="Page_235" id="Page_235">[Pg 235]</a></span>investment an income of only about six per
+cent. on the money actually invested by them. The cost of the entire
+Chicago and Milwaukee system in Wisconsin was stated in the letter as
+being $38,000 per mile. It is not likely that this line of road ever
+cost to exceed $25,000 a mile, or that those who then owned the road
+paid much more than two-thirds of its actual cost for it. The road, as
+the letter itself admits, was bought at sheriff's sale, and no mercy
+whatever was shown to the farmers who had mortgaged their farms to aid
+the railroad company in raising funds for the construction of its line.</p>
+
+<p>The letter contains other misstatements equally grave. Mr. A. B.
+Stickney, the president of the Chicago, St. Paul and Kansas City
+Railroad, in his recent excellent work, "The Railway Problem," reviews
+Mr. Mitchell's letter as follows:</p>
+
+<div class="blockquot"><p>"Mr. Mitchell states the average rate per mile in 1873 for
+passengers at 3.42 cents. It was well understood that this
+was an average rate received from those passengers who paid
+anything, and that, had the average rate been obtained by
+using as a divisor the total number of paying passengers
+plus the number of those who rode free the average would
+have been much below three cents, the price fixed by the
+law, and consequently, if the company would collect the
+legal rate from all alike and abolish the free list, its
+revenues from the passenger business would be increased
+rather than decreased. If the same test is applied to the
+freight rates it becomes equally evident that this statute
+did not reduce the rates in Wisconsin below the average rate
+of 2.50 cents per ton per mile, which, according to Mr.
+Mitchell's statement, was the average for the year 1873. For
+proof, it may be stated that the law classified freight into
+four general classes, to be designated as first, second,
+third and fourth classes, and into seven special classes, to
+be designated as D, E, F, G, H, I and J. The rates on the
+four general classes were made the <span class='pagenum'><a name="Page_236" id="Page_236">[Pg 236]</a></span>same as were 'charged
+for carrying freights in said four general classes on said
+railroads on the first day of June, 1873,' and the rate per
+ton per mile was fixed at certain rates for the first
+twenty-five miles, a less for the second twenty-five miles,
+and a fixed rate per mile after, as follows:</p>
+
+<div class="centered">
+<table border="0" width="80%" cellpadding="2" cellspacing="0" summary="Miles">
+  <tr>
+  <td class="tdc" width="10%">&nbsp;</td>
+  <td class="tdc" width="30%">1st 25 Miles.</td>
+  <td class="tdc" width="30%">2nd 25 Miles.</td>
+  <td class="tdc" width="30%">All Over 50 Miles.</td>
+  </tr>
+  <tr>
+  <td class="tdc">D</td>
+  <td class="tdc">4-4/5 cents.</td>
+  <td class="tdc">3-1/5 cents.</td>
+  <td class="tdc">1-3/5 cents.</td>
+  </tr>
+  <tr>
+  <td class="tdc">E</td>
+  <td class="tdc" colspan="2">Same as class above.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
+    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdc">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">F</td>
+  <td class="tdc">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cents.</td>
+  <td class="tdc">2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cents.</td>
+  <td class="tdc">1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cent.&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">G</td>
+  <td class="tdc">3-1/5 cents.</td>
+  <td class="tdc">2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cents.</td>
+  <td class="tdc">1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cent.&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">H</td>
+  <td class="tdc">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cents.</td>
+  <td class="tdc">2-4/5 cents.</td>
+  <td class="tdc">1-3/5 cents.</td>
+  </tr>
+  <tr>
+  <td class="tdc">I</td>
+  <td class="tdc">4-2/5 cents.</td>
+  <td class="tdc">2-2/5 cents.</td>
+  <td class="tdc">1-1/5 cents.</td>
+  </tr>
+  <tr>
+  <td class="tdc">J</td>
+  <td class="tdc">3-1/5 cents.</td>
+  <td class="tdc">2-2/5 cents.</td>
+  <td class="tdc">1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cent.&nbsp;</td>
+  </tr>
+</table>
+</div>
+
+<p>"When it is considered, in connection with these figures,
+that the four general classes were left by the legislature
+under the same tariffs as had been enforced by the
+companies, and, as a rule, first class is three times the
+rate of class D, and third and fourth class materially
+higher, the evidence seems conclusive that the rates fixed
+by law would produce an average materially higher than the
+average of the whole year, stated by Mr. Mitchell at 2-1/2
+cents. It seems also probable that, had the rates fixed by
+this law been applied to the whole business of the line, the
+interstate as well as the State traffic, it would still have
+produced a larger average. The latter of course is the
+proper test. There are little inaccuracies in the material
+facts as stated by Mr. Mitchell which were pointed out at
+once. For example: In his tabulated statement of passenger
+earnings per mile, averaging the gross earnings from
+transportation of passengers who paid any fare, and omitting
+the large number who went free, the rate is stated at 3
+42-100 cents per mile; then he says: 'The law in question
+proposes to reduce our passenger rate twenty-five per
+cent.,' which would have reduced the rate to 2.57 cents per
+mile, while, the rate fixed by the law complained of was
+three cents per mile. Then Mr. Mitchell proceeds: 'And our
+freight rates about the same; thus deducting from our
+present tariff about twenty-five per cent. of our gross
+earnings.' It was immediately pointed out that the law only
+applied to strictly State business; that is, to <span class='pagenum'><a name="Page_237" id="Page_237">[Pg 237]</a></span>traffic
+that originated and ended in the State of Wisconsin. All
+other traffic was interstate commerce, and could not be
+controlled by State legislation. The volume of business
+which would be affected by the law would therefore be
+comparatively small&mdash;estimated at not over ten per cent., of
+the total traffic of the line. Hence, if the rates fixed by
+the law were twenty-five per cent. less than the rates the
+company had been in the habit of collecting (which was
+denied), it could not possibly have 'deducted from its
+present tariff' more than two and one-half per cent.,
+instead of twenty-five per cent. as stated by Mr. Mitchell.</p>
+
+<p>"It was claimed that the facts were, that the Chicago,
+Milwaukee and St. Paul Company, in its efforts to bankrupt
+the Lake Superior and Mississippi Company, had many of its
+interstate rates so low that it had resulted in loss, and
+that its other rates had been made unreasonably high in
+order to recoup this loss, and that the State of Wisconsin
+was compelled to pay a part of the expense of the
+transportation of favored sections of the State of
+Minnesota."</p></div>
+
+<p>All through the Granger contests the railways have weakened the force of
+their arguments by their misrepresentation of facts and by their
+extravagant predictions of ruin. The companies were continually
+proclaiming: 'If this or that is done, it will ruin us; it will ruin the
+State,' when, in fact, a road cannot be mentioned that has suffered from
+State legislation. Nineteen years ago no railroad manager could have
+written what Mr. Stickney writes to-day, and few railroad managers would
+write to-day what Mr. Mitchell wrote then. And yet, such is the change
+which public sentiment is undergoing upon these questions, that the
+utterances of many of our present railroad authors will appear as absurd
+a few years hence as Mr. Mitchell's letter of nineteen years ago appears
+to us now.</p>
+
+<p>Many railroad attorneys have since been guilty of <span class='pagenum'><a name="Page_238" id="Page_238">[Pg 238]</a></span>resorting to the
+sophistry employed by President Mitchell in that strange letter which he
+addressed to the Governor of Wisconsin. Even so distinguished a
+gentleman as Hon. James W. McDill, now a member of the Interstate
+Commerce Commission, made in 1888, as a member of a railroad lobby, the
+following remarkable statements before the Railroad Committee of the
+General Assembly of Iowa, in a speech opposing a proposed reduction of
+the passenger rate of first-class roads from three to two cents per
+mile:</p>
+
+<div class="blockquot"><p>"The proposition, if confined to the first-class roads of
+Iowa, proposes a one-third reduction of their revenues from
+passenger business.... We have earned in Iowa by first-class
+roads annually about $13,000,000, and a reduction of one
+cent, or from a rate of three cents to two, will reduce
+their revenues about $5,000,000 a year.... Thus it is seen
+that it is proposed to take from the revenues of a part of
+the railroads of Iowa, annually, almost as much as all the
+railroads of Iowa have paid for taxes in nine years
+($6,549,505.84)."</p></div>
+
+<p>Mr. McDill was a member of the Iowa Railroad Commission for several
+years. He may, therefore, be presumed to have known that the State of
+Iowa could not, and did not propose to, regulate interstate traffic, and
+that the thirteen million dollars railroad revenue to which he referred
+was derived both from interstate and State traffic; that the latter was
+only about one-fourth of the former, and that therefore the proposed
+reduction on the basis of schedule rates would have cut down the net
+revenue of the roads only about one million instead of five million
+dollars. But Mr. McDill himself states that the average rate earned by
+all the railroads of the United States was, for the year 1886, only
+2.181 cents per passenger per mile. It certainly was not over 2-1/2
+cents per mile for the first-class roads of Iowa. Thus the <span class='pagenum'><a name="Page_239" id="Page_239">[Pg 239]</a></span>proposed
+reduction, instead of being one cent per mile, as stated by Mr. McDill,
+was only one-half cent per mile; and it only applied to the local
+business of the first-class roads. In other words, the bill under
+consideration, had it been enacted into law, would have caused a
+reduction of 20 per cent. on about 25 per cent. of the total revenue
+from passenger business of the first-class roads, or of five per cent.
+on their total income from passenger traffic in the State of Iowa. It
+will be noticed that Mr. McDill in his calculation made no allowance
+whatever for the increase of business which would have followed such a
+reduction. The gain from this source would probably have greatly
+exceeded the loss due to this small reduction in the fare. In the same
+address Mr. McDill made many other equally fallacious statements.</p>
+
+<p>One of the most devoted advocates of the interests of railroad managers
+is Marshall M. Kirkman. He is the author of a number of books and
+pamphlets upon railway subjects, among them a pamphlet entitled "The
+Relation of the Railroads of the United States to the People and the
+Commercial and Financial Interests of the Country."</p>
+
+<p>Mr. Kirkman introduces his subject with the following rather remarkable
+statement:</p>
+
+<div class="blockquot"><p>"I shall show that while the railways of the United States
+are designated as monopolies, they are not so in fact.
+Accused of disregarding the interests of the community, I
+will show that they are abnormally sensitive to their
+obligations in this direction. While legislatures claim the
+right to fix rates, I shall show that the abnormal
+conditions under which the railway system has grown up and
+its chaotic nature render the exercise of such a privilege
+impossible. I will show that while it is assumed that rates
+may be fixed arbitrarily, they must, on the contrary, be
+based on natural causes, the competition of carriers, their
+necessities and the rivalries of conflicting <span class='pagenum'><a name="Page_240" id="Page_240">[Pg 240]</a></span>markets and
+trade centers; conditions manifestly impossible to determine
+or regulate in advance, and therefore beyond the control of
+legislation.... While a division of business (by pooling) is
+thought to be contrary to the interests of the people, I
+shall show that it is the legitimate fruit of indiscriminate
+railway building and offers the only escape from the
+conditions such practice engenders. I shall show that, while
+it is assumed that rates may be based progressively or
+otherwise on distance, the enforcement of such a principle
+would restrict the source of supply, and, in so far as this
+was the case, render great markets or centers of industry
+impossible."</p></div>
+
+<p>Speaking of the importance of the railroad, Mr. Kirkman says:
+"Superseding every other form of inland conveyance, it determines the
+location of business centers, and vitalizes by its presence, or blasts
+by its absence." He contends that rigid and scrutinizing supervision
+should be exercised by the Government over the location of railroads,
+and that only such lines should be permitted to be built as afford
+reasonable grounds for profitable enterprise. "It should be," he says,
+"an axiom in our day that a government that permits or encourages the
+construction of two railways where one would suffice is, to the extent
+that it does this, a public nuisance." Mr. Kirkman here makes it the
+duty of the Government to arbitrarily meddle with railroad affairs. He
+would give the Government the power to determine when and where an
+additional railroad is needed, and to prohibit the construction of any
+new road that has not the Government sanction. The interests of a
+thousand towns might suffer for want of adequate transportation
+facilities, individuals and communities might be anxious to build their
+own lines for the development of local resources, but all railroad
+enterprise is doomed to a standstill until a conservative governmental
+commission has been entirely satisfied that a <span class='pagenum'><a name="Page_241" id="Page_241">[Pg 241]</a></span>prospected road will pay
+and not deprive existing roads of any part of their revenue. There can
+be no doubt that if such a policy were ever adopted in America, few
+roads would be built without having first passed the ordeal of a legal
+injunction, and many a prospected road, though greatly needed, would
+remain unbuilt because its promoters would be discouraged by the delay
+and cost of litigation.</p>
+
+<p>But while this author is perfectly willing to trust the Government with
+the great responsibility of prohibiting the construction of proposed
+roads, he is not willing to have it exercise the power to determine what
+are reasonable rates. He tries to sustain his objection by the following
+argument: "The fixing of rates upon a railroad is as delicate a process
+as that of determining the pulse of a sick man. They cannot be
+determined abstractly, or in advance of the wants of business, but must
+be adjusted from hour to hour to conform to its fluctuations. Five
+thousand men find active employment in the United States in connection
+with the important duty of making rates. Each case requires particular
+investigation and involves, in many instances, prolonged study and
+research. The duty requires men of marked experience and capacity. They
+and men like them are the silent, unseen power that moves great
+enterprises of every nation. In the case of railroads we may enumerate
+those having official positions, but the experts from whom the official
+heads derive information and assistance cannot be classified. They
+comprise a vast army of experienced and able men familiar with railway
+traffic and quick to respond to its requirements. Such a body of men
+could not be organized by a government, or, if organized, would rapidly
+deteriorate under conditions so unfavorable for their support and
+<span class='pagenum'><a name="Page_242" id="Page_242">[Pg 242]</a></span>development. Whatever authority exercises the duty of fixing rates must
+take up the subject in the same methodical way and, acting through
+skilled agents, pursue its inquiries and determine its results with the
+same experience, minute care and <i>conscientious regard</i> for the
+technical requirements of business that the railway companies observe.
+No government can possess the facilities for perfecting so vast and
+intricate an organization and at the same time render it responsive to
+the public good. The labor is too great and the responsibility too
+remote. It could not move with sufficient quickness to respond to the
+actual requirements of trade, and too many restrictions would
+necessarily govern its actions. For these and other equally important
+reasons governments must always be satisfied to restrict their offices
+in this direction."</p>
+
+<p>Speaking of the men who are commonly termed railroad magnates, Mr.
+Kirkman says: "They alone possess the needed administrative ability that
+the situation demands. They not only provide largely the capital, but
+they discover the fields wherein it may be used most advantageously.
+They are the advance guard of all great enterprises, the natural leaders
+of men. They are an integral part of the country, a necessary and
+valuable element, without which its natural resources would avail
+little." This is a very strong statement in the face of the fact that
+but very few of the class of men to whom Mr. Kirkman refers ever built a
+line of road. They have usually found it more profitable to "gobble"
+roads already built than to construct new lines.</p>
+
+<p>According to this author the public have no reason to complain of
+railroads; on the contrary, the latter have always been the victims of
+public persecution, and "every species of folly, every conceivable
+device of malice, the <span class='pagenum'><a name="Page_243" id="Page_243">[Pg 243]</a></span>impossible requirements of ignorance, the selfish
+cunning of personal interests, the ravings of demagogues, the
+disappointments, envies, prejudices and jealousies of mankind have each
+in turn and in unison sought to injure the railway interest."</p>
+
+<p>But probably the most extravagant passage in the whole treatise is the
+one referring to special rates, which he calls "the foundation and
+buttress of business," without which it could not be carried on. He
+expresses the opinion that without the continued and intelligent use of
+such rates "our cities would soon be as destitute of manufactories as
+one of the bridle paths of Afghanistan," and then continues: "The
+special rate of carriers is like the delicate fluid that anoints and
+lubricates the joints of the human body. It is an essential oil. Without
+it the wheels of commerce would cease and we should quickly revert to
+the period when the stage-coach and the overland teamster fixed the
+limits of commerce and the stature of cities."</p>
+
+<p>The most recent and probably the most radical of Mr. Kirkman's books is
+"Railway Rates and Government Control." It would lead us too far from
+our subject to enter into a discussion of Mr. Kirkman's errors; in fact,
+it might prove an endless task. Suffice it to say that in discussing his
+subject he revels in such phrases as: "Subject too vast to be
+comprehended." "Acts of agrarian legislation and foolish manifestations
+of disappointment and hate." "The rabble will avail itself of every
+excuse to pass laws that would, under other circumstances, be called
+robberies." "Ignorance and demagogism." "Government interference, the
+panacea of cranks and schemers." "Only understood by the few." "These
+people are as sincere as they are ignorant." <span class='pagenum'><a name="Page_244" id="Page_244">[Pg 244]</a></span>"Governments have no
+commercial sense." "Those who condemn them are not so dishonest as
+ignorant, and not so malicious as foolish." "Silly people." "Justice and
+common honesty are systematically denied [the railroads]." "Legal means
+of plundering them." "The intelligence and facilities of Government are
+but one step above the barbarian." "Those who use railroads should pay
+for them," etc., etc.</p>
+
+<p>Mr. Kirkman's argument is in substance: Rate-making is a difficult
+subject. The people are too ignorant to understand it. Those who carry
+on the Government are for the most part fools and demagogues, and are
+utterly unfit to do justice to such a task. Railroad men are wise and
+just, and neither the people nor the Government should meddle with the
+railroad business. In order to place a true estimate upon Mr. Kirkman's
+utterances, one should remember that he is a railroad employe as well as
+the patentee and vendor of a number of railroad account forms which are
+extensively used by railroad companies.</p>
+
+<p>The Chicago <i>Tribune</i>, in reviewing this last literary production of Mr.
+Kirkman, says:</p>
+
+<div class="blockquot"><p>"The great fault of Mr. Kirkman's statements is that they
+are often so general in character as to be both true and
+false at the same time.... He does not seem to comprehend
+the nature of the railroad, or to perceive the danger of
+allowing a railroad to exercise its powers uncontrolled. He
+denies the State's right to interfere with any
+discriminations which a railway corporation chooses to
+adopt. He would allow railways to fix whatever charges they
+please for long hauls and short hauls.... Mr. Kirkman does
+not adduce a single fact in support of these remarkable
+views. He simply says: 'Railroads cannot, if they would,
+maintain any inequitable local tariff.' This is not
+argument, it is simply assertion. Every one who has learned
+the alphabet of this question knows that railways have been
+exceedingly unjust wherever <span class='pagenum'><a name="Page_245" id="Page_245">[Pg 245]</a></span>competition or the law did not
+restrict their powers. If this were the proper place for it
+we would give the author instances of this injustice by the
+hundred, and almost any book on the subject refers to such
+cases by the thousand.... When confronted with the facts
+substantiating such charges the author answers the argument
+by exclaiming: 'But how absurd! But how untrue! Our
+commercial morals are equal to the highest in the world....'
+Scarcely an assertion can be taken without qualification.
+The author fairly revels in half-truths.... The book may
+have its merits, but they are too modest to reveal
+themselves."</p></div>
+
+<p>It is a failing of mankind to take for truth without further
+investigation any assertion that has often been reiterated. Most people
+are prone to believe that an assertion made by a thousand hearsay
+witnesses is true, overlooking the possibility of their drawing from a
+common false source. But it is surprising that an author like Prof.
+Arthur T. Hadley should fall into such an error. In his otherwise
+excellent work, "Railroad Transportation, Its History and Its Laws," Mr.
+Hadley bases a number of his deductions upon false premises advanced by
+railroad managers, and arrives at conclusions which appear strange when
+their source is considered. In the chapter on railroad legislation
+Professor Hadley says: "But a more powerful force than the authority of
+the courts was working against the Granger system of regulation. The
+laws of trade could not be violated with impunity. The effects were most
+sharply felt in Wisconsin. The law reducing railroad rates to the basis
+which competitive points enjoyed left nothing to pay fixed charges. In
+the second year of its operation, no Wisconsin road paid a dividend;
+only four paid interest on their bonds. Railroad construction had come
+to a standstill. Even the facilities of existing roads could not be kept
+up. Foreign capital <span class='pagenum'><a name="Page_246" id="Page_246">[Pg 246]</a></span>refused to invest in Wisconsin; the development of
+the State was sharply checked; the very men who had most favored the law
+found themselves heavy losers.... By the time the Supreme Court
+published the Granger decisions, the fight had been settled, not by
+constitutional limitations, but by industrial ones."</p>
+
+<p>These statements are either utterly untrue or greatly misleading. Mr.
+Hadley ought to know that the railroad companies in the Granger States
+never complied with the letter, much less with the spirit of the law.
+Whenever they made an apparent effort to live up to it they only did so
+to make it odious. Rates were never reduced by the legislature to the
+basis previously enjoyed by competitive points, but merely to the
+average charge which had obtained before the passage of the law. As a
+rule the railroad revenues increased. If any companies failed to earn
+enough to pay fixed charges it was simply because they were determined
+not to do so. A non-payment of dividends did not injure the managers,
+but simply other stockholders of the road. A permanent establishment of
+the principle of non-discrimination, on the other hand, would have
+benefited stockholders, while prejudicing the speculative interest which
+managers had in the roads. Railroad construction came, after the
+financial panic of 1873, to a practical standstill throughout the United
+States; and if the Granger States did not get their share of the very
+small total increase during the five years following the panic, it was
+due solely to a conspiracy on the part of the railroad managers to
+misrepresent and pervert the legislation of these States. The laws, as
+has already been stated, were finally repealed, not because the people
+had tired of them or regarded them unwise or unjust, but because it was
+hoped that the commissioner system would <span class='pagenum'><a name="Page_247" id="Page_247">[Pg 247]</a></span>prove more efficient. It was
+offered as a compromise measure and was accepted as such by the railroad
+managers, who, in their eagerness to rid themselves of the restrictions
+imposed by the Granger laws, gave every assurance of complete submission
+to the requirements of the proposed legislation.</p>
+
+<p>Mr. Hadley even goes so far as to defend railroad pools. "Unluckily," he
+says, "we place these combinations outside of the protection of the law,
+and by giving them this precarious and almost illegal character we tempt
+them to seek present gain, even at the sacrifice of their own future
+interests. We regard them, and we let them regard themselves, as a means
+of momentary profit and speculation, instead of recognizing them as
+responsible public agencies of lasting influence and importance." We can
+partially account for this author's defense of pooling when we are
+informed that he accepts it as an axiom that "combination does not
+produce arbitrary results any more than competition produces beneficent
+ones." Referring to railroad profits, Mr. Hadley says: "The statement
+that corporations make too much money is scarcely borne out by the
+facts. The average return of the railroads of this country is only four
+per cent., the bondholders receiving an average of four and a half per
+cent., the stockholders of two and a half per cent. True, much of the
+stock is water, not representing any capital actually expended; but,
+even making allowance for this, it is hardly probable that the roads are
+earning more than five per cent. on the total investment. This assumes
+an average cost of $45,000 per mile, implying that about half of the
+stock and one-sixth of the bonds are water." Mr. Hadley would probably
+have come much nearer the truth if he had assumed three-fourths of the
+stock and one-fourth of <span class='pagenum'><a name="Page_248" id="Page_248">[Pg 248]</a></span>the bonds to be water. Even Mr. Poor, who
+certainly cannot be accused by railroad men of being inimical to their
+interests, places the average cost of the railroads of this country no
+higher than at $30,000 per mile; and this estimate, it should be
+remembered, includes the value of the large donations made to railroad
+companies by the public. With a full understanding of all the
+circumstances, Mr. Poor said of railroad investments several years ago
+that if the water were taken out of them no class of investments in this
+country would pay as well. In the face of this statement Mr. Hadley
+would do well to revise his figures.</p>
+
+<p>We find, however, in Prof. Hadley's book also eminently sound views,
+like the following: "If the object of a railroad manager is simply to
+pay as large a dividend as possible for the current year, he can best do
+it by squeezing his local tariff, of which he is sure, and securing
+through traffic at the expense of other roads by specially low rates;
+that is, by a policy of heavy discrimination. But the permanent effect
+of such a policy is to destroy the local trade, which gives a road its
+best and surest custom, and to build up a trade which can go by another
+route whenever it pleases. The permanent effect of such a policy is
+ruinous to the railroad as well as the local shipper." And he continues:
+"By securing publicity of management you do much to prevent the
+permanent interests of the railroads from being sacrificed to temporary
+ones. By protecting the permanent interests of the public you enlist the
+stockholders and the best class of railroad managers on the side of
+sound policy."</p>
+
+<p>Edward Atkinson, in an essay entitled "The Railway, the Farmer and the
+Public," endeavors to prove that the farmers have no cause for
+complaining against the railroad, <span class='pagenum'><a name="Page_249" id="Page_249">[Pg 249]</a></span>because rates of transportation have
+been greatly reduced during the past twenty years. Speaking of the
+reductions made in freight rates in the State of New York, he says: "Had
+the rate of 1870 been charged on the tariff of 1883 the sum would have
+been at 1.7016 cents on 9,286,216,628 tons, carried one mile,
+$158,014,262; the actual charge was $83,464,919, making a difference of
+$74,549,343 saved on one year's traffic on the lines reported in New
+York." It either did not occur to Mr. Atkinson, or, if it did occur to
+him, he failed to mention it, that these freight reductions were forced
+upon the railroads chiefly by water competition, and that if the
+railroad companies had not saved these seventy-four million dollars for
+the people, the canal lines, always subject to competition, would have
+saved a large part of it. With equal propriety might it be said that the
+railroads, by meeting canal competition, saved for themselves in the
+year mentioned a goodly share of their gross earnings. Such reasoning is
+absurd, and it is high time that the bubble of an argument so often used
+by railroad advocates be pricked. As Mr. Atkinson has introduced the
+farmer, let us apply his rule to him. There was a time when the farmer
+sold his corn for a dollar a bushel. To-day he sells it for thirty
+cents. He therefore saves to the people of this country, on
+2,000,000,000 bushels, the enormous sum of $1,400,000,000. There is
+scarcely an industry in existence to which this argument does not apply
+with equal force. Mr. Atkinson virtually admits that railroads charge
+all the traffic will bear when he says: "The charge which can be put
+upon the wheat of Dakota or Iowa for moving it to market is fixed by the
+price at which East Indian wheat can be sold in Market Lane." He is
+opposed to the Interstate Commerce Law, which he <span class='pagenum'><a name="Page_250" id="Page_250">[Pg 250]</a></span>regards as "obnoxious
+measures of national interference and futile attempts to control this
+great work." He would rely chiefly upon the publicity of accounts made
+by railway officers, as secured by the private publication of Poor's
+Railway Manual, for all needed regulation, but concedes the
+establishment of a figurehead commission, concluding his remarks upon
+the subject as follows: "A commission which may bring public opinion to
+bear upon railway corporations may well be established, and there the
+work of the legislator may well cease." When we consider the powerful
+agencies employed by railroads to create public sentiment in their favor
+we can well understand the inefficiency of such a milk-and-water method
+of control.</p>
+
+<p>One of the most radical books ever published at the instigation of
+railroad managers appeared in 1888, under the title "The People and the
+Railways." Its author is Appleton Morgan, who attempts to "allay the
+animosity towards the railway interests" as shown in Mr. James F.
+Hudson's book, "The Railways and the Republic." The means which Mr.
+Morgan chooses are not well calculated to accomplish his purpose, for
+the masses of the people prefer in such a controversy arguments to
+ridicule and sarcasm, weapons of literary warfare to which this author
+resorts altogether too freely. Mr. Morgan's opinion as to the benefits
+of centralized wealth and trade combinations differs greatly from that
+held by the great majority of the American people. He says: "The fact,
+the truth is, that (however it may be in other countries) the
+accumulation of wealth and centralization of commerce in great
+combinations has never, in the United States, been a source of
+oppression or of poverty to the non-capitalist or wage-worker." There is
+scarcely an evil in railroad management which Mr. Morgan does not
+defend. Pools, <span class='pagenum'><a name="Page_251" id="Page_251">[Pg 251]</a></span>construction companies, rebates, discriminations and
+over-capitalization all find favor in Mr. Morgan's eye. "Rebates and
+discriminations," he says, "are neither peculiar to railways nor
+dangerous to the 'Republic.' They are as necessary and as harmless to
+the farmer as is the chromo which the seamstress or the shop girl gets
+with her quarter-pound of tea from the small tea merchant, and no more
+dangerous to the latter than are the aforesaid chromos to the small
+recipients." Pools and combinations receive an unusually large share of
+Mr. Morgan's attention. A few selections from his effusions in their
+favor may be given here, viz.:</p>
+
+<p>"These pools are the legitimate and necessary results of the
+rechartering over and over again of railway companies to transact
+business between the same points by paralleling each other. So long as
+the people in their legislatures will thus charter parallel lines
+serving identical points&mdash;thus dividing territory they once granted
+entire&mdash;it is not exactly clear how they can complain if the lines built
+(by money invested, if not on the good faith of the people, at least in
+reliance upon an undivided business) combine to save themselves from
+bankruptcy." And again: "Against the inequality of their own rates and
+the hardship of the long and short haul (in other words, against the
+discrimination of nature and of physical laws) no less than against the
+peril of bankruptcy and the consequent speculative tendency of their
+stocks (after which may come the wrecking, the watering, and the vast
+individual fortunes), the railways of this republic have endeavored, by
+establishment of pool commissions, to defend both the public and
+themselves.... The honest administration of railways for all interests,
+the payment of their fixed charges, the solvency of their securities,
+the faithful and <span class='pagenum'><a name="Page_252" id="Page_252">[Pg 252]</a></span>valuable performance of their duties as carriers, can
+be conserved in but one way&mdash;by living tariffs, such as the pools once
+guaranteed."</p>
+
+<p>In the following passage this author denies to the State the right to
+regulate rates: "Granting that they [the railroads] must carry freights
+for the public in such a way as not to injure either the public or the
+freight in the carrying, most emphatically (it seems to me) it does not
+follow that they must add to the value of the freights they carry by
+charging only such rates as the public or the owners of the freight
+insist on."</p>
+
+<p>But Mr. Morgan's indignation rises to the highest pitch in his
+discussion of the Interstate Commerce Act. He fears that it will cause
+the downfall of our liberties and sees in the background the Venetian
+Bridge of Sighs and the French Bastille. He asks: "Why should for any
+public reasons&mdash;for any reason of public safety&mdash;the Interstate Commerce
+Law have come to stay?" He then berates the act as follows: "To begin
+with, the present act abounds in punishments for and prohibitions
+against an industry chartered by the people, but nowhere extends to that
+industry a morsel of approval or protection. It bristles with penalties,
+legal, equitable, penal, and as for contempt, against railway companies,
+but nowhere alludes to any possible case in which a railway company
+might, by accident, be in the right, and the patron, customer, passenger
+or shipper in the wrong.... The constitutions of civilized nations, for
+the last few centuries at least, have provided that not even guilt
+should be punished except by due process of law, and have uniformly
+refused to set even that due process in motion except upon a complaint
+of grievance. But the Interstate Commerce Law denies the one and does
+away with the necessity for the other. <span class='pagenum'><a name="Page_253" id="Page_253">[Pg 253]</a></span>That statute provides that the
+commission it creates shall proceed 'in such manner and by such means as
+it shall deem proper,' or 'on its own motion,' and that 'no complaint
+shall at any time be dismissed because of the absence of direct damage
+to the complainant.' Even the Venetian council often provided for a
+certain and described hole in the wall through which the anonymous
+bringers of charges should thrust their accusations. Even the court of
+star chamber was known to dismiss inquisitions when it found that no
+wrong had been done. But the statute of interstate commerce appears to
+issue <i>lettres de cachet</i> against anything in the shape of a railway
+company&mdash;to scatter them broadcast, and to invite any one who happens to
+have leisure to fill them out, by inserting the name of a railway
+company. It says to the bystander: 'Drop us a postal card, or mention to
+any of our commissioners, or to a mutual friend, the name of any railway
+company of which you may have heard, and so give us jurisdiction to
+inquire if that company may have by chance omitted to dot an i or cross
+a t in its ledgers, or whether any one of its hundreds of thousands of
+agents&mdash;in the rush of a day's business, or in a shipper's hurry to
+catch a train&mdash;may have named a rate not on the schedule then being
+prepared at headquarters, or charged a sixpence less than some other
+agent 250 miles down the line may have accepted a week ago for what
+might turn out to be a fraction more mileage service in the same general
+direction. No particular form is necessary. Drop in to luncheon with our
+commission any day between twelve and one, and mention the name of a
+railway company. The railway company may have done you no damage, nor
+grieved you in any way; just mention the railroad, and we will take
+jurisdiction of its private (or quasi-public) affairs. Or, if <span class='pagenum'><a name="Page_254" id="Page_254">[Pg 254]</a></span>you don't
+happen to have time to mention it, we will take jurisdiction anyhow, 'of
+our own motion,' of any railway company whose name we find in the
+Official Gazette. It really does not matter which; any one will do."
+This is a fair example of the literature on the Interstate Commerce Law
+paid for by railroad men.</p>
+
+<p>Mr. Stickney, although a railroad president, takes an entirely different
+view of the situation. He considers the law inadequate to bring about
+the reforms needed. He says: "This enormous business is now in the
+control of several hundred petty chieftains, who are practically
+independent sovereigns, exercising functions and prerogatives in
+defiance of the laws, and practically denying their amenability to the
+laws of the country. If the Government would seek to bring them to terms
+and compel them to recognize and obey the laws, it must use the means
+necessary to accomplish the end. It must have executive officers
+sufficient in number as well as armed with an adequate power and dignity
+to command their respect.... The power conferred upon them [the
+Interstate Commerce Commission] to enforce their judicial orders is the
+power 'to scold.' The penalties of the law which the courts are in power
+to impose are certainly severe, but the law has been operated for about
+four years without any convictions, and yet no well-informed person is
+ignorant of the fact that the law has not been obeyed. The president of
+a large system is said to have remarked that 'if all who had offended
+against the law were convicted there would not be jails enough in the
+United States to hold them.' It is evident that the Government has not
+provided adequate machinery for enforcing the law."</p>
+
+<p>Mr. Stickney is correct in his statement that adequate machinery for
+enforcement of the law has not been <span class='pagenum'><a name="Page_255" id="Page_255">[Pg 255]</a></span>provided, but he does not give
+sufficient credit to the law or the commission. While much work remains
+to be done, much progress has been made.</p>
+
+<p>He is of the opinion that the public welfare would be furthered if the
+National Government assumed the sole control of railroads. He gives his
+reasons for the change which he proposes, as follows:</p>
+
+<div class="blockquot"><p>"There are many reasons besides these in the interest of
+uniformity which make it desirable to transfer the entire
+control of this important matter to the regulation of the
+Nation. First, because of its constitution and more extended
+sessions, Congress is able to consider the subject with
+greater deliberation, and therefore with more intelligence,
+than can a legislature composed of members who, as a rule,
+hold their office for but one short session of about sixty
+days' duration. There would also be removed from local
+legislation a fruitful source of corruption, which is
+gradually sapping the foundations of public morality.... In
+the second place, the problem of regulating railway tolls
+and managing railways is essentially and practically
+indivisible, by State lines or otherwise, and therefore it
+is not clear but that whenever the question may come before
+the courts it may be held that the authority of Congress to
+deal with interstate traffic carries with it, as a necessary
+and inseparable part of the subject, to regulate the traffic
+which is now assumed to be controlled by the several States.
+The courts have held that the States have authority to
+regulate strictly State traffic in the absence of
+Congressional action, but their decisions do not preclude
+the doctrine that Congress may have exclusive jurisdiction
+whenever it may choose to exercise the authority. There is a
+line of reasoning which would lead to that conclusion. It
+may be that many will not care to follow the lead of the
+writer as to the measure of aggregate net revenue which
+railway companies are entitled to collect in tolls, but it
+is evident that before the tolls can be intelligently
+determined some measure of such aggregate revenue must be
+ascertained. The question <span class='pagenum'><a name="Page_256" id="Page_256">[Pg 256]</a></span>would then arise, what proportion
+must be levied upon State and interstate traffic
+respectively? If the State should refuse to levy its share
+(and how could such share be ascertained?), then more than
+its share would have to be levied on interstate traffic, and
+thus the State by indirection would be able to do what the
+Constitution prohibits. Of course, when the Constitution was
+adopted railways and railway traffic were unknown. But it
+was a similar question which brought the thirteen original
+States together into one nation, under the present
+Constitution. At least the first movement toward amending
+the original Articles of Confederation was to give Congress
+enlarged power over the subject of commerce."</p></div>
+
+<p>In reply to this it may be said that it will be an unfortunate day for
+the States when they surrender the power to control their home affairs.
+Differences between State and interstate rates could easily be adjusted
+by the National and State commissions and by the courts. It certainly
+ought not to be difficult for such tribunals to see that a rate which is
+made higher or lower, as it may be for State or interstate traffic, is
+wrong.</p>
+
+<p>Mr. Stickney has fallen into the error common to railroad men in
+believing that lower rates of transportation will not prevail in the
+future. There are many reasons why it is probable that they will be
+lower. Present rates are highly profitable on well located lines.
+Labor-saving inventions will increase, and roads will be built and
+operated more cheaply. Lines will be located with lower grades, lighter
+curvature and more directness. Business will increase largely, and the
+ratio of expenses will decrease. Steel will be improved in quality and
+will be substituted for iron. A heavier rail and more permanent roadway
+will be used. Rates of interest will rule lower, and there will be much
+more economy in superintending. Extravagant salaries to favorites will
+be reduced, and <span class='pagenum'><a name="Page_257" id="Page_257">[Pg 257]</a></span>sinecures and parasites will be cut off from the
+payrolls. Lower wages are inevitable as our population becomes more
+dense.</p>
+
+<p>A very interesting and instructive author upon railroad subjects is
+Charles Francis Adams, Jr., ex-president of the Union Pacific Railroad
+and formerly a member of the Board of Railroad Commissioners of the
+State of Massachusetts. After twenty years' constant association with
+railroad men, Mr. Adams should certainly know the character of his
+quondam colleagues. In his book, "Railroads, Their Origin and Problems,"
+he says of them: "Lawlessness and violence among themselves [<i>i. e.</i>,
+the various railroad systems], the continual effort of each member to
+protect itself and to secure the advantage over others, have, as they
+usually do, bred a general spirit of distrust, bad faith and cunning,
+until railroad officials have become hardly better than a race of
+horse-jockeys on a large scale. There are notable exceptions to this
+statement, but, taken as a whole, the tone among them is indisputably
+low. There is none of that steady confidence in each other, that easy
+good faith, that <i>esprit du corps</i>, upon which alone system and order
+can rest. On the contrary, the leading idea in the mind of the active
+railroad agent is that some one is always cheating him, or that he is
+never getting his share in something. If he enters into an agreement,
+his life is passed in watching the other parties to it, lest by some
+cunning device they keep it in form and break it in spirit. Peace is
+with him always a condition of semi-warfare, while honor for its own
+sake and good faith apart from self-interest are, in a business point of
+view, symptoms of youth and a defective education." And again, in an
+address delivered before the Commercial Club of Boston in <span class='pagenum'><a name="Page_258" id="Page_258">[Pg 258]</a></span>December,
+1888, Mr. Adams expressed his opinion concerning the average railroad
+manager of to-day as follows: "That the general railroad situation of
+the country is at present unsatisfactory is apparent. Stockholders are
+complaining; directors are bewildered; bankers are frightened. Yet that
+the Interstate Commerce Act is in the main responsible for all these
+results, remains to be proved. In my opinion, the difficulty is far more
+deep-seated and radical. In plain words, it does not lie in any act of
+legislation, State or National; and it does lie in the covetousness,
+want of good faith and low moral tone of those in whose hands the
+management of the railroad system now is; in a word, in the absence
+among men of any high standard of commercial honor. These are strong
+words, and yet, as the result of a personal experience stretching over
+nearly twenty years, I make bold to say they are not so strong as the
+occasion would justify. The railroad system of this country, especially
+of the regions west of Chicago, is to-day managed on principles
+which&mdash;unless a change of heart occurs, and that soon&mdash;must inevitably
+lead to financial disaster of the most serious kind. There is among the
+lines composing that system an utter disregard of those fundamental
+ideas of truth, fair play and fair dealing which lies at the foundation,
+not only of the Christian faith, but of civilization itself. With them
+there is but one rule&mdash;that, many years ago, put by Wordsworth into the
+mouth of Rob Roy:</p>
+
+<div class="poem"><div class="stanza">
+<span class="i0">"'The simple rule, the good old plan,<br /></span>
+<span class="i0">That he shall take who has the power,<br /></span>
+<span class="i0">And he shall keep who can.'"<br /></span>
+</div></div>
+
+<p>As regards the causes of the Granger movement, Mr. Adams says, in the
+work above mentioned: "That it [the Granger episode] did not originate
+without cause has <span class='pagenum'><a name="Page_259" id="Page_259">[Pg 259]</a></span>already been pointed out. It is quite safe to go
+further, and to say that the movement was a necessary one, and through
+its results has made a solution of the railroad problem possible in this
+country. At the time that movement took shape the railroad corporations
+were in fact rapidly assuming a position which could not be tolerated.
+Corporations, owning and operating the highways of commerce, claimed for
+themselves a species of immunity from the control of the law-making
+power. When laws were passed with a view to their regulation they
+received them in a way which was at once arrogant and singularly
+injudicious. The officers entrusted with the execution of those laws
+they contemptuously ignored. Sheltering themselves behind the Dartmouth
+College decision, they practically undertook to set even public opinion
+at defiance. Indeed, there can be no doubt that those representing these
+corporations had at this juncture not only become fully educated up to
+the idea that the gross inequalities and ruinous discriminations to
+which in their business they were accustomed were necessary incidents to
+it which afforded no just ground of complaint to any one, but they also
+thought that any attempt to rectify them was a gross outrage on the
+elementary principles both of common sense and of constitutional law. In
+other words, they had thoroughly got it into their heads that they, as
+common carriers, were in no way bound to afford equal facilities to all,
+and, indeed, that it was in the last degree absurd and unreasonable to
+expect them to do so. The Granger method was probably as good a method
+of approaching men in this frame of mind as could have been devised."</p>
+
+<p>Speaking of the educational value of railroad competition, Mr. Adams
+says: "Undoubtedly the fierce struggles <span class='pagenum'><a name="Page_260" id="Page_260">[Pg 260]</a></span>between rival corporations
+which marked the history of railroad development, both here and in
+England, were very prominent factors in the work of forcing the systems
+of the two countries up to their present degree of efficiency. Railroad
+competition has been a great educator for railroad men. It has not only
+taught them how much they could do, but also how very cheaply they could
+do it. Under the strong stimulus of rivalry they have done not only what
+they declared were impossibilities, but what they really believed to be
+such."</p>
+
+<p>Mr. Adams has, from his long association with railroad managers, imbibed
+one heresy which is in strange discord with the general soundness of his
+opinions. He holds that the railroad system was left to develop upon a
+false basis, inasmuch as the American people relied for protecting the
+community from abuses upon general laws authorizing the freest possible
+railroad construction everywhere and by any one. It can therefore not be
+surprising that Mr. Adams is an advocate of the legalized pool. He is of
+the opinion that secret combinations among railroads, inasmuch as they
+always have existed, always will exist as long as the railroad system
+continues as it now is. Hence he proposes to legalize a practice which
+the law cannot prevent, and by so doing to enable the railroads to
+confederate themselves in a manner which shall be at once both public
+and responsible. The reply might be made that there are many other
+conspiracies which the law cannot always prevent, but that this is no
+reason why conspiracies should be legalized. If pools and other railroad
+abuses had, since the beginning of the railroad era, been treated as
+crimes and misdemeanors, and punished as such by the imposition of heavy
+fines, few people would to-day be ready to offer apologies for them. If
+the time shall ever <span class='pagenum'><a name="Page_261" id="Page_261">[Pg 261]</a></span>come when pools must be legalized it will be time
+for railroad control equivalent to Government ownership.</p>
+
+<p>Among the more recent writers upon railroad subjects is W. D. Dabney,
+late chairman of the Committee on Railways and Internal Navigation in
+the Legislature of Virginia. Mr. Dabney favors State control, and is, on
+the whole, friendly to the Interstate Commerce Act. He sees danger in
+the pool, but inclines to the belief that the public benefit derived
+from the pooling system outweighs the danger of public detriment from
+its existence. The following is his chief argument for a legalized pool:
+"Perhaps, so long as railroad companies continue to enjoy an absolute
+monopoly of transportation over their own lines, so that free
+competition is restricted in its operation to a comparatively few
+favored points, it may be worthy of serious consideration whether it
+would not be better to legalize than to prohibit pooling, taking care to
+put the whole matter under strict public supervision and control. The
+companies would then be left comparatively free to bring their local
+rates into something like harmony with the long-distance rates, and
+should they fail to do so where the needs of the local community and
+their revenues make it proper to be done, then it is the function of
+public regulation to compel it to be done."</p>
+
+<p>Of the Interstate Commerce Act Mr. Dabney says: "The legislation
+recently enacted by Congress for the regulation of commerce by railway
+is the result of more careful and intelligent deliberation perhaps than
+any other measure of similar character, and it is not unlikely that the
+legislation of many of the States will sooner or later be conformed to
+it."</p>
+
+<p>He speaks at some length of the drift toward railroad centralization. A
+few extracts from this passage may be <span class='pagenum'><a name="Page_262" id="Page_262">[Pg 262]</a></span>here given: "That the tendency
+towards the unification and consolidation of different and competitive
+lines has been decidedly increased by the anti-pooling and the long and
+short haul sections of the Interstate Commerce Law can hardly be
+doubted.... The modern device of the 'trust' as a means of unifying
+industrial interests and eliminating competition had not yet been
+applied in the field of railroad transportation.... The scheme of trust
+here briefly outlined would probably require for its successful
+operation the concurrence of the entire stockholding interest of each
+company embraced in it; and herein, it seems likely, will be found the
+chief difficulty in perfecting such a scheme. Should it ever be
+perfected, a far more stringent public supervision and control of the
+railroad transportation of the country will be demanded."</p>
+
+<p>Another author, Charles Whitney Baker, associate editor of the
+<i>Engineering News</i>, suggests in his book, "Monopolies and the People," a
+plan for the reorganization of our railroad system, to remedy the evils
+of monopoly which are at present connected with railroad management. The
+following quotation from his work outlines the system proposed: "Let the
+Government acquire the title of the franchise, permanent way and real
+estate of all the railway lines in the country. Let a few corporations
+be organized under Government auspices, and let each, by the terms of
+its charter, receive a perpetual lease of all the railway lines built,
+or to be built, within a given territory. Let the territory of each of
+these corporations be so large, and so planned with regard to its
+neighbors, that there shall be, so far as possible, no competition
+between them. For instance, one corporation would operate all the lines
+south of the Ohio and east of the Mississippi River; another all lines
+east of the Hudson <span class='pagenum'><a name="Page_263" id="Page_263">[Pg 263]</a></span>and of Lake Champlain, etc. Let the terms of rental
+of these lines be about 3-1/4 per cent. on the road's actual 'present
+cost' (the sum of money it would cost to rebuild it entirely at present
+prices of material and labor), less a due allowance for depreciation.
+The corporations would be obliged to keep the property in as good
+condition as when received, and would own absolutely all their
+rolling-stock, machinery, etc." The proposed reform measures, it must be
+admitted, are very good in theory, but their practical application is
+unfortunately entirely out of the question under our system of
+government.</p>
+
+<p>Mr. John M. Bonham is the author of a recent work entitled "Railway
+Secrecy and Trusts." This writer, upon the whole, takes advanced ground
+in dealing with the question of railroad reform. He deems the present
+interstate legislation inadequate to correct all the graver railroad
+evils, expressing his views upon this subject as follows:</p>
+
+<div class="blockquot"><p>"Railway construction continues to increase in the United
+States with immense rapidity. Concurrent with this increase,
+and notwithstanding all the efforts that have been made at
+restraint, the aggressions upon political and industrial
+rights increase also. Nor is it likely that without more
+rigorous control than is now exercised these aggressions
+will be any less active than they are to-day. It is coming
+to be pretty generally realized that the Interstate Commerce
+legislation has not fulfilled the expectation of its
+friends. But this is a frequent trait of tentative
+legislation. It is not reasonable to expect that the first
+efforts to solve a problem the factors of which are so
+hidden and complex will be followed by complete success."</p></div>
+
+<p>Concerning the changes needed to make Government regulation in the
+United States more effective, he says:</p>
+
+<div class="blockquot"><p>"A reform which would deal with an elaborate system of evil
+cannot, therefore, be confined to treating <span class='pagenum'><a name="Page_264" id="Page_264">[Pg 264]</a></span>consequences,
+the separate instances of the system. There must be a power
+which can go behind these and grapple with causes. There
+must, therefore, be something more than a court. There must
+be a commission, a department of government which will
+provide organized supervision and inspection against which
+the quasi-public corporation can claim no privacy as
+inviolable. Such a department must be clothed with the power
+to ascertain precisely where and how the evils of the
+present methods originate, and when these are ascertained it
+must be able to apply the remedy at the source of evil. The
+remedial force must be of a preventive kind."</p></div>
+
+<p>A few grave misstatements of historical facts greatly mar Mr. Bonham's
+book. He makes, for instance, the following statement:</p>
+
+<div class="blockquot"><p>"Following this came restrictive legislation, which, in some
+instances, was so unreasonable as to make any railway
+management impossible. Some of the Granger legislation, and
+especially that of Iowa, was of this character, as were also
+some of the earlier efforts to secure Congressional
+legislation."</p></div>
+
+<p>It was left to Mr. Bonham to discover that legislation ever made
+railroad management impossible in Iowa. The General Assembly of Iowa
+passed at two different times railroad laws that were greatly obnoxious
+to railroad managers. In 1874 it passed a maximum tariff act which, at
+the urgent solicitation of the railroad forces, was repealed four years
+later; and in 1888 it passed an act containing the principles of the
+Interstate Commerce Act and in addition authorizing the Board of
+Railroad Commissioners to fix <i>prima facie</i> rates. Strange as it may
+seem to Mr. Bonham and other people inclined to believe without
+investigation the statements of railroad men, the earnings of the Iowa
+roads greatly increased immediately after the enactment of the so-called
+Granger laws in 1874, as the following table will show:</p>
+
+<div class="centered">
+<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="1871">
+  <tr>
+  <td class="tdc" width="30%">Year.</td>
+  <td class="tdc" width="30%">Miles of Railroad.</td>
+  <td class="tdc" width="40%">Gross Receipts.<span class='pagenum'><a name="Page_265" id="Page_265">[Pg 265]</a></span></td>
+  </tr>
+  <tr>
+  <td class="tdc">1871</td>
+  <td class="tdc">2,850</td>
+  <td class="tdc">$12,395,826</td>
+  </tr>
+  <tr>
+  <td class="tdc">1872</td>
+  <td class="tdc">3,642</td>
+  <td class="tdc">&nbsp;&nbsp;14,534,408</td>
+  </tr>
+  <tr>
+  <td class="tdc">1873</td>
+  <td class="tdc">3,728</td>
+  <td class="tdc">&nbsp;&nbsp;15,430,619</td>
+  </tr>
+  <tr>
+  <td class="tdc">1874</td>
+  <td class="tdc">3,765</td>
+  <td class="tdc">&nbsp;&nbsp;15,568,907</td>
+  </tr>
+   <tr>
+  <td class="tdc">1875</td>
+  <td class="tdc">3,823</td>
+  <td class="tdc">&nbsp;&nbsp;18,422,587</td>
+  </tr>
+  <tr>
+  <td class="tdc">1876</td>
+  <td class="tdc">3,938</td>
+  <td class="tdc">&nbsp;&nbsp;17,221,032</td>
+  </tr>
+  <tr>
+  <td class="tdc">1877</td>
+  <td class="tdc">4,075</td>
+  <td class="tdc">&nbsp;&nbsp;20,714,496</td>
+  </tr>
+  <tr>
+  <td class="tdc">1878</td>
+  <td class="tdc">4,157</td>
+  <td class="tdc">&nbsp;&nbsp;21,294,275</td>
+  </tr>
+</table>
+</div>
+
+<p>When the Granger law was repealed in 1878, the railroads were earning
+$1,000 per mile more than they were earning when the law was enacted.
+The present railroad law, which was passed in 1888, and has also been
+the subject of extreme criticism on the part of railroad organs, has had
+the same beneficial effect. The law, owing to the obstacles thrown in
+its way by the railroad managers, did not become operative until 1889.
+From July 1st, 1889, to June 30th, 1892, the gross railroad earnings of
+the Iowa roads, which for three years had been at a standstill,
+increased and were over $7,000,000 more in 1892 than they had been any
+year previous to 1889, as will be seen from the table below:</p>
+
+<div class="centered">
+<table border="0" width="50%" cellpadding="2" cellspacing="0" summary="Gross">
+  <tr>
+  <td class="tdc" colspan="2">Gross Railroad Earnings in Iowa.</td>
+  </tr>
+  <tr>
+  <td class="tdc" width="50%">1886-87</td>
+  <td class="tdc" width="50%">$37,539,730</td>
+  </tr>
+  <tr>
+  <td class="tdc">1887-88</td>
+  <td class="tdc">&nbsp;&nbsp;37,295,586</td>
+  </tr>
+  <tr>
+  <td class="tdc">1888-89</td>
+  <td class="tdc">&nbsp;&nbsp;37,469,276</td>
+  </tr>
+  <tr>
+  <td class="tdc">1889-90</td>
+  <td class="tdc">&nbsp;&nbsp;41,318,133</td>
+  </tr>
+  <tr>
+  <td class="tdc">1890-91</td>
+  <td class="tdc">&nbsp;&nbsp;43,102,399</td>
+  </tr>
+  <tr>
+  <td class="tdc">1891-92</td>
+  <td class="tdc">&nbsp;&nbsp;44,540,000</td>
+  </tr>
+</table>
+</div>
+
+<p>The net earnings per mile of the Iowa roads were $1,421.91 in the year
+1888-89, and $1,821.37 the year following. The total net earnings of all
+Iowa roads during the year ending June 30th, 1891, were $14,463,106,
+against $11,861,310 during the year ending June 30th, 1889, and were
+still greater for the year ending June 30, <span class='pagenum'><a name="Page_266" id="Page_266">[Pg 266]</a></span>1892. No further vindication
+of the Iowa law is necessary. These figures show plainly that the
+lowering and equalizing of the rates not only increased the roads'
+business and income, but also their net earnings. And it must be
+remembered that the reports showing these facts were made by the
+railroad companies and were certainly not made with any intention of
+prejudicing the cause of the railroad manager.</p>
+
+<p>James F. Hudson, the author of "The Railways and the Republic," is a
+very exhaustive and instructive writer upon the subject of railroad
+abuses. His material is well selected, and the subject ably presented.
+To the assertion of railroad managers, that railroad regulation
+injuriously affects the value of railroad property, he makes the
+following reply:</p>
+
+<div class="blockquot"><p>"Suppose that it were true, as these jurists and writers
+claim, that by the assertion of the public right to regulate
+the railways the value of their property is decreased, are
+there no other property rights involved? Do railway
+investments form the only property in the land which
+requires the protection of the law? Are we to understand
+these judgments and their indorsers to mean that because
+railroad property will depreciate if certain principles of
+justice prevail, therefore justice is to be set aside for
+the benefit of railway property? If the magnitude of
+interests involved is to be of weight in deciding such
+questions, let us put against 'the hundreds of millions' of
+railway property on the one side the thousands of millions
+of private property on the other. Railway regulation,
+according to a writer in the <i>Princeton Review</i>, is
+'confiscation of railroad property;' but this puts wholly
+out of the question the idea of private property which is
+rendered possible by leaving unchecked the power of the
+railways over commerce and manufactures through the
+manipulation of freight rates. Of the two parties in
+interest the shippers represent far greater property
+interests than the carriers, although the latter, by their
+<span class='pagenum'><a name="Page_267" id="Page_267">[Pg 267]</a></span>organization, are more powerful. I have yet to hear of a
+single case where restrictive railway legislation has
+seriously damaged the honest valuation of any railway. I
+have yet to learn of any seriously proposed scheme of
+regulation that has proposed to cut down railway profits
+below a fair dividend on capital actually invested. But the
+entire Nation knows of one notorious case in which the
+discriminating policy of the leading railways of the country
+has resulted in the wholesale confiscation of private
+property for the benefit of a favored corporation."</p></div>
+
+<p>Concerning the inconsistency presented by the plea of railroad managers
+for a legalized pool, Mr. Hudson says:</p>
+
+<div class="blockquot"><p>"It has been argued for years that the subject is so
+delicate and vast that it must not be touched by legislation
+in the public interest. To protect the rights of the
+ordinary shipper against the favorite of the railway would
+so hamper the operations of trade, it has been repeated
+times without number, as to take away the independence of
+the railways and destroy the freedom of competition. Yet,
+after years of argument that Government has no
+constitutional power to interfere with the railways, and of
+demonstration that all such interference must be ill-advised
+and injurious, the railway logic comes to the surprising
+climax of appealing to legislation for the aid of the law in
+upholding their efforts to prevent competition."</p></div>
+
+<p>Mr. Hudson maintains that if the pool were legalized it would only be a
+means of swelling railroad earnings. He says:</p>
+
+<div class="blockquot"><p>"If the pool would maintain equitable rates its success
+might be desired, but what guarantee is there that the
+complete establishment of its power would make such rates?
+Its very character, the functions of the men who control its
+policy, and its avowed object of swelling the earnings of
+railways by artificial methods, forbid such an expectation.
+Make the success of the pool absolute, so that it can work
+without fear of competition, and its rates will be uniform,
+but of such a character that their uniformity will be a
+public grievance and burden.... <span class='pagenum'><a name="Page_268" id="Page_268">[Pg 268]</a></span>A grave effect of this
+policy, though not easily calculable, is the ability it
+gives to railway officials to control the prices of stocks,
+and the temptation to enhance their fortunes by so doing....
+It is a heavy indictment against the pooling system that it
+gives power to avaricious and unscrupulous men in railway
+management to enrich themselves at the cost of shareholders
+and investors, both by forming combinations and by exciting
+disputes or ruptures in them."</p></div>
+
+<p>The question whether the common law does not protect the public
+sufficiently is well answered by Mr. Hudson as follows:</p>
+
+<div class="blockquot"><p>"The common law is sufficient in theory, but it has failed
+in practice.... In practice, legal remedies against railway
+injustice can be applied to the courts only by fighting the
+railways at such disadvantages that the ordinary business
+man will never undertake it except in desperate cases. Every
+advantage of strength and position is with the railways....
+This [the railroad] power has kept courts in its pay; it
+defies the principles of common law and nullifies the
+constitutional provisions of a dozen States; it has many
+representatives in Congress and unnumbered seats in the
+State legislatures. No ordinary body of men can permanently
+resist it."</p></div>
+
+<p>But the remedy which Mr. Hudson proposes for the correction of railroad
+evils is one of doubtful efficacy. It is this:</p>
+
+<div class="blockquot"><p>"Legislation should restore the character of public highways
+to the railways by securing to all persons the right to run
+trains over their track under proper regulations, and by
+defining the distinction between the proprietorship and
+maintenance of the railway and the business of common
+carriers."</p></div>
+
+<p>While it is admitted that the opening of the railroads to the free use
+of competing carriers is not necessarily impractical from a technical
+point of view, it cannot be admitted that the proposed remedy would cure
+the evil. <span class='pagenum'><a name="Page_269" id="Page_269">[Pg 269]</a></span>There would certainly be nothing to hinder carrying companies
+forming a trust which might prove more dangerous to the interests of
+shippers than are to-day the combinations of the railroad companies.</p>
+
+<p>Mr. Hudson devotes a chapter to the railroad power in politics, and
+shows how corporations, through their wealth, have secured the greatest
+and most responsible offices in the executive, legislative and judiciary
+departments of the Government. Speaking of their influence in the
+Supreme Court of the United States, he says:</p>
+
+<div class="blockquot"><p>"The assertion that Jay Gould paid $100,000 to the
+Republican campaign fund in 1880, in return for which Judge
+Stanley Mathews was nominated to the Supreme Bench, is
+denied as a political slander; but the fact remains that
+this brilliant advocate of the railway theories of law has
+been placed in the high tribunal, and that his presence
+there together with Justice Field, long a judicial advocate
+of the corporations, is expected to protect the railways in
+future against such constructions of law as the Granger
+decisions."</p></div>
+
+<p>An English writer, Mr. J.S. Jeans, presents, in his "Railway Problems,"
+a great deal that is of interest to American readers. The statistical
+data of his work are especially interesting. We learn that the United
+Kingdom has nearly twenty railroad employes per mile of road operated,
+to less than five in the United States, and that the average number of
+employes per &pound;1,000 ($4,850) of gross earnings is on the railroads of
+the United Kingdom 5.4 to only about half as many in the United States.
+We further learn that the average earnings per train mile in America are
+over 25 per cent. higher than they are in the United Kingdom, and exceed
+those of most European countries.</p>
+
+<p>Of the remarkable increase in number and the <span class='pagenum'><a name="Page_270" id="Page_270">[Pg 270]</a></span>profitableness of the
+third-class passenger traffic in England Mr. Jeans says:</p>
+
+<div class="blockquot"><p>"There has hitherto been a great lack of knowledge in this
+country as to the extent to which the different classes of
+passenger traffic yield adequate profit to the railroad
+companies. English passenger traffic differs from that of
+most other countries in this respect, that the chief
+companies attach third-class carriages to almost every
+train. The accommodation provided for third-class passengers
+in England is also much superior to what is found in other
+countries where there is the same distinction of classes.
+The effect of those two distinguishing features of the
+English railway system is that third-class carriages are
+much more and first-class carriages much less utilized than
+in other countries. The tendency appears to be towards an
+increasing use of third-class, and a decreasing use of
+first-class vehicles. But, all the same, the leading English
+lines continue to provide a large proportion of first-class
+accommodation in every train, and it is no unusual thing to
+find the third-class carriages of express trains absolutely
+full, while first-class carriages are almost empty. The
+natural result is that third-class travel is a source of
+profit, while first-class travel is not.... So far as
+passenger traffic is a source of net profit, that profit is
+contributed by the third-class. The total receipts from
+passenger traffic in England and Wales amounted in 1885 to
+&pound;21,968,000. But if the average receipts per carriage over
+the whole had been the same as in the case of the Midland
+first-class vehicles, namely, &pound;330, the total receipts from
+passenger traffic would only have been about nine millions.
+It is not necessary to be an expert in order to see that
+traffic so conducted must be attended with a very serious
+loss."</p></div>
+
+<p>Of the stock-watering of American railroad companies Mr. Jeans says:</p>
+
+<div class="blockquot"><p>"It seldom happens that in the United States the cost of a
+railway and its equivalent corresponds, as it ought to, to
+the total capital expenditure. There is no country in the
+world where the business of watering stocks is <span class='pagenum'><a name="Page_271" id="Page_271">[Pg 271]</a></span>better
+understood or carried out more systematically and on so
+large a scale. For this reason there is liable to be a great
+deal of error entertained in reference to the natural cost
+of American lines."</p></div>
+
+<p>There are many financial journals that are so closely identified with
+the speculative interests of the country, and many railway papers that
+depend so largely upon railway men for support, that railway managers
+are never without a medium through which they can present their views to
+the public. A systematic and concerted effort is also constantly made by
+the railroads to pervert the press of the country at large. The great
+city papers generally yield to their influences and enlist in their
+service, and yet there are notable exceptions to this.</p>
+
+<p>In speaking of the extravagant sums which the railroads paid to the
+great dailies, ostensibly for advertising, but in fact for their good
+will and other services, a railroad superintendent recently said that it
+was an infamous outrage, and yet it was the best investment of money
+that his company could make. The country papers have shown more
+integrity in maintaining their independence, but the railroads are not
+without their organs among them. It is not unfrequent to find some of
+them defending railroad abuses with all the apparent zeal of a Wall
+Street organ, and a glance at their columns often reminds one of Mr.
+Lincoln's story of the Irishman and the pig. Mr. Lincoln defended an
+Irishman against the charge of stealing a pig. After the testimony was
+taken in court, Mr. Lincoln called his client aside and told him that
+the testimony was so strong against him, and that the case was so clear,
+that it was impossible for him to escape conviction, and he advised him
+to plead guilty and throw himself on the mercy of the court. "No, Mr.
+Lincoln," said Patrick, "you go back and make one of your great speeches
+<span class='pagenum'><a name="Page_272" id="Page_272">[Pg 272]</a></span>and swing your long arms and talk loud to the jury, and you will win
+the case." Mr. Lincoln, in accordance with that disposition to
+accommodate so strongly characteristic of him, did as he was directed by
+his client, and to his great surprise the jury promptly brought in a
+verdict of not guilty. After it was all over, Mr. Lincoln said: "Now,
+Patrick, tell me why that jury acquitted you. I know that you stole the
+pig, and my speech had nothing to do in securing your acquittal."
+Patrick replied: "And sure, Mr. Lincoln, every one of those jurymen ate
+a piece of the pig."</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_273" id="Page_273">[Pg 273]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER X.</h2>
+
+<h2>RAILROAD LITERATURE&mdash;CONTINUED.</h2>
+<br />
+
+<p>Railroad questions have become of such general interest that their
+discussion has become a prominent factor of magazine literature. It is a
+significant fact that these contributors are usually railroad men, and
+under these circumstances an unbiased discussion of the questions at
+issue is indeed a rare occurrence. It is but too frequently the sole
+object of the contributor, and not unfrequently even of the publisher,
+to create a public sentiment in favor of the unjust demands of railroad
+managers.</p>
+
+<p>During the last few years systematic efforts have been made by the
+railroad interests to influence public opinion against the Interstate
+Commerce Law and restrictive State legislation through the leading
+magazines of the country. Mr. Sidney Dillon, president of the Union
+Pacific Railroad, in an article which appeared in the April (1891)
+number of the <i>North American Review</i>, under the title "The West and the
+Railroads," endeavors to show that the West is indebted to the railroad
+managers for nearly all of the blessings which its people enjoy, and
+that therefore railroad legislation in the West is a symptom of rank
+ingratitude. He prefaces his argument with the remark that the elder
+portions of our commonwealth have already forgotten, and the younger
+portions do not comprehend or appreciate, that but for the railroads
+what we now style the Great West would be, except in the valley of the
+Mississippi, an unknown and unproductive wilderness. <span class='pagenum'><a name="Page_274" id="Page_274">[Pg 274]</a></span>He then argues
+that, inasmuch as the railroads carry the wheat of Dakota and Minnesota
+to the sea-coast, and bring those sections of our community into direct
+relation with hungry and opulent Liverpool, the world should "thank the
+railway for the opportunity to buy wheat, but none the less should the
+West thank the railway for the opportunity to sell wheat." It does not
+seem to occur to Mr. Dillon that the railway might, with equal
+propriety, thank the world in general, and the Great West in particular,
+for its opportunity to carry wheat.</p>
+
+<p>We are also told that the railway has reclaimed from nature immense
+tracts of land that were worthless except as to their possibilities,
+which once seemed too vague and remote to be considered and are to-day
+valuable; that it has changed the character of the soil as well as the
+climate of the West, and we are almost given to understand that in many
+respects it has assumed the functions of Providence. Mr. Dillon
+generously admits, however, that railways have not been built from
+philanthropic motives and that we find among railroad promoters and
+contractors men of large fortunes. He then proceeds to reprimand the
+States west of the Mississippi for their "ungrateful" legislation,
+which, he says, interferes with the business of the railway, even to the
+minutest detail, and always to its detriment. Such legislation
+exasperates Mr. Dillon the more because it originated in States "which
+happened to be the communities that owe their birth, existence and
+prosperity to these very railways." Mr. Dillon then gives vent to his
+wrath by the use of such terms as impertinence, ignorance and
+demagogism. He holds that legislative enactments as to the rights and
+liabilities of railway corporations are useless, "because the common law
+has long since established these as pertaining to <span class='pagenum'><a name="Page_275" id="Page_275">[Pg 275]</a></span>common carriers, and
+the courts are open to redress all real grievances of the citizen." Upon
+this theory we might as well dispense with the legislative department of
+the Government, for there is no relation in the community to which the
+principles of the common law can not be applied. Besides this, Mr.
+Dillon entirely ignores the fact that the railway company is not only a
+common carrier, but the keeper of the highway, and as such is subject to
+Government control as much as the turnpike tollgate keeper or the
+collector of customs. "Then as to prices." Mr. Dillon continues: "These
+will always be taken care of by the great law of competition, which
+obtains wherever any human service is to be performed for a pecuniary
+consideration. That any railway, anywhere in a republic, should be a
+monopoly, is not a supposable case."</p>
+
+<p>Like the rest of railway men, Mr. Dillon excels in painting dark
+pictures of railroad catastrophes. A sample production of his art is
+here presented:</p>
+
+<div class="blockquot"><p>"One of the greatest dangers to the community in a republic
+is this: that it is in the power of reckless, misguided or
+designing men to procure the passage of statutes that are
+ostensibly for the public interest and that may lead to
+enormous injuries. Let us imagine for a moment that all
+railways in the United States were at once annihilated. Such
+a catastrophe is not, in itself, inconceivable; the
+imagination can grasp it, but no imagination can picture the
+infinite sufferings that would at once result to every man,
+woman and child in the entire country. Now, every step taken
+to impede or cripple the business and progress of our
+railways is a step towards just such a catastrophe, and
+therefore a destructive tendency."</p></div>
+
+<p>Mr. Dillon, losing sight of all other interests, did not think that his
+nonsensical mode of reasoning would apply equally well to them. Let us,
+for instance, imagine for a <span class='pagenum'><a name="Page_276" id="Page_276">[Pg 276]</a></span>moment that all of the farms of the United
+States were at once annihilated. Can the imagination picture the
+infinite sufferings that would at once result to every man, woman and
+child in the whole country? Now, is not any step taken to impede or
+cripple the business of farming a step towards just such a catastrophe,
+and therefore of a destructive tendency? Mr. Dillon then avails himself
+of an opportunity to give the people of the United States some
+gratuitous advice when he says:</p>
+
+<div class="blockquot"><p>"We do not arrogate superior wisdom or intelligence to
+ourselves when we suggest to the people of the United
+States, and especially that portion of the country where
+railroads have been the subject of what we consider to be
+excessive legislation, that the rational mode of treating
+any form of human industry that has for its object the
+performance of desired and lawful service is to let it
+alone, and that the railway is no exception to this
+principle."</p></div>
+
+<p>This is the very plea that Jefferson Davis made when he kindled the
+flame of treason.</p>
+
+<hr style='width: 45%;' />
+
+<p>In the March, 1891, number of the <i>Forum</i>, Mr. W. M. Acworth discusses,
+under the title "Railways under Government Control," the working of the
+railway systems of the different nations. He holds that the management
+of railroads which are the property of the State is, as a rule, greatly
+inferior to the management of those roads which are the property of
+private trading corporations; he assigns to the railway experts of
+England and America the first places among the railway experts of the
+world, and appears to attribute all the good in the railroad management
+of these countries to the absence of State interference, and all the
+evil in the management of the railroads of other countries to the fact
+that such interference exists. He says of the railroads of England and
+the United States:</p>
+
+<div class="blockquot"><p>"In speed and accommodation, in the energy which pushes<span class='pagenum'><a name="Page_277" id="Page_277">[Pg 277]</a></span>
+railways into remote districts, and in the skill which
+creates a traffic where no traffic existed before, they
+stand to-day in the front rank, as they have stood for the
+last half century. To say that they are very far from
+perfect is nothing; it is only to say that they are worked
+by human agency. Their worst enemies will scarcely deny that
+they are at least alive; so long as there is life there may
+be growth, and we may hope to see them outgrow the faults of
+their youth. The charge made against State railway systems
+is that they are incapable of vigorous life. The old adage
+which proclaimed that 'necessity is the mother of invention'
+has been re-stated of late years as the law of the survival
+of the fittest in the struggle for existence. If the
+doctrine is true, the State railway system, relieved from
+the necessity of struggle, must cease to be fit and will
+fail to survive."</p></div>
+
+<p>While it is not intended to enter here into a defense of a State railway
+system, it may justly be questioned whether "the State railway system,
+relieved from the necessity of struggle, must cease to be fit and will
+fail to survive." The growth of the State system in Europe is in itself
+a sufficient refutation of Mr. Acworth's theory. The mail service has
+for several hundred years been a monopoly of the government; but, while
+it is far from being perfect, it remains to be demonstrated that private
+enterprise could give to the public a better service in the long run.</p>
+
+<p>Mr. Acworth is an Englishman who in former years wrote many bitter
+things concerning the abuses which he then thought he saw in the
+management of the railroads of his native country, which, according to
+his own statement, are, besides those of the United States, the only
+roads in the world for whose regulation competition has been relied upon
+in the past. Mr. Acworth has become a convert to the <i>laissez faire</i>
+theory of dealing with railroads and now evinces an unusual, but perhaps
+pardonable, zeal <span class='pagenum'><a name="Page_278" id="Page_278">[Pg 278]</a></span>in the defense of his new position. In the preface to
+his book, "The Railways of England," he says upon the subject:</p>
+
+<div class="blockquot"><p>"I have published before now not a few criticisms (which
+were meant to be scathing) on English railways anonymously.
+I find myself using, under my own name, the language of
+almost unvarying panegyric. This is partly to be explained
+by the plan of the book, which professes to set before the
+reader those points on each line which best merit
+description&mdash;its excellencies, therefore, rather than its
+defects. Much more, however, is it due to a change of
+opinion in the writer.... I have found in so many cases that
+a satisfactory reply existed to my former criticisms, that I
+have perhaps assumed that such an answer would be
+forthcoming in all; and if I have taken up too much the
+position of an apologist, where I should have been content
+to be merely an observer, let me plead as my excuse that I
+am only displaying the traditional zeal of the new-made
+convert."</p></div>
+
+<p>Prof. Hadley, of whose work, "Railroad Transportation, its History and
+its Law," mention has been made above, contributed an article to the
+April, 1891, number of the <i>Forum</i>, under the title "Railway Passenger
+Rates." He endeavors to show that the high passenger rates of American
+railroads are due solely to superior service. He says:</p>
+
+<div class="blockquot"><p>"Continental Europe pays two-thirds as much as America or
+England and gets an inferior article. India pays still less
+and gets still less. The difference is seen both in quality
+and quantity of service. In India express trains rarely run
+at a greater speed than 25 miles an hour. In Germany and
+France their speed ranges from 25 to 35 miles an hour, and
+only in exceptional instances is more than 40 miles an hour.
+In the United States and in England the maximum speed rises
+as high as 50, or, in exceptional instances, 60 miles an
+hour. With regard to the comfort of the cars in different
+countries, <span class='pagenum'><a name="Page_279" id="Page_279">[Pg 279]</a></span>there is more room for difference of opinion;
+but there can be no doubt that the average traveler in the
+United States, or even in the English third-class car, fares
+better than he would in the corresponding class on
+continental railroads, and infinitely better than the bulk
+of travelers in British India."</p></div>
+
+<p>It may be admitted that upon the whole the speed of American and English
+railroads is greater than that of continental roads, yet the difference
+is much less than Mr. Hadley would make us believe. The fast trains of
+the Berlin and Hamburg Railroad, according to R&ouml;ll's "Railroad
+Encyclopedia," make the distance of 179 miles in three hours and
+forty-four minutes. The average speed is therefore 48 miles an hour.
+There are but few lines in the United States whose regular express
+trains run at a greater speed. The express trains of the Berlin and
+Brunswick line make 45-1/2 miles an hour. Trains are run on the Vienna
+and Buda-Pesth Railway at the rate of 42 miles an hour and on the Paris
+and Calais Railway at a rate of over 40 miles an hour. Official reports
+give the average speed of express trains in Northern Germany as 32.2
+miles per hour, which is considerably more than the average speed of our
+Western trains, upon which the rates charged are twice as high as those
+charged by German roads. The average speed of the express trains in
+England was 35.7 miles per hour in 1890, in the Netherlands 30.7 miles,
+in France 30 miles, in Denmark and Southern Germany 28.8 miles and in
+Austria 27.8 miles per hour. Accurate statistics showing the average
+speed in America are not in existence, but it may well be questioned
+whether the difference between the speed of American and European trains
+is sufficient to justify upon that score any essential difference in the
+rates. Mr. Hadley's statement that the average traveler in the United
+States, <span class='pagenum'><a name="Page_280" id="Page_280">[Pg 280]</a></span>or even in the English third class, fares better than he would
+in the corresponding class on continental railroads, is far too sweeping
+to be true. It is certain that the Belgian, German, Austrian or French
+second-class coupes are much to be preferred to the smoking and emigrant
+cars which in America are made to take their places.</p>
+
+<p>To prove that much more work is demanded of American railroads than of
+European railroads, Mr. Hadley presents the following table:</p>
+
+<div class="centered">
+<table border="0" width="90%" cellpadding="2" cellspacing="0" summary="Annual">
+  <tr>
+  <td class="tdc" width="27%">Countries.</td>
+  <td class="tdc" width="23%">Population.</td>
+  <td class="tdc" width="25%">Miles run by Trains annually.</td>
+  <td class="tdc" width="25%">Annual Train Service per head of Population.</td>
+  </tr>
+  <tr>
+  <td class="tdl">United States (1889)</td>
+  <td class="tdc">&nbsp;&nbsp;61,000,000</td>
+  <td class="tdc">724,000,000</td>
+  <td class="tdc">12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">Great Britain (1889)</td>
+  <td class="tdc">&nbsp;&nbsp;38,000,000</td>
+  <td class="tdc">303,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">Germany (1889)</td>
+  <td class="tdc">&nbsp;&nbsp;48,000,000</td>
+  <td class="tdc">181,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;3-3/4</td>
+  </tr>
+  <tr>
+  <td class="tdl">France (1888)</td>
+  <td class="tdc">&nbsp;&nbsp;38,000,000</td>
+  <td class="tdc">145,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;3-3/4</td>
+  </tr>
+  <tr>
+  <td class="tdl">Austria-Hungary (1887)</td>
+  <td class="tdc">&nbsp;&nbsp;4,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;66,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;1-2/3</td>
+  </tr>
+  <tr>
+  <td class="tdl">India (1889)</td>
+  <td class="tdc">200,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;51,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;0-1/4</td>
+  </tr>
+</table>
+</div>
+
+<p>And he adds: "These figures are for passenger trains and freight trains
+together, as some countries do not give statistics of the two
+separately; but the general results would be nearly the same if
+passenger trains alone could be considered. The figures show that, for
+every man, woman and child, a train is run twelve miles annually in the
+United States, in Great Britain eight miles, in Germany or France a
+little less than four miles, in Austria not much more than a mile and a
+half, and in British India less than a quarter of a mile."</p>
+
+<p>This statement, even if correct, is certainly misleading. No allowance
+is made for the greater distances and the greater average haul in
+America, and none for our bulky <span class='pagenum'><a name="Page_281" id="Page_281">[Pg 281]</a></span>raw products, which require more car
+room than the manufactured goods predominating as freight in Europe.</p>
+
+<p>If Mr. Hadley's statement of miles run by trains annually is used in
+connection with Mr. Poor's statement showing the length, for 1889, of
+the railroads of the countries given in the above table, it can be shown
+that the average number of trains run annually per mile is considerably
+less here than in Europe:</p>
+
+<div class="centered">
+<table border="0" width="90%" cellpadding="2" cellspacing="0" summary="Average">
+  <tr>
+  <td class="tdc" width="25%">Countries.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdc" width="25%">Length of Railroad in miles (1889).</td>
+  <td class="tdc" width="25%">Miles run by Trains annually.</td>
+  <td class="tdc" width="25%">Average Number of Trains per mile per annum.</td>
+  </tr>
+  <tr>
+  <td class="tdl">United States</td>
+  <td class="tdc">161,396</td>
+  <td class="tdc">724,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;4,485</td>
+  </tr>
+  <tr>
+  <td class="tdl">Great Britain</td>
+  <td class="tdc">&nbsp;&nbsp;19,930</td>
+  <td class="tdc">303,000,000</td>
+  <td class="tdc">15,203</td>
+  </tr>
+  <tr>
+  <td class="tdl">Germany</td>
+  <td class="tdc">&nbsp;&nbsp;25,360</td>
+  <td class="tdc">181,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;7,137</td>
+  </tr>
+  <tr>
+  <td class="tdl">France</td>
+  <td class="tdc">&nbsp;&nbsp;21,910</td>
+  <td class="tdc">145,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;6,618</td>
+  </tr>
+  <tr>
+  <td class="tdl">Austria-Hungary</td>
+  <td class="tdc">&nbsp;&nbsp;15,990</td>
+  <td class="tdc">&nbsp;&nbsp;66,000,000</td>
+  <td class="tdc">&nbsp;&nbsp;4,127</td>
+  </tr>
+</table>
+</div>
+
+<p>It is seen that while the average number of trains run per mile per
+annum is only 4,485 in the United States, it is 6,618 in France, 7,137
+in Germany, and 15,203 in Great Britain. In Austria-Hungary it is
+somewhat less than here. It is not claimed that this is in every respect
+a fair argument; but it is at least as fair as Mr. Hadley's. As has been
+stated before, the average earnings per train mile are larger in the
+United States than in most nations, and, excepting Sweden, railway
+capital has the highest gross earnings of any nation in the world; and
+when Mr. Hadley bases his argument in favor of higher rates for American
+railroads than for those of Europe upon the claim that the latter secure
+larger train loads, he simply reasons from false premises.</p>
+
+<p>Mr. Hadley then continues:</p>
+
+<div class="blockquot"><p>"But why cannot our railroad men, with our present train service, secure
+larger loads by making lower rates, and give us cheap service as well as
+plenty of it? Why cannot we secure two good things instead of one? For
+two reasons: First, because it is not certain that low rates <span class='pagenum'><a name="Page_282" id="Page_282">[Pg 282]</a></span>will be
+followed by greatly increased travel; second, because such increased
+travel would not be so economical to handle in America as it is in
+Europe. It is wrong to assume that, because reductions of charges in
+Europe have increased travel enormously, they would have a proportionate
+effect in America and a corresponding advantage in American railroad
+economy. It is a somewhat significant fact that second-class trains at
+reduced rates have been extremely successful in Europe and not at all so
+in America. Other things being equal, the American public would be glad
+to have its travel at lower fares; but it cares more for comfort and
+speed, and for being able to travel at its own times, than for a slight
+difference in charge. The assumption so frequently made, that a
+reduction in fares would cause an enormous increase in travel in this
+country, is for the most part a pure assumption, not borne out by the
+facts."</p></div>
+
+<p>The great increase in business which has everywhere followed reductions
+in postage rates, telegraph rates and street-car fares, as well as
+railroad rates, sufficiently refutes the assertion that it is not
+certain that low rates would be followed by greatly increased travel. If
+the second class has not been as successful here as in Europe this is
+solely due to the fact that the American railroad companies have
+systematically discouraged second-class travel by forcing passengers
+into filthy and over-crowded cars. The statement that increased travel
+would not be so economical to handle in America as in Europe scarcely
+needs a reply. If, as Prof. Hadley says, the American public demand more
+frequent trains than the people of Europe, and if these frequent trains
+are not at present profitable to our railroad companies, it would seem
+to be plainly to their interest to hold out every inducement to the
+public to increase travel and thus fill their trains.</p>
+
+<p>Mr. Hadley does not aid his argument when, referring to the Hungarian
+zone system, he says: "The <span class='pagenum'><a name="Page_283" id="Page_283">[Pg 283]</a></span>importance of the zone system in Austria and
+in Hungary lies in the fact that its adoption was accompanied by a great
+reduction in rates. The unit rate for slow, third-class trains, which
+had previously been nearly a cent and a half a mile, was reduced to less
+than one cent.... The use of railroads under the new system, though
+vastly greater than it was before, is vastly less than that of a
+well-managed American road at American rates." Mr. Hadley inadvertently
+presents here one of the very best reasons why our passenger rates
+should be reduced.</p>
+
+<p>The fact is, railroad men are opposed, and always have been opposed, to
+reduction of rates, and to all progressive movements that require
+increased expenditures or threaten to temporarily reduce their revenues.
+When the introduction of the zone system was first advocated in Hungary
+it was opposed by just such men and just such arguments.</p>
+
+<p>No one can contradict the following facts, viz.: That the average cost
+of European roads is much greater than that of American roads; that the
+number of railroad employes per mile is much greater there than here;
+that much larger sums are expended for repairing and improving the
+roads, and that therefore the lives of passengers are much safer in
+Europe than in America; and that the average speed and corresponding
+accommodations of European trains, and especially those of England,
+Germany, France and Austria-Hungary, compare quite favorably with the
+average speed and corresponding accommodations of our roads. It is,
+under these circumstances, absurd to claim that the higher prices
+charged by American roads are due to the greater cost of service.</p>
+
+<p>Mr. Hadley's labors as a railroad author have, it seems, greatly
+increased his corporation bias. In an address <span class='pagenum'><a name="Page_284" id="Page_284">[Pg 284]</a></span>which he delivered before
+the American Bankers' Association at New Orleans in November, 1891, upon
+the subject of "Recent Railroad Legislation and its Effects upon the
+Finances of the Country," he made a number of assertions which ill
+comport with the fairness of a public statistician or the wisdom of a
+Yale professor. After a few introductory remarks, Prof. Hadley made the
+following statement:</p>
+
+<p>"Every one knows that railroad property has fallen in value since the
+passage of the Interstate Commerce Act four years and a half ago; few
+have made any accurate estimate of the amount of that fall. Let us take
+the stock of the leading railroad systems centering in Chicago as a
+type. Here we find an aggregate shrinkage of over $60,000,000, or more
+than one-quarter of the par value of the stocks.</p>
+
+<div class="centered">
+<table border="0" width="90%" cellpadding="2" cellspacing="0" summary="Par">
+  <tr>
+  <td class="tdc" width="34%" rowspan="2">&nbsp;</td>
+  <td class="tdc" width="23%" rowspan="2">Par Value.</td>
+  <td class="tdc" colspan="2">Price.</td>
+  <td class="tdc" width="23%" rowspan="2">Shrinkage.</td>
+  </tr>
+  <tr>
+  <td class="tdc" width="10%">Apr. 4, 1887.</td>
+  <td class="tdc" width="10%">Nov. 4, 1891.</td>
+  </tr>
+  <tr>
+  <td class="tdl">C., M. &amp; St. P.</td>
+  <td class="tdc">&nbsp;&nbsp;$30,904,261</td>
+  <td class="tdc">&nbsp;&nbsp;93</td>
+  <td class="tdc">&nbsp;&nbsp;75</td>
+  <td class="tdc">&nbsp;&nbsp;$5,560,000&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">C., M. &amp; St. P. Preferred</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;21,555,900</td>
+  <td class="tdc">122</td>
+  <td class="tdc">119</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;647,000&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">C. &amp; N. W.</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;31,365,900</td>
+  <td class="tdc">121</td>
+  <td class="tdc">116</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;1,568,000&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">C. &amp; N. W. Preferred</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;22,325,454</td>
+  <td class="tdc">148</td>
+  <td class="tdc">139</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;2,009,000&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">C., R. I. &amp;; P.</td>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;41,960,000</td>
+  <td class="tdc">126</td>
+  <td class="tdc">&nbsp;&nbsp;82</td>
+  <td class="tdc">&nbsp;&nbsp;18,462,000&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">C., B. &amp; Q.</td>
+  <td class="tdc" style="text-decoration: underline;">&nbsp;&nbsp;&nbsp;&nbsp;77,540,500</td>
+  <td class="tdc">140</td>
+  <td class="tdc">&nbsp;&nbsp;98</td>
+  <td class="tdc" style="text-decoration: underline;">&nbsp;&nbsp;32,567,000&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">Total</td>
+  <td class="tdc">$225,651,000</td>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdc">$60,815,000"</td>
+  </tr>
+</table>
+</div>
+
+<p>The table shows that fifty-one million of these sixty million dollars
+are the shrinkage of the Chicago, Rock Island and Pacific and the
+Chicago, Burlington and Quincy stocks. It is surprising that Prof.
+Hadley should be ignorant of the real causes of this depreciation, which
+are known to nearly every Granger in the West. In 1887 the Chicago, Rock
+Island and Pacific Railroad Company owned 1,121 miles of road, only 172
+of which were outside of the States of Illinois and Iowa. In 1891 the
+same company owned 2,725 miles of road, with 1,776 miles outside of
+Illinois and Iowa and scattered through <span class='pagenum'><a name="Page_285" id="Page_285">[Pg 285]</a></span>Missouri, Kansas, Nebraska,
+Colorado, Indian Territory and Oklahoma. In Kansas alone the Rock Island
+system grew from two miles in 1887 to 1,059 miles in 1891. In other
+words, to a little over a thousand miles of <i>good</i> road the company's
+managers added nearly 2,000 miles of poor road and a proportionate
+amount of new stock, and the depreciation in the company's stock which
+followed was no greater than one should have expected under such
+circumstances. The managers of the Rock Island and the promoters of
+these new lines found the transactions to their advantage, while the
+original stockholders of the company had to bear the imposition, as
+hundreds of thousands of railroad stockholders had done before them. But
+neither the law of Congress nor that of any State was to blame for this
+depreciation of the Rock Island stock.</p>
+
+<p>Since 1891, railroad stocks have advanced on an average at least twenty
+per cent., and during the last sixty days have declined about
+twenty-five per cent., although there has been no essential change in
+interstate or State legislation. It is certainly as fair to call the
+advance the ultimate result of restrictive railroad legislation as to
+attribute to that legislation the shrinkage above referred to. Extensive
+speculations similar to those just mentioned were, during the same
+period, indulged in by the managers of the C., B. &amp; Q. Railroad Company
+and its proteg&eacute;, the C., B. &amp; N., who, in addition to this, greatly
+injured their road in 1888 by the unjust provocation of the engineers'
+strike. So destructive were this strike and its consequences to the
+company's business that it is difficult to account for the motives of
+those who provoked and stubbornly prolonged it except upon the theory
+that it played an important role in their stock manipulations.</p>
+
+<p><span class='pagenum'><a name="Page_286" id="Page_286">[Pg 286]</a></span>But the recent legislation of a considerable number of States has, in
+Prof. Hadley's opinion, been still more detrimental to railroad
+interests than that of Congress. He says;</p>
+
+<div class="blockquot"><p>"In the second place, the legislatures of several States,
+stimulated by the example of Congress, hastened to pass in
+imitation, of the Interstate Commerce Act, laws which, in
+many instances, went far beyond their model in point of
+stringency. Examples are furnished by the statutes of Iowa,
+Maryland, Minnesota and South Carolina in 1887-88; of
+Florida in 1888-89, and of no less than thirteen States in
+1889-90, viz.: Georgia, Iowa, Kentucky, Massachusetts,
+Mississippi, New Hampshire, New Jersey, North Dakota, Ohio,
+Rhode Island, South Dakota, Virginia, Wyoming; as well as by
+the recently adopted Constitution of Kentucky. The
+legislation of 1890-91 shows a slight reaction against the
+movement of the three years previous.</p>
+
+<p>"In two respects the State legislatures went quite beyond
+the scope of the Interstate Commerce Act. They tried to
+prescribe safety appliances to the operating department, and
+rates to the traffic department. Of the first of these
+groups little need be said, except that as a rule they have
+failed to accomplish any great progress toward the result in
+view, and have in some instances actually hindered such
+progress. The attempt at prescribing rates was more serious.
+It involved a return to the methods of the Granger
+legislation, fifteen years earlier, which had operated so
+disastrously upon the railroads and the public alike. The
+system of commissioners with powers to make schedules which
+should be at least <i>prima facie</i> evidence of reasonable
+rates had, during the intervening period, never been wholly
+abandoned; but the powers thus conferred had been sparingly
+exercised. It was either left unused, as was generally the
+case in the North from 1877 to 1887, or the schedule rates
+were put so high as not to interfere with good railroad
+economy, of which examples are seen in Georgia and other
+parts of the South. But from the year 1887 onward there was
+a pressure upon the Commissioners to make schedules, and <span class='pagenum'><a name="Page_287" id="Page_287">[Pg 287]</a></span>to
+make them low; and lest these boards should not be able to
+reflect the popular feeling directly enough, they were, in
+some instances, no longer to be appointed by the Governor,
+but elected by popular vote. The law which was most severely
+applied and attracted most public attention was that of
+Iowa.... The agitation against the railroads has many points
+in common with the land agitation in Ireland. Absentee
+ownership is at the bottom of the trouble in either case.
+Property is owned in one place and used in another, and the
+users, not satisfied with the conditions of use, insist on
+taking the business direction into their own hands. They
+claim the right to fix rates in Iowa for the same general
+reasons by which they claim the right to fix rents in
+Ireland."</p></div>
+
+<p>It must be presumed that Mr. Hadley is ignorant of the fact that under
+the Iowa Commissioners' tariff the gross earnings of the Iowa railroads
+increased $7,000,000, or more than 17 per cent., in about three years,
+and their net revenue increased in proportion. Never have the railroads
+or the people of Iowa enjoyed a healthier prosperity than they do at
+present. It is true that the State of Iowa denies to the railroad
+companies the right to charge what they please; but this claim does not
+prevent them from doing justice to the absentee owner of railroad
+property. That absentee owners of property are disposed to take undue
+advantage of those who use it is illustrated in the very case which Mr.
+Hadley cites. So flagrant was the injustice done by the English landlord
+to the Irish tenant that the English Parliament was constrained to
+interfere and correct it.</p>
+
+<p>Mr. Hadley says further:</p>
+
+<div class="blockquot"><p>"It is seen in Iowa to-day, where, as a result of radical
+legislation with regard to rates, railroad construction has
+almost entirely ceased, the average for the years 1888-90
+being less than fifty miles."</p></div>
+
+<p>Now Professor Hadley hails from the State of <span class='pagenum'><a name="Page_288" id="Page_288">[Pg 288]</a></span>Connecticut, where
+railroads are permitted to make their own tariffs and where legislators
+are supposed not to be hostile to them. According to Poor's Manual, that
+State had 1,004.02 miles of railroad in 1888, and just 2.52 miles more
+in 1891, while Iowa had 8,364 miles in 1888, 8,436 in 1891, and 8,505
+miles on January 1, 1893. Will Mr. Hadley please explain why railroad
+construction has ceased in Connecticut? Iowa has one mile of railroad
+for every 227 inhabitants, and Connecticut has one for every 741
+inhabitants, although the per capita valuation is $473 in the latter,
+and only $273 in the former State. Nor have other Eastern States done
+much better than Connecticut. During the three years 1888-1891 there
+were built 74 miles of railroad in New Hampshire, 50 in Vermont, 23 in
+Massachusetts and 9 in Rhode Island. Iowa has an area of 56,000 square
+miles and a population of 1,911,896, an assessed valuation of
+$520,000,000; New England has an area of 66,400 square miles, a
+population of 4,700,745, and an assessed valuation of $3,500,000,000.
+Yet Iowa has 1,576 miles of railroad more than all the New England
+States together. She has a railroad net as close as that of the Empire
+State, having one mile of road to about 6-1/2 miles of territory,
+although the population of that State is three times as dense as hers.
+Nevertheless, railroad construction is at present active in Iowa,
+several lines of road are in the process of construction at the present
+writing, and there is every indication of still greater activity in the
+near future. The <i>Railway Age</i> of March 17, 1893, in a detailed list of
+new lines projected or under construction in the United States, gives
+for Connecticut only 32 miles, while it gives for Iowa 930 miles.</p>
+
+<p>Mr. Hadley continues:</p>
+
+<div class="blockquot"><p>"It is seen to some extent in the Northwest as a whole. At<span class='pagenum'><a name="Page_289" id="Page_289">[Pg 289]</a></span>
+the close of the year 1887 the States included by Henry V.
+Poor in the Central, Northern and Northwestern groups had
+25,040 miles of road, while those of the South Atlantic,
+Gulf and Mississippi Valley had but 24,567. To-day this
+relation is reversed: the Northwest has but 27,294 miles,
+while the South has 30,696."</p></div>
+
+<p>Had Mr. Hadley taken the pains to look up the population of these groups
+he would have found that the "South" is fully three times as populous as
+the "Northwest," and that therefore his figures prove nothing beyond the
+fact that at the present rate of gain the railroad facilities of the
+South will in a quarter of a century be equal to those of the Northwest
+to-day.</p>
+
+<p>But the argument is weak in another respect. The State in the Southern
+group that made by far the greatest gain in railroad mileage during the
+period mentioned by Mr. Hadley is Georgia, which gained about 1,000
+miles in three years, yet that State prescribed rates for railroad
+companies six years before Iowa did, and has for many years exerted a
+more thorough control over her railroads than perhaps any other State in
+the Union. The smallest increase is in West Virginia, which during the
+period given gained an average of only 69 miles per annum; and yet in
+West Virginia railroads charge their own rates and usually have their
+own way.</p>
+
+<p>Finally Prof. Hadley says:</p>
+
+<div class="blockquot"><p>"Where are we to find the limit to such unwise action? The
+United States Supreme Court can do something and has shown a
+disposition to do something. In the Minnesota cases it
+repudiated the doctrine of uncontrolled rights on the part
+of the legislature to make rates, as emphatically as it
+repudiated the doctrine of uncontrolled rights on the part
+of agents of the corporation in the Granger cases, twelve
+years before."</p></div>
+
+<p><span class='pagenum'><a name="Page_290" id="Page_290">[Pg 290]</a></span>It is evident that Mr. Hadley is as much mistaken in his interpretation
+of the decision of the court as he has been in his other assertions, as
+will be seen from the following extract from Judge Blatchford's opinion
+in Budd vs. New York, in which he says, "The main question involved is
+whether this court will adhere to its decision in Munn vs. Illinois."</p>
+
+<p>The court first quoted from the opinion of Judge Andrew of the Court of
+Appeals of New York, as follows: "The opinion further said that the
+criticism to which the case of Munn vs. Illinois had been subjected
+proceeded mainly upon a limited and strict construction and definition
+of the police power; that there was little reason, under our system of
+government, for placing a close and narrow interpretation on the police
+power, or restricting its scope so as to hamper the legislative power in
+dealing with the varying necessities of society and the new
+circumstances as they arise calling for legislative intervention in the
+public interest; and that no serious invasion of constitutional
+guarantees by the legislature could withstand for a long time the
+searching influence of public opinion, which was sure to come sooner or
+later to the side of law, order and justice, however it might have been
+swayed for a time by passion or prejudice or whatever aberrations might
+have marked its course."</p>
+
+<p>Judge Blatchford then said: "We regard these views, which we have
+referred to as announced by the Court of Appeals of New York, so far as
+they support the validity of the statute in question, as sound and
+just.... We must regard the principle maintained in Munn vs. Illinois as
+firmly established."</p>
+
+<p>General Horace Porter has made a contribution to the railway rate
+literature by an article which appeared in the <span class='pagenum'><a name="Page_291" id="Page_291">[Pg 291]</a></span>December, 1891, number
+of the <i>North American Review</i>. Unfortunately many of the General's
+statements are either false or misleading. Thus, in a table which he
+presents for the purpose of comparing the passenger rates of Europe with
+those of the United States, he gives the regular first-class schedule
+rates for the United Kingdom, France and Germany and the average
+earnings per passenger per mile for this country. That this is an unfair
+comparison needs no further argument, especially when it is remembered
+that in Europe from 85 to 90 per cent, of all passengers are carried in
+the third class at a regular rate averaging about 1-1/2 cents per mile,
+and that considerable reductions are made for excursion, commutation and
+return tickets.</p>
+
+<p>But General Porter says concerning American rates:</p>
+
+<div class="blockquot"><p>"When we take into consideration the excursion and the
+commutation rates, we find first-class passengers carried as
+low as half a cent a mile."</p></div>
+
+<p>Now the question arises whether American railway companies carry
+passengers at such rates with or without loss to themselves. If they are
+carried at a loss, an injustice is done to the regular passengers, whose
+fare must not only make up the loss, but yield a larger profit than
+would otherwise be necessary. If, on the other hand, a rate of half a
+cent a mile can be made remunerative, there is certainly no justice in
+maintaining rates five and six times as large on well-patronized lines.
+General Porter places stress upon our superior accommodations in the way
+of lighting, ventilation, ice-water, lavatories, and free carriage of
+baggage, etc., and then adds:</p>
+
+<div class="blockquot"><p>"In this connection we must also recollect that the cost of
+fuel, wages and all construction materials is considerably
+higher here than in Europe, while the population from which
+the railways derive their support is much <span class='pagenum'><a name="Page_292" id="Page_292">[Pg 292]</a></span>more sparse; the
+United States having 166,000 miles of railway with a
+population of 63,000,000, while Europe has only 135,000
+miles with a population of 335,000,000."</p></div>
+
+<p>We grant the point which the General makes on ventilation, ice-water,
+etc.; but, to make the comparison a fair one, he should also have
+referred to the much greater cost of European roads, to their much
+greater number of employes per mile, to the much shorter haul, to the
+higher price of their fuel, to the superiority of their roadbed and the
+greater security of their passengers. Moreover, whether the railroads of
+a country are profitable or not cannot be ascertained by merely
+comparing miles of road with square miles of territory and number of
+inhabitants. British India has a population of 275,000,000 and only
+about 16,000 miles of railroad, and yet her roads are scarcely as
+profitable as our own. China has 3,000,000 and Asia has about 4,000,000
+people to every mile of railroad, but so far their railroads have proved
+no bonanza. The question is not how many people there are to each mile
+of railroad, but rather to what extent the railroad is used by the
+people. The amount of freight carried annually by the railways of the
+United States is about 680,000,000 tons, or 85,000,000,000 ton miles,
+and the number of passengers carried is about 535,000,000, representing
+an aggregate of travel of nearly 13,000,000,000 miles. This shows an
+average of 1,300 tons of freight carried one mile, and 200 miles
+traveled annually for each inhabitant of the nation, and a greater use
+of railway facilities than that of any other country in the world. The
+income of the railroads per capita is $17 in the United States, $11 in
+the United Kingdom, $5 in Germany, $4 in France, and still less in
+Italy, Austria and Russia. The average freight haul is 63 miles in
+<span class='pagenum'><a name="Page_293" id="Page_293">[Pg 293]</a></span>Europe and 120 miles in the United States; the average passenger haul 15
+miles in Europe and 24 miles in the United States. It has already been
+shown that the average earnings per train mile are also larger here than
+there. R&ouml;ll's Encyclopedia of Railroads for 1892 shows that in France
+the average rate for all traffic for the year 1888 was for passengers
+1.45 cents per mile, and for freight 1.14 cents per ton per kilometer,
+and that the nation had also received by way of free or reduced rates on
+Government business during that year benefits to the amount of
+$59,000,000. Large reductions have been made during the past year in
+passenger rates.</p>
+
+<p>The General indulges in making the stereotyped railroad charge that "the
+legislatures of several of the States have enacted laws to effect a
+reduction of rates, the literal obedience to some of which would amount
+to the practical confiscation of railway property."</p>
+
+<p>The General or any of his friends cannot name a road that was ever
+confiscated by legislation, or even seriously injured. It is a fact that
+the very legislation of which railroad managers so bitterly complain has
+had a beneficial influence on railroad earnings. Thus, in Iowa, where,
+according to the testimony of railroad men, Grangerism has reigned
+supreme during the past few years, railroad earnings increased between
+1889 and 1892 from $37,000,000 to $44,000,000, or more than 18 per cent.
+Still better results could have been secured if the railroad managers
+had been in sympathy with the law. There is no doubt that they would
+gladly suffer, or rather have their companies suffer, a loss of revenue,
+if this would lead to a repeal of the laws and restore to them the power
+to manipulate rates for their own purposes.</p>
+
+<p>But the General comes to the main point of his article <span class='pagenum'><a name="Page_294" id="Page_294">[Pg 294]</a></span>when he
+complains against "the unreasonable requirements and restrictions of the
+Interstate Commerce Law." He says:</p>
+
+<div class="blockquot"><p>"Principal among these are what is known as the 'long and
+short haul clause,' which prohibits railway companies from
+receiving any greater compensation in the aggregate for a
+shorter than for a longer haul over the same line in the
+same direction, the shorter being included within the longer
+distance; and the anti-pooling clause, which prevents
+railway companies from entering into any agreement with each
+other for an apportionment of joint earnings."</p></div>
+
+<p>If we carefully examine the railroad literature of the last four years,
+we find that it has concentrated its efforts toward the creation of
+public sentiment in favor of the repeal of these two clauses of the
+Interstate Commerce Law. Railroad men are well aware of the fact that,
+with these two clauses stricken out, the Interstate Commerce Law would
+be practically valueless, and in clamoring for their repeal they evince
+a persistency worthy of a better cause. The practices which these
+clauses aim to prohibit cannot be defended upon any consideration of
+justice and equity, and it is folly to expect the American people to
+sacrifice their convictions of right to the selfish interest of a
+comparatively small number of persons interested in the manipulation of
+railroad stocks.</p>
+
+<p>The July, 1891, number of the <i>Forum</i> contains an article on the
+operation of the Interstate Commerce Law from the pen of Aldace F.
+Walker, formerly a member of the Interstate Commerce Commission, and now
+commissioner of the Western Traffic Association. Mr. Walker evidently
+belongs to the old school of railroad men, who have not yet accepted the
+Granger decision. Referring to it, he says:</p>
+
+<div class="blockquot"><p>"This decision was not unanimous, and the reasoning
+<span class='pagenum'><a name="Page_295" id="Page_295">[Pg 295]</a></span>presented was not so convincing as to command universal
+acceptance. It was at once challenged by the corporations,
+and has been from time to time attacked in the same
+tribunal; it has not yet been withdrawn, but it has been
+materially modified, notably in a case from Minnesota,
+decided in 1890, when it was established that there is a
+limit beyond which the State cannot go in reducing railway
+rates, which limit would be passed in case a State should
+attempt to deprive a corporation of its property, without
+due process of law, by fixing rates too low to permit of a
+fair remuneration for its use. A large debatable ground yet
+remains open, with a possibility that the position of the
+railway in Federal jurisprudence may eventually be radically
+modified."</p></div>
+
+<p>The passage quoted clearly indicates that railroad men expect better
+things of the court in the future, but Mr. Walker is much mistaken in
+supposing the court materially modified the Granger decision, as will be
+seen by referring to the case of Budd vs. the State of New York, decided
+in February, 1892, by the same court.</p>
+
+<p>Mr. Walker, unlike Mr. Depew, candidly admits the former universality of
+the evil of discrimination. He says:</p>
+
+<div class="blockquot"><p>"In order to secure traffic, a railway official felt called
+upon to underbid his rival. He gave the shipper a private
+rate, a rebate, a free pass&mdash;anything in the shape of a
+concession or a favor. The land was honeycombed with special
+arrangements of innumerable forms, all secret, because
+otherwise they would have been useless, and all forced upon
+the carriers by the exigencies of unbridled competition.
+Many shippers became wealthy from such gains. Others were
+envious of like success. At last the public sense of justice
+demanded a reform."</p></div>
+
+<p>And Mr. Walker's candor rises to a still higher pitch when he admits
+that the ingenuity of railroad managers has found ways to evade the
+Interstate Commerce Law. The following passage from the Commissioner's
+article <span class='pagenum'><a name="Page_296" id="Page_296">[Pg 296]</a></span>will, no doubt, be a great surprise to such law-abiding and
+confiding managers as Mr. Depew:</p>
+
+<div class="blockquot"><p>"There was nothing in the law specifically forbidding the
+payment of 'commissions,' and it was found that the routing
+of business might be secured by a slight expenditure of that
+nature to a shipper's friend. Other kindred devices were
+suggested, some new, some old; the payment of rent, clerk
+hire, dock charges, elevator fees, drayage, the allowance of
+exaggerated claims, free transportation within some single
+State&mdash;a hundred ingenious forms of evading the plain
+requirements of the law were said to be in use. The
+demoralization was not by any means confined to the minor
+roads. Shippers were ready to give information to other
+lines concerning concessions which were offered them, and to
+state the sum required to control their patronage. A freight
+agent, thus appealed to, at first perhaps might let the
+business go, but when the matter became more serious and he
+saw one large shipper after another seeking a less desirable
+route, he was very apt to throw up his hands and fall in
+with the procession."</p></div>
+
+<p>Mr. Walker is very severe on the Interstate Commerce Act, which, he
+says, might in its present form "well be entitled, 'An act to promote
+railway bankruptcies and consolidations by driving weak roads out of
+competitive business.'" To remedy the evil which, in his opinion, the
+act causes, he favors the granting of differentials by the stronger to
+the weaker roads. Such a device is simply a species of pool under a less
+offensive name. Its manifest object is to maintain rates through a
+conspiracy of rival railroads. Mr. Walker admits this when he says:</p>
+
+<div class="blockquot"><p>"It operates in practice to affect a distribution of the
+traffic somewhat roughly, giving rise to frequent
+dissensions and bickerings over the 'differentials' which
+are allowed; but after all it has enabled the trunk lines
+usually to secure a better maintenance of tariff rates and a
+better observance of the provisions of the law against
+<span class='pagenum'><a name="Page_297" id="Page_297">[Pg 297]</a></span>private rebates and discriminations than has been
+attainable in other sections of the country where different
+conditions make such an arrangement impracticable. It
+vividly illustrates, however, the necessity of some plan by
+which common business may be divided."</p></div>
+
+<p>This problem, which apparently causes so much perplexity to railroad
+managers, would soon be solved if railroad abuses were done away with.
+So long as these abuses exist and rates are maintained by artificial
+means there will be bickering and strife for business which legitimately
+belongs to others. Mr. Walker then bewails the proscription of the pool,
+saying:</p>
+
+<div class="blockquot"><p>"It may be stated without fear of contradiction that if the
+carriers had been left free to make arrangements among
+themselves upon which each line might rely for eventually
+receiving in some form a fair share of competitive traffic,
+the temptation for secret rate-cutting would have been in
+great measure removed and the country would have been spared
+most of the traffic disturbances and illegitimate
+contrivances for buying business which have since been
+periodically rife."</p></div>
+
+<p>This argument amounts to this, that, rather than place a law upon our
+statute books which reckless railroad managers might be strongly tempted
+to violate, they should be permitted to combine and control the highways
+and levy <i>ad libitum</i> upon the commerce of the country. It is a most
+preposterous proposition.</p>
+
+<p>The article especially condemns the long and short haul clause of the
+law. That this clause is injurious to the commerce of the country is,
+however, not obvious from his reasoning. Mr. Walker makes the statement
+that this clause of the law "has removed from many jobbing centers
+important advantages which they previously had, and has enabled interior
+communities, formerly of little apparent consequence, to deal directly
+with distant <span class='pagenum'><a name="Page_298" id="Page_298">[Pg 298]</a></span>markets." If he means by this that this feature of the law
+has equalized shipping throughout the country, he is doubtless right. If
+he wishes us to infer, however, that it prevents the railroad companies
+from doing substantial justice to all, he presumes altogether too much
+upon the credulity of his readers.</p>
+
+<p>Another article from the same author appeared under the title
+"Unregulated Competition Self-destructive," in the December, 1891,
+number of the same periodical. He commences his article with an inquiry
+into the pedigree and merit of the time-honored proverb, "Competition is
+the life of trade," and arrives at the conclusion that the phrase is
+fatherless and insignificant. He says:</p>
+
+<div class="blockquot"><p>"'Competition is the life of trade;' 'Competition is the
+death of trade;' one phrase is as true as the other. For all
+that appears, it was a toss-up which of the two should
+become current as the expression of the general thought."</p></div>
+
+<p>It is its general recognition that gives a truth a proverb's currency.
+Mr. Walker sneers at a disagreeable proverb because, like the majority
+of his colleagues, he holds the masses in contempt. He gives his
+estimate of popular intelligence in the following words:</p>
+
+<div class="blockquot"><p>"Unfortunately most men do not think worthily, or do not
+think at all; they are ruled by phrases, and they catch the
+crude ideas of others as they fly."</p></div>
+
+<p>Mr. Walker's whole argument is one in favor of the legalization of the
+pool, though he carefully avoids the word which grates so harshly on the
+American ear. He makes the broad statement, without offering the least
+proof in support of it, that measures have been everywhere adopted "to
+subdue and ameliorate the evil results of inordinate and excessive
+competitive strife," and then he asks:</p>
+
+<div class="blockquot"><p>"Has not the time come for a reversal of the legislative<span class='pagenum'><a name="Page_299" id="Page_299">[Pg 299]</a></span>
+attitude? Would it not be well for Congress, State
+legislatures and the judiciary to cease their futile
+attempts to maintain unqualified freedom of competition, and
+substitute therefore a recognition of the right of every
+industry to combine under proper supervision, and to make
+agreements for the maintenance of just and reasonable
+prices, the prevention of the enormous wastage consequent
+upon warlike conditions, and the preservation of existing
+institutions through the years to come?"</p></div>
+
+<p>Mr. Walker then proceeds to make the bold prediction that revolution and
+anarchy will follow if the demands of the railroad corporations are not
+complied with, saying:</p>
+
+<div class="blockquot"><p>"Unless this course is adopted a social convulsion may
+fairly be apprehended, forced by the universal and necessary
+repudiation of existing laws and rules of decision, and by
+the general formation of combinations without their pale."</p></div>
+
+<p>This is a strange threat indeed, and unworthy of a man who has held as
+great a public trust as Mr. Walker has. The article also contains the
+statement that combinations do not extinguish competition. "They
+regulate it," says Mr. Walker, "with more or less efficiency, and they
+often go so far as to suspend its operation in respect to one or more
+important features of the strife; for example, the price paid or the
+time consumed. But as long as the employer or the purchaser has a
+choice, so long there is competition." Here is a sample of Mr. Walker's
+irony, for the choice which the shipper has under the pool is simply
+Hobson's choice.</p>
+
+<p>Mr. Walker has also an article in the August, 1892, number of the
+<i>Forum</i>, the substance of which is to show that organizations among
+railroad companies, like the Western Traffic Association, are necessary
+for the <span class='pagenum'><a name="Page_300" id="Page_300">[Pg 300]</a></span>purpose of restraining competition among them. He holds that
+such competition as exists in almost all other lines of business "is
+radically vicious to all interests, however pleasant and desirable it
+may seem to self-styled anti-monopolists," and that "it is a calamity
+not only to the owners of the roads, but to the public also."</p>
+
+<p>According to his statement, the Traffic Association is simply a little
+innocent and inoffensive organization whose duty it is only to maintain
+rates, and he sees nothing wrong in allowing a few representatives of
+corporations to meet in secret and discuss, scheme and levy such a tax
+upon the commerce of this country as may suit their convenience; and he
+regrets that their attempts are "hampered by legislation which forbids
+the formation of pools." In other words, he proposes to have the case in
+court decided by a jury made up entirely of the parties at interest in
+the case. This piece of effrontery is about on a par with the average
+argument of this class of pleaders.</p>
+
+<p>Suppose we apply the same rule to other classes. Take the farmers, for
+instance. Let them have an organization for the purpose of maintaining
+rates, with their representatives meeting in secret and fixing the price
+of their produce and asking the Government to enforce their orders,
+pools and edicts, so as to afford them relief from selling corn at ten
+cents per bushel, beef and pork at a dollar and a half per hundred, and
+hay at two dollars per ton, and their other produce at proportionate
+rates. Who would condemn such an organization more severely than the
+advocates of the Traffic Association? They never find terms sufficiently
+expressive with which to condemn the Farmers' Alliance and other kindred
+associations, which are organized solely for the purpose <span class='pagenum'><a name="Page_301" id="Page_301">[Pg 301]</a></span>of lawfully
+correcting existing abuses and of forming a wholesome public sentiment.</p>
+
+<p>It is evident that some progress is being made upon this question, as
+Mr. Walker admits that "the fortunes which have been made are seen to
+have been the result of dealings in stocks and in titles, the
+consequences of which, if involving wrong, are rightly charged against
+the lax legislation which has made such operations possible." "Every
+person seeking for the services of a common carrier is entitled to know
+that he is charged no more than his neighbor who obtains the same
+service under the same conditions." "The theory that any unjust
+discrimination or unjust preference or advantage in respect to
+individuals, communities or descriptions of traffic must be suppressed
+by the State, has become firmly lodged in legislation." This improvement
+in the sentiment of railroad men is gratifying.</p>
+
+<p>This gentleman, as has already been stated, was for several years a
+member of the Interstate Commerce Commission, a board created by
+Congress for the special purpose of enforcing the law which he so
+unreservedly condemns. No doubt Mr. Walker performed the duties of his
+office as he understood them; but if he held then the views which he
+holds now, his work must have been a hindrance rather than a help to the
+commission.</p>
+
+<p>Among financial journals, so many of which are devoted to the support of
+vicious and demoralizing methods, and are ever ready to defend whatever
+is bad in corporation management, it is refreshing to find occasionally
+one that exposes abuses and favors the earning of legitimate dividends,
+and it is a pleasure to quote the following from the June number, 1892,
+of the <i>Banker's Magazine</i>:</p>
+
+<div class="blockquot"><p>"There are two widely differing theories concerning the
+<span class='pagenum'><a name="Page_302" id="Page_302">[Pg 302]</a></span>management of railroads in this country; one theory is that
+profits should be acquired from fluctuations in the stock,
+and the other is that the profits should be acquired in the
+old-fashioned way, by performing a useful service and
+receiving a reward therefor, to be divided among the
+stockholders in the way of a dividend. These two theories
+are so different in their practical operation that they give
+rise to the most diverse consequences. Of course, many
+railroads are not dividend-earning, and with these the
+profits to the managers and those who are allied with them
+must come from stock fluctuations and from whatever sucking
+arrangements can be devised whereby their vitality or
+sustenance can be acquired by the favored few who are in
+control. Unfortunately, there are many railroads in this
+condition, the history of which is too well known to require
+description. Once in control, the way is easy to retain it
+and to make money by a thousand devices which ingenious and
+unscrupulous managers are constantly planning and putting
+into operation.</p>
+
+<p>"The consequences of the other theory are as different, both
+to the corporate property and to the public, as can be
+imagined. When a railroad is properly managed and earning
+dividends, a policy of development is adopted, having for
+its end the natural expansion of the property in harmony
+with the growth of the country, the needs of business and
+the desires of the people. The fruits of such a policy may
+not be apparent at once, but they inevitably come, and, when
+they are reaped, are enjoyed and appreciated by all. Only by
+such a policy can our roads ever become great, commanding
+the confidence of the people, and fulfilling their highest
+uses; in short, only by such a policy can a railroad be
+brought to a high degree of perfection.</p>
+
+<p>"The difference is clearly seen by contrasting a road of
+this character with one that is run by the Wall Street
+method for stock-jobbing purposes. By this method dividends
+are not regarded as of so much consequence to investors as
+an instrument or argument for affecting the value of the
+stock. In other words, if a dividend is earned and paid at
+all, it is chiefly as an instrument or agency <span class='pagenum'><a name="Page_303" id="Page_303">[Pg 303]</a></span>for
+stock-jobbing purposes, and not because the road is managed
+primarily for this purpose. Furthermore, dividends, too
+often, are disregarded altogether, as well as any policy of
+permanent improvement or of general development. The
+cardinal idea always is, how can the road be maintained and
+manipulated so as to cause the largest variations in the
+stock and the most money for the managers?</p>
+
+<p>"Too many managers, as is well known, have made great sums
+for themselves and built additions long in advance of their
+means, and have seriously crippled their corporations by so
+doing. But they have made fortunes for themselves. What the
+great majority of mankind consider is the immediate present,
+and not the future.</p>
+
+<p>"It is undoubtedly a hard thing for those who are conducting
+their corporations in an honest and able manner, for the
+benefit of their owners, to keep still while their enemies
+are pounding them and glorifying those who are managing
+their corporations for personal and corrupt ends; but all
+cheap and false practices must finally lead to disaster. We
+hear a great deal of this kind of thing nowadays. One of the
+evil effects of speculation and newspaper reading is, that
+people have got in the way of not thinking much for
+themselves; of regarding as truth whatever is printed, and
+of not opening their eyes wide enough to discover the
+shallowness of the reasonings and falsehoods that are put
+forth at the behests of speculators, or of those who are
+managing corporations for speculative purposes. The American
+people have had an amazing experience in losses from
+following advice thus plentifully and freely given;
+nevertheless, there seem to be persons left who are willing
+to listen and fall into the old ways and be trapped, as so
+many others have been in the past. There is a considerable
+class, having means and nothing to do, who perhaps might
+just as well lose their money in poker, railroad or grain
+speculation as in any other way, for this furnishes about
+the only source of amusement to them; but, after all, there
+is no reason why railroads should be managed so exclusively
+for the amusement of this class. The time is coming, and
+probably is not far <span class='pagenum'><a name="Page_304" id="Page_304">[Pg 304]</a></span>off, when they will get enough of it;
+and railroad investors will conclude that dividends for
+themselves are better than profits for speculators; and when
+they do, all stock-jobbing managers will be consigned to the
+limbo which is their proper destination."</p></div>
+
+<p>This magazine is edited by Mr. Albert S. Bolles, author of several
+excellent financial works. We are much indebted to him for the sound
+banking system which we now have, and which has contributed so largely
+to the unexampled prosperity which this country has enjoyed for the last
+thirty years.</p>
+
+<p>Our national banking system illustrates well how service able the
+corporation may be to a people when its use is restricted by wholesome
+laws to the performance of its proper functions.</p>
+
+<p>The old United States Bank was organized for practically the same
+purposes as our present national banks, but for lack of proper
+restrictions its use was soon perverted to ignoble purposes. The bank
+managers showed so much partiality in the distribution of their favors
+and accommodations, and meddled in politics to such an extent, that the
+people became disgusted with it, and a renewal of its charter was
+refused.</p>
+
+<p>Mr. Clay clearly saw how dangerous a great money power might become to
+our country, and, in opposing the extension of the bank's charter, said:</p>
+
+<div class="blockquot"><p>"The power to charter companies is one of the most exalted
+attributes of sovereignty. In the exercise of this gigantic
+power we have seen an East India Company created, which is
+in itself a sovereignty, which has subverted empires and set
+up new dynasties, and has not only made war, but war against
+its legitimate sovereign! Under the influence of this power
+we have seen rise a South Sea Company, and a Mississippi
+Company, that distracted and convulsed all Europe, and
+menaced a total overthrow of all credit and confidence, and
+universal bankruptcy."</p></div>
+
+<p><span class='pagenum'><a name="Page_305" id="Page_305">[Pg 305]</a></span>Can we afford to ignore the lessons of history?</p>
+
+<p>Mr. Henry Clews makes some spicy and pertinent observations on railroad
+men's methods in an article which recently appeared in the <i>Railway
+Age</i>. Mr. Clews seems to have but little confidence in the average
+railroad director. He advises stockholders to exercise constant
+vigilance and defensive conservatism, "lest they become the instruments
+by which unscrupulous and crafty directors work out schemes that are in
+reality nothing but frauds or robbery." And then he adds:</p>
+
+<div class="blockquot"><p>"In estimating corporate acts we must never forget that,
+while the best of men will bear watching as to their
+individual dealings with others, they need to be doubly
+watched when they sit around a corporation board and vote as
+to transactions in respect of which none of them can be
+called to personal account. Temptations attack with enormous
+force when the gains are prospectively great and the risk of
+penalty inappreciable or non-existent."</p></div>
+
+<p>Mr. Clews also tells us how roads are wrecked by their boards of
+directors. "In one case," he says, "the stock of a leading railway,
+which in 1880 sold at 174, in 1884 sold at 22-1/2, and in 1885 at 22.
+This vast shrinkage of value was not owing to panic or to stringency of
+money, nor did it arise from a diminution of traffic on the original
+line; but it was because consolidation had been pushed to an extreme by
+the directors of the corporation, so much so that the entire system
+yielded no dividends; a fleet and useful animal had been loaded down
+with dead wood and rubbish till he could scarcely crawl; barren acres
+had been added to an originally fruitful farm until the whole estate
+could hardly pay taxes; a mass of rotten apples had been thrown into the
+measure with sound fruit, and buyers refused the whole as a mere heap
+<span class='pagenum'><a name="Page_306" id="Page_306">[Pg 306]</a></span>of corruption. And it was generally believed that the men who
+perpetrated this mischief under the names of 'construction,' 'requisite
+consolidation,' 'absorption of necessary branches,' etc., had made a
+great deal of money by it and had not made it honestly. But it was all
+done pursuant to legal forms and by boards of directors, so that the
+defrauded stockholders were without remedy."</p>
+
+<p>Mr. Clews then gives us a more detailed account of the way in which
+branch roads are built and absorbed, viz.:</p>
+
+<div class="blockquot"><p>"Given a useful, well constructed, dividend-paying road, a
+body of people with some capital and political influence,
+aided by some of the directors of this prosperous line;
+construct a branch road to some outside point; the more
+important such point the better, but that is of small
+consequence. The road gets itself built; it is bonded for
+more than it cost, and it cost twice as much as it ought,
+since the constructors were all together in the ring and
+have favored each other. Then the capital stock is fixed at
+so much, and this is mostly distributed among the
+constructors. The road then, swelled to a fictitious price
+of three or four to one, and not worth anything to start
+with, is ripe for absorption and consolidation. Its
+directors and those of the main line meet, confer and vote
+the measure through. They all profit by it, more or less,
+but their profits are enormously in excess of the trifling
+losses due to the shrinkage of values of the shares of the
+main line. A director of the main line may perhaps lose
+$20,000 on a thousand shares, but what is this when compared
+to a gain of hundreds of thousands in his holdings of the
+branch road, whose liabilities are assumed by his victimized
+corporation? And such a director would not be equal to the
+demands of his covetousness if he had not sold thousands of
+shares short, in anticipation of the fall which the
+transactions of himself and his associates were inevitably
+bound to produce."</p></div>
+
+<p>Mr. Clews concludes his article with the following passage:</p>
+
+<div class="blockquot"><p>"The profits realized on the speculative constructions are<span class='pagenum'><a name="Page_307" id="Page_307">[Pg 307]</a></span>
+enormous and have constituted the chief source of the
+phenomenal fortunes piled up by our railroad millionaires
+within the last twenty years. It is no exaggeration to
+characterize these transactions as direct frauds upon the
+public. They may not be such in a sense recognized by the
+law, for legislation has strangely neglected to provide
+against their perpetration; but morally they are nothing
+less, for they are essentially deceptive and unjust, and
+involve an oppressive taxation of the public at large for
+the benefit of a few individuals who have given no
+equivalent for what they get. The result of this system is
+that, on the average, the railroads of the country are
+capitalized at probably fully 50 per cent. in excess of
+their actual cost. The managers of the roads claim the right
+to earn dividends upon this fictitious capital, and it is
+their constant effort to accomplish that object. So far as
+they succeed they exercise an utterly unjust taxation upon
+the public by exacting a compensation in excess of a fair
+return upon the capital actually invested. This unjust
+exaction amounts to a direct charge and burden on the trade
+of the country which limits the ability of the American
+producer and merchant to compete with those of foreign
+nations and checks the development of our vast natural
+resources. In a country of 'magnificent distances' like ours
+the cost of transportation is one of the foremost factors
+affecting the capacity for progress; and the artificial
+enhancement of freight and passenger rates due to this false
+capitalization has been a far more serious bar to our
+material development than public opinion has yet realized.
+The hundreds of millions of wealth so suddenly accumulated
+by our railroad monarchs is the measure of this iniquitous
+taxation, this perverted distribution of wealth. This
+creation of a powerful aristocracy of wealth, which
+originated in a diseased system of finance, must ultimately
+become a source of very serious social and political
+disorder. The descendants of the mushroom millionaires of
+the present generation will consolidate into a broad and
+almost omnipotent money power, whose <span class='pagenum'><a name="Page_308" id="Page_308">[Pg 308]</a></span>sympathies and
+influence will conflict with our political institutions at
+every point of contact. They will exercise a vast control
+over the larger organizations and movements of capital;
+monopolies will seek protection under their wing, and by the
+ascendancy which wealth always confers they will steadily
+broaden their grasp upon the legislation, the banking and
+commerce of the nation."</p></div>
+
+<p>These are strong words, but they come from a man whose thirty years'
+experience in Wall Street enables him to speak intelligently upon this
+subject and who certainly cannot be accused of being prejudiced against
+railroad men or corporate investments. In a recent number of his <i>Weekly
+Financial Review</i> Mr. Clews said of the railroad stock market:</p>
+
+<div class="blockquot"><p>"Judgment passes for little in estimating the future of many
+securities, for the market is almost wholly under the
+control of comparatively few persons, whose operations must
+inevitably influence the value of thousands of millions of
+stocks and bonds. Never in the history of Wall Street was
+the value of such an enormous aggregation of securities so
+absolutely under the control of so small a circle as at this
+time. Such a state of affairs cannot be considered
+satisfactory; hence not only is speculation likely to be
+unhealthily stimulated, but the future of these combinations
+gives birth to a variety of uncertainties which, while they
+may elevate prices, will certainly not add to their
+stability."</p></div>
+
+<p>If the silly claim of railroad men, that Western people do not invest in
+railroad securities on account of their unprofitableness, needed any
+answer, the above words would furnish it.</p>
+
+<p>The May, 1893, number of the <i>North American Review</i> contains an article
+entitled "A Railway Party in Politics," by Mr. H. P. Robinson, editor of
+the <i>Railway Age</i>. Mr. Robinson belongs to that class of reformers who
+can see but one side of a question, and only a short-sighted <span class='pagenum'><a name="Page_309" id="Page_309">[Pg 309]</a></span>view of
+that. He is as zealous as a new convert, and is expert, in the ward
+politician's way, in defense of the worst abuses practiced by railway
+men. He says:</p>
+
+<div class="blockquot"><p>"That the right to 'regulate' the railways, which is vested
+in the State, has now been carried in the West to a point
+not only beyond the bounds of justice, but beyond its
+constitutional limits, and that it would soon be impossible
+for any railway company in the West to keep out of
+bankruptcy unless some vigorous and concerted action were
+taken to arouse public opinion, and to compel a modification
+of the present policy.</p>
+
+<p>"It is easy to see how much strength such a party, if
+formed, would possess. According to the reports of the
+Interstate Commerce Commission there were in the immediate
+employ of the railways of the United States a year and a
+half ago 749,301 men, all or nearly all voters, which number
+has now, it may be assumed, been increased to about 800,000.
+There are, in addition, about one million and a quarter
+shareholders in the railway properties of the country; and
+in other trades and industries immediately dependent upon
+the railways for their support there are estimated to be
+engaged, as principals or employes, over one million voters
+more. These three classes united would give at once a massed
+voting strength of some three millions of voters. There are
+also, in the smaller towns especially, and at points where
+railway shops are located, all over the country, a number of
+persons, small tradesmen, boarding-house keepers, etc., who
+are dependent for their livelihood on the patronage of
+railway employes, and whose vote could unquestionably be
+cast in harmony with any concerted employes' movement.
+Moreover, unlike most new parties, this party would be at no
+loss for the sinews of war or for the means of organization.
+The men whom it would include form even now almost a
+disciplined army. With them co-operation is already a habit.
+While the financial backing and the commercial and physical
+strength of which the party would find itself possessed from
+its birth would be practically unlimited....</p>
+
+<p><span class='pagenum'><a name="Page_310" id="Page_310">[Pg 310]</a></span>"For the present it seems to them better to believe that the
+people&mdash;those people who are not railway men&mdash;are acting now
+only in ignorance, and that as soon as they see the truth
+they will, by their own instinctive sense of justice,
+re-mould their opinions and their policy without political
+coercion.</p>
+
+<p>"At the same time there has already come into existence in
+some of the Western States a movement which has its
+significance and its practical influence. This is what is
+called the Railway Employes' Club movement. It started in
+Minnesota, at a small meeting of railway employes held in
+Minneapolis in 1888. From that meeting the movement grew,
+and made a certain feeble effort, not entirely unsuccessful,
+to influence the State election in the fall of that year. By
+the State election of 1890 the movement had grown and was
+better organized, and the Employes' Club did exercise
+considerable influence in the election of certain of the
+State officers and certain members of the State legislature
+in that year.</p>
+
+<p>"From Minnesota the movement spread to Iowa, and there is no
+contradiction of the fact that the railway employes' vote
+was one of the strongest forces in the State election of the
+fall of 1891. It also overflowed into Kansas, Nebraska,
+Missouri and Texas. Had the election of last November been
+normal it is probable that the effect of the Railway
+Employes' Club vote would have been as visible in two or
+three of those States then as it had been in Iowa in the
+preceding year. But in the deluge which occurred all trace
+of the smaller streams and currents was obliterated. Had the
+members of the clubs not taken the precaution to do
+considerable work in the local nominating conventions of
+both parties they would be compelled to confess that their
+campaign of 1892 was a failure....</p>
+
+<p>"So far the clubs have admitted and will admit of no
+negotiations with the State committees of other parties.
+They hold their own meetings and decide for themselves that
+such and such a candidate is inimical to their interests as
+railway employes, and such and such a man is their friend.
+Then they go to the polls and vote&mdash;voting in the <span class='pagenum'><a name="Page_311" id="Page_311">[Pg 311]</a></span>main
+their normal party ticket, scratching only a man here and a
+man there, their attention being chiefly centered upon
+members of the boards of railroad commissioners and of the
+State legislatures.</p>
+
+<p>"In Minnesota in 1890 their weight was thrown chiefly in
+favor of Republicans. In Iowa in 1891 it was given to
+Democrats. In all States the men whom they oppose are those
+who have made themselves conspicuous as 'Granger' and
+anti-railway politicians. The keynote of the movement and
+the one plank in the platform of the clubs is that the
+extreme anti-railroad legislation of late years has reduced
+the earnings of the companies to a point at which they are
+unable any longer to keep full forces on their payrolls or
+to pay such wages as they should, and that by this
+legislation the railway employes are necessarily the
+immediate sufferers....</p>
+
+<p>"A railway party is therefore already in existence.... And
+moreover, though accidentally only, it is working forcibly
+in behalf of railway interests as a whole....</p>
+
+<p>"Meanwhile Mr. A. F. Walker, the chairman of the Joint
+Committee of the Trunk Line and Central Traffic
+Associations, prophesies that if things go on as they are
+going now, before long 'the managers of the railways will be
+chiefly receivers.' In the year 1891 receivers were
+appointed for twenty-six companies in the United States,
+representing $84,479,000 of capital, and twenty-one
+companies, with 3,223 miles of road, with a capitalization
+of $186,000,000, were sold under foreclosure.</p>
+
+<p>"It is doubtful whether the result which Mr. Walker
+foretells would be regarded as a calamity by the 'uninformed
+public opinion of the West.' That Minnesota railroad
+commissioner was quite sure of the public applause before he
+made his classic declaration that he proposed to 'shake the
+railroads over hell' before he had done with them, and the
+Governor of Iowa, who announced that he did not care if
+'every d&mdash;d railroad in the State went into bankruptcy'
+before the expiration of his term of office, knew that the
+sentiment would have the sympathies of his constituents.
+This attitude of the Western mind is, of course, largely
+explained by the fact that the people of <span class='pagenum'><a name="Page_312" id="Page_312">[Pg 312]</a></span>the West do not as
+a rule own railway securities. In two States (the only two
+in the West in which, so far as I am aware, the figures have
+been compiled) out of 27,645 stockholders in the lines
+within the State borders only 359 are residents of the
+States. If the other 27,286 were also residents of these
+States (that is to say, if 27,286 of the present residents
+were also stockholders in the railways), it is probable that
+the ferocity of the public opinion in these States against
+railways would be materially modified."</p></div>
+
+<p>It is evident that Mr. Robinson has not been as successful in organizing
+small tradesmen, boarding-house keepers, employes and shareholders into
+a new party as he contemplated, notwithstanding "it was at no loss for
+the sinews of war."</p>
+
+<p>He attempts to show that this movement originated with the employes, but
+it is too well known that the employes who organized the movement were
+under pay of the railroad companies and received their instructions from
+the railroad managers. The statement which Mr. Robinson attributes to
+the Governor of Iowa undoubtedly originated in the mind of one who is
+laboring to modify the ferocity of "the uninformed public opinion of the
+West." No Governor of Iowa ever made any such statement, nor ever
+entertained any such sentiment. It is a sheer fabrication.</p>
+
+<p>There are a number of standard text-books of law which are indispensable
+to the student of railroad questions desiring to go back to first
+principles. Only a few of them can be mentioned here.</p>
+
+<p>I. F. Redfield, in his "Law of Railways," says concerning the necessity
+for railroad supervision:</p>
+
+<div class="blockquot"><p>"Railways being a species of highway, and in practice
+monopolizing the entire traffic, both of travel and
+transportation, in the country, it is just and necessary and
+<span class='pagenum'><a name="Page_313" id="Page_313">[Pg 313]</a></span>indispensable to the public security that a strict
+legislative control over the subject should be constantly
+exercised."</p></div>
+
+<p>Regarding the original character of the railway as a common highway,
+Redfield says:</p>
+
+<div class="blockquot"><p>"The Railways Clauses Consolidation Act provides, in detail,
+for the use of railways by all persons who may choose to put
+carriages thereon, upon the payment of the tolls demandable,
+subject to the provisions of the statute and the regulations
+of the company. The view originally taken of railways in
+England evidently was to treat them as a common highway,
+open to all who might choose to put carriages thereon. But
+in practice it is found necessary for the safety of the
+traffic that it should be exclusively under the control of
+the company, and hence no use is, in fact, made of the
+railway by others."</p></div>
+
+<p>As to the questionable financial expedients so frequently resorted to in
+building American railways, this author says:</p>
+
+<div class="blockquot"><p>"This is not the place, nor are we disposed, to read a
+homily upon the wisdom of legislative grants, or the
+moralities of moneyed speculations in stocks on the exchange
+or elsewhere. But it would seem that legislation upon this
+subject should be conducted with sufficient deliberation and
+firmness so as not to invest such incorporations with such
+unlimited powers as to operate as a net to catch the unwary,
+or as a gulf in which to bury out of sight the most
+disastrous results to private fortunes, which has justly
+rendered American investments, taken as a whole, a reproach
+wherever the name has traveled."</p></div>
+
+<p>The opinion is expressed in this work that under certain circumstances
+railroad securities should be aided by State credit, and is supported by
+the following argument:</p>
+
+<div class="blockquot"><p>"Here we have no national funded stock in convenient sums
+for small investment, and which, being sure, is really a
+great blessing to the mass of those who wish to invest
+moderate sums as a protection against age or <span class='pagenum'><a name="Page_314" id="Page_314">[Pg 314]</a></span>calamity. In
+those countries where such opportunities exist, it removes
+all temptation to invest small sums in these enterprises,
+which, however necessary for the public, such small owners
+can but poorly afford to aid in carrying forward, and which
+consequently should in justice either be guaranteed or owned
+by the State, or at all events aided by State credit, when
+they become indispensable for the public convenience."</p></div>
+
+<p>Upon the subject of eminent domain Redfield says:</p>
+
+<div class="blockquot"><p>"That railways are but improved highways, and are of such
+public use as to justify the exercise of the right of
+eminent domain, by the sovereign, in their construction, is
+now almost universally conceded."</p></div>
+
+<p>Kent says in his "Commentaries on American Law":</p>
+
+<div class="blockquot"><p>"The right of eminent domain, or inherent sovereign power,
+gives to the legislature the control of private property for
+public uses, <i>and for public uses only</i>.... So, lands
+adjoining New York canals were made liable to be assumed for
+the public use, so far as was necessary for the great object
+of the canals.... In these and other instances which might
+be enumerated, the interest of the public is deemed
+paramount to that of any private individual; and yet, even
+here, the constitutions of the United States and of most of
+the States of the Union have imposed a great and valuable
+check upon the exercise of legislative power, by declaring
+that private property should not be taken for public use
+without just compensation.... It undoubtedly must rest, as a
+general rule, in the wisdom of the legislature to determine
+when public uses require the assumption of private property;
+but if they should take it for a purpose not of a public
+nature, as if the legislature should take the property of A
+and give it to B, or if they should vacate a grant of
+property, or of a franchise, under the pretext of some
+public use or service, such cases would be gross abuses of
+their discretion, and fraudulent attacks on private right,
+and the law would clearly be unconstitutional and void."</p></div>
+
+<p><span class='pagenum'><a name="Page_315" id="Page_315">[Pg 315]</a></span>Concerning the construction of corporate powers Kent lays down the
+following rule:</p>
+
+<div class="blockquot"><p>"The modern doctrine is to consider corporations as having
+such powers as are specifically granted by the act of
+incorporation, or as are necessary for the purpose of
+carrying into effect the powers expressly granted, and as
+having no other. The Supreme Court of the United States
+declared this obvious doctrine, and it has been repeated in
+the decisions of the State courts. No rule of law comes with
+a more reasonable application, considering how lavishly
+charter privileges have been granted. As corporations are
+the mere creatures of law, established for special purposes,
+and derive all their powers from the acts creating them, it
+is perfectly just and proper that they should be obliged
+strictly to show their authority for the business they
+assume, and be confined in their operations to the mode and
+manner and subject matter prescribed."</p></div>
+
+<p>As to the duties of common carriers he says:</p>
+
+<div class="blockquot"><p>"As they hold themselves to the world as common carriers for
+a reasonable compensation, they assume to do and are bound
+to do what is required of them in the course of their
+employment, if they have the requisite convenience to carry
+and are offered a reasonable and customary price; and if
+they refuse without just ground, they are liable to an
+action."</p></div>
+
+<p>Judge Cooley, in his very able work, "Constitutional Limitations,"
+refers to the so-called vested rights of corporations and the abuse
+growing out of them as follows:</p>
+
+<div class="blockquot"><p>"It is under the protection of the decision in the Dartmouth
+College case that the most enormous and threatening powers
+in our country have been created, some of the great and
+wealthy corporations actually having greater influence in
+the country at large, and upon the legislation of the
+country, than the States to which they owe their corporate
+existence. Every privilege granted or right conferred&mdash;no
+matter by what means or on what pretense&mdash;being made
+inviolable by the Constitution, the <span class='pagenum'><a name="Page_316" id="Page_316">[Pg 316]</a></span>Government is
+frequently found stripped of its authority in very important
+particulars, by unwise, careless or corrupt legislation; and
+a clause of the Federal Constitution whose purpose was to
+preclude the repudiation of debts and just contracts
+protects and perpetuates the evil."</p></div>
+
+<p>The late President Garfield, in one of his legislative speeches, called
+attention to the fact that Chief Justice Marshall pronounced the
+decision in the Dartmouth College case ten years before the steam
+railway was born, and then said:</p>
+
+<div class="blockquot"><p>"I have ventured to criticise the judicial application of
+the Dartmouth College case, and I venture the further
+opinion that some features of that decision, as applied to
+the railway and similar corporations, must give way under
+the new elements which time has added to the problem."</p></div>
+
+<p>Charles Fisk Beach, Jr., in his recent work entitled "Commentaries on
+the Law of Private Corporations," well defines what constitutes
+dedication to a public use. He says:</p>
+
+<div class="blockquot"><p>"Whenever any person pursues a public calling and sustains
+such relations to the public that the people must of
+necessity deal with him, and are under a moral duress to
+submit to his terms if he is unrestrained by law, then, in
+order to prevent extortion and an abuse of his position, the
+price he may charge for his services may be regulated by
+law. When private property is affected with a public
+interest it ceases to be <i>juris privati</i> only. This was said
+by Lord Chief Justice Hale more than three hundred years ago
+in his treatise <i>De Portibus Maris</i>, and has been accepted
+without objection as an essential element in the law of
+property ever since."</p></div>
+
+<p>Treating of the fiduciary position of directors and officers of
+corporations, the same author says:</p>
+
+<div class="blockquot"><p>"The directors, officers and agents of a corporation are
+held to the general rule of law resting 'upon our great
+moral obligation to refrain from placing ourselves in
+relations which ordinarily excite a conflict between
+self-interest <span class='pagenum'><a name="Page_317" id="Page_317">[Pg 317]</a></span>and integrity.' The directors and officers
+are the agents of the company, and while acting in that
+capacity for it cannot deal with themselves to the detriment
+of the corporation. All contracts of that character are
+voidable at the option of the corporation."</p></div>
+
+<p>And further he says:</p>
+
+<div class="blockquot"><p>"A director whose personal interests are adverse to those of
+the corporation has no right to act as a director. As soon
+as he finds he has personal interests which are in conflict
+with those of the company he ought to resign."</p></div>
+
+<p>T. Carl Spelling, in his treatise on "The Law of Private Corporations,"
+says of pooling arrangements:</p>
+
+<div class="blockquot"><p>"Courts long ago exercised jurisdiction to regulate rates of
+<i>quasi</i> public corporations, and on the same principle will
+refuse to enforce pooling contracts between railroad and gas
+companies. Such contracts are void as against public
+policy.... There is substantial harmony between the English
+and American definitions of monopoly, the two countries
+agreeing that contracts entered into by and between two or
+more corporations, the necessary result of whose performance
+will crush and destroy competition, are illegal."</p></div>
+
+<p>Upon the subject of eminent domain Mr. Spelling remarks:</p>
+
+<div class="blockquot"><p>"That the legislature may thus select any agency it sees fit
+for the exercise of eminent domain, and also that it may
+determine what purposes shall be deemed public, are
+propositions too deeply rooted in the jurisprudence of this
+country to admit now of doubt or discussion. Making an
+application of this doctrine to railway operations,
+conceding it to be settled that these facilities for travel
+and commerce are a public necessity, if the legislature,
+reflecting the public sentiment, decide that the general
+benefit is better promoted by their construction through
+individuals or corporations than by the State itself, it
+would clearly be pressing a constitutional maxim to an
+absurd extreme if it were to be held that the public
+necessity should be only provided for in the way which is
+<span class='pagenum'><a name="Page_318" id="Page_318">[Pg 318]</a></span>least consistent with the public interest.... The power of
+eminent domain being an inherent element of sovereignty, it
+cannot be divested out of the State or abridged by contract
+or treaty so as to bind future legislatures. Nor can the
+right be divested by private contract."</p></div>
+
+<p>Concerning State control of corporations the same author says:</p>
+
+<div class="blockquot"><p>"The subordination of all private interests to the purposes
+of government, subject only to the condition that the object
+to be accomplished shall be one in which the public has an
+interest, is no longer an open question. In its general
+bearing this principle is too well settled and uniformly
+recognized&mdash;underlying the adjudications by courts of all
+cases involving constitutional provisions&mdash;to require more
+than a mere statement."</p></div>
+
+<p>And again he says:</p>
+
+<div class="blockquot"><p>"Nor is it longer necessary to seek a justification of the
+common practice of regulating the rates of charges and
+general management of railroads on the ground that they have
+received valuable franchises of a public nature and had
+important powers of sovereign character conferred upon them.
+That may be an important political consideration, and as
+such may strengthen the argument in favor of the right; but
+the right itself rests upon firmer ground, and upon other
+considerations than that of pecuniary consideration derived
+from the State. The State may regulate their business, not
+because they are corporations, nor yet because they are
+corporations of a particular kind, but because they, like
+the individuals of which they are composed, are subject to
+the laws which say that when one devotes his property to a
+use in which the public has an interest, he in effect grants
+to the public an interest in that use, and must submit to be
+controlled by the public for the common good to the extent
+of the interest he has thus created."</p></div>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_319" id="Page_319">[Pg 319]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER XI.</h2>
+
+<h2>RAILROADS AND RAILROAD LEGISLATION IN IOWA.</h2>
+<br />
+
+<p>The first survey for a railroad in the State of Iowa was made in the
+fall of 1852. The proposed road had its initial point at Davenport and
+followed a westerly course. It was practically an extension of the
+Chicago and Rock Island Railroad, which was then being built between
+Chicago and the Mississippi River. On the 22d day of December, 1852, the
+Mississippi and Missouri Railroad Company was formed, its object being
+to build, maintain and operate a railroad from Davenport to Council
+Bluffs. The articles of association were acknowledged before John F.
+Dillon, notary public, and filed for record in the office of the
+Recorder of Scott County, on the 26th of January, 1853, and in the
+office of the Secretary of State on the first day of February following.
+In 1853 the Mississippi and Missouri Railroad Company entered into an
+agreement with the Railroad Bridge Company of Illinois for the
+construction and maintenance of a bridge over the Mississippi at Rock
+Island. The work was commenced in the fall of that year, and the bridge
+was completed on April 21, 1856, it being then the only bridge spanning
+the Mississippi River. The first division of the Mississippi and
+Missouri Railroad, extending from Davenport to Iowa City, was completed
+on the first of January, 1856, and was formally opened two days later. A
+branch line to Muscatine was completed shortly thereafter. On the first
+day of July the State of Iowa had in all sixty-seven miles of railroad,
+bonded at $14,925 a mile, which at that time <span class='pagenum'><a name="Page_320" id="Page_320">[Pg 320]</a></span>probably represented the
+total cost of construction. The earnings of these sixty-seven miles of
+road during the six months following July 1, 1856, amounted to $184,193,
+or $2,749 per mile, which was equal to an annual income of about $5,500
+per mile.</p>
+
+<p>On the 15th of May, 1856, Congress granted to the State of Iowa certain
+lands for the purpose of "aiding in the construction of railroads from
+Burlington, on the Mississippi River, to a point on the Missouri River
+near the mouth of the Platte River; from the city of Davenport, Iowa, by
+way of Iowa City and Fort Des Moines, to Council Bluffs; from Lyons City
+northwesterly to a point of intersection with the main line of the Iowa
+Central Air Line Railroad near Maquoketa, thence on said line running as
+near as practical to the forty-second parallel across the State; and
+from the city of Dubuque to the Missouri River near Sioux City." The
+grant comprised the alternate sections designated by odd numbers and
+lying within six miles from each of the proposed roads. Provision was
+also made for indemnity for all lands covered by the grant which were
+already sold or otherwise disposed of.</p>
+
+<p>The wisdom of the land-grant policy has been questioned. When these
+grants were made it was believed by many that railroads would not and
+could not be built in the West without such aid. While others did not
+share this opinion, they at least supposed that land grants would
+greatly stimulate railroad enterprise and lead to the early construction
+of the lines thus favored.</p>
+
+<p>The land grant of the Mississippi and Missouri Railroad was a mere
+donation for that part of the line which was already completed at the
+time the grant was made; and the extension of this line, as well as the
+construction of <span class='pagenum'><a name="Page_321" id="Page_321">[Pg 321]</a></span>the other lines to which the grant applied, was not
+made as fast as had been anticipated. The price of all Government lands
+lying outside of the land-grant belts was $1.25 per acre. To reimburse
+the public treasury for the loss resulting from these grants, the price
+of lands situated within the land-grant belts was advanced to $2.50 per
+acre, practically compelling the purchasers of the even-numbered
+sections of land, instead of the Government, to make the donation to the
+railroads, it being supposed that the benefits resulting to those
+regions from the immediate construction of railroads would
+correspondingly enhance the value of the alternate sections of land
+reserved by the Government. Designing men soon saw the advantages which
+the situation offered. They combined with their friends to organize
+companies for the construction of the land-grant roads, built a small
+portion of the proposed line, to hold the grant, and then awaited
+further developments, or rather the settlement of the country beyond.
+There are those who believe that the doubling of the price of Government
+land within the belt of the proposed land-grant roads greatly retarded
+immigration and with it the construction of roads. They hold that, had
+no grant whatever been made to any railroad company and had equal
+competition in railroad construction been permitted, the Iowa through
+lines, instead of following, would have led, the tide of immigration.</p>
+
+<p>It has been seen that in 1856 the Mississippi and Missouri Railroad was
+completed as far as Iowa City. On the second day of June of that year
+its Board of Directors asked the Governor of the State to convene the
+General Assembly in extra session, to consider the disposition which
+should be made of the recent Congressional grant. This urgency might
+lead one to suppose that the company <span class='pagenum'><a name="Page_322" id="Page_322">[Pg 322]</a></span>was anxious to extend its line at
+the earliest opportunity. The General Assembly was convened, and the
+land given to the State by Congress for the purpose of aiding in the
+construction of a railroad from Davenport to Council Bluffs was given to
+the Mississippi and Missouri Railroad Company. The act was approved by
+the Governor on July 14, 1856, and three days later the company
+"assented to and accepted the grant." It then executed mortgage after
+mortgage, and built a branch line through quite a populous territory,
+from Muscatine to Washington, but the main line made very slow progress.
+In 1865 the bonded debt of the company amounted to $6,851,754, although
+the line was completed only to Kellogg, in Jasper County, about forty
+miles east of Des Moines. In spite of the fact that the cost of
+operating the road had from the beginning varied but little from 60 per
+cent. of its gross receipts, its president, in a circular letter to the
+stock-and bondholders, dated October 20th, 1865, made the statement that
+the company was "driven to the necessity of selling the road or
+reorganizing." In 1866 suit was brought in the Circuit Court of the
+United States for the District of Iowa for the foreclosure of the
+company's mortgages, and a decree of foreclosure was entered on the 11th
+day of May of that year. The property was sold on the 9th day of July
+following at Davenport, and was purchased by the Chicago, Rock Island
+and Pacific Railroad Company, which was incorporated in this State a few
+weeks previous to the sale, for the purpose of acquiring the railroads
+built by the Mississippi and Missouri Railroad Company with all its
+appurtenant property, "and all the rights, privileges and franchises
+granted by the act of Congress of May 15th, 1856, to the State of Iowa,
+and by the State of Iowa granted to the said Mississippi and <span class='pagenum'><a name="Page_323" id="Page_323">[Pg 323]</a></span>Missouri
+Railroad Company, and when so acquired to maintain and operate the said
+railroad." It is a significant fact that all the corporators of the new
+company, except one, were directors of the bankrupt company. On the 20th
+of August, 1866, the Chicago, Rock Island and Pacific Company of the
+State of Iowa consolidated with the Chicago, Rock Island and Pacific
+Railroad Company of Illinois, and conveyed all its property, powers and
+franchises to the consolidated company. The validity of the
+consolidation was questioned by a large number of stock-and bondholders,
+and the courts were appealed to to issue injunctions restraining the
+consolidated company from extending its line or expending any money
+obtained through the sale of its securities. In this predicament the
+company turned to the Iowa legislature for protection. Anxious to secure
+the early completion of the road, the Twelfth General Assembly, by an
+act approved February 11th, 1868, recognized the consolidated company,
+and resumed and granted to it "all right or interest" which the State
+had in the lands previously granted to the Mississippi and Missouri
+Railroad Company. The act expressly provided, however, that the Chicago,
+Rock Island and Pacific Railway Company should "at all times be subject
+to such rules, regulations and rates of tariff for transportation of
+freight and passengers as may from time to time be enacted and provided
+for by the General Assembly of the State of Iowa," and that if the
+company should neglect to comply with any of the requirements of the
+act, it should forfeit to the State all its franchises and corporate
+rights acquired by or under the laws of the State, and all lands granted
+to aid in the construction of its road. The line was completed to
+Council Bluffs in June, 1869.</p>
+
+<p>The lands in aid of the construction of a railroad running across the
+State, as nearly as practicable along the <span class='pagenum'><a name="Page_324" id="Page_324">[Pg 324]</a></span>forty-second parallel, were
+granted by the General Assembly to the Iowa Central Air Line on the 14th
+of July, 1856, but as this company failed to fulfill the conditions of
+its grant, it was, on the 17th of March, 1860, transferred to the Cedar
+Rapids and Missouri River Railroad Company. This company completed the
+road to Marshalltown in 1862, to Nevada in 1864, to Boone in 1865, and
+to Council Bluffs in the fall of 1867.</p>
+
+<p>The Burlington and Missouri River road reached the Missouri River but a
+few months later. Ten years after this company had received its grant,
+its line had only been completed as far as Albia, in Monroe County. In
+1867 the road was built little more than half across the State. But it
+managed not to be far behind its two rivals on the north in reaching the
+Missouri River.</p>
+
+<p>At first sight it might seem as if these companies had all at once
+become awake to their obligations. When it is remembered, however, that
+in 1869 the junction of the Union Pacific and Central Pacific railroads
+was effected, and thus a continuous line across the continent formed,
+the conclusion lies near that the haste with which the three Iowa
+land-grant roads were completed was simply the result of a strife for
+the large amount of through business which the completion of the Pacific
+route promised to bring to them.</p>
+
+<p>No such inducement existed for the Dubuque and Sioux City Company, and
+twelve years after receiving its grant it had not yet built half of its
+line. In his message to the Twelfth General Assembly, delivered January
+14, 1868, Governor Stone said: "Under the provisions of the act adopted
+by the General Assembly, at its extra session (in July, 1856), this (the
+Dubuque and Sioux City) company became the beneficiary of the grant
+designed to secure the <span class='pagenum'><a name="Page_325" id="Page_325">[Pg 325]</a></span>construction of a railroad leading from Dubuque
+to Sioux City, and this valuable donation was accepted from the State,
+with all the terms and conditions imposed. A large portion of this grant
+has already been absorbed by the company, in various ways, by pretended
+sales and incumbrances. This road has been constructed to Iowa Falls, a
+distance of 143 miles from Dubuque, but I am unable to discover any
+reliable evidence of earnest intention on the part of this company to
+construct the line to its terminal point on the Missouri River."</p>
+
+<p>The Governor further recommended that the General Assembly pass an act
+resuming the control over these lands. At about the same time an
+agreement was effected between the Iowa Falls and Sioux City Railroad
+Company (which was organized in the fall of 1867) and the Dubuque and
+Sioux City Railroad Company, by which the latter transferred to the
+former its land grant for the unfinished portion of the Dubuque and
+Sioux City road. This agreement was confirmed by the General Assembly,
+through an act approved April 7, 1868. The road was completed to Fort
+Dodge in August, 1869, and to Sioux City a year or two later. The entire
+line was then leased to the Illinois Central.</p>
+
+<p>The land grant to this line of road embraced over 1,000,000 acres of the
+finest lands of the State. We can appreciate the magnitude of this
+donation when we consider that, had these lands been sold at only $8 per
+acre, the proceeds would have paid the whole expense of building and
+equipping the road from Dubuque to Sioux City. The lands granted to the
+C., R. I. &amp; P. R. R. were sold at an average price of over $8 per acre,
+and those of the B. &amp; M. at over $12 per acre.</p>
+
+<p>Among the other important land grants is that made to the McGregor
+Western Railroad Company. This <span class='pagenum'><a name="Page_326" id="Page_326">[Pg 326]</a></span>company was the successor of the
+McGregor, St. Peters and Missouri River Railroad Company, which was
+organized in 1857 for the purpose of constructing a railroad from
+McGregor to the Missouri River. The construction of the road was
+commenced in 1857 at McGregor. Large local subscriptions were taken
+along the proposed line, the writer being one of the subscribers. Work
+was continued the next year until much of the heavy grading had been
+done, when the road was allowed to go through the process of
+foreclosure, like many other roads built in the West at that time. The
+old stock was completely wiped out, and new owners came into possession
+of the property, reorganizing under the name of the McGregor Western
+Railway Company. Nearly all the early investments of Iowa people were
+thus confiscated by the same class of men who now cry out loudly against
+confiscatory measures. By an act of Congress approved May 12, 1864, the
+State of Iowa was granted, for the use and benefit of the McGregor
+Western Railroad Company, every alternate section of land designated by
+odd numbers for ten sections in width on each side of the proposed road.
+The act contained the condition that in the event of the failure of said
+McGregor Western Railroad Company to build twenty miles of said road
+during each and every year from the date of its acceptance of the grant
+the State might resume the grant and so dispose of it as to secure the
+completion of the road in question. The McGregor Western Railroad
+Company failing to comply with the conditions of the grant, the General
+Assembly on the 27th day of February, 1868, resumed the lands and on the
+31st day of March of the same year regranted them to the McGregor and
+Sioux City Railway Company. The act specially provided that the company
+accepting <span class='pagenum'><a name="Page_327" id="Page_327">[Pg 327]</a></span>the grant "shall at all times be subject to such rules,
+regulations and rates of tariff for the transportation of freight and
+passengers as may from time to time be enacted and provided for by the
+General Assembly of the State of Iowa, and further subject to the
+conditions, limitations, restrictions and provisions contained in this
+act and in the acts of Congress granting said lands to the State of
+Iowa." It also contained the condition that at least twenty miles of
+road should be built by the company every year and that the whole road
+should be completed to the intersection of the then proposed railway
+from Sioux City to the Minnesota State line by the first day of
+December, 1875.</p>
+
+<p>The McGregor and Sioux City Railway Company also failing to comply with
+the terms of the grant, the lands were again resumed by the General
+Assembly on March 15th, 1876, and regranted to the McGregor and Missouri
+River Railroad Company upon the condition that it complete the road to
+the intersection of the Sioux City and St. Paul Railroad on or before
+the first day of December, 1877.</p>
+
+<p>But the State found itself again disappointed, and two years later the
+General Assembly for the third and last time resumed its grant and then
+conferred it upon the Chicago, Milwaukee and St. Paul Railway Company
+upon the express conditions that it complete the road to Spencer on or
+before the first day of January, 1879, and to Sheldon within a year
+thereafter, and that the road should at all times be subject to State
+control. The road was completed to Sheldon without delay, and on the
+30th of November, 1878, the Governor of the State certified to the
+Secretary of the Interior that the Chicago, Milwaukee and St. Paul
+Railway Company had completed its road <span class='pagenum'><a name="Page_328" id="Page_328">[Pg 328]</a></span>from Algona to Sheldon in
+compliance with the conditions of the original grant and the laws of the
+State.</p>
+
+<p>It thus took over twenty years to complete this road. Ten years after
+its construction had commenced it had only reached Calmar in Winneshiek
+County. In 1869 the road was completed to Clear Lake and in 1870 to
+Algona. This point remained its terminus until it passed into the hands
+of the Chicago, Milwaukee and St. Paul Railway Company.</p>
+
+<p>The State of Iowa has not derived that benefit from the large land
+grants made to its railroads which her people had a right to expect. In
+spite of these grants roads were built only when there was reason to
+believe that they would be immediately profitable to their owners. The
+land grants enriched the promoters of these enterprises much more than
+they did the State in whose interest the grants were presumed to be
+made. As a rule they enabled scheming men to hold the selected territory
+until a railroad through it promised to be a safe and profitable
+investment, and to avoid the payment of taxes on their millions of acres
+of land, which in the meantime became very valuable. Other roads were
+built at an early day without Government aid. They were pushed forward
+by the current of immigration until the threatened competition of roads
+favored by these grants checked their progress. The Chicago, Iowa and
+Nebraska road may be cited as a fair illustration. It was projected on
+the 26th of January, 1856, in the town of Clinton, to be built from
+Clinton to the Missouri River via Cedar Rapids. It was opened to De Witt
+in 1858 and completed to Cedar Rapids the following year. The road was
+82-1/2 miles long and was built entirely with private means, receiving
+neither legislative aid nor local subsidy. It is <span class='pagenum'><a name="Page_329" id="Page_329">[Pg 329]</a></span>more than probable
+that this road would at an early day have been completed to the Missouri
+River, had it not feared the rivalry of the subsidized Cedar Rapids and
+Missouri road.</p>
+
+<p>The total number of acres of land granted by Congress to aid the
+construction of Iowa roads is 4,069,942. A fair idea of the value of
+these lands may be obtained from the fact that the Chicago, Rock Island
+and Pacific Railroad Company sold over half a million acres of its lands
+at an average of $8.68 per acre, and the Chicago Burlington and Quincy
+sold nearly 350,000 acres at an average of $12.17 per acre.</p>
+
+<p>But land grants form only a small part of the public and private
+donations which have been made to Iowa roads. Including the railroad
+taxes voted by counties, townships and municipalities, the grants of
+rights of way and depot sites and public and private gifts in money,
+these roads have received subsidies amounting to more than $50,000,000,
+or enough to build 40 per cent. of all the roads of the State. There is
+no doubt that the contributions of the public toward the construction of
+the railroads of Iowa is several times as large as the actual
+contributions of their stockholders for that purpose.</p>
+
+<p>The people of Iowa were from the first very favorably disposed towards
+railroads. Every inducement was held out to railroad builders to come
+here and help to multiply the tracks for the iron horse. They came and
+brought with them many abuses which since the first introduction of
+railroads had gradually been developed in other States.</p>
+
+<p>The contrast between the old and the new mode of transportation was so
+great, and the public appreciated so highly the superior conveniences
+afforded by the latter, that for years the abuses practiced by the early
+railroads <span class='pagenum'><a name="Page_330" id="Page_330">[Pg 330]</a></span>were scarcely noticed, or, if they did attract the attention
+of the public, they appeared more like necessary features of the new
+system of transportation than like abuses. The evil gradually increased,
+but for years no attempt was made to check its growth. The railroad
+managers construed this failure of the people to interfere with, or even
+protest against, their unjust practices as a quasi-sanction of their
+course, and soon claimed to do by right what they had formerly done by
+sufferance. The evils increased until the patience of the people finally
+became exhausted.</p>
+
+<p>While the State thus for years dealt very leniently with the railroad
+companies, the laws of Iowa had from the beginning of railroad building
+emphasized the principle of State control. This principle was asserted
+in the very first railroad act ever passed in the State. Section 14 of
+chapter I. of the acts of the extra session of the Fifth General
+Assembly, regranting to the various railroad companies the lands granted
+to the State by Congress for railroad purposes, provides that "railroad
+companies accepting the provisions of this act shall at all times be
+subject to such rules and regulations as may from time to time be
+enacted and provided for by the General Assembly of Iowa...." In 1866 an
+attempt was made in the General Assembly to regulate rates, but the
+Attorney-General, to whom the question of constitutionality was
+submitted, held in his opinion that it was not in the power of the
+legislature to prescribe rates for railroad companies. This opinion
+provoked much indignation among the people of the State, and led to the
+expression of a sound public opinion by legislative acts which could not
+be misunderstood.</p>
+
+<p>When the Twelfth General Assembly (in 1868) regranted to the Chicago,
+Rock Island and Pacific <span class='pagenum'><a name="Page_331" id="Page_331">[Pg 331]</a></span>Railroad Company the lands originally granted
+to the Mississippi and Missouri Company, it only did so upon the
+condition that "said railroad company, accepting the provisions of this
+act, shall at all times be subject to such rules, regulations and rates
+of tariff for transportation of freight and passengers as may from time
+to time be enacted and provided for by the General Assembly of the State
+of Iowa...." The same restricting clause, known as the Doud Amendment,
+was added to all other land grant acts passed by the Twelfth and
+subsequent General Assemblies, and the various companies willingly and
+gladly accepted it.</p>
+
+<p>The abuses of which the people of Iowa complained were far from being
+confined to their State. They were practiced throughout the Northwest,
+and the demand for reform was as loud in Minnesota, Wisconsin and
+Illinois as it was in Iowa. In 1871 laws were passed in Illinois and
+Minnesota fixing maximum charges for the transportation of freight and
+passengers and prohibiting discriminations. The railroads claimed that a
+State did not have the right to prescribe rates and refused to be bound
+by these laws. Instead of modifying their policy, they became daily more
+arrogant. Discriminations which had before been practiced under the veil
+of secrecy, or which had been defended by railroad managers as
+exceptions to the general rule made necessary by a peculiar combination
+of circumstances wholly beyond their control, were now openly and
+defiantly practiced by several of the larger roads. The Chicago,
+Milwaukee and St. Paul Railroad Company, in its effort to annihilate a
+rival, went so far as to openly announce to the public its intention to
+entirely disregard distance as a factor in rate-making. It gradually
+became the general rule to wage war against <span class='pagenum'><a name="Page_332" id="Page_332">[Pg 332]</a></span>rivals at competitive
+points and to "recoup" by charging excessive rates at non-competitive
+points. Every encouragement was thus given by the railroads to the
+Granger movement, which spread in less than two years over the whole
+Northwest.</p>
+
+<p>In the fall of 1873 Iowa elected a Granger legislature, like Minnesota,
+Wisconsin and Illinois. The wildest predictions were made by railroad
+men as to the extremes to which the Granger legislature would go, but it
+confined itself to enacting a law establishing an official
+classification and fixing maximum rates for all railroad companies. The
+law was approved March 23, 1874, and went into effect on the 4th of July
+following. This law in no case compelled companies to carry freight at a
+lower rate than they had voluntarily carried it in the past. Many of the
+rates in force at the time of the passage of the act were considerably
+lower than the corresponding maximum rates fixed by the legislature. The
+average rates fixed by the law were higher than the rates at which the
+railroads had previously carried a large portion of corresponding
+freight. The revenues of the road were not even curtailed by this law;
+on the contrary, by equalizing rates, <i>i. e.</i>, by leveling up the rates
+given to favored places and favored individuals and leveling down the
+exorbitant rates exacted from the public at non-competitive points, the
+railroad companies were enabled to effect an increase in their total
+revenue.</p>
+
+<p>The Granger law remained in force until 1878. Its constitutionality was
+tested by the railroad companies in the Supreme Court of the United
+States, but this high tribunal held that rate-making was a legislative
+and not a judicial function, that it was within the province of the
+State legislature to prescribe rates for the transportation <span class='pagenum'><a name="Page_333" id="Page_333">[Pg 333]</a></span>of
+passengers and freight wholly within the State, and that for protection
+against abuses by legislatures the people must resort to the polls, and
+not to the courts.</p>
+
+<p>The Granger laws have been and are still severely criticised by those
+opposed to the principle of State control and by the ignorant. It is
+nevertheless true that those laws were moderate, just and reasonably
+well adapted to remedy the evils of which the public complained. It has
+been the policy of most railroad men to attack them as crude, intensely
+radical and socialistic. The obloquy heaped upon them was the work of
+designing men who desired to continue their impositions upon the people.
+Mr. Charles Francis Adams, however, admits that the Granger method was
+probably as good a method as could have been devised of approaching men
+who had thoroughly got it into their heads that they, as common
+carriers, were in no way bound to afford equal facilities to all, and,
+indeed, that it was in the last degree absurd and unreasonable to expect
+them to do so.</p>
+
+<p>The Iowa law was imperfect in detail, and yet its enactment proved one
+of the greatest legislative achievements in the history of the State. It
+demonstrated to the people their ability to correct by earnestness and
+perseverance the most far-reaching public abuses and led to an emphatic
+judicial declaration of the common-law principle that railroads are
+highways and as such are subject to any legislative control which may be
+deemed necessary for the public welfare.</p>
+
+<p>Defeated in the courts, the railroad managers now endeavored to make
+odious the new law which deprived them of the power to manipulate
+railroad interests to their personal advantage. By complying with only
+part of its letter and none of its spirit, they contrived to create
+<span class='pagenum'><a name="Page_334" id="Page_334">[Pg 334]</a></span>hardships for certain interests and localities. Instead of charging in
+all cases reasonable rates, as the spirit of the law demanded, they
+would frequently charge the maximum rates permitted under the law, and
+when they by this practice succeeded in damaging certain interests, they
+would point to the Granger law as the source of all existing railroad
+evils. So, likewise, when they were asked by their patrons to reduce a
+high rate, they would plead the legislative schedule in excuse of their
+failure to comply with the request. When the legislature of 1878
+convened, the railroad managers appeared before it and pleaded
+submissively for a repeal of the Granger law and the establishment of a
+commissioner system. They claimed that they were ready and willing to
+submit to all reasonable regulation, but that a maximum tariff law was
+prejudicial both to the best interests of the roads and those of the
+public. They further asserted that the people had grown tired of this
+manner of regulating railroad charges and earnestly desired a change of
+policy; that the interference of the State with the railroad business
+had injuriously affected certain industrial interests and had greatly
+retarded railroad construction by driving capital and promoters of
+railroad enterprises from the State. These statements would indeed have
+argued strongly in favor of a repeal of the law if they had been based
+on facts. There had been, however, no expression of public
+dissatisfaction during the campaign preceding the session of the General
+Assembly. There were doubtless individuals and even communities to whom
+the law had been made so odious that they felt they had but little to
+lose by a change, but the masses of the people believed that the law was
+based upon just principles and desired its perfection rather than its
+repeal. As to the claim that <span class='pagenum'><a name="Page_335" id="Page_335">[Pg 335]</a></span>railroad construction had been checked by
+hostile legislation, statistics prove that during the five years
+following the great panic of 1873 Iowa fared no worse in this respect
+than her sister States east, west or south.</p>
+
+<p>The arguments produced by the railroad managers no doubt influenced some
+members of the General Assembly; by far the greater number of them,
+however, realised that the failure of the law to bring the expected
+relief was not due so much to its own imperfections as to the absence of
+a power to enforce it. The writer, with others, was convinced that a
+strong and conscientious commission would be a much more potent agency
+to secure reasonable rates for the shipper than a maximum tariff law
+without proper provisions for its efficient enforcement; they, in short,
+preferred a commission without a tariff law to a tariff law without a
+commission. The question became the subject of many animated debates in
+both houses of the General Assembly, but the commissioner system at last
+prevailed. The act establishing a Board of Railroad Commissioners, and
+defining their duties, was approved on the 23rd of March, 1878, and went
+into force a few days later. The act empowered the commission to
+exercise a general supervision over all railroads operated in the State,
+to inquire into any neglect or violation of the laws of the State by any
+railroad corporation or its officers or employes, to examine the books
+and documents of any corporation, to investigate complaints of shippers
+that unreasonable charges had been made by railroad companies, and to
+modify any charge which they might deem unreasonable. It was also made
+the commissioners' duty to make an annual report to the Governor
+disclosing the working of the railroad system in the State, the officers
+of each company being required to make annual returns to the board for
+this purpose.</p>
+
+<p><span class='pagenum'><a name="Page_336" id="Page_336">[Pg 336]</a></span>Though the enactment of this law was a surprise to the people, they
+accepted it in good cheer, and determined to give it an honest trial.
+The law was extensive in its scope and stringent for that time, and, if
+strictly enforced in letter and in spirit, promised to be, and would
+have been, entirely sufficient for the thorough control of railroad
+corporations.</p>
+
+<p>Nevertheless, in the course of time it became apparent that either the
+law had not lodged sufficient authority in the commission or the
+commission did not make use of the authority which the law had given
+them. In spite of the commission, the railroad companies maintained
+pools and charged extortionate and discriminating rates, in direct
+violation of the law. It is true the commissioners righted many a wrong.
+In investigating the complaints of shippers against railroad companies
+they often rendered valuable services to those who had neither the means
+nor the inclination to prosecute their rights in the courts of law; but
+as they held that they could only pass upon individual charges, and did
+not have the power to revise the companies' tariffs, the companies were
+virtually in a position to become guilty of more extortions in one day
+than the commission could investigate in a year. Moreover, the railroad
+company might be ordered by the commission to return an overcharge to a
+certain shipper, but this did not prevent it from continuing the
+excessive charge. If the overcharged shipper again wanted relief it was
+his privilege to again apply to the commission, and to continue this
+tedious process until either his or the commissioners' patience became
+exhausted. The people soon found that the new system of control was
+almost as inadequate as that which it had displaced. Some attributed the
+weakness of the commission to its personnel, others to <span class='pagenum'><a name="Page_337" id="Page_337">[Pg 337]</a></span>the law. There
+is no doubt that the commission might have accomplished more than it
+did.</p>
+
+<p>It was hoped by some that as the commission gained in experience it
+would gain in influence, and that railroad evils would gradually
+diminish. But they were disappointed in their expectations. Every year
+seemed to add to the grievances of the public. Success greatly
+emboldened the railway companies. Discriminations seemed to increase in
+number and gravity. At many points in the western part of the State
+freight rates to Chicago were from 50 to 75 per cent. higher than from
+points in Kansas and Nebraska. A car of wheat hauled only across the
+State paid twice as much freight as another hauled twice the distance
+from its point of origin to Chicago. Minnesota flour was hauled a
+distance of 300 miles for a less rate than Iowa flour was carried 100
+miles. Certain merchants received from the railroad companies a discount
+of 50 per cent. on all their freights and were thus enabled to undersell
+all their competitors. The rate on coal in carload lots from Cleveland,
+Lucas County, to Glenwood was $1.80 per ton, and from the same point to
+Council Bluffs only $1.25, although the latter was about thirty miles
+longer haul. Innumerable cases of this kind could be cited. There was
+not a town or interest in the State that did not feel the influence of
+these unjust practices. Many of the rates complained against, it is
+true, were beyond the direct control of the State commission, but there
+was an impression among well-informed shippers that if the commission
+had the power to fix local rates and exercised it judiciously, the
+railroad companies would soon find it to their interest to be as
+reasonable in making through rates for Iowans as they expected the
+commission, to be in prescribing local tariffs.</p>
+
+<p><span class='pagenum'><a name="Page_338" id="Page_338">[Pg 338]</a></span>The demand of the people for more equitable rates and a more thorough
+control of the railroad business increased from year to year. Repeated
+attempts were made in the General Assembly to secure the passage of an
+act looking to that end, but, owing to shrewd manipulations on the part
+of the railroad lobby, every attempt was defeated. There always was, of
+course, a large number of members who represented districts not well
+supplied with railroad facilities. These, as a rule, honestly opposed
+restrictive legislation, believing that such legislation would check
+building, and that, on the other hand, competition could be relied upon
+to correct abuses. Of those members who had less positive convictions
+many were retained as railroad attorneys and were thus made serviceable
+to the companies. Other members with political ambition were nattered or
+intimidated into subjection, and bribes in disguise, such as passes and
+special rates, were not unfrequently resorted to to strengthen the
+railroad following in both houses of the General Assembly.</p>
+
+<p>Railroad corruption did not pause here. It is a notorious fact that
+large sums of money were paid to venal papers of both parties in
+consideration of an agreement on their part to defend transportation
+abuses and exert their influence against progressive railroad
+legislation. The vilest means were often resorted to by these sheets to
+obtain their end. Public men who had the courage to avow their
+opposition to existing railroad abuses or to favor a more perfect system
+of State control of railways were misrepresented, ridiculed, traduced
+and denounced as demagogues and socialists by hypocritical editors, who
+prostituted their political influence as long as they enjoyed railroad
+stipends, and who at intervals became converts to the cause of the
+people for the purpose of extorting <span class='pagenum'><a name="Page_339" id="Page_339">[Pg 339]</a></span>from the railroad companies a new
+and increased subsidy. But truth can not long be suppressed. The masses
+of the people may be imposed upon for a time, but even the shrewdest
+rogue will eventually be compelled to surrender. In time even rather
+unsophisticated voters learned to place a true estimate upon the motives
+of the editors, whose policy, as one of them expressed it in the
+author's presence, was "controlled by the counting-room."</p>
+
+<p>Railroad politicians gradually lost their influence, and the symptoms of
+public discontent greatly increased. In the political campaign of 1887
+State control of railroads became one of the main issues. Both of the
+great political parties in their platforms had declared themselves very
+emphatically in favor of such legislation as would bring railroad
+corporations under complete State control, and with very few exceptions
+the various legislative districts had nominated only such men as
+candidates for legislative offices as were known to be in thorough
+accord with the masses of the people upon the railroad question.</p>
+
+<p>The election resulted in an even more complete defeat of the railroad
+forces than had been generally anticipated. Yet no hasty step was taken
+when the General Assembly convened. A large number of bills
+contemplating railroad reforms in various ways were introduced, but the
+material presented was carefully sifted by the railroad committees and a
+committee bill was framed which incorporated the best features of them
+all. The committees listened patiently for weeks to the arguments of the
+representatives of both the railroads and the shippers.</p>
+
+<p>Never before had so formidable a railroad lobby assembled at the State
+Capitol. The danger signal had been raised, and not only were the great
+political manipulators of the State called into requisition, but experts
+from adjoining <span class='pagenum'><a name="Page_340" id="Page_340">[Pg 340]</a></span>States joined them in besieging the legislature. The
+dogs of war were let loose from all quarters. A legion of hirelings were
+zealous to show their servility and loyalty to their lords. The daily
+and weekly papers of the State in the service of railroad companies
+teemed with arguments from the pens of railroad attorneys, and their
+columns were profusely supplemented with editorials copied from
+prominent corporation papers like the New York <i>Tribune</i>, New York
+<i>Times</i>, New York <i>World</i>, Albany <i>Evening Argus</i>, Boston <i>Advertiser</i>,
+and others from various parts of the country.</p>
+
+<p>These papers, attempting to disguise the motives that prompted them to
+come to the defense of the Wall Street interest, affected the position
+of disinterested and impartial observers. They condemned the proposed
+measures as wild and socialistic, and they painted in dark colors the
+disasters to railroad property, the injustice to its owners, and
+misfortunes to the people of Iowa, that would follow their adoption.
+Especially did they bewail the losses that would fall upon the widows
+and orphans who had confidingly invested all of their hard earnings in
+this property.</p>
+
+<p>They never uttered a word of condemnation, but entirely ignored or
+defended the abuses by which the stockholders were robbed at one end of
+the line and the patrons were imposed on at the other.</p>
+
+<p>Many of these papers were notified that their statements were altogether
+erroneous, but they would not admit a line to their columns in relation
+to the matter that indicated any other disposition than complete
+subserviency to the interests of Wall Street.</p>
+
+<p>There were, however, an unusual number of strong men in this General
+Assembly, and this extraordinary <span class='pagenum'><a name="Page_341" id="Page_341">[Pg 341]</a></span>display of railroad forces only tended
+to impress more strongly upon them the necessity of curbing the railroad
+power, and their best energies were concentrated upon the subject, with
+a firm determination to deal with it in a manner dictated by reason and
+experience.</p>
+
+<p>So well did the bill which was finally adopted by the committee reflect
+the general sentiment of the members of the General Assembly that not a
+single vote was cast against it in either house upon its final passage.
+Since the adjustment of business under this law, there has been less
+friction between the people and the railroads than before for thirty
+years, and so satisfactory has it proved to all that no one, not even a
+railroad man, has to this day asked the legislature to repeal the law or
+any part of it. The act contains no new principle of railroad control.
+By far the greater part of its provisions were taken from the old law.
+Nearly every one of its features may be found either in the Interstate
+Commerce Act or upon the statute books of other States. It provides that
+charges must be reasonable and just, that no undue preference or
+advantage shall be given to any railroad patron, and that equal
+facilities for interchange of traffic shall be given to all roads; it
+prohibits pooling, a greater charge for a shorter than longer haul, the
+shorter or any portion of it being included in the longer, and
+discrimination against any shipping point. It requires that schedules of
+rates and fares shall be printed and kept for public inspection, and
+that no advance shall be made in rates or fares once established except
+after ten days' public notice; and it empowers the Board of Railroad
+Commissioners to make and revise schedules for railroads, the rates
+contained in such schedules to be received and held in all suits as
+<i>prima facie</i> reasonable maximum <span class='pagenum'><a name="Page_342" id="Page_342">[Pg 342]</a></span>rates. The act further provides
+penalties and means of enforcement.</p>
+
+<p>It must not be supposed that by the passage of this act the legislature
+disclaimed the right to fix absolute rates; it simply chose this
+expedient because in the present tentative stage of rate regulation it
+seemed most efficient.</p>
+
+<p>There has been much misunderstanding concerning the Iowa law. Many
+suppose that the Iowa commissioners have power to make confiscatory
+rates for the railroads, while in fact they can only name maximum rates
+which shall be deemed and taken in all courts of the State as <i>prima
+facie</i> evidence that they are reasonable and just maximum rates until
+the railroads show that they are not. They are at liberty to go into
+court any day and show this, if they are able. They are, however,
+careful not to undertake it, for no one knows better than they do that
+the rates fixed by the commissioners are liberal for the railroads.</p>
+
+<p>There are nine States, besides Iowa, in which the power to fix rates has
+been conferred upon railroad commissioners. This feature of the law was
+therefore far from being a novel one, yet no provision of the act was,
+previous to its passage, so furiously opposed, or subsequent to it so
+stubbornly resisted as this. Railroad managers realized that a surrender
+of the right to make their own rates was virtually a surrender of the
+power to practice abuses.</p>
+
+<p>Soon after the passage of the law the commissioners commenced the work
+of preparing schedules of the rates for the roads. They endeavored to do
+justice to both the railroad companies and their patrons by affording a
+fair compensation to the former and at the same time giving <span class='pagenum'><a name="Page_343" id="Page_343">[Pg 343]</a></span>relief to
+the depressed interests represented by the latter. Their rates were not
+as low as the special rates that had at various times been granted to
+favorite shippers, but were a fair average of the various rates in vogue
+at the time. While the schedule was under consideration, the railroad
+managers were given frequent hearings, in which they endeavored to
+impress their views upon the commissioners and to obtain many important
+concessions, which they urged as essential to the welfare of the
+railroad interests. Their views guided the commission to such an extent
+that it was generally supposed that the schedule as finally adopted
+would be accepted by the railroad companies without protest.</p>
+
+<p>The schedule of the Iowa commission has been sharply criticised by Mr.
+Stickney in his "Railway Problem." He finds in it inconsistencies and
+confusion, due, as he charges, to faulty mathematics. But it is claimed
+by the commission, and Mr. Stickney should know, that whenever
+mathematics were ignored in the construction of the schedule it was done
+at the earnest and persistent solicitation of the railroad managers,
+who, it seems, were more interested in maintaining their interstate
+rates than in the consistency of the Iowa schedule.</p>
+
+<p>The rates were published, as required by law, and June 28, 1888, was
+fixed as the day on which they were to take effect. A few days previous
+to this date the companies asked that the taking effect of the new
+tariff be postponed a week. When this request was granted by the
+chairman of the commission, the railroad managers took advantage of the
+courtesy by enjoining the commissioners in the Federal court from
+enforcing it.</p>
+
+<p>Several months later the commissioners modified their schedule by the
+adoption of the Western Classification. <span class='pagenum'><a name="Page_344" id="Page_344">[Pg 344]</a></span>Again the railroad managers
+asked the court for an injunction, but this time met with a refusal.</p>
+
+<p>After many suits for penalties had been instituted against them, and
+many more threatened, they adopted the new schedule, but endeavored to
+inaugurate a policy of retaliation by reducing their train service and
+discharging a large number of employes, and in many ingenious ways
+continued their seditious course with a determination characteristic of
+a band of insurrectionists. But the impetus which railroad traffic
+received under the operation of the commissioners' schedule was such
+that they soon found it necessary to restore to the service its former
+efficiency.</p>
+
+<p>The Railroad Commissioners' report shows that while the number of
+employes was 24,642, and their yearly compensation was $14,212,500 in
+1889, in 1892 there were 30,492 employes, and their yearly compensation
+$18,070,915.</p>
+
+<p>The increase in both the gross and net earnings of Iowa lines has been
+remarkable, as shown in the following table gathered from the
+commissioners' reports:</p>
+
+<div class="centered">
+<table border="0" width="80%" cellpadding="2" cellspacing="0" summary="Gross">
+  <tr>
+  <td class="tdc" width="25%">Year.</td>
+  <td class="tdc" width="25%">Gross Earnings, Total.</td>
+  <td class="tdc" width="25%">Net Earnings,<br /> Total.</td>
+  <td class="tdc" width="25%">Per Mile.</td>
+  </tr>
+  <tr>
+  <td class="tdc">1888-89</td>
+  <td class="tdc">$37,369,276</td>
+  <td class="tdc">$11,861,310</td>
+  <td class="tdc">$1,421</td>
+  </tr>
+  <tr>
+  <td class="tdc">1889-90</td>
+  <td class="tdc">&nbsp;&nbsp;41,318,133</td>
+  <td class="tdc">&nbsp;&nbsp;12,798,430</td>
+  <td class="tdc">&nbsp;&nbsp;1,522</td>
+  </tr>
+  <tr>
+  <td class="tdc">1890-91</td>
+  <td class="tdc">&nbsp;&nbsp;43,102,399</td>
+  <td class="tdc">&nbsp;&nbsp;14,463,106</td>
+  <td class="tdc">&nbsp;&nbsp;1,720</td>
+  </tr>
+  <tr>
+  <td class="tdc">1891-92</td>
+  <td class="tdc">&nbsp;&nbsp;44,540,000</td>
+  <td class="tdc">&nbsp;&nbsp;14,945,000</td>
+  <td class="tdc">&nbsp;&nbsp;1,777</td>
+  </tr>
+</table>
+</div>
+
+<p>It was claimed by railroad men that the effect of Iowa legislation would
+be particularly disastrous to her local roads, which had no opportunity
+to make up on through business the losses incurred in the local traffic.
+The Burlington, Cedar Rapids and Northern was particularly cited as a
+line which would have to go into bankruptcy under the new law. Its
+earnings commenced to increase, <span class='pagenum'><a name="Page_345" id="Page_345">[Pg 345]</a></span>however, immediately after the adoption
+of the commissioners' schedule, and at the end of the first year they
+were large enough to change this line from a Class "C" to a Class "B"
+road. They continued to increase, and in 1891 its gross earnings on
+substantially the same mileage were 36 per cent, and its net earnings 64
+per cent. larger than they had been in 1888. The increase continued and
+enabled the company to make a dividend to its stockholders February 1,
+1893, it being the first dividend ever made by the company. It is a good
+illustration of what the Iowa law has done for weak railroads. It has
+again changed class and is now a Class "A" road.</p>
+
+<p>It is seen that the fears, or rather the pretended fears of the railroad
+managers, that the legislature of Iowa would bankrupt her railroads,
+were entirely groundless. As a result of the law railroads have been
+able to increase their gross earnings as well as their profits. They
+have been enabled to give employment to a larger number of men, and
+there has been no occasion for them to carry out the dishonest threat to
+decrease the wages of their employes. Had it not been for their
+increased earnings in Iowa, the losses recently sustained in other
+States by several of the through lines would have made it impossible for
+them to declare the dividends which they did.</p>
+
+<p>Under her beneficial railroad policy Iowa has prospered wonderfully, and
+her railroads have been more prosperous than when they were allowed to
+have their own way. The commissioners' tariff has made jobbing and
+manufacturing profitable where it was unprofitable before. It has added
+to our industries and our commerce, and has made new business for the
+people as well as the railroads. It has contributed to the increase in
+the value of our farms and factories and their products, and the time
+will come <span class='pagenum'><a name="Page_346" id="Page_346">[Pg 346]</a></span>when wise railroad managers, like the majority of former
+slaveholders of the South, would not resurrect the past if they could.
+In fact, honorable managers now acknowledge that they would not if they
+could.</p>
+
+<p>The railroad companies are at present making a systematic effort to
+weaken the Iowa commission, but if they should succeed in doing so, the
+people, under our system of electing the commissioners, can readily
+correct the evil.</p>
+
+<p>Other States have much experience similar to that of Iowa. Nebraska has
+just adopted a maximum tariff law for the control of her roads. It will,
+of course, be resisted by the railroad managers of that State.</p>
+
+<p>The State of Texas is not so productive in proportion, but is much
+greater in extent than Iowa, and upon the whole resembles it much in its
+prominent characteristics. Both are thrifty, progressive States, with no
+large commercial or manufacturing centers where their people can easily
+organize to protect their financial interests.</p>
+
+<p>The people of Texas endured patiently the abuses so prevalent in
+railroad management until a few years since they enacted a railroad law
+similar to that of Iowa. The Wall Street managers of the Texas railroads
+are at the present time using all of their familiar methods to influence
+the people of that State to repeal their law. The following letter
+serves to show the spirit with which they are approached:</p>
+
+<div class="blockquot">
+<p class="right">"<span class="smcap">23 Broad Street</span>,<br /> <span class="smcap">New York</span>, November 30,
+1891.</p>
+
+<p class="noin">James B. Simpson, Esq., Dallas, Tex.</p>
+
+<p>"<span class="smcap">Dear Sir:</span> Yours of the 26th is received and
+contents carefully noted. Very likely you have valuable
+franchises, or what would be valuable in almost any other
+State than Texas; but while there are many places in Texas
+where <span class='pagenum'><a name="Page_347" id="Page_347">[Pg 347]</a></span>we would like to build some railroads&mdash;mostly short
+ones&mdash;we cannot do anything so long as the disposition
+exists that now seems to in Texas; that is, to do all the
+harm they can do this kind of property, and I think my views
+are shared by all people who have money to invest. No one is
+disposed to create property which, after being created, is
+not to be controlled by its ownership. Of course, we all
+expect to be subject to the police regulations and to pay
+the taxes of any State even as other property, but whenever
+anything is done beyond that it checks this kind of
+improvement, and where it approaches so near confiscation as
+the sentiment of Texas tends it entirely prevents capital
+from being invested.</p>
+
+<p>"I think there is no road in Texas that is to-day earning
+its operating and fixed charges. Every road, I think, has
+been or is in the hands of a receiver, excepting our great
+east and west line, which is supported by business going
+entirely through the State, which business could also be
+sent another way, and would be so sent, excepting that we
+believe the people of Texas will some time take a sober
+second thought and treat the railroads as they do other
+kinds of property. When that time comes I shall be ready to
+talk to you about your franchises, if it comes in my day,
+and I believe it will, as I think no other people are
+suffering from an unwise policy persistently pursued as are
+the people of your State.</p>
+
+<p class="right">
+<span style="padding-right: 11em;">"Yours truly,</span><br />
+<span style="padding-right: 4em;" class="smcap">C. P. Huntington."</span></p>
+</div>
+
+<div class="poem"><div class="stanza">
+<span class="i0">"Now, in the name of all the gods at once,<br /></span>
+<span class="i0">Upon what meat doth this our C&aelig;sar feed,<br /></span>
+<span class="i0">That he hath grown so great?"<br /></span>
+</div></div>
+
+<p>It was but a few years ago when this Mr. Huntington was keeping a small
+retail store in the city of Sacramento, and he exhibited then no greater
+ability, except perhaps that he was a little more venturesome, than
+thousands of others engaged in the same occupation; subsequently he
+engaged, with several others, in the Central Pacific Railroad scheme,
+and received from the bounties of our <span class='pagenum'><a name="Page_348" id="Page_348">[Pg 348]</a></span>generous Government as his share
+of the profits in that enterprise several million dollars, which sum has
+ever since been continually swelled by the exercise of a power scarcely
+inferior to the power of taxing the property of the Pacific Coast. He
+has been so successful for years in manipulating Congressmen and State
+legislatures and shaping the policies of States that he now considers it
+impertinent and short-sighted for a people to take steps to limit his
+levies upon them. It is to be hoped that the boycotting and intimidating
+methods resorted to will have no more effect upon the people of that
+State than they had on the people of Iowa.</p>
+
+<p>Iowa is the queen among the States of the Union. No other State has so
+little waste land or is so productive. Her annual output of staple
+products amounts to hundreds of millions of dollars in value. Her people
+are intelligent, progressive and just. None are governed more by the
+precepts of the golden rule, or are more disposed to render unto C&aelig;sar
+the things that are C&aelig;sar's. She can well be proud of the progress she
+has made in State control of railroads. Let no backward step be taken.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_349" id="Page_349">[Pg 349]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER XII.</h2>
+
+<h2>THE INTERSTATE COMMERCE ACT.</h2>
+<br />
+
+<p>The Constitution of the United States was adopted nearly fifty years
+before the locomotive made its appearance. Had the steam railroad been
+in existence in 1787 and been as important an agency of commerce as it
+is to-day, there is every reason to believe that the railroad question
+would have received the special attention of the framers of that
+instrument. It is a well-known fact that the "new and more perfect
+government" had its origin in the necessities of commerce, and while the
+future exigencies of trade were beyond the reach of the most speculative
+mind, the provisions of the Constitution relating to the subject of
+interstate commerce were made broad and far-reaching. Section 8 of
+Article I. of the Constitution provides that "the Congress shall have
+power ... to regulate commerce with foreign nations, and among the
+several States, and with the Indian tribes ... and to make all laws
+which shall be necessary and proper for carrying into execution the
+foregoing powers and all other powers vested by this Constitution in the
+Government of the United States, or in any department or officer
+thereof."</p>
+
+<p>If any doubt ever existed as to the import of the phrase "to regulate
+commerce," it has been entirely removed by the decisions of the Supreme
+Court. In the Passenger cases, 7 Howard, 416, the court said:</p>
+
+<div class="blockquot"><p>"Commerce consists in selling the superfluity; in purchasing
+articles of necessity, as well productions as manufactures;
+in buying from one nation and selling to <span class='pagenum'><a name="Page_350" id="Page_350">[Pg 350]</a></span>another, or <i>in
+transporting the merchandise</i> from the seller to the buyer
+to gain the freight."</p></div>
+
+<p>And again, in the Philadelphia and Reading Railroad vs. Pennsylvania,
+the Supreme Court said:</p>
+
+<div class="blockquot"><p>"Beyond all question the transportation of freights or of
+the subjects of commerce for the purpose of exchange or sale
+is a constituent of commerce itself. This has never been
+doubted, and probably the transportation of articles of
+trade from one State to another was the prominent idea in
+the minds of the framers of the Constitution when to
+Congress was committed the power to regulate commerce among
+the several States.... It would be absurd to suppose that
+the transmission of the subjects of trade from the seller to
+the buyer, or from the place of production to market, was
+not contemplated, for without that there could be no
+consummated trade with foreign nations or among the States."</p></div>
+
+<p>Chief Justice Marshall, in Gibbons vs. Ogden, 9 Wheaten, 196, construed
+the words "power to regulate" as follows:</p>
+
+<div class="blockquot"><p>"This power, like all others vested in Congress, is complete
+in itself, may be exercised to its utmost extent, and
+acknowledges no limitations other than are prescribed in the
+Constitution."</p></div>
+
+<p>It is a strange fact that during the first eighty years of the
+Government's existence Congress did not exert its power to regulate the
+conduct of common carriers engaged in interstate transportation. The
+first act regulating such carriers was passed in July, 1866. It
+authorized railroad companies chartered by the States to carry
+passengers, freights, etc., "on their way from any State to another
+State, and to receive compensation therefor, and to connect with roads
+of other States so as to form continuous lines for transportation of the
+same to the place of destination." The passage of this act, it should be
+remembered, was urged by the railroad companies themselves. <span class='pagenum'><a name="Page_351" id="Page_351">[Pg 351]</a></span>Seven years
+later an act was passed providing that "no railway within the United
+States, whose road forms any part of a line or road over which cattle,
+sheep, swine or other animals shall be conveyed from one State to
+another, or the owners or masters of steam, sailing or other vessels
+carrying or transporting cattle, sheep or swine or other animals from
+one State to another, shall confine the same in cars, boats or vessels
+of any description for a longer period than twenty-eight consecutive
+hours, without unloading the same for water, rest and feeding, for a
+period of at least five consecutive hours, unless prevented from so
+unloading by storm or accidental causes."</p>
+
+<p>Every violation of this act was made punishable by a penalty of from
+$100 to $500.</p>
+
+<p>Though Congress had asserted the right to regulate commerce among the
+States, it had made previous to 1873 very limited use of that power. In
+the midst of the Granger movement the Senate of the United States passed
+on the 26th day of March, 1873, the following resolution:</p>
+
+<div class="blockquot"><p>"<i>Resolved</i>, That the Select Committee on Transportation
+Routes to the Seaboard be authorized to sit at such places
+as they may designate during the recess, and to investigate
+and report upon the subject of transportation between the
+interior and the seaboard; that they have power to employ a
+clerk and stenographer, and to send for persons and
+papers...."</p></div>
+
+<p>The committee, under the chairmanship of Mr. Windom, discharged their
+duty with great fidelity, and submitted their report to the Senate
+during its next regular session. They declared that the defects and
+abuses of the then existing systems of transportation were insufficient
+facilities, unfair discrimination and extortionate charges. As the
+principal causes of such excessive rates they assigned <span class='pagenum'><a name="Page_352" id="Page_352">[Pg 352]</a></span>stock watering,
+capitalization of surplus earnings, construction rings, general
+extravagance and corruption in railway management, and combinations and
+consolidations of railway companies. The committee were of the opinion
+that the promotion of competition would not permanently remedy the
+existing evils, and laid it down as a general rule that competition
+among railways ends in combination and in enhanced rates. As expedient
+and practical remedies for the existing evils they recommended the
+following measures:</p>
+
+<p>1. Direct Congressional regulation of railway transportation, under the
+power to regulate commerce among the several States.</p>
+
+<p>2. Indirect regulation and promotion of competition, through the agency
+of one or more lines of railway, to be owned and controlled by the
+Government.</p>
+
+<p>3. The improvement of natural water-ways and the construction of
+artificial channels of water communication.</p>
+
+<p>The report was accepted and considered, but there the matter rested, so
+far as the practical results were concerned.</p>
+
+<p>In 1878 Mr. John H. Reagan, of Texas, introduced in the House of
+Representatives a bill for an act to regulate railroad companies engaged
+in interstate commerce. This may be said to have been the first real
+interstate commerce bill before Congress. It was a progressive, thorough
+and well-planned measure, but failed to receive the approval of Congress
+because a majority of its members considered it too radical a measure.
+The bill contained many of the provisions of the present Interstate
+Commerce Act, including the anti-pooling and the long and short haul
+clauses; but instead of creating a commission it lodged in the courts,
+both State and Federal, the power to enforce the law.</p>
+
+<p><span class='pagenum'><a name="Page_353" id="Page_353">[Pg 353]</a></span>Other bills were introduced from year to year, but during a period of
+nine years none of them drew sufficient votes to make it a law. Congress
+may be said to have been divided into three camps upon the railroad
+question, viz.: those who favored the system of regulation proposed by
+Mr. Reagan, those who favored the commissioner system and those who were
+opposed to every mode of Federal regulation of interstate commerce. In
+the meantime, the inactivity of Congress caused considerable
+restlessness among the people, and the demand for action became louder
+every year. The issue entered into politics, and a number of Western
+Congressmen owed their failure to be re-elected to their indifference or
+enmity to Federal railroad legislation.</p>
+
+<p>On March 21st, 1885, under authority of a resolution adopted by the
+Senate of the United States, the President of the Senate appointed a
+select committee to investigate and report upon the subject of the
+regulation of the transportation of freight and passengers between the
+several States by railroad and water routes. Senator Cullom, of
+Illinois, became its chairman. The committee examined a large number of
+witnesses, including railroad managers and shippers, addressed letters
+to the railroad commissioners of the several States, to boards of trade,
+chambers of commerce, State boards of agriculture, Patrons of Husbandry,
+Farmers' Alliances, etc., and made every effort to obtain the opinions
+of those who had given special attention to the transportation problem.</p>
+
+<p>The report of the committee was submitted to the Senate on January 18,
+1886. Concerning the abuses of railroad transportation it differed but
+little from that of the Windom committee. The report declared publicity
+to be the best remedy for unjust discrimination and <span class='pagenum'><a name="Page_354" id="Page_354">[Pg 354]</a></span>recommended that
+the posting of rates and public notice of all changes in tariffs be
+required. It also recommended that a greater charge for a shorter than a
+longer haul be made presumptive evidence of an unjust discrimination,
+and that a national commission be established for the enforcement of any
+laws that might be passed for the regulation of interstate commerce.
+Upon the question of pooling the report stated:</p>
+
+<div class="blockquot"><p>"The committee does not deem it prudent to recommend the
+prohibition of pooling, which has been urged by many
+shippers, or the legalization of pooling compacts, as has
+been suggested by many railroad officials and by others who
+have studied the question.... The majority of the committee
+are not disposed to endanger the success of the methods of
+regulation proposed for the prevention of unjust
+discrimination by recommending the prohibition of pooling,
+but prefer to leave that subject for investigation by a
+commission when the effects of the legislation herein
+suggested shall have been developed and made apparent."</p></div>
+
+<p>The report was accompanied by a bill representing "the substantially
+unanimous judgment of the committee as to the regulations which are
+believed to be expedient and necessary for the government and control of
+the carriers engaged in interstate traffic."</p>
+
+<p>The bill was before Congress for more than a year, receiving several
+important amendments before its final passage in both houses. It was
+approved by the President on the 4th day of February, 1887, and took
+effect sixty days after its passage, except as to the provisions
+relating to the appointment and organization of an Interstate Commerce
+Commission, which took effect at once.</p>
+
+<p>The act contains twenty-four sections, but is by no means cumbersome. It
+is, in many respects, the most important piece of legislation that has
+been had in <span class='pagenum'><a name="Page_355" id="Page_355">[Pg 355]</a></span>Congress for the past twenty years. It applies to common
+carriers engaged in the transportation of passengers or property wholly
+by railroad, or partly by railroad and partly by water, when both are
+used, under a common control, management or arrangement, for a
+continuous carriage or shipment from one State or Territory of the
+United States, or the District of Columbia, to any other State or
+Territory in the United States or the District of Columbia, or from any
+place in the United States to an adjacent foreign country, or from any
+place in the United States through a foreign country to any other place
+in the United States. It prohibits unjust and unreasonable charges,
+special rates, rebates, drawbacks, undue or unreasonable preferences,
+advantages, prejudices and disadvantages, as well as all discriminations
+between connecting lines. It makes unlawful a less charge for a longer
+than for a shorter haul over the same line, in the same direction, the
+shorter being included within the longer distance, except when specially
+authorized by the Interstate Commerce Commission. It prohibits pools,
+requires schedules of freight rates and passenger fares to be kept in
+all depots and stations, permits no advance in the rates, fares and
+charges once established, except after ten days' public notice, and
+makes it unlawful for common carriers to charge either more or less than
+schedule rates.</p>
+
+<p>It also requires them to file copies of all schedules, traffic contracts
+and joint schedules with the Interstate Commerce Commission, as well as
+to make them public when directed by the commission, and prohibits
+combinations to prevent the carriage of freight from being continuous
+from the place of shipment to the place of destination. It makes common
+carriers liable for all damages <span class='pagenum'><a name="Page_356" id="Page_356">[Pg 356]</a></span>to persons injured by violations of the
+act, and specially provides that any court before which such a damage
+suit may be pending may compel any director, officer, receiver, trustee
+or agent of the defendant company to appear and testify in the case, and
+that the claim that any such testimony or evidence may tend to criminate
+the person giving such evidence shall not excuse such witness from
+testifying, but that such evidence or testimony shall not be used
+against such person on the trial of any criminal proceeding. It likewise
+subjects such officers and employes of a railroad company as may be
+guilty of aiding or abetting in violations of the act to fines not
+exceeding $5,000 for each offense.</p>
+
+<p>These provisions are covered by the first ten sections of the act.
+Section 11 establishes the Interstate Commerce Commission, to be
+composed of five commissioners appointed by the President by and with
+the advice and consent of the Senate. It provides that the commissioners
+first appointed shall continue in office for the term of two, three,
+four, five and six years, respectively, from the first of January, 1887,
+the term of each to be designated by the President, and that their
+successors shall be appointed for terms of six years, except that any
+person chosen to fill a vacancy shall be appointed only for the
+unexpired term of the commissioner whom he shall succeed. No more than
+three commissioners may be appointed from the same political party, and
+the President has the power to remove any commissioner for inefficiency,
+neglect of duty or malfeasance in office. Authority is given to the
+commission to inquire into the management of the business of all common
+carriers subject to the provisions of the act and to require the
+attendance of witnesses and to invoke the aid of any court of the United
+States for that purpose.</p>
+
+<p><span class='pagenum'><a name="Page_357" id="Page_357">[Pg 357]</a></span>Section 13 authorizes any person, firm, corporation or association, any
+mercantile, agricultural or manufacturing society, any body politic or
+municipal organization to file complaints against any common carrier
+subject to the provisions of the act, with the commission, whose duty it
+is made to forward a statement of the charges to such common carrier and
+call upon him to satisfy the complaint or answer the same in writing,
+and to investigate the matters complained of, if the complaint is not
+satisfied. The commission is also charged with the duty of making such
+investigations at the request of State or territorial railroad
+commissions and may even institute them at its own motion. Section 14
+requires the commission to make a report in writing of any investigation
+it may make and to enter it of record and furnish copies of it to the
+complainant and the common carrier complained of. Section 15 makes it
+the commissioners' duty, when it is found that any law cognizable by it
+has been violated by a common carrier, to serve notice on such carrier
+to desist from such violation and to make reparation for an injury found
+to have been done. If any lawful order or requirement of the commission
+is disobeyed by a common carrier, it becomes their duty and is lawful
+for any company or person interested in such order to apply by petition
+to the Circuit Court of the United States sitting in equity in the
+judicial district in which the common carrier complained of has its
+principal office, and the court has power to hear and determine the
+matter speedily and without the formal pleadings and proceedings
+applicable to ordinary suits, and to restrain the common carrier from
+continuing such violation or disobedience. It is further provided by
+this section that on such hearings the report of the commission shall be
+accepted as <i>prima facie</i> evidence.</p>
+
+<p><span class='pagenum'><a name="Page_358" id="Page_358">[Pg 358]</a></span>Section 17 regulates the proceedings of the commission. A majority
+constitute a quorum for the transaction of business. The commission may
+from time to time make or amend rules for the regulation of proceedings
+before it. Any party may appear before it and be heard in person or by
+attorney, and every vote or official act of the commission must be
+entered of record and its proceedings made public upon the request of
+either party interested.</p>
+
+<p>Section 19 provides that the principal office of the commission shall be
+in Washington, but that for the convenience of the public it may hold
+special sessions in any part of the United States.</p>
+
+<p>Section 20 authorizes the commission to require annual reports from all
+common carriers subject to the provisions of the act, to fix the time
+and prescribe the manner in which such reports shall be made, and to
+require from such carriers specific answers to all questions upon which
+the commission may need information.</p>
+
+<p>Section 21 excepts from the operation of the act the carriage of
+property for the United States, State or municipal governments, or for
+charitable purposes, or for fairs and expositions; also the issuance of
+mileage, excursion and commutation tickets, the giving of reduced rates
+to ministers of religion, the free carriage by a railroad company of its
+own officers and employes, and the exchanging of passes or tickets among
+the principal officers of railroad companies.</p>
+
+<p>The sections not noticed are of minor importance, relating to annual
+reports, salaries, appropriations of funds, etc.</p>
+
+<p>The act was amended on March 2, 1889, but the amendments made did not
+materially affect its principal provisions.</p>
+
+<p><span class='pagenum'><a name="Page_359" id="Page_359">[Pg 359]</a></span>When the law was passed its friends well realized that its success would
+greatly depend on the character of the commissioners whom it was
+incumbent upon the President to appoint. It was feared that if the
+railroad influence should control these appointments, the power to
+suspend the long and short haul clause would be the chief and perhaps
+the only power exercised by the commission. There was great danger that
+the office of Interstate Commerce Commissioner might become a sinecure
+for servile railroad lawyers, as similar State officers had been before,
+and that a public trust might be turned into an additional corporation
+agency for evil. The selection of the commissioners, and especially that
+of Judge T. M. Cooley, of Michigan, was greatly to the credit of
+President Cleveland. A man of unquestionable integrity, an eminent
+jurist and close student of railroad affairs, Judge Cooley was
+particularly well qualified for the office of chairman of the Interstate
+Commerce Commission, which he occupied for nearly five years with signal
+fitness, and from which he only retired to the sincere regret of the
+American people. Under Judge Cooley's leadership the commission has been
+more than a purely executive board. It was under the Constitution not in
+the power of Congress to clothe the Interstate Commerce Commission with
+full judicial authority without giving its members, like other Federal
+judges, tenure for life, instead of a term of years. The inherent force
+of the commission's decisions in its interpretation of the law made them
+in many cases virtually the equivalent of judicial rulings.</p>
+
+<p>A few of the most important decisions of the commission may be mentioned
+here. Construing the long and short haul clause, they held that, in case
+of complaint for violating this section of the act, "the burden of proof
+is <span class='pagenum'><a name="Page_360" id="Page_360">[Pg 360]</a></span>on the carrier to justify any departure from the general rule
+described by the statute, by showing that the circumstances and
+conditions are substantially dissimilar." They also decided that "when a
+greater charge in the aggregate is made for the transportation of
+passengers or the like kind of property for a shorter than a longer
+distance over the same line in the same direction, the shorter being
+included in the longer distance, it is not sufficient justification
+therefor that the traffic which is subjected to such greater charge is
+way or local traffic and that which is given the more favorable rates is
+not; and that it is not "sufficient justification for such greater
+charge that the short-haul traffic is more expensive to the carrier,
+unless when the circumstances are such as to make it exceptionally
+excessive, or the long-haul traffic exceptionally inexpensive, the
+difference being extraordinary and susceptible of definite proof; nor
+that the lesser charge on the longer haul has for its motive the
+encouragement of manufactures or some other branch of industry, nor that
+it is designed to build up business or trade centers."</p>
+
+<p>Upon the question of publicity of the railroad business the commission
+held that, as the books of the defendant carriers, as to rates charged,
+facilities furnished and general movements of freight, are in the nature
+of semi-public records, the officers and agents of defendant carriers
+ought to give promptly to a complainant any statement of facts called
+for, if such statement may probably have importance on the hearing.</p>
+
+<p>Judge Brewer's opinion as to what constitutes a reasonable rate was
+evidently not shared by Judge Cooley and his colleagues, for in the case
+of the New Orleans Cotton Exchange vs. the Cincinnati, New Orleans and
+Pacific Railway Company the commission decided that the fact <span class='pagenum'><a name="Page_361" id="Page_361">[Pg 361]</a></span>that a
+road earns but little more than operating expenses cannot be made to
+justify grossly excessive rates, and that "wherever there are more roads
+than the business at fair rates will remunerate, they must rely upon
+future earnings for the return of investments and profits." In another
+case the commission hold that "in fixing reasonable rates the
+requirements of operating expenses, bonded debt, fixed charges and
+dividend on capital stock from the total traffic are all to be
+considered, but the claim that any particular rate is to be measured by
+these as a fixed standard, below which the rate may not lawfully be
+reduced, is one rightly subject to some qualifications, one of which is
+that the obligations must be actual and in good faith."</p>
+
+<p>The rules governing the proper construction of classification sheets
+which the commission has laid down are founded upon common sense and
+justice. They say:</p>
+
+<div class="blockquot"><p>"A classification sheet is put before the public for general
+information; it is supposed to be expressed in plain terms
+so that the ordinary business man can understand it and, in
+connection with the rate sheets, determine for himself what
+he can be lawfully charged for transportation. The persons
+who prepare the classification have no more authority to
+construe it than anybody else, and they must leave it to
+speak for itself."</p></div>
+
+<p>In defining what is legitimate traffic the commission made the following
+decision:</p>
+
+<div class="blockquot"><p>"The transportation of traffic under circumstances and
+conditions that force a low rate for its carriage or an
+abandonment of the business, but which affords some revenue
+above the cost of its movement, and works no material
+injustice to other patrons of a carrier, is to be deemed
+legitimate competition. When, however, its carriage is at a
+loss and imposes a burden on like traffic at other points
+and on other traffic, it is to be deemed destructive and
+illegitimate competition."</p></div>
+
+<p><span class='pagenum'><a name="Page_362" id="Page_362">[Pg 362]</a></span>It has been shown in a former chapter that the weaker oil refiners have
+been discriminated against by the railroads, which permitted the
+Standard Oil Company to use their own tank cars in the shipment of oil
+and charge its competitors excessive rates for like shipments in
+barrels. Complaint being made of this discrimination, the commission
+held that it is properly the business of a carrier by railroad to supply
+rolling stock for the freight he offers or proposes to carry, and that
+"if the diversities and peculiarities of traffic are such that this is
+not always practical, and the consignor is allowed to supply it for
+himself, the carrier must not allow its own deficiencies in this
+particular to be made the means of putting at unreasonable disadvantage
+those who may use in the same traffic all the facilities which it
+supplies."</p>
+
+<p>A most important ruling of the commission is that relating to the pass
+abuse. Complaint was made that the Boston and Maine Railroad Company
+issued in the States of Maine, New Hampshire, Vermont and Massachusetts
+free passes to certain classes of persons, among them "gentlemen long
+eminent in the public service, higher officials of the States, prominent
+officials of the United States, members of the legislative railroad
+committees of the above named States, and persons whose good will was
+claimed to be important to the defendant." The commission decided that
+such a discrimination is unwarranted, that a carrier is bound to charge
+equally to all persons, regardless of their relative individual standing
+in the community, and that the words "under substantially similar
+circumstances and conditions" relate to the nature and character of the
+service rendered by the carrier, and not to the official, social or
+business position of the passenger.</p>
+
+<p><span class='pagenum'><a name="Page_363" id="Page_363">[Pg 363]</a></span>It is a notorious fact that the practice of issuing free passes to
+public officials and other influential persons has been more or less
+indulged in by nearly every railroad in the country up to the present
+time. It is to be hoped that this ruling of the commission will be
+enforced in such a manner as to put an end to this intolerable abuse.</p>
+
+<p>The Interstate Commerce Commission has been equally efficient in its
+administrative capacity. From the very first it called attention to the
+great advantage of having one classification of freight throughout the
+country, and it has since labored diligently to unify the various
+classifications in use. As the commission in this undertaking is only
+armed with the armor of moral suasion, it is a difficult task; but there
+is little doubt that the accomplishment of this great reform is only a
+question of a few years. Iniquities in classifications and rates are
+constantly pointed out by the commission and corrected by the companies.
+Moreover, the annual reports of the commission, not to mention its very
+excellent statistical data, diffuse much useful information and dispel
+many delusions. Thus the fourth annual report of the commission says:</p>
+
+<div class="blockquot"><p>"A stranger to the law might infer, from some public
+addresses and pamphlets which have assumed to discuss this
+subject, that the railroad companies were prohibited from
+carrying the necessities of life over long distances at very
+low rates, unless their rates on other subjects of
+transportation for shorter distances were made to
+correspond. Indeed, instances have been pointed out in which
+it was said that certain articles of commerce could not now
+be transported for long distances, because, by reason of
+this provision, they would not bear the charges that must
+under compulsion of law be imposed upon them. Among such
+instances has been mentioned the granite industry of New
+England, as to which it has been said that valuable
+manufactories have ceased to be profitable because it has
+<span class='pagenum'><a name="Page_364" id="Page_364">[Pg 364]</a></span>now become impossible for the proprietors to obtain from
+the railroad companies the nominal rates for the
+transportation of their products which they formerly
+enjoyed, since it is now, by the long and short haul clause,
+made criminal for the companies to give such rates.</p>
+
+<p>"A complaint of this nature is not to be met by argument,
+because it is baseless in point of fact. The instance
+mentioned may safely be assumed to be chosen rather from
+regard to the need of an attack upon the law than from any
+belief in the justice of its application. The prohibition of
+the fourth section, so far as concerns this article of
+commerce, or any other that can be named, will have no
+application whatever until it is made to appear that
+elsewhere upon the lines of the road conveying it there is
+property of the same kind, for transportation by the same
+carriers in the same direction, upon which the carriers are
+disposed to making greater charges in the aggregate for the
+shorter hauls.</p>
+
+<p>"The wheat of the extreme West, it is also said, can no
+longer have the nominal rates which were formerly made for
+transportation to the seaboard, but this assertion is also
+without point or applicability, unless it is shown that the
+carriers are not only disposed to give such rates, but
+propose to make up for the consequent losses to themselves
+by the imposition of greater charges in the aggregate for
+the carriage of the like grain when offered for carriage by
+growers in the States nearer the seaboard. Nominal rates
+impartially made as between shippers of like articles in the
+same direction and under like circumstances and conditions
+are as admissible now as they ever were."</p></div>
+
+<p>The same report contains a rather pointed reply to Judge Brewer's ruling
+in the Iowa rate cases, viz., that, "where the rates prescribed will not
+pay some compensation to the owners, then it is the duty of the courts
+to interfere and protect the companies from such rates," and that
+compensation implies three things: "Payment of cost of service, interest
+on bonds and then some <span class='pagenum'><a name="Page_365" id="Page_365">[Pg 365]</a></span>dividends." The commission reviews this stupid
+rule as follows:</p>
+
+<div class="blockquot"><p>"The effort has sometimes been made to indicate a rule which
+must constitute the minimum of reduction in all cases, and
+it has been said that rates must not be made so low that the
+carriers would be left unable to pay interest on their
+obligations and something by way of dividend to
+stockholders, after maintaining the road in proper condition
+and paying all running expenses. This comes nearer to a
+suggestion of a rule of law for these cases than any other
+that has come to the knowledge of the commission. But it is
+so far from being a rule of law, that it is not even a rule
+of policy, or a practical rule to which any name can be
+given, and to which the carriers themselves or the public
+authorities can conform their action. In the first place,
+when we take into consideration the question of the
+condition of roads and of equipment, the proper improvements
+to be made, the new conveniences and appliances to be
+considered and made use of, if deemed desirable, and the
+innumerable questions that are involved in the matter of
+running expenses, it is very obvious that there can be no
+standard of expenses which the court can act upon and apply,
+but that the whole field is one of judgment in the exercise
+of a reasonable discretion by the managing powers or by the
+public authorities in reviewing their action. It is to be
+borne in mind that there are many roads in the country that
+never have been and in all probability never will be able to
+pay their obligations and to pay dividends, even the
+slightest, to their stockholders.... If the rule suggested
+is a correct one, and must be adhered to by the public
+authorities, then it is entirely impossible that those who
+operate these roads can prescribe excessive charges, since
+it is impossible to fix any rates that would bring their
+revenues up to the point of enabling them to pay any
+dividends.... But the rule suggested would also be one under
+which those roads would be entitled to charge the most
+which, instead of being built with the money of the
+stockholders themselves, had been constructed with <span class='pagenum'><a name="Page_366" id="Page_366">[Pg 366]</a></span>money
+borrowed; the larger the debt the higher being the rates
+that would be legal. If a road were out of debt so that it
+had no bonds to provide for, it must content itself with
+such rates as would pay some dividend to its stockholders.
+If the road were in debt, though it perhaps served the same
+communities, it might be entitled to charge rates 50, or
+possibly 100 per cent higher.... But over and beyond all
+this the attempt to apply the rule suggested would be
+absolutely futile for the reason that the rates prescribed
+for one road would necessarily affect all others that either
+directly or indirectly came in competition with it."</p></div>
+
+<p>It is no exaggeration to say that the annual reports of the commission
+stand unexcelled as dauntless, clear, concise and instructive public
+documents. It may also be asserted that whatever success has so far
+attended the Interstate Commerce Law, that success is in a great measure
+due to the tact, courage and ability of the men who, in the past, have
+been the guiding spirits of the commission.</p>
+
+<p>Efforts will be made by railroad managers in the future, as they have
+been made in the past, to weaken the commission by securing the
+appointment of men servile to the railroad interest as members of that
+body.</p>
+
+<p>Mr. Depew says that "all railroad men are politicians, and active ones."
+This is true as to manipulating managers and will continue to be so just
+as long as we allow such extraordinary powers to be exercised by them.
+The saloon men are politicians, and active ones. There is not a city or
+town in this broad land that is not in danger of falling under their
+sway unless their offensive efforts are resisted. The old United States
+Bank managers were politicians, and active ones. They perverted the
+trust reposed in their hands to such an extent that the indignation of
+the people was aroused, and under the <span class='pagenum'><a name="Page_367" id="Page_367">[Pg 367]</a></span>lead of a stern old patriot the
+bank was swept out of existence. Shall we restrain corporation
+management within proper limits and make corporations serve the public
+welfare, or shall we let the abuses go on until the people, under the
+lead of another Jackson, demand emphatically the application of some
+remedy, for better or for worse? Perhaps Government ownership, perhaps
+something else. Nations, like individuals, should profit by the
+experience of the past.</p>
+
+<p>The Interstate Commerce Commission, in their sixth annual report, say,
+concerning the Interstate Commerce Law:</p>
+
+<div class="blockquot"><p>"It was scarcely possible that it should be so complete and
+comprehensive at the outset as to require no alteration or
+amendment. Those who are familiar with the practices which
+obtained prior to the passage of this law, and contrast them
+with the methods and conditions now existing, will accord to
+the present statute great influence in the direction of
+necessary reforms and a high degree of usefulness in
+promoting the public interest.</p>
+
+<p>"Whoever will candidly examine the reports of the commission
+from year to year, and thus become acquainted with the work
+which has been done and is now going on, will have no doubt
+of the potential value of this enactment in correcting
+public sentiment, restraining public injustice and enforcing
+the principle of reasonable charges and equal treatment.
+Imperfections and weaknesses which could not be anticipated
+at the time of its passage have since been disclosed by the
+effort to give it effective administration. The test of
+experience, so far from condemning the policy of public
+regulation, has established, its importance and intensified
+its necessity. The very respects in which the existing law
+has failed to meet public expectation point out the
+advantages and demonstrate the utility of Government
+supervision....</p>
+
+<p>"Of this much we are convinced: The public demand for
+Government regulation and the necessity for legal
+<span class='pagenum'><a name="Page_368" id="Page_368">[Pg 368]</a></span>protection against the encroachments of railroad
+corporations have not been diminished by the experience of
+the last six years. The act to regulate commerce was not
+framed to meet a temporary emergency, nor in obedience to a
+transient and spasmodic sentiment. The people will not
+tolerate a return to the injustice and wrong-doing which
+inevitably occurs when no correction is undertaken and no
+regulation attempted. The evils of unrestricted management
+will not be permanently endured, and legal remedies will
+continue to be sought until they are amply provided. The
+present statute, however crude and inadequate in many
+respects, was the constitutional exercise of most important
+powers and the legislative expression of a great and
+wholesome principle. Its fundamental and pervading purpose
+is to secure equality of treatment. It assumes that the
+railroads are engaged in a public service, and requires that
+service to be impartially performed. It asserts the right of
+every citizen to use the agencies which the carrier provides
+on equal terms with all his fellows, and finds an invasion
+of that right in every unauthorized exemption from charges
+commonly imposed.</p>
+
+<p>"The railroad is justly regarded as a public facility which
+every person may enjoy at pleasure, a common right to which
+all are admitted and from which none are excluded. The
+essence of this right is equality, and its enjoyment can be
+complete only when it is secured on like conditions by all
+who desire its benefits. The railroad exists by virtue of
+authority proceeding from the State, and thus differs in its
+essential nature from every form of private enterprise. The
+carrier is invested with extraordinary powers, which are
+delegated by the sovereign, and thereby performs a
+governmental function. The favoritism, partiality and
+exactions which the law was designed to prevent resulted, in
+large measure, from a general misapprehension of the nature
+of transportation and its vital relation to commercial and
+industrial progress. So far from being a private possession,
+it differs from every species of property, and is in no
+sense a commodity. Its office is peculiar, for it is
+essentially public. The railroad, therefore, can rightfully
+do nothing which the State itself <span class='pagenum'><a name="Page_369" id="Page_369">[Pg 369]</a></span>might not do if it
+performed this public service through its own agents instead
+of delegating it to corporations which it has created. The
+large shipper is entitled to no advantage over his smaller
+rival in respect of rates or accommodations, for the
+compensation exacted in every case should be measured by the
+same standard. To allow any exceptions to this fundamental
+rule is to subvert the principle upon which free
+institutions depend and substitute arbitrary caprice for
+equality of right.</p>
+
+<p>"The spirit of the law is opposed to usages so long
+continued and so familiar that their unjust and demoralizing
+character has not been clearly perceived, but it is a long
+step towards such regulation of the agencies of
+transportation as will make them equally available to all
+without discrimination between individuals or communities.
+It can hardly be the fault of those who are charged with its
+administration if the beneficial aims of this statute have
+not been fully attained and compliance with its provisions
+not completely secured. A better understanding of its
+purpose and an educated public sentiment, aided by the
+needful amendments which experience suggests, will fully
+vindicate the policy of Congress in undertaking to bring the
+great transportation interests of the country into general
+harmony with its requirements.</p>
+
+<p>"It affords us gratification to add that many railroad
+managers of the highest standing now concede the necessity
+for Government regulation, and avow themselves in favor of
+such further enactments as will make that regulation
+effective."</p></div>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_370" id="Page_370">[Pg 370]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER XIII.</h2>
+
+<h2>THE RATE QUESTION.</h2>
+<br />
+
+<p>Railroad managers frequently make the assertion that the average freight
+rates charged in the United States are lower than those usually charged
+in European countries and that this fact is in itself sufficient proof
+that they are too low. A comparison of the transportation problem of
+Europe with our own will show this argument to be fallacious.</p>
+
+<p>While from $25,000 to $30,000 a mile is a very liberal estimate of the
+average cost of American roads, the average cost of European railroads,
+owing to their expensive rights of way, substantial road-beds and heavy
+grades, is probably not less than $75,000 per mile. British railway
+companies have laid out for the purchase of land, for right of way and
+depot accommodations an amount about equal to the entire average cost of
+American roads for the same number of miles.</p>
+
+<p>For instance, the Southeastern Company paid $20,000; the Manchester and
+Leeds Company, $30,750, and the London, Birmingham and Great Western,
+$31,500 per mile. The first Eastern Counties line paid even $60,000 per
+mile for land through an agricultural district. As nearly as can be
+ascertained, the average cost of the right of way of railroads was over
+$20,000 for the United Kingdom. In Belgium the average cost of the right
+of way was $11,000. It was lower, however, in the other countries of the
+European continent.</p>
+
+<p>The topography of the country through which the <span class='pagenum'><a name="Page_371" id="Page_371">[Pg 371]</a></span>English railways are
+built is such as necessitated enormous expenses for heavy embankments,
+cuttings, viaducts, tunnels and bridges, and in some cases increased the
+cost of the roads to fabulous sums. The Lancashire and Yorkshire Railway
+actually cost $260,000 per mile for the whole of its 403 miles. European
+roads have been built in a much more permanent manner and have terminal
+facilities whose cost is far beyond any sum paid for such purposes in
+this country. In Great Britain, moreover, the expenses of contests and
+of procuring charters have been very great and have probably averaged
+$3,000 per mile.</p>
+
+<p>English railway men charge Americans with having indulged in
+stock-watering to a greater extent than any other people in the world.
+This is probably true, yet the English have not been dull students of
+this art, and they are far from free of having indulged in this luxury.
+Much of their railroad stock was issued in a wasteful manner and
+represents no actual investment, and it is safe to say that from 30 to
+40 per cent. of their present railroad capitalization is water.</p>
+
+<p>If upon the above basis both European and American railroads are to
+yield an interest of 4-1/2 per cent. on the actual investment, the
+former will have to earn at least $2,250 per mile more than the latter,
+and this difference equals about 50 per cent. of the average operating
+expenses of American roads per mile. Labor is cheaper across the
+Atlantic, but this difference is more than equalized by the employment
+of a much larger number of men per mile, as the following table will
+show:</p>
+
+<div class="centered">
+<table border="0" width="80%" cellpadding="2" cellspacing="0" summary="Men">
+  <tr>
+  <td class="tdc" width="25%">Countries.</td>
+  <td class="tdc" width="25%">No. of men employed per mile.</td>
+  <td class="tdc" width="25%">Average wages<br /> per annum.</td>
+  <td class="tdc" width="25%">Wages paid<br /> per mile.</td>
+  </tr>
+  <tr>
+  <td class="tdl">United Kingdom</td>
+  <td class="tdc">18</td>
+  <td class="tdc">$335</td>
+  <td class="tdc">$6,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Belgium</td>
+  <td class="tdc">22</td>
+  <td class="tdc">&nbsp;&nbsp;210</td>
+  <td class="tdc">&nbsp;&nbsp;4,620</td>
+  </tr>
+  <tr>
+  <td class="tdl">Russia</td>
+  <td class="tdc">15</td>
+  <td class="tdc">&nbsp;&nbsp;240</td>
+  <td class="tdc">&nbsp;&nbsp;3,600</td>
+  </tr>
+  <tr>
+  <td class="tdl">Germany</td>
+  <td class="tdc">14</td>
+  <td class="tdc">&nbsp;&nbsp;250</td>
+  <td class="tdc">&nbsp;&nbsp;3,500</td>
+  </tr>
+  <tr>
+  <td class="tdl">France</td>
+  <td class="tdc">14</td>
+  <td class="tdc">&nbsp;&nbsp;220</td>
+  <td class="tdc">&nbsp;&nbsp;3,080</td>
+  </tr>
+  <tr>
+  <td class="tdl">United States</td>
+  <td class="tdc">&nbsp;&nbsp;5</td>
+  <td class="tdc">&nbsp;&nbsp;555</td>
+  <td class="tdc">&nbsp;&nbsp;2,625</td>
+  </tr>
+</table>
+</div>
+
+<p><span class='pagenum'><a name="Page_372" id="Page_372">[Pg 372]</a></span>The London and Northwestern Railway is 1,793 miles long and has over
+55,000 employes, or over 30 per mile. The Lancashire and Yorkshire
+Company employs over 42 per mile.</p>
+
+<p>The train men of Europe work less hours and earn less per capita for
+their employers than do the train men of this country. The average
+annual gross earnings per employe on sixteen of the leading lines of
+Great Britain, as shown by Mr. Jeans, appear to be $975 against $1,600
+on fifteen leading lines of the United States, while the average net
+earnings per employe are $465 on the British lines against $720 on the
+American lines; making a difference in favor of this country of 70 per
+cent. in gross earnings and 53 per cent. in net earnings. If American
+labor is more expensive, it is also more efficient than labor is
+elsewhere.</p>
+
+<p>It must also be considered that the average haul in Europe is much less
+than the average haul in the United States. It has always been
+maintained by the railroad companies, and very justly, too, that the
+terminal charges are as important a factor of freight rates as is the
+cost of carriage. The terminal charges are the same for a
+twenty-five-mile haul as for a thousand-mile haul; they form a
+comparatively large part of the total charges for the former and a very
+small part of the total charges for the latter. It is therefore
+manifestly unjust to compare the rates per ton per mile of Europe with
+those of the United States without making due allowance for the
+difference in the length of their average hauls. All other things being
+equal, a fair comparison between the freight rates of different
+countries should be based upon hauls of equal length.</p>
+
+<p>There is another consideration which should not be lost sight of. The
+commodities in the United States which <span class='pagenum'><a name="Page_373" id="Page_373">[Pg 373]</a></span>contribute principally to the
+long haul are raw products. The universally low rates of these
+commodities greatly lower the general average. In Europe, on the other
+hand, manufactured goods predominate as long-haul freight, and based
+upon increased risk and increased cost of carriage, considerably swell
+the general average of freight charges. The railroads of the United
+States also do more business per train mile than those of any other
+country excepting perhaps Austria, Russia and India. This should
+certainly enable them to do business for less than it is done by
+transatlantic lines.</p>
+
+<p>In addition to all this, a number of European countries, particularly
+France, require their railroads to perform large services, such as the
+carrying of the mails and the transportation of the officers and
+employes of the Government, gratuitously, and to carry soldiers at
+reduced rates.</p>
+
+<p>Another factor in the equation should be considered. European roads are
+built, equipped and all permanent improvements wholly made at the
+expense of the stock- and bondholders, while in this country they are
+partially constructed at the expense of the patrons of the road. In the
+former case the capitalization of the road represents what has been paid
+by the stock- and bondholders, and in the latter, not only what they
+have paid, but large contributions paid from the income of the road and
+from public and private donations.</p>
+
+<p>It will thus be seen that railroad rates ought to be lower, and even
+much lower, here than in Europe. If it <i>is</i> true that the average rate
+per ton per mile is lower in America than across the Atlantic, this is
+chiefly due to the fact that water transportation has forced down
+through (or long-haul) rates and has thus lowered the general average.
+<span class='pagenum'><a name="Page_374" id="Page_374">[Pg 374]</a></span>This reduction was by no means made voluntarily by the railway
+companies, but was forced upon them. Where in the United States water
+does not exist, as in local traffic, rates are usually much higher than
+in Europe.</p>
+
+<p>The reduction in freight rates was brought about by a number of
+inventions which greatly lowered the cost of both the construction and
+the operation of railways. Through the introduction of the steam shovel,
+of the wheel-scraper, of improved rock-drills, and of other labor-saving
+machines, as well as by a general improvement in the methods of grading,
+the cost of grading has been reduced from 25 to 50 per cent., and
+railroad bridges are now built at one-third of their former cost. Owing
+to Bessemer's great invention, steel rails can at the present time be
+bought for one-half of what iron rails cost ten or fifteen years ago,
+and about one-third of the cost twenty years ago. According to David A.
+Wells, the author of "Recent Economic Changes," the annual producing
+capacity of a Bessemer converter was increased fourfold between 1873 and
+1886, and four men can now make a given product of steel in the same
+time and with less cost of material than it took ten men ten years ago
+to accomplish. A ton of steel can now be made with 5,000 pounds of coal,
+while it required twice that quantity in 1868. When it is considered
+that rails and tires made of steel last three times as long as those
+made of iron, permit greater speed, carry a much larger weight, and
+require less repairs, the importance to the railroad interests of the
+improvements made in the manufacture of steel can hardly be
+overestimated. Similar reductions have been made in the car and machine
+shops. An average train to-day probably costs no more than one-half as
+much as it did twenty years ago. Mr. Wells, in the work just mentioned,
+says:</p>
+
+<div class="blockquot"><p>"In 1870-'71 one of the leading railroads of the<span class='pagenum'><a name="Page_375" id="Page_375">[Pg 375]</a></span>
+Northwestern United States built 126 miles, which, with some
+tunneling, was bonded for about $40,000 per mile. The same
+road could now (1889) be constructed, with the payment of
+higher wages to laborers of all classes, for about $20,000
+per mile."</p></div>
+
+<p>A great saving has also been made in the consumption of coal. Under
+favorable circumstances a loaded freight car can now be propelled a mile
+with one pound of coal. A similar economy of fuel has, through the
+improvement of their engines, been effected in ocean steamers. The
+invention of the compound engine has reduced the expense of running
+about one-half, while it has doubled the room left for the cargo. The
+statement has recently been made that a piece of coal half as large as a
+walnut, when burned in the compound engine of a modern steamboat, drives
+a ton of food and its proportion of the ship one mile on its way to a
+foreign port.</p>
+
+<p>Furthermore, the invention of the air-brake has materially reduced the
+number of train men formerly necessary to safely manage a train, just as
+the introduction of steam-hoisting and other machines, both upon docks
+and vessels, has greatly decreased the number of men employed upon the
+mercantile marine.</p>
+
+<p>There is certainly much similarity between the railroad and the
+steamboat as agencies of transportation. Whatever fuel and labor-saving
+causes operate on one must necessarily operate upon the other. When we,
+therefore, find that the ocean rates are only from one-third to
+one-fourth of what they were thirty years ago, we are justly surprised
+to see railroad rates maintained as high as they are. Operating expenses
+have been greatly reduced and passenger travel has largely increased
+during the past twenty years, but reductions corresponding in the
+passenger rates of the United States have not been made.</p>
+
+<p><span class='pagenum'><a name="Page_376" id="Page_376">[Pg 376]</a></span>It is, nevertheless, no easy matter always to determine what are
+reasonable rates. It is easier to tell what rates are unreasonable.
+Rates are unreasonable that bring an income in excess of sufficient to
+keep the road in proper condition, to pay operating expenses, including
+taxes and a fair rate of interest on the amount, not including
+donations, actually invested in the road. The patrons of a road should
+not be taxed to pay interest on their own donations, or on public
+donations, to the road, as the donations were made for the benefit of
+the public, and not for the benefit of private individuals. A rate which
+may appear reasonable to the carrier is apt to be regarded as too high
+by the shipper; and, again, one that seems reasonable to the shipper is
+denounced as too low by the railroad man. Each is tempted to consult
+only his own interests and to disregard the just claims of the other
+side. Thus, while the shipper will claim that his rates ought to be low
+enough to enable him to compete with other shippers more advantageously
+located than he is, the railroad manager will demand a rate which would
+enable him to declare high dividends on largely fictitious values. The
+owners of roads which were built merely for purposes of speculation or
+blackmailing insist on being permitted to charge exorbitant rates to
+bring up their earnings to the level of those roads for whose
+construction there was a legitimate demand.</p>
+
+<p>It is a settled principle of common law that all rates must be
+reasonable, but no uniform rule has as yet been adopted by which the
+question of reasonableness is to be determined. The doctrine laid down
+by Judge Brewer, that "where the rates prescribed will not pay some
+compensation to the owners, then it is the duty of the courts to
+interfere and protect the companies from such rates," <span class='pagenum'><a name="Page_377" id="Page_377">[Pg 377]</a></span>and that
+"compensation implies three things: cost of service, interest on bonds,
+and then some dividends," is absurd. A question is never settled until
+it is settled right, and this rule is certainly open to very serious
+objections. A road may be bonded for several times its cost or its real
+value, it may be managed with such recklessness or extravagance that its
+operating expenses may be twice what they would be under a careful and
+economical management, yet under this rule the shipper must pay the
+premium which bond-watering and bad management command. The general
+enforcement of such a rule would place the public at the mercy of
+scheming railroad manipulators. No matter to what extent the business of
+a road may increase, a reduction of rates can always be prevented by the
+issue of new bonds and the doubling of the already lordly salaries of
+its managers. Again, under the operation of this rule a road which
+entirely suffices to do the business between two points may be
+paralleled by another and the public be compelled to pay excessive rates
+to maintain both. It might be said that the public cannot be forced to
+patronize any road, that if it would not withdraw its patronage from the
+old line, the new line would soon become bankrupt, and that in such an
+event its owners, and not the public, would be the sufferers. This
+argument may be met by the statement that, aside from the fact that
+concerted action among a large number of people can never be secured,
+few roads rely for their support solely upon local business, and that
+any loss which the older road sustains from encroachments by its rival
+upon its through traffic it is compelled to make up by raising its rates
+upon its local business. It is the almost inevitable consequence when
+one road is paralleled by another that the business which was
+<span class='pagenum'><a name="Page_378" id="Page_378">[Pg 378]</a></span>previously done by one road will be nearly equally divided between the
+two, and under the rule laid down by Judge Brewer the public will be
+called upon to pay the operating expenses and the interest on the bonds
+of both, together with such dividends on the stock as the financiering
+ability of their managers may secure. The better judgment seems to be
+that to determine what are reasonable rates is not a question for
+judicial adjudication.</p>
+
+<p>The Interstate Commerce Commission, in their fourth annual report,
+assert that "there can be no standard of expense which the courts can
+act upon and apply, but that the whole field is one of judgment in the
+exercise of a reasonable discretion by the managing powers, or by the
+public authorities in reviewing their action." Their views upon this
+subject are still more definitely stated in the following words
+contained in the same report:</p>
+
+<div class="blockquot"><p>"An attempt is made to give authority to the courts to
+interfere by the suggestion that property or charter
+contract rights, or both, are involved in the matter of
+fixing rates, and therefore that it is not possible the
+conclusions of administrative boards should be final. This
+is an endeavor, by the mere use of words, to confer
+jurisdiction upon the courts where the substance is
+altogether wanting. Property or contract rights are involved
+in these cases precisely as they are in numerous other cases
+of the exercise of power under the police authority of the
+State, either by the State itself or by its municipalities."</p></div>
+
+<p>These views cannot fail to commend themselves to any unprejudiced mind.
+It is a well-established fact that all officials will, if permitted,
+extend their jurisdiction, and judges are no exception to the rule. It
+was therefore but natural that the courts should attempt to solve the
+problem of railroad rates.</p>
+
+<p>The attempt so far has been fruitless, nor will it be otherwise as long
+as the courts persist in approaching <span class='pagenum'><a name="Page_379" id="Page_379">[Pg 379]</a></span>with abstract legal maxims a
+question which, above all things, requires the light of experience and
+the exercise of sound discretion. The question of railroad rates will
+never be satisfactorily settled until it is definitely referred to
+expert administrative State and National boards empowered and prepared
+to meet the many contingencies that will always arise in the
+transportation business.</p>
+
+<p>It is not difficult to account for the inability of the courts to
+properly adjudicate the question of reasonable rates. The legislature,
+or a board to which it has delegated its power, prescribes for a
+railroad company a classification and tariff. The company claims that
+the rates so fixed are unreasonably low and applies to the courts for
+redress.</p>
+
+<p>Now, if the rates were based upon the cost of service only, it might,
+perhaps, be possible for a court to determine whether the prescribed
+rates are adequate or not. But even in such a case the question would
+arise whether the capitalization and the operating expenses of the road
+are not excessive, and its determination would require expert knowledge
+and sound discretion rather than legal lore. However, since the cost of
+service is not the only, and with railroad men not even an essential,
+factor in rate-making, it is evident that the rates upon single
+commodities can not be reviewed upon their individual merits, but the
+tariff must, in the judicial determination of the question whether it is
+reasonable or not, be viewed as a whole. But as it is impossible to
+foretell what effect a readjusted tariff would have on the revenues of a
+road, even courts are forced to admit that an actual trial of the tariff
+is necessary to establish its merits or demerits.</p>
+
+<p>If the complaining company were as anxious to give the new tariff a fair
+trial as it usually is to demonstrate to <span class='pagenum'><a name="Page_380" id="Page_380">[Pg 380]</a></span>the satisfaction of the court
+that it is devoid of every principle of justice, such a test might be
+accepted by the public as a reliable basis of judicial procedure. But
+railroad managers are not only striving to perpetuate their own high
+rates, but to show to the public that freight tariffs not emanating from
+a railroad company's office are of necessity crude and unjust to the
+carrier. They know that if they should succeed in convincing the public
+that administrative boards are incapable of dealing with that question,
+they might for years to come be left in undisputed possession of the
+power to make their own rates. This is certainly for the railroad
+manager a prize worth contending for, and no sacrifice is too great for
+him to make when there is any hope of ultimate victory. Being absolutely
+uncontrolled in his action, he finds it an easy matter, by temporarily
+diverting business from his line, by the increase of operating expenses
+and by repressing growing industries, and in many other ways, to curtail
+the business of his road and diminish its revenues. He can court losses
+in a thousand different ways discernible neither to the courts nor the
+general public. In short, it is in the power of any railroad manager to
+manipulate such a trial in his own interest, and, if determined, to
+obtain a verdict against any tariff not of his own making. This policy
+was pursued by several Iowa roads subsequent to Judge Brewer's decision
+that the alleged unreasonableness of the Iowa commissioners' tariff must
+be established by an actual trial, and was persevered in until the suit
+was withdrawn.</p>
+
+<p>But even if the competency of the courts to properly determine such
+questions were admitted, there would still exist one serious objection
+to their jurisdiction. Courts necessarily move slowly, while all
+differences arising <span class='pagenum'><a name="Page_381" id="Page_381">[Pg 381]</a></span>between the public and the railways, and especially
+those concerning rates of transportation, require prompt and decisive
+action. There are no fixed conditions in commerce. It is a kaleidoscope
+constantly presenting new phases. Competition at home and abroad, tariff
+duties, the condition of the crops and a thousand other influences
+affect it and may require a prompt readjustment of the tariff. So long
+as railroad companies are permitted to resort to injunctions and effect
+other delays rendered possible through the machinery of the courts, to
+prevent for years the enforcement of tariffs prescribed by
+administrative authorities, so long will the public be at their mercy.
+So long as they have nothing to lose and everything to gain by a
+judicial contest, it will be their policy to delay through the courts
+the enforcement of any tariff, whether prescribed by legislature or by
+an authorized commission, that falls below their standard. It is not to
+be understood that the acts of railroad commissioners should never be
+subject to a judicial view. If such boards clearly exceed their
+authority or are otherwise guilty of maladministration, if they violate
+constitutional rights, then railroad companies, if injured by their
+acts, should be permitted to seek redress in the courts; but they should
+not be permitted to nullify an official tariff by legal maneuvers. It is
+clearly not within the province of the courts to make rates or to lay
+down rules to be followed by those to whom the law has delegated the
+power to make them, nor should the courts aid the railroads in any
+attempt to nullify an official tariff that has been legally promulgated.
+A tariff prepared by sworn and disinterested officials is more likely to
+be just than one prepared by interested railroad men, and railroad
+companies should be compelled to adopt it and continue <span class='pagenum'><a name="Page_382" id="Page_382">[Pg 382]</a></span>it in use until
+it is amended or revoked by legal authority.</p>
+
+<p>Individual shippers are powerless as against strong corporations.
+Railroads apply to the courts for what they are pleased to term redress,
+and in the meantime refuse with impunity to accept an official tariff;
+but the shipper has no protection: he must pay their rates or go out of
+business. What reason can be assigned why the weaker should thus be
+discriminated against? A promulgation of a tariff prepared by a
+commission is equivalent to a declaration on the part of these officials
+that the rates or some of the rates charged by the railroads are
+unreasonably high. The railroad, in applying to the courts for
+protection, claims that the tariff prescribed by the commission is
+unreasonably low. Both tariffs are therefore impeached, one being that
+of an interested private company, the other that of a disinterested
+public board. It is evident that, even if the people should see fit to
+give the courts jurisdiction in such controversies, one of these tariffs
+must temporarily prevail pending the decision of the court, and sound
+public policy and justice to the patrons of the road certainly require
+that the official tariff be recognized by the courts and made to be
+respected by the railroad company until it is proved to be unreasonable
+and is set aside by lawful authority.</p>
+
+<p>It is claimed by railroad men that they should be allowed to make their
+own tariffs because rate-making is so intricate a subject that none but
+railroad experts can do it justice. If this were so the courts would be
+even less competent to review a schedule of rates than a State or
+National commission would be to make one. Courts cannot be expected to
+have expert knowledge in all matters that are likely to be brought
+before them. They must <span class='pagenum'><a name="Page_383" id="Page_383">[Pg 383]</a></span>rely upon the testimony of expert witnesses
+whenever technical questions are involved in the determination of cases.
+The identical sources of information from which courts draw are
+accessible, or may be made accessible, to a commission, which has the
+additional advantage that its members may be selected with special
+reference to their fitness for the duties which they will be called upon
+to perform and are expected to devote their whole time to the settlement
+of questions arising in the transportation business. Such a commission
+can practically be made a court with jurisdiction over all matters
+connected with railroad business. The railroad manager, no doubt, is
+thoroughly familiar with the wants and desires of his company; but it
+may fairly be presumed that he is less familiar with the needs of the
+public than a railroad commission whose members are in constant
+communication with the people, patiently listen to the complaints of
+shippers, court and receive suggestions as to needed changes in
+classification and rates, and study the relative advantages of the
+different sections and different interests of the State or the country
+as regards transportation. A railroad freight agent, on the contrary, is
+disposed to think that shippers ought to be satisfied with any rate
+lower than those charged fifty years ago for carting or other crude
+methods of transportation. He regards their views and suggestions as
+chimerical and not worthy of any notice, and does not even hesitate to
+inform them that rate-making is a branch of the railroad business wholly
+beyond their comprehension, and ought not to be meddled with or even
+inquired into by the public. The general freight agent is the employe of
+a company which rates his usefulness solely by his ability to constantly
+increase its revenues, and he invariably proceeds upon <span class='pagenum'><a name="Page_384" id="Page_384">[Pg 384]</a></span>the theory that
+the best tariff is that which comes nearest imposing upon each commodity
+offered for carriage the maximum transportation tax that it will bear. A
+man who entertains such opinions cannot be supposed to be able to do
+justice to the shipper, and should not be permitted to act as arbitrator
+in rate controversies between the public and the company whose employe
+and advocate he is. Nor have we any reason to hope for a change in the
+present tariff policy of railroads. History has sufficiently
+demonstrated the fact that reforms must come from without. As long as
+human nature remains as it is, railroad officials will, if permitted,
+arrange tariffs in the interest of the men who give them employment, for
+if they did otherwise their services would soon be dispensed with. A
+freight tariff should be in the nature of a contract between the carrier
+and the shipper, and the assent of both parties ought to be essential to
+its validity. But as it is impracticable for all the parties interested
+to meet for the purpose of effecting an agreement, the power to make
+rates has in several States wisely been conferred upon railroad
+commissioners, and there is a strong tendency in others to adopt the
+same policy. Such boards have every opportunity to obtain any
+information needed for the efficient and faithful discharge of their
+duties. They can hear the representatives of the railroads as well as
+those of the shippers, investigate carefully disputed points, summon
+experts and witnesses, and obtain official information relating to
+classifications and rates from every State in the Union, and, if
+necessary, from every quarter of the civilized world. The assertion may
+safely be made that, with experience, a commission acquires more expert
+knowledge relating to the business of rate-making than a railroad
+manager. If there is any <span class='pagenum'><a name="Page_385" id="Page_385">[Pg 385]</a></span>mystery connected with the business of
+rate-making which has so far been in the sole possession of railroad
+men, it is to their interest to initiate the commissioners into their
+profound secrets. It will be their privilege to enlighten the
+commissioners as to the actual cost of their respective lines, the cost
+of every branch of the railway service, and as to a thousand other
+matters which the public has both a desire and a right to know. If,
+after a schedule of rates has been prepared, and before it is
+promulgated, railroad men can suggest any improvement in it, they should
+have the privilege to do so; or if, after giving it a fair trial, they
+should be prepared to show that any rate is unreasonably low and
+injurious to them, their complaint should be carefully investigated,
+and, if found well grounded, the wrong should at once be righted.</p>
+
+<p>But the same privileges should be extended to shippers. Their rights and
+their welfare should be guarded as sacredly as those of the railroad
+companies. They should have the same opportunity to examine a proposed
+schedule before its promulgation and protest against any feature of it
+which they may regard prejudicial to their interests, and their
+statements should receive the same consideration as is accorded to those
+of representatives of the railroad companies. So, likewise, when
+shippers prove to the satisfaction of the commission that a rate has
+outlived its reasonableness, their complaints should at once be
+investigated, and if their cause is found to be a just one, the tariff
+should be so amended as to give them relief.</p>
+
+<p>The labors of a board of railroad commissioners are onerous, and their
+responsibility is great. No uniform rule can be laid down for their
+guidance in the fixing of rates, yet there are a few fundamental
+principles which <span class='pagenum'><a name="Page_386" id="Page_386">[Pg 386]</a></span>should always be adhered to. The cost of service
+should invariably be an important factor of a rate. Railroads should not
+be compelled to carry any commodity for less than the actual cost of
+moving it, nor should rates be fixed greatly in excess of such cost of
+service. The carload should be the unit of wholesale shipments. Since it
+costs the railroad company as much to move ten carloads of freight which
+belong to one shipper as it costs to move ten carloads belonging to ten
+shippers, no advantage beyond the general carload rate should be given
+to the large shipper. The difference in the rates between shipments in
+less than carload lots ought to be determined solely by the difference
+in the cost of carriage and handling. Where shipments are made in
+carload lots, the loading and unloading is usually done by the shipper
+and consignee, cars are loaded to their full capacity, and no loading or
+unloading of shipments at intermediate points is necessary. It is
+therefore but just that the consignor and consignee should have the
+benefit of the reduced cost of such shipments. Raw materials, and
+especially coal and lumber and kindred articles, the transportation of
+which requires neither an expensive rolling stock nor warehouse
+accommodations nor speedy movement, and in which the risk of loss or
+damage is insignificant, should be carried at the lowest rate possible.
+Such a policy will tend to foster other interests, which will develop
+business for the road and will build up remote sections of the country,
+and will often enable railroads to carry large quantities of these
+commodities at times when they would otherwise be nearly idle. There
+should be a uniform classification throughout the country, based upon
+considerations of justice and equity instead of railroad tradition. Such
+articles should be classed together as resemble <span class='pagenum'><a name="Page_387" id="Page_387">[Pg 387]</a></span>each other as concerns
+bulk, weight and risk, or what is virtually the same, cost of carrying
+and handling. It may be safely assumed that a rate which has been made
+and used by railroad companies is remunerative. If it is claimed by
+railroad men that it is not, the burden of proof should rest upon them.
+A rate may also be considered remunerative to a road if other lines
+similarly situated have voluntarily adopted it. A schedule finally must
+be considered reasonable if it enables the company for which it is
+prescribed to earn under efficient and economical management sufficient
+to maintain its road in proper condition and a fair rate of interest
+upon a fair valuation of its road. Property is never worth more than
+what it can be duplicated for, and railroad property is no exception to
+the rule. If there has been a depreciation in the property of a company,
+it should not demand dividends upon values which no longer exist. Nor
+can the same returns be conceded to railroad property as to private
+capital. Its investment is permanent and well secured, if it is honestly
+and intelligently made; and its dividends are net returns after the
+payment of all expenses, including taxes, cost of management and
+maintenance. The three per cent. bonds of the United States Government
+find a ready sale at prices above par. Were there less speculation and
+more honesty and stability in railroad management, railroad securities
+yielding a revenue of from 2-1/2 to 4 per cent. on the actual investment
+would be eagerly sought after by conservative capitalists.</p>
+
+<p>Rate-making requires honesty of purpose, intelligence and discretion,
+qualities as likely to be found among the servants of the people as
+among those of corporations. A commission may err, but its errors are
+not likely to prove <span class='pagenum'><a name="Page_388" id="Page_388">[Pg 388]</a></span>as detrimental to the railroad companies as the
+extortionate and discriminating rates imposed by railroad managers have
+proved to the interests of the public. Railroad managers acknowledge no
+obligation except that of earning dividends for their companies, while
+the members of a railroad commission, on the contrary, are responsible
+for their acts to the people, with us the source of all government and
+all power. To question the justice and sincerity of the people, or to
+deny the efficacy of such a control, is to deny the wisdom of popular
+government.</p>
+
+<p>Railroads might be permitted to reduce their rates below the official
+tariff, but they should be required to give at least thirty days' notice
+of such a change, to enable shippers to prepare for it. The companies
+should not be permitted, however, to raise rates again without obtaining
+the commissioners' consent and giving at least two months' notice of the
+proposed advance. Sudden fluctuations in rates are a fruitful source of
+disaster in those branches of business in which the cost of
+transportation forms an important factor in the price of commodities,
+and are as unjust and unwarrantable as would be fluctuations in import
+duties. As long as they are tolerated there can be no reliable basis for
+business calculations or contracts. There is little doubt that, were
+such regulations enforced, railroad wars, so demoralizing to the
+business of the country, would soon belong to the things of the past,
+and a far-reaching assurance of future welfare would be given to the
+commercial, manufacturing and all other legitimate interests of the
+country. It should always be kept in view by the rate-making power that
+the railroad company, like the gas company, the water company and the
+street car company, is acting in the capacity of a public agent, and the
+rate of compensation should be fixed by public authority.</p>
+<br />
+<br />
+<br /><span class='pagenum'><a name="Page_389" id="Page_389">[Pg 389]</a></span>
+<br />
+
+<hr />
+<br />
+<h2>CHAPTER XIV.</h2>
+
+<h2>REMEDIES.</h2>
+<br />
+
+<p>The railroad in America is still in its infancy, both as regards extent
+of mileage and methods of operation. In 1860 the United States had in
+round numbers 30,000 miles of road; in 1870 this number had increased to
+53,000; in 1880 to 93,000, and in 1890 to 167,000. It will thus be seen
+that the average increase during each of those three decades was nearly
+80 per cent. Should this rate of increase continue during the next three
+decades there would be in the present territory of the United States a
+little over three hundred thousand miles in 1900, 550,000 miles in 1910
+and close to one million miles in 1920, or about one mile of road for
+every three miles of territory. It is not likely that the rate of
+increase of the past will continue in the future; but even if this
+should be reduced from 80 to 40 per cent. it would be less than
+fifty-five years when the railroad mileage of the United States would
+reach the million point.</p>
+
+<p>Even this might seem an extravagant estimate, but it must be remembered
+that there are already a number of States in the Union with a railroad
+mileage closely approaching this proportion. The District of Columbia
+has one mile of road for every 3.39 square miles of territory, New
+Jersey for every 3.79, Massachusetts for every 3.96, and Connecticut for
+every 4.96 square miles. Ohio, Pennsylvania, Rhode Island and Illinois
+follow with one mile of railroad for every 5.14, 5.20, 5.57 and 5.59
+square miles of territory, respectively, and Indiana, New York, Delaware
+and Iowa are not far behind them.</p>
+
+<p><span class='pagenum'><a name="Page_390" id="Page_390">[Pg 390]</a></span>It should also be borne in mind that many of the through lines have
+double, some triple, and some even quadruple tracks, which, if taken
+into the account, would increase the mileage much more; and still
+railroad construction in most of these States is far from being at a
+standstill. The United States will eventually be able to sustain a
+closer net of railways than any country in Europe, and we may rest
+assured that the time will come when the fertile prairie States of the
+Northwest will have a mile of railroad for every square mile of
+territory.</p>
+
+<p>In view of the future magnitude of the transportation interest the
+importance of placing its control and management early upon sound
+principles should not be under-estimated. Abuses crept into railroad
+management in the past, not because the men who controlled it were
+necessarily worse than men engaged in other pursuits, but because the
+States failed to provide adequate legislation for the control of this
+new social and commercial force, and the license enjoyed by railroad men
+gradually turned into serious evils what seemed at first only harmless
+practices. It cannot be denied, however, that the absence of restraint
+in time attracted to the business unscrupulous men whose sharp practices
+frequently forced their colleagues of better conscience to do what their
+sense of honor and justice condemned. These evils and abuses have
+increased with the growth of the railroad system, and nothing short of
+the sovereign power can now correct them. It is incumbent upon the state
+not only to correct the evils of the past, but to base legislative
+control of railroads upon principles so wise and so broad as to endure
+for ages, permitting the unlimited growth of the system and at the same
+time insuring commercial liberty and prosperity to the generations to
+come.</p>
+
+<p><span class='pagenum'><a name="Page_391" id="Page_391">[Pg 391]</a></span>As it is always easier to tear down than to build up, so it is likewise
+easier to point out evils than it is to provide proper remedies for
+their cure. Almost any one can criticise existing conditions, but it
+requires wise and constructive statesmanship to propose practical
+measures which will bring about desired improvement. The apparent
+magnitude of the work of correcting the evils and abuses connected with
+the transportation business, many of which have been in vogue for more
+than a generation, has discouraged many from seriously undertaking it.
+And yet we shall find the problem by no means a difficult one, if we
+properly analyze it and go to the root of the evil. Prof. Bryce, in his
+work "The American Commonwealth," refers to the fact that the people of
+this country have been equal to the task of solving the gravest problems
+which have been presented to them, and we need have no doubt of their
+ability to solve the railroad problem. Railroad regulation does not
+require the adoption of any new principle of law. If the common law is
+rightly applied and provision is made for its strict and systematic
+enforcement, it will meet every condition that is likely to arise in the
+transportation business. It should always be remembered that the
+railroad is an improved highway, and the principal reason for which it
+is built is to accommodate the people and promote their welfare, and not
+to serve the selfish ends of a few individuals, and that private
+companies were permitted to build and operate it only because the State
+believed that the public interests could best be served in this way.</p>
+
+<p>It is one of the duties of the State to facilitate transportation by
+establishing highways. These highways may be built by the State directly
+or through municipalities or even private corporations. Thus, under
+authority derived <span class='pagenum'><a name="Page_392" id="Page_392">[Pg 392]</a></span>from the State, cities lay out, construct and
+maintain streets within their limits. But these streets become public
+and are always subject to State control. The same rule applies to
+turnpikes and ferries. Although the State transfers to an individual or
+a company its right to maintain a ferry or to build and maintain a
+turnpike, and to compensate itself for its outlay by the collection of
+tolls, the ferry and turnpike nevertheless remain highways, subject to
+the control of the State.</p>
+
+<p>The railroad partakes of two natures, that of a highway and that of a
+common carrier. Railroad companies therefore enjoy the privileges and
+assume the duties of both. The State justly exercises in behalf of such
+companies the right of eminent domain, <i>i. e.</i>, the right of the
+sovereign to apply private property to public use; but it cannot
+rightfully appropriate private property for private use, even if legal
+compensation were to be made for it. It is only upon the theory that
+railroads are highways, constructed for the public good and subject to
+public control, that the State has authorized railroad companies to take
+private property for their own use by paying for it a reasonable
+compensation. A railroad may even take possession of and intersect a
+public road for the purpose of carrying on its functions. But while the
+sovereign may exercise the right of eminent domain, it cannot delegate
+it to any individual or number of individuals, except to its agents,
+performing its functions and being bound to comply with any rule which
+may be prescribed for the public good. Under the common law the
+individual is entitled to as full use of the railroad as he is of the
+common highway. If he is not allowed to put on his own vehicle, this
+restriction is simply due to the fact that the people believe that the
+business can be done most safely, most <span class='pagenum'><a name="Page_393" id="Page_393">[Pg 393]</a></span>economically and most
+efficiently by one company or a limited number of companies operating
+the road for a reasonable compensation. Nor does this restriction differ
+materially from that which the law has placed upon the use of the common
+road. Without legislative sanction no one has a right to put upon it a
+team of elephants or a locomotive and train of cars, or other strange
+motors, and thereby obstruct the public travel. These restrictions might
+be removed by the legislative power, and there is also no doubt that
+under the common law the State has the right to permit the independent
+use of the railroad track by any person having motive power and cars
+adapted to it. The persons and freight transported on the railroad are
+taxed to maintain it, while in the case of the common road this tax is
+placed upon the people and the adjoining property. How to collect the
+tax necessary to sustain the road is simply a question of public policy,
+and it cannot be collected in any case except with the expressed
+permission of the State. If a company is permitted by the State to
+operate a railroad it should only be permitted to collect such tolls as
+are just and reasonable, and what is just and reasonable should be
+determined by the sovereign State, and not by the operating company. The
+railroads of the United States collect from our people in round numbers
+a transportation tax of eleven hundred million dollars annually. This
+tax is equal to a levy of $17 per head, or $85 per family; it is about
+as large as all our other taxes combined. In the State of Iowa it
+amounts to about $22 per head, or $110 per family, and is two and
+one-half times as large as all the State, county, school and municipal
+taxes collected within her borders.</p>
+
+<p>When we consider how thoroughly other public charges are hedged about,
+by careful restrictions and limitations, <span class='pagenum'><a name="Page_394" id="Page_394">[Pg 394]</a></span>and with what caution the
+amount to be collected is fixed after thorough public discussion, by
+agents of the people selected by them to serve only for short periods,
+and that those who collect and disburse the funds are under oath and
+bonds for a faithful performance of their duty, is it not preposterous
+to permit agents appointed by a few interested persons, and often
+serving for a long term of years, without any responsibility to the
+public, to fix the rate of this tax, and to collect and disburse the
+immense sums levied for the support of these highways without any
+supervision or restraint?</p>
+
+<p>The Government might as well lease the post-office, waterways and the
+collection of import duties to the highest bidder and permit the lessees
+to reimburse themselves by the collection of such tolls as they might
+see fit, without any governmental restraint whatever, their franchises
+enabling the operating companies to tax each individual, each locality
+and each letter, parcel or article as they saw fit. How long would the
+people of this country endure such a condition of things? The collection
+of taxes has been farmed out, but not by any civilized nation in modern
+times. History shows that this system of taxation has always been
+productive of the gravest abuses, and prejudicial to the public welfare.
+As has already been shown, the railroad is an improved highway, and the
+railroad company in operating it is doing a public business and not a
+private business, and therefore it should be governed by rules
+applicable to public business, and not such as are applicable to private
+business. It is admitted by all that for the services which it performs
+the operating company should receive a reasonable compensation; but to
+say what a reasonable compensation is, how it shall be collected, and to
+prescribe rules <span class='pagenum'><a name="Page_395" id="Page_395">[Pg 395]</a></span>regulating the business of the public carrier, is
+solely the right and the duty of the State. The people have never
+permitted the rate of any other public charge to be fixed by the
+beneficiary. Why, then, should privileges be conceded to one beneficiary
+which are denied to all others?</p>
+
+<p>The assertion is often made by railroad managers that railroad
+transportation is a private business as much as any other branch of
+commerce. It is not likely that these same managers would wish to have
+their argument carried to its logical conclusion, for, should the courts
+at any time take their view, they would be under the necessity of
+declaring null and void all their charters, which were granted to them
+upon the assumption that the railroad was a highway operated under the
+authority and control of the State by private companies for the public
+good. If, on the other hand, railroad managers are, for their own
+protection, forced to recognize the public character of railroads, they
+can no longer question the right of the State to so control their
+business as the public good may demand. And this shows the absurdity of
+the claim often made by railroad managers, that, as long as the rates
+charged by them are reasonable, the State has no right to interfere with
+their business, or, in other words, that they may discriminate between
+individuals and localities, and that they may legally practice a
+thousand other abuses as long as individual shippers find it beyond
+their power to prove that they have been charged exorbitant rates.</p>
+
+<p>Charles Fisk Beach, Jr., in his "Commentaries on the Law of Private
+Corporations," lays it down as a general principle of law that "whenever
+any person pursues a public calling and sustains such relations to the
+public that the people must of necessity deal with him, and are under a
+moral duress to submit to his terms if he is unrestrained <span class='pagenum'><a name="Page_396" id="Page_396">[Pg 396]</a></span>by law, then,
+in order to prevent extortion and an abuse of his position, the price he
+may charge for his services may be regulated by law." And applying this
+principle to common carriers, and especially railroads, this author
+says:</p>
+
+<div class="blockquot"><p>"The sovereign has always assumed peculiar control over
+common carriers as conducting a business in which the public
+has an interest, and in the case of railway carriers an
+additional basis of governmental control is grounded in the
+extraordinary franchise of eminent domain conferred upon
+these companies. For corporations engaged in carrying goods
+for hire as common carriers have no right to discriminate in
+freight rates in favor of one shipper, even when necessary
+to secure his custom, if the discriminating rate will tend
+to create a monopoly by excluding from their proper markets
+the products of the competitors of the favored shipper."</p></div>
+
+<p>If railroads had no obligations or advantages beyond those of other
+common carriers, such as stage lines and steamship companies, their
+discriminations might be less objectionable, but, as keepers of the
+toll-gates of the public highways, they are no more at liberty to
+regulate their own business regardless of the public welfare than were
+their predecessors, the toll-collectors stationed along the public
+turnpikes and canals. As such public tax-collectors they are bound to
+give equal treatment to all persons and places.</p>
+
+<p>Although the business of constructing and keeping in repair the turnpike
+roads was, as a rule, left to private persons, and the promoters of such
+enterprises were permitted to reimburse themselves for their outlay by
+the collection of tolls, their schedules of tolls were prescribed by the
+State and their business was placed under the supervision of public
+officers, whose duty it was to see that neither extortion nor
+discrimination was practiced in the <span class='pagenum'><a name="Page_397" id="Page_397">[Pg 397]</a></span>collection of these tolls, and that
+the private management of a public business did not become the source of
+abuse. The State thus insisted upon exercising a restraining influence
+over the business of turnpike companies because it realized the danger
+of entrusting the management of a semi-public business to companies
+organized solely for private gain, with officers responsible only to
+their stockholders, who, under ordinary circumstances, could be relied
+upon to measure the usefulness of an employe by his ability to
+contribute to the increase of the annual dividends. It will scarcely be
+claimed, even by railroad men, that since the days of turnpikes and
+stage-coaches corporations have become more unselfish and their officers
+less servile. The temptations have increased, while human frailty
+remains the same.</p>
+
+<p>Of course, if we consult the railroad managers as to the best policy to
+be adopted for the future control of railroad companies, we shall be
+informed that we have already gone too far in railroad legislation, that
+nearly all the present evils of transportation of which the public and
+the railroad companies complain may be traced to legislative
+restrictions, and especially to certain features of the Interstate
+Commerce Act. They reluctantly admit that this act has been instrumental
+for good inasmuch as it has corrected some of the abuses that formerly
+existed, but they insist that several of its provisions are too radical
+and do infinitely more harm than good, both to the railroad companies
+and the people; that these obnoxious provisions ought to be repealed,
+and that under such restrictions as would still remain railroad
+companies ought to be permitted to manage their own business. If we
+inquire what modification of the Interstate Commerce Act the railroads
+desire, we find that if the act were <span class='pagenum'><a name="Page_398" id="Page_398">[Pg 398]</a></span>amended in conformity with their
+wishes there would be little of it left that is of value. But the
+features which are specially obnoxious to them are the long and short
+haul and the anti-pooling clauses. They even go so far as to demand that
+the Government should not only permit pooling, but should use its strong
+arm to enforce all pooling contracts which railroad companies might see
+fit to enter into. This means, in other words, that the Government
+should enforce an agreement to restrict competition, which is made in
+direct violation of the common law, and aid the companies in maintaining
+such rates as they see fit to establish. If the railroad manager is
+cross-examined and forced to confess the truth, he will have to admit
+that what he really desires is freedom from all restraint, or, if public
+opinion will not tolerate this, then only law enough in letter to
+satisfy a public clamor and permit him to violate its spirit, and to
+then trust to him and the future to bring it into disrepute and cause
+its repeal.</p>
+
+<p>Some shrewd managers have recently expressed a willingness to submit
+their pooling arrangements to a public commission for approval, before
+they should go into effect. This is objectionable on the ground that
+they would then, more even than before, endeavor to control the making
+of the commission. It is far safer to absolutely prohibit pooling and
+all devices used as a substitute for it. No necessity for pooling
+exists, and no good reason can be given why it should be permitted
+unless complete government control is established.</p>
+
+<p>State control of railroad transportation is as essential to the welfare
+of the companies as it is to that of the public. The history of the past
+twenty years has shown that railroad companies are utterly unable to
+regulate their <span class='pagenum'><a name="Page_399" id="Page_399">[Pg 399]</a></span>relations with each other. They either cannot arrive at
+an understanding, and then the stronger companies resort to hostilities
+to bring the weaker ones to their terms; or, when an agreement has been
+reached among them, they find themselves unable to enforce it. Anarchy
+then reigns supreme, until finally a truce is patched up, to be again
+followed by evasions, defiance and "war." The nature of the railroad
+business is in fact such that, in the absence of strict State control,
+it is impossible for a conscientious manager to retain the business to
+which his road is naturally entitled, and do full justice to both the
+patrons and the stockholders of his road. Efforts have been made again
+and again by railroad companies to regulate their affairs and adjust
+their difficulties by resorting to pools, agreements, associations and
+combinations, formed with all the ingenuity of which men are capable,
+and supported by penalties and fines; but the unscrupulous railroad
+manager has always found a way to violate or subvert the agreement.
+There is a disposition among railroad companies to arrogate all the
+powers of sovereignty. They want to make their own laws, impose fines
+and declare war, and often go even so far as to openly defy the power of
+the State that has given them their existence.</p>
+
+<p>When railroad managers are shorn of the power to practice abuses, they
+are at the same time deprived of the many advantages they now have to
+speculate in railroad securities and enrich themselves at the expense of
+the public and of other railroad stockholders. The great fortunes of
+this country have been amassed within a few years, and chiefly from
+manipulations of railroad property. If the people permit these practices
+to go on without restraint but a few years more, the property of the
+nation <span class='pagenum'><a name="Page_400" id="Page_400">[Pg 400]</a></span>will be largely under the control of a few bold adventurers. The
+great fortunes of Europe which it has required centuries to accumulate
+are already outstripped by the "self-made" millionaires of this country.
+However persistently railroad managers may assure the people that abuses
+in the transportation business have been reduced to a minimum and that
+more stringent legislation will be an evil, it is a fact that many of
+the graver railroad abuses are still practiced and that much more
+reformation is needed in railroad management, or in railroad
+supervision, or in both, to make the railroad what it was designed to
+be, a highway operated for the public and open to all upon equal and
+equitable terms.</p>
+
+<p>The virtual ruler of the United States is public opinion. It is the
+power that controls the legislative as well as the executive and
+judicial departments of the Government. Enactments of legislatures and
+of Congress and decisions of the courts, even of the Supreme Court of
+the United States, not in harmony with an intelligent and determined
+public opinion, cannot endure, and executives not in accord with the
+masses of the people cannot long retain public confidence or official
+authority.</p>
+
+<p>Under these circumstances no reform movement has any prospect of success
+unless it is supported by public opinion. It should therefore be the
+principal endeavor of all advocates of railroad reform to create public
+opinion in favor of the measures proposed by them. With an intelligent
+public on the alert, the Government may be relied upon to pursue a
+healthy and progressive railroad policy. Unfortunately, there are times
+when public opinion upon great questions is dormant, while pecuniary
+interests, like the force of gravity, never suspend their action. To
+arouse the masses at such times, we must <span class='pagenum'><a name="Page_401" id="Page_401">[Pg 401]</a></span>rely largely upon an honest,
+independent and courageous press, not influenced by gift or patronage.</p>
+
+<p>Many plans have been proposed for a better control of railroads. Some of
+these are merely theoretical; others have been tried in part, and a few
+have been tried in their entirety, but under circumstances radically
+different from those surrounding us. A system which may be well adapted
+to a monarchy with a centralization of governmental powers would
+probably prove a failure here, when brought in contact with the
+principles of dual sovereignty and local rule. Unless a revolution
+should change our system of government, a dual system of railroad
+control will always be necessary in the United States; for it is not at
+all likely that the individual States will ever voluntarily give up
+their right to regulate commerce carried on within their respective
+borders. On the other hand, the common welfare requires that the
+commerce which is carried on between the States should not be hampered
+by local interference, but should be regulated only by Congress. Our
+experience as a nation has shown that such a quality of sovereignty is
+not inconsistent with strength or efficiency, nor need it be productive
+of rivalry or friction. The fact that a certain mode of railroad
+management has been successful elsewhere is not sufficient proof that it
+would be successful here, nor is the fact that it has not been
+successful elsewhere sufficient proof that it would not be successful
+here. The more the conditions which exist here resemble those under
+which it was tested, the greater is the probability that it can be
+adapted to our circumstances. Independent thought and action is an
+essential element of progress, yet it is the part of wisdom to profit by
+the speculation and experience of others.</p>
+
+<p><span class='pagenum'><a name="Page_402" id="Page_402">[Pg 402]</a></span>The following are the principal methods that have been tried or proposed
+for the control and management of railroads:</p>
+
+<p><i>1. Publicity of the railroad business.</i></p>
+
+<p>It is held by some that the secrecy with which railroad business is at
+present transacted is the source of all evils. It is contended that if
+railroads were required to report to the public every item of income and
+expenditure, discrimination and extortion, as well as bribery and
+corrupt subsidizing, would soon cease. If the companies were compelled
+to render an account of all receipts, special rates and drawbacks could
+not safely be granted by railroad managers, or, if granted, would soon
+lose their charm for recipients, for it would be but a short time until
+others would demand and even exact the same privileges. An attorney
+would, as a member of the legislature, be slow to accept a retaining fee
+if the amount of such fee were made known to his constituents.
+Publishers would hesitate to apply for railroad subsidies if the
+companies were compelled to render periodically an itemized account of
+such expenditures, and railroad companies would, under similar
+circumstances, hesitate to pay subsidies, for the subsidized journal
+would soon be without patrons. If the items annually expended upon
+railroad lobbies were reported, these lobbies would soon be frowned, or
+even hissed, out of legislative halls. There can be no doubt that full
+and complete publicity in railroad business would correct a large number
+of existing abuses, and it should therefore be insisted upon as one of
+the first and essential features of railroad reform. It is questionable,
+however, whether railroad managers are so sensitive to public opinion
+that publicity could be relied upon as a cure for all railroad evils. To
+what extent it is desirable <span class='pagenum'><a name="Page_403" id="Page_403">[Pg 403]</a></span>to supplement publicity by other measures
+of State control will be considered hereafter.</p>
+
+<p>It will, of course, be urged by railroad managers that the State has no
+right to pry into the privacy of their business and that they should be
+guaranteed the same protection against intrusion that is enjoyed by
+other branches of business. To this we must reply that not even banks or
+insurance companies are permitted to conduct their business as private,
+and that controlling the highway and levying a transportation tax upon
+every article of commerce passing over it is essentially public business
+and unquestionably subject to public control. Every citizen is as much
+interested in it as he is in the transactions of the custom-house, or of
+the public treasury, and any transaction of a railroad manager that
+shuns public inspection can be set down as a public evil and should be
+suppressed. It may safely be laid down as a general rule that the
+refusal of a railroad company to give publicity to its transactions is
+presumptive evidence of wrong. The people are not alone interested in
+such publicity. Stockholders have likewise a right to be protected
+against the sinister manipulations of dishonest managers, and publicity
+furnishes them the best guarantee of honest management.</p>
+
+<p>Stockholders should attend the meetings of their companies and should
+obtain full knowledge of the management of their affairs. If they will
+make thorough examination and get at bottom facts the chances are that
+contracts will be found with owners of patents, white lines, blue lines,
+refrigerator car lines, coal companies, ferry companies, manufacturing
+companies, packing companies and other kindred organizations, by which
+hundreds of millions of dollars are diverted from the treasuries of the
+<span class='pagenum'><a name="Page_404" id="Page_404">[Pg 404]</a></span>railroad companies to the pockets of influential persons connected with
+the management of the roads.</p>
+
+<p>It has recently come to light that the officers of a Pennsylvania
+railroad company, during fifteen years, by some means of secret rebates
+and other allowances, have taken about $100,000,000 out of the treasury
+of the company and distributed it as largesses to about half a dozen
+iron and steel establishments.</p>
+
+<p>This is a method of getting wealthy at the expense of others not unknown
+to many another great fortune accumulated in the last twenty years.
+Railroad discriminations have been a fruitful source of those gross
+inequalities in wealth distribution which now agitate society and call
+people's parties and the like into existence. The modern millionaire
+appears to be an entirely natural creation. Perhaps this money taken in
+special rates from the Pennsylvania railroad's treasury, or, rather,
+from the pockets of the road's other patrons, and of the men who may
+have sought, without special rates, to compete with the favored ones in
+their business, only to be crushed in financial ruin, will be spent in a
+praiseworthy way, in accord with the principles of "the gospel of
+wealth." What we need now is the gospel of distribution of facilities
+for the accumulation of wealth, as well as the gospel of distribution of
+great fortunes.</p>
+
+<p>Whether inspired by a bull or a bear interest or neither, all will
+concede the ability of Mr. Henry Clews to picture the evils of railroad
+management; and his lack of generosity in accrediting ability or honesty
+to legislators who are called upon to provide remedies for the wrongs
+that he so well depicts will not deter me from indorsing the following
+statement made by him in a magazine article which is pertinent to this
+discussion:</p>
+
+<div class="blockquot"><p>"One great difficulty that present railroad legislators have<span class='pagenum'><a name="Page_405" id="Page_405">[Pg 405]</a></span>
+to contend with is the evil methods of railroad building and
+extension. A great deal of the mileage of the last two years
+has been premature, and doubtless for speculative purposes.
+Most of it has been constructed, however, by old companies
+who had good credit to float bonds and could raise all the
+money required. Hence there has been but little financial
+embarrassment arising from the too rapid construction. But
+people are beginning to find out that a great deal of this
+building has been in the interest of speculative directors
+and their friends, who, for a mere song, had bought up
+barren lands considered worthless because there was no means
+of transportation. But these lands soon become immensely
+valuable for sites of villages, towns and cities. The
+construction companies, by which these roads were generally
+built, raised the cost to the highest possible figures, in
+order, I fear, to make dividends for the construction
+stockholders. It is noteworthy that the directors connected
+with these construction schemes have been exceedingly
+prosperous, while the stockholders of the roads have grown
+poor in an inverse ratio. The dividends of the latter have
+disappeared. The new mileage, much of which, I apprehend,
+has been made on this principle, was about twenty-one
+thousand miles, which is greater than the entire mileage of
+Great Britain. There should be additions to the Interstate
+Law, or a special law regulating the methods of construction
+companies, which are probably doing more to demoralize the
+railroad system&mdash;and doing it very insidiously, too&mdash;than
+any other factor connected with these great arteries of the
+country's prosperity.</p>
+
+<p>"Legislative reform is greatly needed in the matter of
+railroad reports, especially for the safety of investors,
+and to prevent speculative abuses among railroad officials
+and their friends and favorites. There should be statements
+issued annually, or perhaps more frequently, upon the truth
+of which everybody might rely. These should be sworn
+statements, and should bear the signatures of at least three
+of the directors. These directors should be <span class='pagenum'><a name="Page_406" id="Page_406">[Pg 406]</a></span>required to
+call to their aid expert accountants, and should have placed
+at their disposal all the books of the company or
+corporation and all the other papers necessary to verify the
+accuracy of their report. The correctness of the statement,
+when issued, would then be a foregone conclusion, and an
+investor in London, Paris or Berlin could buy or sell on his
+own judgment, an experiment which, under existing
+arrangements, might prove very costly. It is proverbial that
+a railroad statement now is defective in the most essential
+particulars, and, to put it mildly, usually covers a
+multitude of sins. According to one plan approved by
+railroad companies, the statement published to-day, for
+instance, is made to show a surplus of many millions, but
+there is nothing said about an open construction account to
+which the surplus is debtor. On this favorable showing (with
+this <i>suppressio veri</i>) the stock goes up and the insiders
+quickly unload upon the investment public. The following
+statement, which comes out six months later, shows that the
+surplus has been used to settle the construction
+indebtedness. The surplus has disappeared; consequently the
+stock suffers a serious decline. Those who bought on the
+strength of the large surplus sell out, on being informed of
+its distribution. Then the inside sharks come forward again
+and purchase at reduced prices, probably at a depreciation
+of from ten to fifteen points or more, and keep their stock
+until the next periodical appearance of the bogus surplus.
+Thus the insiders grow rich, while the outsiders become
+poor. The only remedy for this abuse is a sworn statement at
+regular intervals, and if the directors should commit
+perjury they would render themselves liable to State prison.
+If a few of them should be tempted to fall into the trap,
+and be made examples of in this way, nothing would do more
+to work a speedy reform in this contemptible method of
+book-keeping.</p>
+
+<p>"I would also suggest a change in the character of the
+directors. Those usually chosen for this office now are men
+who have vast interests of their own, more than sufficient
+to absorb their entire time and thoughts. They are selected
+mainly on account of their high-sounding <span class='pagenum'><a name="Page_407" id="Page_407">[Pg 407]</a></span>names, to give
+tone to the corporation and solidify its credit, in order
+that the lambs of speculation may have proper objects in
+whom confidence can be reposed and no questions asked. The
+management of the affairs of the corporation is frequently
+intrusted to one man, who runs the business to suit his own
+individual interests."</p></div>
+
+<p>We can appreciate the force of the above remarks when we consider that
+last year seventy-five companies realized a gross income of
+$846,888,000, which is equal to about 80 per cent. of the total income
+received by all of the railroads of the United States.</p>
+
+<p><i>2. Free competition upon all railroads.</i></p>
+
+<p>Mr. Hudson, in his excellent work, "The Railways and the Republic,"
+recommends the following remedy:</p>
+
+<div class="blockquot"><p>"Legislation should restore the character of public highways
+to the railways, by securing to all persons the right to run
+trains over their tracks upon proper regulations, and by
+defining the distinction between the proprietorship and
+maintenance of the railway and the business of common
+carriers."</p></div>
+
+<p>Mr. Hudson proposes to leave the track in the possession of its present
+owners, but to permit any individual or company to run, upon the payment
+of a fixed toll, trains and cars over it, under the control of a
+train-dispatcher stationed at a central point. This train-dispatcher is
+to be notified by telegraph of the movement of each train, and is to
+give his orders to the officers in charge of each train, as to what
+points they are to go, where to pass one train and where to wait for
+another. Each transportation company is to own, load and forward its own
+trains; it is to be required to run its regular train on schedule time
+or to have it follow another train as an extra. They are to be liable to
+their shippers as well as to the railway company for all damages caused
+by their neglect, while the railroad company is to be held responsible
+for the <span class='pagenum'><a name="Page_408" id="Page_408">[Pg 408]</a></span>condition of its track. It will not be necessary to go into the
+details of Mr. Hudson's plan. Suffice it to say that he proposes to
+establish free competition in the railway business by making the use of
+the railway track as free as that of the turnpike or canal, subject only
+to such control on the part of the public train-dispatcher as the
+paramount considerations of speed and safety may require.</p>
+
+<p>The adoption of Mr. Hudson's plan would simply be a return to the first
+principle of railroad transportation. It has already been shown that the
+first English charters permitted the public to use their own vehicles
+and motive power upon the railroad track, but that shippers and
+independent carriers could not avail themselves of these provisions of
+the early charters because it was in the power of the railroad companies
+to make their tolls prohibitory. There is but little question as to the
+practicability of Mr. Hudson's plan from a purely technical standpoint,
+and its adoption might be advisable if it should be demonstrated that a
+monopoly of the track is inconsistent with the operation of the railways
+for the public good. It is seriously doubted, however, whether such
+ideal competition as Mr. Hudson desires to bring about could be secured
+except at the expense of true economy. Concentration, or, rather,
+consolidation in the railroad business has, under proper legal
+restriction, always resulted in a saving of operating expenses, and
+usually in a reduction of rates. Any step in the opposite direction,
+whatever other merits it may possess, is in the end not likely to give
+lower rates. If it is a settled principle that railroads are only
+entitled to a fair compensation for their services, it must be evident
+that what would be a fair compensation for the same or similar services
+to a large, well-organized, well-regulated and well-managed company
+<span class='pagenum'><a name="Page_409" id="Page_409">[Pg 409]</a></span>cannot be sufficient compensation to an individual carrier or a small
+company, whose expenses will always be comparatively larger than those
+of its better-equipped rival. Monopoly and extortion need not
+necessarily be synonymous. In fact, States and municipalities in their
+public works often prefer monopoly to competition as the cheaper of the
+two. Nevertheless, should it ever be found that monopolies cannot be
+reconciled with justice and economy, a return to the first principles of
+railroading may become advisable.</p>
+
+<p><i>3. State ownership and management.</i></p>
+
+<p>A number of European states, notably Prussia, France and Belgium, as
+well as Australia, British India and the British colonies in Southern
+Africa, have adopted government ownership of railroads. The motives
+which led to this step in the various countries differ greatly. While in
+Europe military and political considerations predominated, in Africa and
+Australia it was more the want of private capital and energy which led
+the government to engage in railroad enterprises. There has in most of
+these states been a desire to avoid the evils usually connected with
+private management. The experiment of state ownership and management of
+railroads has been longest tried in Belgium, and with the best results.
+With an excellent service the rates of the Belgian state roads are the
+lowest in Europe. Their first-class passenger tariffs are, next to the
+zone tariff recently adopted on the state roads of Hungary, the lowest
+in the world, and are, for the same distance, lower than those of
+American roads. In Prussia the state service, upon the whole, is also
+superior to that of private companies, and is probably equal to the
+public demand. In France the government only owns and operates less
+important lines, but furnishes upon these a more <span class='pagenum'><a name="Page_410" id="Page_410">[Pg 410]</a></span>efficient and cheaper
+service than private companies would either be able or disposed to
+furnish. The oft-repeated statement of those opposed to government
+regulation to the contrary notwithstanding, government ownership and
+management of railroads is a decided success in Europe, Mr. Jeans says
+of state railroads:</p>
+
+<div class="blockquot"><p>"Notwithstanding the superior financial result, the lines
+worked by the state are those kept in the best order, and
+the working of which gives the greatest satisfaction to the
+commercial world and the public in general as regards
+regularity of conveyance, cheapness of transit and the
+comfort of travelers."</p></div>
+
+<p>It is difficult to see how any unbiased person can travel on any of the
+state roads of Europe without coming to the same conclusion. State
+management offers certainly some decided advantages to the public. Above
+all, the business of the roads is not conducted for the pecuniary
+advantage of a few, but for the common good. Commerce is not arbitrarily
+disturbed to aid unscrupulous managers in their stock speculations. New
+lines are not built for speculative purposes, but for the development of
+the country. Rates are based more upon the cost of service than upon
+what the traffic will bear, and the ultimate object of the state's
+policy is not high profits, but a healthy growth of the country's
+commerce, while the sole aim of a private company is to get the largest
+revenue possible. The permanent way of the state road is kept in better
+condition, the public safety and convenience being paramount
+considerations. Rates are stable and uniform, instead of being
+changeable and discriminating, and all persons and places are as equal
+before the railroad tax collector as before the law. It may be laid down
+as a general rule that under private management of railroads efforts
+will be made to secure the highest rates possible, <span class='pagenum'><a name="Page_411" id="Page_411">[Pg 411]</a></span>while it is the aim
+of the Government to grant the lowest rates possible. Mr. Jeans proves
+by statistics that the cost of maintenance of way is generally higher on
+the state lines, and that traffic expenses are higher on the lines of
+private companies. In commenting upon this difference he says:</p>
+
+<div class="blockquot"><p>"It might easily be contended, and even proved beyond all
+doubt, that the first characteristic is a result of the
+better condition in which the state keeps the permanent way;
+and, so far as this is the case, the public convenience,
+safety and general advantage are promoted.</p>
+
+<p>"The highest range of traffic expenses on companies' lines
+undoubtedly argues greater laxity of management, since, as
+we have already shown, this is one of the most elastic of
+items, and may be either very high or very low, according as
+economy or extravagance is the prevailing system.... The
+experience of Continental Europe points unmistakably to the
+exercise of greater economy in state management."</p></div>
+
+<p>Judge Dillon, of the United States Court, in his order appointing Hon.
+J. B. Grinnell receiver for the Central Railroad of Iowa, in 1876, said:</p>
+
+<div class="blockquot"><p>"The railroads in the hands of the court&mdash;and in the circuit
+there are eight or ten&mdash;have all been run with less expense,
+and have made more money, than when they were operated by
+the companies; and we hope and believe under your
+supervision that this road will prove no exception, and that
+the property will be worth more at the end of the
+litigation."</p></div>
+
+<p>Upon Mr. Grinnell's resignation, after nearly three years of service,
+Judge Grant said, in asking for the discharge of his bondsmen:</p>
+
+<div class="blockquot"><p>"I concur entirely in the opinion of the State commissioners
+that he has very much improved the condition of the road,
+and he left it in far superior condition to that in which he
+received it."</p></div>
+
+<p><span class='pagenum'><a name="Page_412" id="Page_412">[Pg 412]</a></span>Yet Government ownership and management of railroads also has its
+drawbacks. It is claimed by some that such management is more expensive
+than that of lines owned by private companies. It has already been shown
+that the permanent way is kept in better condition by the state than by
+private corporations. In Russia, Germany, Austria-Hungary, France and
+Italy the state expends from 15 to 30 per cent. more for the maintenance
+of the permanent way than the private companies. It is perhaps also true
+that the rank and file of railroad employes fare, on an average, better
+under government than they do under private management; but, as an
+offset to this, it should be remembered that quite a saving is effected
+by the state in the salary account of general officers. The people will
+not consent to pay the manager of a railroad line a salary six times as
+large as that of a cabinet officer, and provide at the same time
+sinecures for his sons, brothers, nephews and cousins.</p>
+
+<p>It is furthermore claimed that, as government is organized, it cannot,
+all other things being equal, respond to the demands of commerce as
+promptly as private companies. This feature, however, may be an
+advantage to the country at large rather than a detriment. But the
+strongest argument that can be produced against state ownership of
+railroads is that under a democratic form of government it might exert a
+demoralizing influence in politics. The 1,700 railroad companies of the
+United States have at present an army of about 800,000 employes. This
+number is constantly increasing, and it is more than probable that
+before the end of the present century it will have reached a million.
+When it is considered what importance is at present attached to the
+political influence of a hundred thousand Federal officers, <span class='pagenum'><a name="Page_413" id="Page_413">[Pg 413]</a></span>it is not
+surprising that conservative citizens should hesitate to add to the
+ranks of these officeholders a six or seven times larger force.
+Dangerous as the railroad influence now is in politics, it would be ten
+times more dangerous if under a system of Government management
+considerations of self-interest should induce a million railroad
+employes to act as a political unit and political parties should vie
+with each other in bidding for the railroad vote. Could our civil
+service ever be so organized as to divest it entirely of political
+power, state management of railroads might still offer the best solution
+of the railroad problem.</p>
+
+<p>Mr. T. B. Blackstone, president of the Chicago and Alton Railroad
+Company, has recently created somewhat of a surprise by declaring in
+favor of Government ownership of railroads. That Mr. Blackstone's
+programme will eventually receive the approval of a large number of his
+colleagues there can be but little doubt. With the people wide-awake
+upon this subject, the opportunities for railroad speculation are
+lessening, and the scheme to early unload the railroads of the country
+on the Government at a highly inflated value speaks well for the
+financial farsightedness of its author. Mr. Blackstone proposes to have
+railroad stockholders do here what the former owners of the telegraph
+did in Great Britain, <i>i. e.</i>, dispose of their property to the
+Government, at a price representing several times its original cost or
+even several times the cost of duplication.</p>
+
+<p>Mr. C. Wood Davis, formerly general freight and passenger agent of one
+of the leading roads east from Chicago, is one of the best informed and
+clearest-headed writers upon the railroad question. He has, after much
+experience and long study, been converted to the advocacy <span class='pagenum'><a name="Page_414" id="Page_414">[Pg 414]</a></span>of national
+ownership as a solution of the railroad problem. In a recent article
+published by the Arena Publishing Company, entitled "Should the Nation
+own the Railways?" he presents the objections and advantages of national
+ownership. He says:</p>
+
+<div class="blockquot"><p>"The objections to national ownership are many, that most
+frequently advanced, and having the most force, being the
+possibility that, by reason of its control of a vastly
+increased number of civil servants, the party in possession
+of the Federal administration at the time such ownership was
+assumed would be able to perpetuate its power
+indefinitely.... This objection would seem to be well taken,
+and indicates serious and far-reaching results unless some
+way can be devised to neutralize the political power of such
+a vast addition to the official army.... In the military
+service we have a body of men that exerts little or no
+political power, as the moment a citizen enters the army he
+divests himself of political functions; and it is not
+hazardous to say that 700,000 capable and efficient men can
+be found who, for the sake of employment, to be continued so
+long as they are capable and well behaved, will forego the
+right to take part in political affairs. If a sufficient
+number of such men can be found, this objection would, by
+proper legislation, be divested of all its force....</p>
+
+<p>"2. That there would be constant political pressure to make
+places for the strikers of the party in power, thus adding a
+vast number of useless men to the force, and rendering it
+progressively more difficult to effect a change in the
+political complexion of the administration.</p>
+
+<p>"That this objection has much less force than is claimed is
+clear from the conduct of the postal department, which is
+unquestionably a political adjunct of the administration;
+yet but few useless men are employed, while its conduct of
+the mail service is a model of efficiency after which the
+corporate-managed railways might well pattern. Moreover, if
+the railways are put under non-partisan control, this
+objection will lose nearly, if not quite, all its force.</p>
+
+<p><span class='pagenum'><a name="Page_415" id="Page_415">[Pg 415]</a></span>"3. That the service would be less efficient and cost more
+than with continued corporate ownership. This appears to be
+bare assertion, as from the very nature of the case there
+can be no data outside those furnished by the
+government-owned railways of the British colonies, and such
+data negative these assertions; and the advocates of
+national ownership are justified in asserting that such
+ownership would materially lessen the cost, as any expert
+can readily point out many ways in which the enormous costs
+of corporate management would be lessened. With those
+familiar with present methods, and not interested in their
+perpetuation, this objection has no force whatever.</p>
+
+<p>"4. That with constant political pressure unnecessary lines
+would be built for political ends. This is also bare
+assertion, although it is not impossible that such results
+would follow; yet such has not been the case in the British
+colonies where the governments have had control of
+construction....</p>
+
+<p>"5. That, with the amount of red tape that will be in use,
+it will be impossible to secure the building of needed
+lines. While such objection is inconsistent with the fourth,
+it may have some force, but as the greater part of the
+country is already provided with all the railways that will
+be needed for a generation, it is not a very serious
+objection even if it is as difficult as asserted to procure
+the building of the new lines. It is not probable, however,
+that the Government would refuse to build any line that
+would clearly subserve public, convenience, the conduct of
+the postal service negativing such a supposition....</p>
+
+<p>"6. That lines built by the Government would cost much more
+than if built by corporations. Possibly this would be true,
+but they would be much better built and cost far less for
+maintenance and betterments, and would represent no more
+than actual cost; and such lines as the Kansas Midland,
+costing but $10,200 per mile, would not, as now, be
+capitalized at $53,024 per mile, nor would the president of
+the Union Pacific (as does Sidney Dillon, in the <i>North
+American Review</i> for April) say that "a <span class='pagenum'><a name="Page_416" id="Page_416">[Pg 416]</a></span>citizen, simply as
+a citizen, commits an impertinence when he questions the
+right of a corporation to capitalize its properties at any
+sum whatever," as then there would be no Sidney Dillons who
+would be presidents of corporations, pretending to own
+railways built wholly from Government moneys and lands, and
+who have never invested a dollar in the construction of a
+property which they have now capitalized at the modest sum
+of $106,000 per mile....</p>
+
+<p>"7. That they are incapable of as progressive improvement as
+are corporate-owned ones, and will not keep pace with the
+progress of the nation in other respects; and in his <i>Forum</i>
+article Mr. Acworth lays great stress upon this phase of the
+question and argues that as a result the service would be
+far less satisfactory.</p>
+
+<p>"There may be force in this objection, but the evidence
+points to an opposite conclusion. When the nation owns the
+railways trains will run into union depots, the equipment
+will become uniform and of the best character, and so
+sufficient that the traffic in no part of the country would
+have to wait while the worthless locomotives of some
+bankrupt corporation were being patched up, nor would there
+be the present difficulties in obtaining freight cars
+growing out of the poverty of corporations which have been
+plundered by the manipulators, and improvements would not be
+hindered by the diverse ideas of the managers of various
+lines in relation to the adoption of devices intended to
+render life more secure or to add to the public
+convenience.... Existing evidence all negatives Mr.
+Acworth's postulate that "state railway systems are
+incapable of vigorous life."</p>
+
+<p>"8. An objection to national ownership which the writer has
+not seen advanced is that States, counties, cities,
+townships and school districts would lose some $27,000,000
+of revenue derived from taxes upon railways. While this
+would be a serious loss to some communities, there would be
+compensating advantages for the public, as the cost of
+transportation could be lessened in like measure.</p>
+
+<p>"Many believe stringent laws, enforced by <span class='pagenum'><a name="Page_417" id="Page_417">[Pg 417]</a></span>commissions
+having judicial power, will serve the desired end, and the
+writer was long hopeful of the efficacy of regulation by
+State and National commissions; but close observation of
+their endeavors and of the constant efforts&mdash;too often
+successful&mdash;of the corporations to place their tools on such
+commissions, and to evade all laws and regulations, have
+convinced him that such control is and must continue to be
+ineffective and that the only hope of just and impartial
+treatment for railway users is to exercise the 'right of
+eminent domain,' condemn the railways, and pay their owners
+what it would cost to duplicate them; and in this connection
+it may be well to state what valuations some of the
+corporations place upon their properties.</p>
+
+<p>"Some years since the Santa Fe filed in the counties on its
+line a statement showing that at the then price of labor and
+materials&mdash;rails were double the present price&mdash;their road
+could be duplicated for $9,685 per mile, and, the materials
+being much worn, the actual cash value of the road did not
+exceed $7,725 per mile.</p>
+
+<p>"In 1885 the superintendent of the St. Louis and Iron
+Mountain Railway, before the Arkansas State Board of
+Assessors, swore that he could duplicate such a railway for
+$11,000 per mile, and yet Mr. Gould has managed to float its
+securities, notwithstanding a capitalization of five times
+that amount."</p></div>
+
+<p>Among the advantages to be derived from Government ownership he names
+the following:</p>
+
+<div class="blockquot"><p>"First would be the stability and practical uniformity of
+rates, now impossible, as they are subject to change by
+hundreds of officials, and are often made for the purpose of
+enriching such officials....</p>
+
+<p>"It would place the rate-making power in one body, with no
+inducement to act otherwise than fairly and impartially, and
+this would simplify the whole business and relegate an army
+of traffic managers, general freight agents, soliciting
+agents, brokers, scalpers and hordes of traffic association
+officials to more useful callings, while relieving the
+honest user of the railway of intolerable burdens.</p>
+
+<p><span class='pagenum'><a name="Page_418" id="Page_418">[Pg 418]</a></span>"Under corporate control, railways and their officials have
+taken possession of the majority of mines which furnish the
+fuel so necessary to domestic and industrial life, and there
+are few coal fields where they do not fix the price at which
+so essential an article shall be sold, and the whole nation
+is thus forced to pay undue tribute.</p>
+
+<p>"Controlling rates and the distribution of cars, railway
+officials have driven nearly all the mine owners, who have
+not railways or railway officials for partners, to the wall.</p>
+
+<p>"With the Government operating the railways, discriminations
+would cease, as would individual and local oppression; and
+we may be sure that an instant and absolute divorce would be
+decreed between railways and their officials on one side,
+and commercial enterprises of every name and kind on the
+other.</p>
+
+<p>"The failure to furnish equipment to do the business of the
+tributary country promptly is one of the greater evils of
+corporate administration, enabling officials to practice
+most injurious and oppressive forms of discrimination, and
+is one that neither Federal nor State commission pays much
+attention to. With national ownership a sufficiency of cars
+would be provided. On many roads the funds that should have
+been devoted to furnishing the needed equipment, and which
+the corporations contracted to provide when they accepted
+their charters, have been divided as construction profits,
+or, as in the case of the Santa Fe, Union Pacific, and many
+others, diverted to the payment of unearned dividends, while
+the public suffers from this failure to comply with charter
+obligations.</p>
+
+<p>"There would be such an adjustment of rates that traffic
+would take the natural short route, and not, as under
+corporate management, be sent around by the way of Robin
+Hood's barn, when it might reach its destination by a route
+but two-thirds as long, and thus save the unnecessary tax to
+which the industries of the country are subjected. That
+traffic can be sent by these roundabout routes at the same
+or less rates than is charged by the shorter ones is <i>prima
+facie</i> evidence that rates are too high.</p>
+
+<p>"There would be a great reduction in the number of <span class='pagenum'><a name="Page_419" id="Page_419">[Pg 419]</a></span>men
+employed in towns entered by more than one line. For
+instance, take a town where there are three or more
+railways, and we find three or more full-fledged staffs,
+three or more expensive up-town freight and ticket offices,
+three or more separate sets of all kinds of officials and
+employes, and three or more separate depots and yards to be
+maintained. Under Government control these staffs&mdash;except in
+very large cities&mdash;would be reduced to one, and all trains
+would run into one centrally located depot; freight and
+passengers be transferred without present cost, annoyance
+and friction, and public convenience and comfort subserved,
+and added to in manner and degree almost inconceivable.</p>
+
+<p>"The great number of expensive attorneys now employed, with
+all the attendant corruption with the fountains of justice,
+could be dispensed with, and there would be no corporations
+to take from the bench the best legal minds, by offering
+three or four times the Federal salary....</p>
+
+<p>"Every citizen riding would pay fare, adding immensely to
+the revenues. Few have any conception of the proportion who
+travel free, and half a century's experience renders it
+doubtful if the evil&mdash;so much greater than ever was the
+franking privilege&mdash;can be eliminated otherwise than by
+national ownership. From the experience of the writer, as an
+auditor of railway accounts, and as an executive officer
+issuing passes, he is able to say that fully ten per cent.
+travel free, the result being that the great mass of railway
+users are yearly mulcted some thirty millions of dollars for
+the benefit of the favored minority; hence it is evident
+that if all were required to pay for railway services as
+they are for mail services, the rates might be reduced ten
+per cent, or more, and the corporate revenues be no less,
+and the operating expenses no more. In no other
+country&mdash;unless it be under the same system in Canada&mdash;are
+nine-tenths of the people taxed to pay the traveling
+expenses of the other tenth. By what right do the
+corporations tax the public that members of Congress,
+legislators, judges and other court officials and their
+families may ride free? Why is it that <span class='pagenum'><a name="Page_420" id="Page_420">[Pg 420]</a></span>when a legislature
+is in session passes are as plentiful as leaves in the
+forest in autumn?...</p>
+
+<p>"The corporations have ineffectually wrestled with the
+commission evil, and any number of agreements have been
+entered into to do away with it; but it is so thoroughly
+entrenched, and so many officials have an interest in its
+perpetuation, that they are utterly powerless in the
+presence of a system which imposes great and needless
+burdens upon their patrons, but which will die the day the
+Government takes possession of the railways, as then there
+will be no corporations ready to pay for the diversion of
+traffic.</p>
+
+<p>"As a rule, American railways pay the highest salaries in
+the world for those engaged in directing business
+operations, but such salaries are not paid because
+transcendent talents are necessary to conduct the ordinary
+operations of railway administration, but for the purpose of
+checkmating the chicanery of corporate competitors. In other
+words, these exceptionally high salaries are paid for the
+purpose, and because their recipients are believed to have
+the ability to hold up their end in unscrupulous corporate
+warfare where, as one railway president expressed it, 'the
+greatest liar comes out ahead....'</p>
+
+<p>"Government control will enable railway users to dispense
+with the services of such high-priced umpires as Mr. Aldace
+F. Walker, as well as of all the other officials of
+sixty-eight traffic associations, fruitlessly laboring to
+prevent each of five hundred corporations from getting the
+start of its fellows, and trying to prevent each of the five
+hundred from absorbing an undue share of the traffic. It
+appears that each of these costly peace-making attachments
+has an average of seven corporations to watch....</p>
+
+<p>"With National ownership the expenditures involved in the
+maintenance of traffic associations would be saved and
+railway users relieved of a tax that, judging from the
+reports of a limited number of corporations of their
+contribution towards the support of such organizations, must
+annually amount to between $4,000,000 and $5,000,000.</p>
+
+<p>"Of the six hundred corporations operating railways,
+probably five hundred maintain costly general offices,
+<span class='pagenum'><a name="Page_421" id="Page_421">[Pg 421]</a></span>where president, secretary and treasurer pass the time
+surrounded by an expensive staff. The majority of such
+offices are off the lines of the respective corporations, in
+the larger cities, where high rents are paid and great
+expenses entailed, that proper attention may be given to
+bolstering or depressing the price of the corporation's
+shares, as the management may be long or short of the
+market. So far as the utility of the railways is concerned,
+as instruments of anything but speculation such offices and
+officers might as well be located in the moon, and their
+cost saved to the public....</p>
+
+<p>"Railways spend enormous sums in advertising, the most of
+which National ownership would save, as it would be no more
+necessary to advertise the advantages of any particular line
+than it is to advertise the advantages of any given mail
+route.... A still greater expense is involved in the
+maintenance of freight and passenger offices off the
+respective lines, for the purpose of securing a portion of
+competitive traffic. In this way vast sums are expended in
+the payment of rents and the salaries of hordes of agents,
+solicitors, clerks, etc., etc....</p>
+
+<p>"Under Government control discriminations against localities
+would cease, whereas now localities are discriminated
+against because managers are interested in real estate
+elsewhere, or are interested in diverting traffic in certain
+directions....</p>
+
+<p>"Another, and an incalculable benefit, which would result
+from National ownership, would be the relief of State and
+National legislation from the pressure and corrupting
+practices of railway corporations, which constitute one of
+the greatest dangers to which republican institutions can be
+subjected. This alone renders the nationalization of the
+railways most desirable, and at the same time would have the
+effect of emancipating a large part of the press from a
+galling thraldom to the corporations....</p>
+
+<p>"Estimated net annual saving to the public which would
+result from Government control:</p>
+
+<div class="centered">
+<table border="0" width="80%" cellpadding="2" cellspacing="0" summary="routes">
+  <tr>
+  <td class="tdl" width="85%">From consolidation of depots and staffs</td>
+  <td class="tdr" width="15%">$20,000,000<span class='pagenum'><a name="Page_422" id="Page_422">[Pg 422]</a></span></td>
+  </tr>
+  <tr>
+  <td class="tdl">From exclusive use of shortest routes</td>
+  <td class="tdr">25,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">In attorneys' fees and legal expenses</td>
+  <td class="tdr">12,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">From the abrogation of the pass evil</td>
+  <td class="tdr">30,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">From the abrogation of the commission evil</td>
+  <td class="tdr">20,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">By dispensing with high-priced managers and staffs</td>
+  <td class="tdr">4,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">By disbanding traffic associations</td>
+  <td class="tdr">4,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">By dispensing with presidents, etc.</td>
+  <td class="tdr">25,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">By abolilshing all but local offices, solicitors, etc.</td>
+  <td class="tdr">15,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Of five-sevenths of the advertising account</td>
+  <td class="tdr" style="border-bottom: .5pt black solid;">5,000,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Total savings by reason of better administration</td>
+  <td class="tdr">$160,000,000</td>
+  </tr>
+</table>
+</div>
+
+<p>"It would appear that, after yearly setting aside
+$50,000,000 as a sinking fund, there are the best reasons
+for believing that the cost of the railway service would be
+some $310,000,000 less than under corporate management.</p>
+
+<p>"That $6,000,000,000 is much more than it would cost to
+duplicate existing railways will not be questioned by the
+disinterested familiar with late reductions in the cost of
+construction, and that such a valuation is excessive is
+manifest from the fact that it is much more than the market
+value of all the railway bonds and shares in existence."</p></div>
+
+<p>The above quotations from Mr. Davis' article hardly do it justice, and
+it should be read in full to appreciate its full force. Many of the
+predictions and estimates are undoubtedly in the main correct, yet upon
+the whole it must be admitted that it is a rather rosy and too hopeful
+view to take of Government ownership of our railroads.</p>
+
+<p><i>4. State ownership with private management.</i></p>
+
+<p>This is a compromise between a public and a private system of railway
+ownership and management. It is claimed by the advocates of this system
+that if the Government would acquire by purchase or through condemnation
+proceedings all of the railroads of the country, pay for them by issuing
+its bonds, and then lease the various lines to the highest responsible
+bidders, prescribing a schedule and rules of management, most of the
+<span class='pagenum'><a name="Page_423" id="Page_423">[Pg 423]</a></span>benefits resulting from state ownership of railroads could be secured
+while nearly all its disadvantages would be avoided. It is proposed to
+purchase railroads at their actual value and to issue in payment bonds
+bearing the same rate of interest as other Government securities. This
+would deprive managers of every opportunity to manipulate the railroad
+business for purposes of stock speculation. It would also reduce the
+fixed charges of our railroads at least 50 per cent., the benefits of
+which reduction the public would chiefly share. The acquisition of the
+railroads by the Government would, moreover, afford the conservative
+capitalist a safe and permanent investment, which, with the gradual
+disappearance of our war debt, might become a national desideratum.</p>
+
+<p>It is proposed by the advocates of this system that the Government fix
+rates of transportation for a certain period, to be reviewed at the end
+of that period upon an agreed basis. The operating companies would be
+required to keep their roads in repair and give sufficient bonds for the
+faithful performance of their contracts. If found guilty of persistent
+violations of the terms of their leases or of such laws as Congress
+might enact for their control, their bonds and leases might be declared
+forfeited. A new Government department or bureau would have to be
+established and charged with the duty of exercising the same control
+over railroads which the Government now exercises over national banks,
+and in addition to this complete publicity of the service would have to
+be relied upon to prevent the introduction of abuses.</p>
+
+<p>There are at least two valid objections that can be urged against the
+adoption of such a system. Responsible companies could not be induced to
+lease a line for a valid consideration unless their rates were
+definitely fixed for a <span class='pagenum'><a name="Page_424" id="Page_424">[Pg 424]</a></span>series of years. Such a course might, however,
+in time result in great hardship to the commerce of the country, as the
+great and unavoidable difference in the rates of the various railroad
+lines of the country would give to the commercial interests of some
+sections decided advantages over those of others. Besides this it would
+be very difficult to compel the different companies to keep the lines
+leased by them in repair. Controversies would constantly arise between
+the officers charged with the supervision of the roads and the operating
+companies, which could be ultimately determined only by the courts,
+causing to the Government loss, or at least delay in the adjustments.</p>
+
+<p><i>5. National control.</i></p>
+
+<p>Mr. A. B. Stickney, in his work, "The Railway Problem," holds that in
+the interest of uniformity it is desirable to transfer the entire
+control of railroads to the National Government. He assigns two reasons
+for the proposed change; one being that Congress would consider the
+subject of railroad control with more intelligence and greater
+deliberation; the other, that "the problem of regulating railway tolls
+and of managing railways is essentially and practically indivisible by
+the State lines or otherwise," and that the authority of Congress to
+deal with interstate traffic carries with it the right to regulate the
+traffic which is now assumed to be controlled by the several States.</p>
+
+<p>It must be admitted that it is a difficult matter to draw the line of
+demarcation between National and State control, and that Congressional
+regulation of railways would remedy many evils which now affect our
+transportation system; yet there is reason to believe that the proposed
+change would in the end be productive of more evil than <span class='pagenum'><a name="Page_425" id="Page_425">[Pg 425]</a></span>good. It is an
+essentially American maxim that the home government only should be
+trusted with the administration of home affairs. The people of each
+State know best their local needs, and it is safe to say that for a
+generation or two no serious effort will be made to amend the Federal
+Constitution in this respect or to secure from the courts an
+interpretation of the interstate commerce clause greatly differing from
+that which now obtains.</p>
+
+<p>It is thus seen that nearly all the methods of railroad management which
+we have discussed are, at the present time at least, more or less
+impracticable on account of the radical changes which they would
+necessitate. It is not likely that for many years to come the American
+people could be induced to try any extensive experiments in state
+ownership of railroads; nor is it any more likely that the present
+generation will undertake the difficult task of separating the ownership
+of railroads from their operation.</p>
+
+<p>A nation is, like the individual, inclined to follow beaten tracks. It
+finds it, as a rule, easier to improve these tracks than to abandon them
+and mark out a new course. Any proposition made for the improvement of
+our system of railroad transportation is in the same proportion likely
+to receive the approval of the masses in which it makes use of existing
+conditions. It will, therefore, be my aim, in making suggestions as to a
+more efficient control of this modern highway, to retain whatever good
+features the present system possesses, and to only propose such changes
+as may seem essential to restore to the railroad the character of a
+highway.</p>
+
+<p>As has been indicated above, any system of railway regulation, to be
+applicable to our circumstances, must recognize the dual sovereignty of
+Nation and State. The <span class='pagenum'><a name="Page_426" id="Page_426">[Pg 426]</a></span>great majority of our railroad corporations were
+originally created by the State, and are only responsible to the State
+as long as they do not engage in interstate commerce. Even foreign
+corporations must submit to all police regulations of the State in which
+they may do business, and as long as the American Constitution remains
+intact the individual States will, and should, assert their right to
+regulate local traffic and to exercise police supervision over all
+railroads crossing their boundaries.</p>
+
+<p>All power should be kept as closely to the people as is consistent with
+efficiency in the public service. It may even be questioned whether
+entire transfer to the Federal Government of the supervisory powers now
+exercised by the States in railroad affairs would tend to correct
+existing railroad evils more speedily or more effectually than they can
+be corrected through the agency of local rule. The conditions, and
+therefore the wants, of the different States differ so greatly that
+general legislation must always fail when it attempts to regulate
+matters of merely local concern.</p>
+
+<p>The means employed by the State for the regulation of the roads under
+its jurisdiction should be such as are least likely to lead to a
+conflict with Federal authority, and experience has shown that the
+authority of the General Government and that of an individual State over
+a railroad company, which is incorporated under the laws of the latter,
+but is engaged in interstate commerce, may be so harmonized as to avoid
+conflicts between the two sovereignties without any great sacrifice of
+power on the part of either. Judge Cooley said recently in reference to
+regulation by National and State commissions:</p>
+
+<div class="blockquot"><p>"There is no good reason in the nature of things why the
+conformity should not be complete and perfect. It is
+<span class='pagenum'><a name="Page_427" id="Page_427">[Pg 427]</a></span>remarkable that up to this time there has been so little&mdash;I
+will not say of conflict, but even of diversity of action
+between the National and State commissions. Indeed, I recall
+no instance at this time when anything done by the one has
+seemed to me to afford just ground for complaint by the
+other. This may justly be attributed to the fact that there
+has been no purpose on the part of either to do any act that
+could afford ground for just complaint on the part of
+managers of the business regulated and no desire to do
+anything else than to apply rules of right and equality for
+the protection of the general public. The aim of all
+regulation ought to be justice, and when it is apparent that
+this is the purpose of the several commissions, the railroad
+managers of the country may more reasonably be expected to
+co&ouml;perate with them much more generally than they do now. If
+these managers were to come generally and heartily into more
+full and complete recognition of the rules of right and
+justice that the law undertakes to lay down for the
+performance of their duties in their management of the great
+interests they represent, there cannot be the least doubt
+that the general result would be, not only that their
+service to the public would be more useful than it is now,
+but that the revenues derived from their business would be
+materially increased through the cutting off of many of the
+drains upon them, which now, while affecting injuriously the
+returns they can make to their stockholders, at the same
+time have the effect of prejudicing the mind of the general
+public against railroad management to an extent quite beyond
+what is generally understood by those who suffer from it.
+The prejudice is inevitable, and not at all unreasonable
+when it is seen, as it very often is, that these drains
+result from an unjust discrimination against the public or
+some portion thereof, that they are of a character that
+ought to need no law and no criminal or other penalties to
+put them under the ban of condemnation in every office of
+railroad management.</p>
+
+<p>"I take the liberty of adding one more thought: that the
+more perfect is railroad legislation, the less we shall hear
+of transportation by rail being made a Government <span class='pagenum'><a name="Page_428" id="Page_428">[Pg 428]</a></span>function,
+the General Government making purchase of all the roads and
+entering upon a course which will lead we know not where or
+into what disasters."</p></div>
+
+<p>There has been during the past twenty years a tendency in a majority of
+the States to place the local control of railroads in the hands of
+executive boards, usually styled "railroad commissioners." Previous to
+this period the various States relied solely upon legislation for the
+regulation of the transportation business, but in time they became
+convinced that such laws were inoperative for the want of an enforcing
+power. It was found that the individual shipper was unable to cope with
+a powerful company and usually would rather suffer wrong than to enter
+into a contest which nearly always resulted in great pecuniary loss to
+him. On the other hand, it was apparent that if the claim of the
+individual were pressed by a railroad commission, even though such a
+body had but limited powers, it would, under ordinary circumstances, be
+honored, provided it was meritorious; and if the commission was
+compelled to enforce a demand through the courts, it would have the
+support of the State to poise the wealth and power of the corporation.</p>
+
+<p>The term "railroad commissioner" in the United States is nearly as old
+as the railroad itself; but the first officials bearing that title were
+merely successors to the turnpike commissioners of yore; their duties
+consisted chiefly in supervising, passing or reporting upon the
+construction and condition of the highway.</p>
+
+<p>The first railroad commission, in the present acceptation of the term,
+was created in the State of Massachusetts, in 1869. The commission
+consisted of three persons, whose principal duty was to "make an annual
+report to the General Court, including such statements, facts and
+<span class='pagenum'><a name="Page_429" id="Page_429">[Pg 429]</a></span>explanations as will disclose the actual working of the system of
+railroad transportation in its bearing upon the business and prosperity
+of the commonwealth, and such suggestions as to its general railroad
+policy, or any part thereof, or the condition, affairs or conduct of any
+railroad corporation, as may seem to it appropriate." This board also
+had the general supervision of all railroads and power to examine the
+same. It was required to give notice in writing to any railroad
+corporation which, in its judgment, was guilty of any violation of the
+railroad laws of the State; and if such company continued the violation,
+after such notice, it became the duty of the commission to present the
+facts to the Attorney-General. It was further made the duty of the board
+to examine, from time to time, the books and accounts of all railroads,
+to see that they were kept in a uniform manner, and upon the system
+prescribed by the board. It was also required to investigate the cause
+of any accident on a railroad resulting in loss of life. These being the
+principal duties of the board, its powers were very limited; but its
+personnel supplied the power which the law had withheld. The success of
+this commission exceeded even the expectations of the advocates of the
+system, who, in view of the limited powers of the commission, had
+anticipated but meager results.</p>
+
+<p>To quiet the Granger movement the railroads favored and finally secured
+the adoption of the commissioner system in the West, and South, in which
+sections it attained its highest development. It was soon found that a
+commission after the Massachusetts model, when composed of men less
+competent or less disposed to do their duty, was liable to dwindle into
+a statistical board or even become a pliant tool in the hands of the
+railroads. Furthermore, <span class='pagenum'><a name="Page_430" id="Page_430">[Pg 430]</a></span>the conditions in Massachusetts, where railroad
+owners and railroad patrons lived side by side and were in many
+instances even identical, differed materially from those found in the
+West and South, where railroad patrons were made to pay excessive rates,
+to produce liberal dividends on fictitious stocks for non-resident
+stockholders. Here a conflict between the railroads and such commissions
+as were determined to do their duty became often unavoidable. Railroad
+companies were as a rule disposed to disregard the recommendation of a
+commission to reduce exorbitant rates. This led in those States which
+suffered most from unjust tariffs to a popular demand to endow the
+commission with the power to fix <i>prima facie</i> rates. While the number
+of States which have taken this step is at present still limited, public
+opinion in its favor is growing throughout the nation, and a general
+adoption of this policy is probably only a question of time. There is
+every reason for believing that a commission vested with the right to
+fix local rates, to require full and complete reports from railroad
+companies, and to make proper regulations for their control, aided by
+penal legislation to compel compliance with their orders, will be a
+sufficient aid to the State in exercising such control over the
+companies operating lines within its borders as its dignity and the
+welfare of its people demand.</p>
+
+<p>Viewing the question from a national point of view, we find that, owing
+to the great and constantly increasing importance of interstate traffic,
+improved Federal agencies for railroad control are a pressing need.
+While much has been accomplished by the Interstate Commerce Act, much
+yet remains to be done. Violations of the act are still far too
+frequent, and they have been encouraged by unfriendly decisions by some
+of the inferior Federal courts.</p>
+
+<p><span class='pagenum'><a name="Page_431" id="Page_431">[Pg 431]</a></span>It must be admitted that nearly all the evils connected with interstate
+transportation could soon be remedied were it not for the difficulties
+which the Interstate Commerce Commission encounters in the enforcement
+of the law. On the one hand it is not possible with the machinery at
+present provided to detect and prove a considerable part of the
+violations of which railroad managers are daily guilty; and on the other
+hand, if these violations are brought to light, there would not,
+according to the testimony of a prominent railroad man, be courts enough
+in the country to try the violators. Besides this, such is the
+artfulness of railroad managers that in a majority of cases it would be
+impossible to reach the guilty party, and subordinates would have to
+answer for the transgressions of their superiors.</p>
+
+<p>To provide adequate machinery for the supervision of the transportation
+business, a national bureau of commerce and transportation should be
+established. As its chief a director-general of railroads should be
+appointed by the President, on the recommendation of the Secretary of
+the Interior, by and with the advice and consent of the Senate. This
+officer should hold his office for a term of at least six years, unless
+sooner removed by the President, upon reasons to be communicated by him
+to the Senate. He should not be interested either directly or indirectly
+in railroad securities. The Interstate Commerce Commission should be
+continued as an advisory board. It should upon the whole retain its
+present functions and should be consulted by the director-general in all
+matters requiring expert investigation. A number of divisions or
+sub-bureaus should be established, and each should be entrusted, under
+the supervision of the director-general, with such duties as may be
+deemed necessary to secure the greatest efficiency.</p>
+
+<p><span class='pagenum'><a name="Page_432" id="Page_432">[Pg 432]</a></span>There should be a division charged with the duty of carefully examining
+and compiling the detailed reports which the various companies should by
+law be required to make to the bureau. An inspection service should also
+be established, similar to that now maintained by the Treasury and
+Post-office Departments. Its officers should be empowered to enter all
+railroad offices and examine the companies' books, board trains and
+employ other legal means to detect violations of the railroad law and
+report them to the chief of the bureau.</p>
+
+<p>Railroad companies might be permitted to make interstate rates, but all
+schedules should be submitted to the bureau for approval or revision.
+Legal provision should be made against every sort of speculation in
+railroad stocks on the part of railroad officers, who should, in
+addition, be prohibited from sharing in the profits of favorite rates,
+as at present. All executive officers and directors of railroad
+companies should, like officers of national banks, be required to
+qualify by taking an oath of office, and should be held to strict
+accountability for their official acts. Officers of railroad companies
+should not be allowed to receive and use proxies at stockholders'
+meetings.</p>
+
+<p>The director-general should have the power, when he has proof that a
+railroad manager is persistently violating the law, to remove him and to
+appoint a receiver to take charge of the road until its owners can make
+provision and furnish sufficient guarantee for a more responsible
+management. Such a procedure would not be without analogy in the sphere
+of Federal authority. The Comptroller of the Currency is authorized by
+law to remove the derelict officials of a national bank and place its
+business in charge of a receiver. The beneficial effect of this
+<span class='pagenum'><a name="Page_433" id="Page_433">[Pg 433]</a></span>provision is evinced in the extreme rareness of such a step. When
+railroad managers are held responsible for their own official acts, as
+well as for those of their subordinates, and when all railroad
+transgressions are visited upon their source in such a manner as to be
+remembered by the stings of disgrace and of a blighted career,
+unfaithful railroad managers will be extremely rare.</p>
+
+<p>The plan here outlined is of course capable of being greatly improved.
+Experience only is a reliable guide as to the merits of the various
+details of such a system of control. What is needed above all things is
+a beginning, the establishment of the principle of complete control of
+railroad transportation by the State and the Nation. When this step is
+once taken, the friends of railroad reform may safely trust to time for
+the solution of the subordinate questions of this important problem.</p>
+
+<p>By thorough State and Federal supervision of the railroad business many
+of the present abuses can be prevented. But the temptations of railroad
+managers to violate the law will continue to exist as long as the
+speculative element is permitted to remain in railroad securities. To
+remove the fountain-head of the evil eventually, the way should
+gradually be paved for a change in railroad organization and ownership
+which would also greatly increase the responsibility and efficiency of
+railroad management. In the beginning of the railroad era, nearly all,
+and not unfrequently all the capital needed for the construction of a
+new line was supposed to be furnished by the company's stockholders. But
+as it often happened that the cost of construction considerably exceeded
+the original estimate, the State authorized railroad companies to
+mortgage their property for the purpose of raising the money necessary
+to complete the road. <span class='pagenum'><a name="Page_434" id="Page_434">[Pg 434]</a></span>In time this provision of the law was taken
+advantage of by speculative stockholders to such an extent that roads
+were often bonded for the full amount necessary to construct them, and
+even for more, while the stock was issued simply as a bonus to the
+promoters and the bondholders of the road. But as the bonds and shares
+scarcely ever remain in the same hands, such a condition was eventually
+brought about that roads were controlled by those who had little or
+nothing invested in the enterprise, and their real owners were deprived
+of all influence in their management, retaining only the right to
+foreclose their mortgages when things came to the worst. It is evident
+that men who have only a speculative interest in property cannot have
+the same concern for its permanent value and prosperity as those who
+hold it as a permanent investment. Many of the railroad abuses of the
+past had their origin in the law permitting the bonding of railroad
+property. Were it desirable to make a property for the sole use and
+convenience of speculators and gamblers, a better scheme could hardly be
+devised than the present system of our railroad organizations. Were
+railroad companies organized like national banks, were each shareholder
+required to pay the full amount of the face value of his shares, and
+were mortgaging railroad property entirely prohibited, it is not likely
+that the proportion of bankrupted railroads would be any larger than
+that of bankrupted banks. Few, if any, railroads would be built for
+purely speculative or blackmailing purposes.</p>
+
+<p>Capital is naturally conservative, and speculation is only invited where
+the chances of gain are greatly out of proportion to the capital
+invested. Were the principle of ownership which applies to national
+banks and other well regulated corporations also applied to the
+railroads, and <span class='pagenum'><a name="Page_435" id="Page_435">[Pg 435]</a></span>were bonds entirely abolished, only such persons would
+by the shareholders be placed in charge of their property as could give
+to them the best assurance of honest and conservative management. Such a
+change would greatly increase public confidence in, and the value of,
+railroad securities, and would eventually place them above bank stock as
+desirable investments. With the great fluctuations which under present
+circumstances obtain in railroad stocks, these securities are regarded
+as unsafe and unsatisfactory investments by conservative people. During
+a period of less than twelve months in 1891 and 1892 the stock of the
+Atchison, Topeka and Santa Fe fluctuated from 28-1/2 to 43-1/2, or 53
+per cent.; that of the Chesapeake and Ohio from 15-1/4 to 25-7/8, or 70
+per cent.; of the Chicago and Northwestern from 101 to 118, or 17 per
+cent.; of the Chicago, Saint Paul, Minneapolis and Omaha from 20-1/2 to
+38-1/2, or 88 per cent.; of the Chicago, Milwaukee and St. Paul from
+48-3/4 to 78-1/2, or 61 per cent.; of the Iowa Central from 6-1/2 to 13,
+or 100 per cent.</p>
+
+<p>If we look over the stock quotations of the past ten or twelve years we
+find still greater fluctuations. The following table, taken from the
+<i>United States Investor</i>, shows the range of prices of a few of the
+principal stocks during this period:</p>
+
+<div class="centered">
+<table border="0" width="80%" cellpadding="2" cellspacing="0" summary="Name">
+  <tr>
+  <td class="tdc" width="40%">Name.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdc" width="30%">Lowest.</td>
+  <td class="tdc" width="30%">Highest.</td>
+  </tr>
+  <tr>
+  <td class="tdl">Cenral Pacific</td>
+  <td class="tdc">26-1/2 &nbsp;&nbsp;(1888)</td>
+  <td class="tdc">102-7/8 &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Chesapeake and Ohio</td>
+  <td class="tdc">&nbsp;&nbsp;1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1888)</td>
+  <td class="tdc">&nbsp;&nbsp;33-7/8 &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Erie</td>
+  <td class="tdc">&nbsp;&nbsp;9-1/4 &nbsp;&nbsp;(1885)</td>
+  <td class="tdc">&nbsp;&nbsp;52-7/8 &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Illinois Central</td>
+  <td class="tdc">79-1/4 &nbsp;&nbsp;(1879)</td>
+  <td class="tdc">150-1/2 &nbsp;&nbsp;(1882)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Lake Erie and Western</td>
+  <td class="tdc">&nbsp;&nbsp;1-3/8 &nbsp;&nbsp;(1885)</td>
+  <td class="tdc">&nbsp;&nbsp;65-3/4 &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Michigan Central</td>
+  <td class="tdc">46-1/2 &nbsp;&nbsp;(1885)</td>
+  <td class="tdc">130-1/8 &nbsp;&nbsp;(1880)</td>
+  </tr>
+  <tr>
+  <td class="tdl">New Jersey Central</td>
+  <td class="tdc">31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1885)</td>
+  <td class="tdc">131&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1889)</td>
+  </tr>
+  <tr>
+  <td class="tdl">New York Central</td>
+  <td class="tdc">81-3/4 &nbsp;&nbsp;(1885)</td>
+  <td class="tdc">155-3/8 &nbsp;&nbsp;(1880)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Northern Pacific</td>
+  <td class="tdc">14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1884)</td>
+  <td class="tdc">&nbsp;&nbsp;54-3/8 &nbsp;&nbsp;(1882)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Rock Island</td>
+  <td class="tdc">63-3/8 &nbsp;&nbsp;(1891)</td>
+  <td class="tdc">204&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1880)</td>
+  </tr>
+  <tr>
+  <td class="tdl">C., M. &amp; St. P.<span class='pagenum'><a name="Page_436" id="Page_436">[Pg 436]</a></span></td>
+  <td class="tdc">34-3/8 &nbsp;&nbsp;(1879)</td>
+  <td class="tdc">129-1/4 &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Texas and Pacific</td>
+  <td class="tdc">&nbsp;&nbsp;5-1/2 &nbsp;&nbsp;(1884)</td>
+  <td class="tdc">&nbsp;&nbsp;73-5/8 &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Wabash</td>
+  <td class="tdc">&nbsp;&nbsp;2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1885)</td>
+  <td class="tdc">&nbsp;&nbsp;60&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Atchison and Topeka</td>
+  <td class="tdc">23-3/4 &nbsp;&nbsp;(1890)</td>
+  <td class="tdc">152-1/2 &nbsp;&nbsp;(1880)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Chicago, Burlington and Quincy</td>
+  <td class="tdc">75-7/8 &nbsp;&nbsp;(1891)</td>
+  <td class="tdc">182-1/2 &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">N. Y. &amp; N. E.</td>
+  <td class="tdc">&nbsp;&nbsp;9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1884)</td>
+  <td class="tdc">&nbsp;&nbsp;86&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Wisconsin Central</td>
+  <td class="tdc">&nbsp;&nbsp;2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1880)</td>
+  <td class="tdc">&nbsp;&nbsp;39&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1881)</td>
+  </tr>
+  <tr>
+  <td class="tdl">Union Pacific</td>
+  <td class="tdc">28&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1884)</td>
+  <td class="tdc">131&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;(1881)</td>
+  </tr>
+</table>
+</div>
+
+<p>And such fluctuations have always been rather the rule than the
+exception. It is a gross outrage upon the investing public to let this
+state of affairs continue. It should be corrected without delay.</p>
+
+<p>How many high officials in charge of railroad property will under these
+circumstances resist the temptation to speculate in the stock of their
+companies, and, so long as it is permitted, how many will resist the
+temptation to adopt such policies in the government of their roads as
+will cause such fluctuations? It is a common report that it is not an
+unfrequent occurrence for Senators and members of Congress to receive
+information from railway officials that enables them to raise their
+campaign funds by speculation in Wall Street.</p>
+
+<p>Mr. Henry C. Adams, statistician of the Interstate Commerce Commission,
+says in his third annual report:</p>
+
+<div class="blockquot"><p>"It certainly appears ... that the motive for ownership in
+railroad stock is quite different from the ordinary motives
+which lead men to invest in corporate enterprises, thus
+presenting an additional proof that railways are a business
+not subject to ordinary business rules."</p></div>
+
+<p>There is no safer business in the world than railroad transportation;
+there is none that has less elements of uncertainty; none whose returns
+in the aggregate are less varying. Every other business in the country,
+whether prospering or struggling, pays tribute to it. It rests on a cash
+<span class='pagenum'><a name="Page_437" id="Page_437">[Pg 437]</a></span>basis, and suffers probably less from hard times than any business of
+its magnitude. Both the merchant and the manufacturer run large risks in
+doing business largely on a credit basis. The farmer sows in the spring,
+harvests in the fall, and often cannot realize on his products until
+winter; but the railroad company always receives its pay as soon as its
+work is done, and not unfrequently even before it is done. Statistics
+show that railroad revenues are, in the aggregate, remarkably uniform,
+and there is no reason why railroad securities should be less stable
+than bank or insurance stocks. Mr. Jeans says:</p>
+
+<div class="blockquot"><p>"It is observable, in respect to the net profits from
+railway working, that they have not fluctuated from year to
+year in the same way as nearly all other profits have
+done.... It comes, then, to this, that, next after land and
+house property, the railway interest is the largest and most
+important in the country. But it is superior to both of
+these rival interests in its profit-earning capabilities,
+yielding, as it does, more than 4 per cent. on the capital
+expended, against a possible average of 2-1/2 to 3 per cent.
+in respect to the others."</p></div>
+
+<p>There may be some arguments in favor of bonding railroads, but this
+practice is, upon the whole, productive of infinitely more evil than
+good. The State should, therefore, compel railroad companies to
+liquidate all of their bonded indebtedness without unnecessary delay. In
+the proportion in which this is accomplished railroad shares will gain
+in stability and value.</p>
+
+<p>Railroad men complain that the small savings of the poor invested in
+railroad securities do not yield adequate returns and are often lost in
+consequence of the foreclosing of the roads in which these investments
+have been made. Others complain that railroads are bankrupted in the
+interest of designing bondholders. Still others charge <span class='pagenum'><a name="Page_438" id="Page_438">[Pg 438]</a></span>that rich and
+powerful roads contrive to obtain a controlling interest in the
+depreciated stock of weaker roads and then manage these roads in their
+own interest and greatly to the detriment of other stockholders. All
+these evils would disappear if the law required the identity of actual
+and virtual ownership. "Freezing-out" processes could no longer be
+resorted to by expert directors to obtain without compensation the
+property of their less sophisticated fellow stockholders. One railroad
+could no longer obtain control of another by acquiring an insignificant
+part of the sum total of its securities. There would be no longer any
+clashing between the interests of bondholders and stockholders, and
+railroads would no longer be managed in the interest of a small minority
+of their owners.</p>
+
+<p>In addition to the cancellation of all railroad mortgages the State
+should require that all railroad stocks should, in the future, be paid
+in full. Furthermore, roads should be built only from the proceeds of
+the capital stock, and the expense of repairs should be defrayed from
+the revenues of the road. Dividends should only be paid from surplus
+earnings and should in no case exceed a fair rate of interest on the
+actual present value of the road. The statistician to the Interstate
+Commerce Commission suggests the creation of a special commission
+charged with the duty of converting the actual capitalization of
+railroad lines into a just value of their property. To do justice to
+both the railroads and their patrons in the fixing of rates, it is
+important that the just value of railroad property be ascertained, but
+the work could probably be done with less friction by a co&ouml;peration of
+National and State commissions. A number of reforms are needed within
+the province of railroad management. Passenger rates are, as a rule, too
+high, and out of all proportion to freight <span class='pagenum'><a name="Page_439" id="Page_439">[Pg 439]</a></span>rates. Many passenger
+tariffs still recognize the old stage-coach principle of fixing the fare
+in an exact proportion to the distance traveled. Thus a passenger who
+takes the train for a five-mile trip pays only fifteen cents for his own
+transportation and that of one hundred pounds of baggage, while the
+passenger who buys a ticket for a journey of one hundred miles pays, on
+most American lines, exactly twenty times the amount paid by the
+five-mile passenger. Here the principle of collecting terminal charges
+is entirely ignored. Sufficient inducements are not held out to the
+passenger to prolong his journey, and as a consequence of this
+short-sighted policy of the railroad companies the average distance
+traveled in the United States by each passenger, instead of having
+gradually increased, has gradually decreased of late years until it is
+now only 24.18 miles. The average freight haul in the United States is
+120 miles, or about five times as long as the average journey per
+passenger. How can such a difference be accounted for except by the
+dissimilarity in the principles which govern the computation of
+passenger and freight charges? The same rule should be adopted in fixing
+passenger rates that is recognized by railroad men in fixing freight
+rates: the rate per mile should decrease with the increase of the number
+of miles traveled.</p>
+
+<p>The principle of arranging passenger tariffs on a sliding scale has
+found recognition in Europe. In Denmark first-class passenger fare is
+3.13 cents for each of the first 47 miles, 2.67 cents for each of the
+next 47 miles, and only 2.22 cents for every additional mile. The
+practical application of this principle is, in fact, only limited by the
+extent of the kingdom. In nearly all European countries a uniform
+reduction, ranging from 20 to 30 per cent., is made from regular rates
+for return trip tickets, <span class='pagenum'><a name="Page_440" id="Page_440">[Pg 440]</a></span>and coupon tickets are issued to tourists
+almost everywhere at largely reduced rates.</p>
+
+<p>Hungary recently adopted a new method of making passenger and freight
+tariffs for its state lines. This is now generally called the zone
+system. There are two classes of tickets sold, one for short trips on
+suburban or branch lines, the other for longer journeys on the main
+lines. The distances that can be traveled on short or suburban lines are
+divided into two zones of stations, and those on main lines into
+fourteen zones. The division of the kingdom into zones is made with
+Buda-Pesth as the center. A ticket purchased for a particular zone
+carries the passenger to the end of that zone or any nearer station.</p>
+
+<p>The following table will show the extent of each zone and the fares
+paid:</p>
+
+<div class="centered">
+<table border="0" width="90%" cellpadding="2" cellspacing="0" summary="Short">
+  <tr>
+  <td class="tdc smcap" width="20%" rowspan="2" style="border-top: .5pt black solid;">Zone.</td>
+  <td class="tdcl smcap" width="20%" rowspan="2" style="border-top: .5pt black solid;">Distance.</td>
+  <td class="tdcl smcap" colspan="3" style="border-top: .5pt black solid;">Local Trains.</td>
+  <td class="tdcl smcap" colspan="3" style="border-top: .5pt black solid;">Fast Trains.</td>
+  </tr>
+  <tr>
+  <td class="tdcl" width="10%" style="border-top: .5pt black solid;">First Class.</td>
+  <td class="tdcl" width="10%" style="border-top: .5pt black solid;">Second Class.</td>
+  <td class="tdcl" width="10%" style="border-top: .5pt black solid;">Third Class.</td>
+  <td class="tdcl" width="10%" style="border-top: .5pt black solid;">First Class.</td>
+  <td class="tdcl" width="10%" style="border-top: .5pt black solid;">Second Class.</td>
+  <td class="tdcl" width="10%" style="border-top: .5pt black solid;">Third Class.</td>
+  </tr>
+  <tr>
+  <td class="tdc" style="border-top: .5pt black solid;">Short Lines.</td>
+  <td class="tdll" style="border-top: .5pt black solid;">&nbsp;</td>
+  <td class="tdcl" style="border-top: .5pt black solid;">Fl.</td>
+  <td class="tdcl" style="border-top: .5pt black solid;">Fl.</td>
+  <td class="tdcl" style="border-top: .5pt black solid;">Fl.</td>
+  <td class="tdcl" style="border-top: .5pt black solid;">Fl.</td>
+  <td class="tdcl" style="border-top: .5pt black solid;">Fl.</td>
+  <td class="tdcl" style="border-top: .5pt black solid;">Fl.</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdll">First Station.</td>
+  <td class="tdcl">0.30</td>
+  <td class="tdcl">0.15</td>
+  <td class="tdcl">&nbsp;&nbsp;.10</td>
+  <td class="tdcl">-</td>
+  <td class="tdcl">-</td>
+  <td class="tdcl">-</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdll">Second Station.</td>
+  <td class="tdcl">&nbsp;&nbsp;.40</td>
+  <td class="tdcl">&nbsp;&nbsp;.22</td>
+  <td class="tdcl">&nbsp;&nbsp;.15</td>
+  <td class="tdcl">-</td>
+  <td class="tdcl">-</td>
+  <td class="tdcl">-</td>
+  </tr>
+  <tr>
+  <td class="tdc">Main Lines.</td>
+  <td class="tdll">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;1</td>
+  <td class="tdll">&nbsp;&nbsp;&nbsp;&nbsp;1-25 km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.50</td>
+  <td class="tdcl">&nbsp;&nbsp;.40</td>
+  <td class="tdcl">&nbsp;&nbsp;.25</td>
+  <td class="tdcl">0.60</td>
+  <td class="tdcl">0.50</td>
+  <td class="tdcl">0.30</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;2</td>
+  <td class="tdll">&nbsp;&nbsp;26-40 km.</td>
+  <td class="tdcl">1.00</td>
+  <td class="tdcl">&nbsp;&nbsp;.80</td>
+  <td class="tdcl">&nbsp;&nbsp;.50</td>
+  <td class="tdcl">1.20</td>
+  <td class="tdcl">1.00</td>
+  <td class="tdcl">&nbsp;&nbsp;.60</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;3</td>
+  <td class="tdll">&nbsp;&nbsp;41-55 km.</td>
+  <td class="tdcl">1.50</td>
+  <td class="tdcl">1.20</td>
+  <td class="tdcl">&nbsp;&nbsp;.75</td>
+  <td class="tdcl">1.80</td>
+  <td class="tdcl">1.50</td>
+  <td class="tdcl">&nbsp;&nbsp;.90</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;4</td>
+  <td class="tdll">&nbsp;&nbsp;56-70 km.</td>
+  <td class="tdcl">2.00</td>
+  <td class="tdcl">1.60</td>
+  <td class="tdcl">1.00</td>
+  <td class="tdcl">2.40</td>
+  <td class="tdcl">2.00</td>
+  <td class="tdcl">1.20</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;5</td>
+  <td class="tdll">&nbsp;&nbsp;71-85 km.</td>
+  <td class="tdcl">2.50</td>
+  <td class="tdcl">2.00</td>
+  <td class="tdcl">1.25</td>
+  <td class="tdcl">3.00</td>
+  <td class="tdcl">2.50</td>
+  <td class="tdcl">1.50</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;6</td>
+  <td class="tdll">&nbsp;&nbsp;86-100 km.</td>
+  <td class="tdcl">3.00</td>
+  <td class="tdcl">2.40</td>
+  <td class="tdcl">1.50</td>
+  <td class="tdcl">3.60</td>
+  <td class="tdcl">3.00</td>
+  <td class="tdcl">1.80</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;7</td>
+  <td class="tdll">101-115 km.</td>
+  <td class="tdcl">3.50</td>
+  <td class="tdcl">2.80</td>
+  <td class="tdcl">1.75</td>
+  <td class="tdcl">4.20</td>
+  <td class="tdcl">3.50</td>
+  <td class="tdcl">2.10</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;8</td>
+  <td class="tdll">116-130 km.</td>
+  <td class="tdcl">4.00</td>
+  <td class="tdcl">3.20</td>
+  <td class="tdcl">2.00</td>
+  <td class="tdcl">4.80</td>
+  <td class="tdcl">4.00</td>
+  <td class="tdcl">2.40</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;9</td>
+  <td class="tdll">131-145 km.</td>
+  <td class="tdcl">4.50</td>
+  <td class="tdcl">3.60</td>
+  <td class="tdcl">2.25</td>
+  <td class="tdcl">5.40</td>
+  <td class="tdcl">4.50</td>
+  <td class="tdcl">2.70</td>
+  </tr>
+  <tr>
+  <td class="tdc">10</td>
+  <td class="tdll">146-160 km.</td>
+  <td class="tdcl">5.00</td>
+  <td class="tdcl">4.00</td>
+  <td class="tdcl">2.50</td>
+  <td class="tdcl">6.00</td>
+  <td class="tdcl">5.00</td>
+  <td class="tdcl">3.00</td>
+  </tr>
+  <tr>
+  <td class="tdc">11</td>
+  <td class="tdll">161-175 km.</td>
+  <td class="tdcl">5.50</td>
+  <td class="tdcl">4.40</td>
+  <td class="tdcl">2.75</td>
+  <td class="tdcl">6.60</td>
+  <td class="tdcl">5.50</td>
+  <td class="tdcl">3.30</td>
+  </tr>
+  <tr>
+  <td class="tdc">12</td>
+  <td class="tdll">176-200 km.</td>
+  <td class="tdcl">6.00</td>
+  <td class="tdcl">4.80</td>
+  <td class="tdcl">3.00</td>
+  <td class="tdcl">7.20</td>
+  <td class="tdcl">6.00</td>
+  <td class="tdcl">3.60</td>
+  </tr>
+  <tr>
+  <td class="tdc">13</td>
+  <td class="tdll">201-225 km.</td>
+  <td class="tdcl">7.00</td>
+  <td class="tdcl">5.30</td>
+  <td class="tdcl">3.50</td>
+  <td class="tdcl">8.40</td>
+  <td class="tdcl">6.50</td>
+  <td class="tdcl">4.20</td>
+  </tr>
+  <tr>
+  <td class="tdc">14</td>
+  <td class="tdll">225 km. and over</td>
+  <td class="tdcl">8.00</td>
+  <td class="tdcl">5.80</td>
+  <td class="tdcl">4.00</td>
+  <td class="tdcl">9.60</td>
+  <td class="tdcl">7.00</td>
+  <td class="tdcl">4.80</td>
+  </tr>
+</table>
+</div>
+
+<p><span class='pagenum'><a name="Page_441" id="Page_441">[Pg 441]</a></span>(The florin is a little more than one-third of a dollar.)</p>
+
+<p>A ride from a city to the first suburban station costs from 3 to 10
+cents, according to class of car, and to the second station 5 to 13.6
+cents. On through trains a person may travel 15 miles at a cost of from
+8-1/2 to 20 cents, according to kind of train and class of car, a
+hundred miles for from 85 cents to $2.00; 140 miles for from $1.15 to
+$2.80 and any distance above 140 miles for from $1.35 to $3.25. A person
+may thus travel from Buda-Pesth to Predeal, a distance of 472 miles,
+with a third-class ticket for zone 14, purchased at a cost of $1.35, or
+28-100 of a cent per mile.</p>
+
+<p>Our railroad men with much complacency point to the fact that these
+rates do not cover the forwarding of passengers' baggage and that this
+service must be paid for separately. These charges, however, are very
+moderate, being on 120 pounds of baggage 8-1/3 cents a distance of 34
+miles or less, about 17 cents for a distance of more than 34 and less
+than 62 miles, and about 34 cents for any distance over 62 miles. The
+additional charge for carrying 120 pounds of baggage from Buda-Pesth to
+Predeal is therefore about one-fourteenth of one cent per mile. It must
+be admitted that this system of charging separately for passenger and
+baggage is eminently just, for there is no good reason why the passenger
+without baggage should be taxed to pay for the carriage of that of his
+fellow-traveler.</p>
+
+<p>The zone tariff was introduced on the state railways of Hungary by M.
+Barosz, the Hungarian Minister of Commerce, on the 1st of August, 1889.
+The adoption of the new tariff was ridiculed and condemned as visionary
+by road experts, who even went so far as to prove to the satisfaction of
+practical railroad men that the innovation was destined to be a failure.
+For a month or two it almost <span class='pagenum'><a name="Page_442" id="Page_442">[Pg 442]</a></span>seemed as if their prediction might be
+fulfilled, the number of passengers carried remaining behind the number
+carried during the corresponding period of previous years. But soon the
+reaction set in. The month of November, 1889, already witnessed an
+increase in the number of passengers as well as in receipts over the
+same month of the year previous. The result of the first year's trial
+demonstrated the wisdom of the "innovation." The number of passengers
+carried, which had been only 5,186,227 in 1888-89, rose to 13,060,751 in
+1889-90, and the total receipts for passengers and baggage rose from
+9,138,715 florins to 11,186,321 florins, a gain of 2,047,606 florins, or
+22 per cent., during the first year. There is a continued increase both
+in the number of passengers and in receipts, and the success of the
+system must be pronounced phenomenal. The railroad experts of Europe,
+who had predicted the signal failure of the zone system, now that the
+unexpected has happened, are trying to discover the particular favorable
+conditions which made the success of the system possible in Hungary. It
+will probably be a decade, or even two, before the railroad experts of
+both hemispheres will be entirely reconciled to this new application of
+the old principle that a reduction in the price of a commodity increases
+the demand for it.</p>
+
+<p>It is strange, indeed, that intelligent men should be so slow in
+recognizing an economic principle for which both history and daily
+experience furnish an unlimited number of illustrations. The post-office
+receipts everywhere have increased with a reduction in postage. The
+Government telegraph in England did not become self-supporting until
+Parliament made a sweeping reduction in its rates. The revenue from the
+Brooklyn bridge never paid a fair interest on the capital expended in
+its construction until <span class='pagenum'><a name="Page_443" id="Page_443">[Pg 443]</a></span>its tolls were cut down. Were it necessary,
+hundreds of other examples could be added to these.</p>
+
+<p>Hungary has also applied the zone system to its freight traffic. Three
+zones are fixed for the carrying of goods, viz.: Zone I, for distances
+less than 200 kilometers (124 miles); Zone II, for distances over 200
+and less than 400 kilometers, and Zone III, for distances over 400
+kilometers. A uniform tariff is established for each zone, which is
+one-third less than the average freight rates for equal distances
+formerly in force. American railroads should profit by the wisdom and
+experience of the Hungarian Government, and adopt at an early day such
+features of its system as upon our soil and under our institutions may
+be made practicable. The Hungarian system, with some modifications, is
+now being tried by Austria and a few of the German states, and is
+increasing railroad revenues wherever adopted.</p>
+
+<p>There is a growing demand for lower fares. This demand increases in the
+same proportion in which the desire and the necessity for travel
+increase. European states have not been slow to meet it. Reductions are
+made everywhere, and chiefly favor the lower classes. Thus, when France,
+within the last year, changed her passenger tariff, she reduced
+first-class fare 9 per cent., second-class fare 18 per cent., and
+third-class 27 per cent.</p>
+
+<p>The European passenger reports show the numbers of first and
+second-class passengers are continually falling off, while those of the
+third-class passengers are fast increasing. In England and Wales the
+number of first-class passengers fell between 1875 and 1889 from
+37,000,000 to 24,000,000 while the number of third-class passengers
+increased during that same period from 350,000,000 to 601,000,000, and
+this increase still continues. In the <span class='pagenum'><a name="Page_444" id="Page_444">[Pg 444]</a></span>United Kingdom the number of
+third-class passengers for 1891 was over 750,000,000. Furthermore,
+passenger revenue comes chiefly from the third class. In the United
+Kingdom the receipts from first-class passengers were in 1889
+&pound;3,188,000; from second-class passengers, &pound;2,705,000; and from
+third-class passengers, &pound;19,785,000. It is thus seen that receipts from
+third-class passengers are nearly 3-1/2 times as large as those from the
+first and second-class passengers combined. A similar proportion is
+found in nearly every country on the continent. European roads
+discovered some years ago that first and second-class passengers were
+carried at a loss, and all the passenger earnings were derived from
+third-class passengers. The profits from this source show a considerable
+increase every year.</p>
+
+<p>The average fare per mile is 2.15 cents in the United States, and only
+1.17 cents in Germany, 1.67 cents in Austria, 1.18 cents in Belgium,
+1.29 cents in Denmark, 1.45 cents in France, 1.64 cents in Italy, and
+1.45 cents in Russia. It is often claimed by railroad men that we travel
+more luxuriously than the people of any other country in the world, but
+it should not be forgotten that traveling in the United States is also
+more expensive than anywhere else. It is contended that class
+distinctions are odious in America, and that second and third-class cars
+would not be patronized. The same argument might be applied to theaters,
+hotels, clothiers, grocers, etc. It is difficult to see why distinction
+here should be less odious than on the railroad train. The truth is,
+Americans are just like other people and will avail themselves of
+accommodations in keeping with their means if they have the opportunity.
+Many passengers who will not travel in an uncouth smoking-car would, if
+clean second-class cars <span class='pagenum'><a name="Page_445" id="Page_445">[Pg 445]</a></span>were provided, gladly dispense with the luxury
+of an upholstered seat if by doing so they could save from $5 to $10 a
+day.</p>
+
+<p>A common laborer in this country earns from a dollar to a dollar and a
+half a day, and in the performance of his labor as a rule suffers
+greater inconvenience than does the traveler who travels the country in
+a second-class car. Is it under these circumstances at all likely that
+the American would hesitate to travel for a day in a plain but clean
+car, if by doing so he could save a week's earnings? We may even go
+further and say that it is a very reasonable assumption that the man who
+earns his bread by the sweat of his brow would choose the cheaper car if
+the difference in one day's fare were equal to one day's wages. It is a
+common saying in Europe that the first-class passengers consist of lords
+and fools, and few of the hundreds of thousands of American tourists
+traveling abroad give the natives occasion to class them with either.
+The first-class car has almost fallen into disuse in Europe, and even
+the patronage of the second-class is less than ten per cent, of that of
+the third.</p>
+
+<p>Reduced rates for return tickets should be provided under rules and
+regulations of commissioners.</p>
+
+<p>The Massachusetts legislature recently passed a law requiring the
+railways of that State to sell interchangeable thousand-mile tickets for
+$20. The State commission is given power to except any company from its
+requirements if the public welfare or the financial condition require or
+demand it. This is a step in the right direction and should be followed
+by other States. Michigan also requires certain roads to carry
+first-class passengers at two cents per mile.</p>
+
+<p>Railroad companies should be compelled to discard the <span class='pagenum'><a name="Page_446" id="Page_446">[Pg 446]</a></span>pass as a
+courtesy as well as a consideration. The giving of passes under the
+guise of mileage books, or tickets for pretended or unnecessary
+services, is very pernicious and should be prohibited. Such a reform
+would soon enable them to offer low fares to all. An employe may be
+furnished free transportation while actually engaged in the business of
+his company, and it should be made the duty of the State and National
+commissions to make proper regulations governing such free
+transportation of employes. Half-fare tickets for adults should also be
+abolished. The pauper ticket is given to the minister of the gospel to
+secure for the railroads the influence of the pulpit, though offered
+under the pretense of charity or support of the church. The State should
+not permit the railroad companies to practice this or any other kind of
+charity at the expense of the general public. The railroad is a highway,
+and the company operating it is entitled to rates sufficient to pay
+operating expenses and a fair interest on the value of the property. It
+can therefore easily be seen that the so-called gifts show no liberality
+on the part of the railroad company, but are made at the expense of
+other people. Donations made by railroad companies should be made from
+the pockets of their stockholders and not from the pockets of their
+patrons.</p>
+
+<p>All perquisites of railroad officers should be abolished. When a railway
+official has become so pompous and consequential that he requires a
+special car, it is about time to look about for his successor. If we are
+to have a special-car aristocracy in this country let it be supported at
+the expense of some other interest.</p>
+
+<p>Another railroad reform is needed on this side of the Atlantic. While
+the great majority of railroad officials are courteous and considerate,
+and perform their duties in <span class='pagenum'><a name="Page_447" id="Page_447">[Pg 447]</a></span>the most agreeable and acceptable manner,
+there are a few who do not properly appreciate the relation which they
+sustain to the patrons of their companies. They are inclined to forget
+that they are quasi-public servants, and that the public has a right to
+demand courteous treatment at their hands. All railroad employes should
+realize that their first duty is to administer to the welfare and the
+convenience of the public, and each one should have the full protection
+of the law in his efforts to do so. The American public objects much
+less to an inferior car than to rude treatment by the companies' agents.
+Railroad superintendents may justly be blamed for the incivilities of
+their subordinates. It is their duty to know the character of those whom
+they employ, and not to retain in their employ those who are derelict in
+their duty to the public. Nothing offends the feelings of a true
+American more than the display of a bureaucratic spirit on the part of
+public servants. Nothing more commends a line of railroad to the public
+than uniform painstaking kindness and courteous treatment on the part of
+its employes. It is made the duty of railroad employes of France "to so
+treat the public as if they were eager to oblige it," and the very first
+paragraph of the official instructions to the railroad employes of
+Germany enjoins them "to assume a modest and polite demeanor in their
+intercourse with the public." In this connection it might be stated that
+the second paragraph of those instructions positively forbids the
+acceptance of any gratuity by a railroad employe. If our American
+sleeping and dining-car companies would give their employes adequate
+compensation and then adopt and enforce the German rule concerning
+"tipping," their service would gain popularity and their employes
+self-respect.</p>
+
+<p><span class='pagenum'><a name="Page_448" id="Page_448">[Pg 448]</a></span>Entrance into the railway service should be by agreement for a definite
+time, and dismissals and resignations should be governed by rules agreed
+upon by boards of commissioners and the companies.</p>
+
+<p>The use of the corporation has done so much to secure for capital so
+large a share of the profits of industrial enterprises, and large
+salaries also for the officers who manage them, that laborers have been
+led to organize themselves into associations for like purposes, and
+ambitious men have not been slow in availing themselves of the
+advantages afforded them in this new field.</p>
+
+<p>It is right and proper for laborers to organize such associations when
+they can do so under wise and economical management, for the purpose of
+securing greater intelligence, better education, higher culture, higher
+wages, a shorter work-day, and a general ameliorating of their
+condition, all of which will tend to make them more efficient workmen
+and also better enable them to resist the aggression of centralized
+wealth; for, in the absence of organization, the single-handed employe
+of the great modern employer is comparatively helpless. But if these
+organizations are allowed to be controlled by ignorant, unreasonable or
+designing men, who will, at trifling provocations, resort to violent and
+unlawful measures, they are sure to prove harmful, and a great
+detriment, instead of a help, to their members, and the sooner they are
+abandoned the better for all.</p>
+
+<p>Great conflicts are sure to arise between organized capital and
+organized labor, and they must be settled in a reasonable way, or
+anarchy will prevail. They cannot be left for headstrong or
+inconsiderate men representing either side to determine, but the line
+must be drawn by the public authorities.</p>
+
+<p><span class='pagenum'><a name="Page_449" id="Page_449">[Pg 449]</a></span>Each year affords accumulated evidence of the necessity of extending
+legal restrictions over the management of the railway business, and the
+law, as laid down by Judge Ricks to the Ann Arbor strikers last March,
+in the United States Circuit Court, at Toledo, is undoubtedly correct
+and will meet with general approval from the public.</p>
+
+<p>He says:</p>
+
+<div class="blockquot"><p>"You are engaged in a service of a public character, and the
+public are interested not only in the way in which you
+perform your duties while you continue in that service, but
+are quite as much interested in the time and circumstances
+under which you quit that employment. You cannot always
+choose your own time and place for terminating these
+relations. If you are permitted to do so you might quit your
+work at a time and place and under circumstances which would
+involve irreparable damage to your employers and jeopardize
+the lives of the traveling public."</p></div>
+
+<p>Mr. Powderly, in commenting upon the above decision, does not complain
+of it, but says:</p>
+
+<div class="blockquot"><p>"The decision shows, as I have said before, that the
+principle of Government ownership of the railroads is being
+recognized by the courts. While the decision is apparently
+against the men, it emphasizes our position that the
+Government has the right to supervise the railroads. Now it
+is a poor rule that won't work both ways.</p>
+
+<p>"The Interstate Commerce Law was passed for the purpose of
+controlling the railroads, but up to date no railroad has
+paid any attention to the law. Anarchy of the worst kind has
+prevailed. By that I mean a total disregard of the law, and
+that is what the corporations charge against the anarchists.
+The courts hold themselves in readiness to obey the will of
+the corporations when a charge is made against the workmen,
+but no effort is made to carry out the mandates of the law
+when the provokers of strikes, the corporations, violate the
+law."</p></div>
+
+<p>There is but little doubt, if the judges of the Federal courts would
+show the same zeal in holding railroad <span class='pagenum'><a name="Page_450" id="Page_450">[Pg 450]</a></span>managers amenable to the law as
+Judge Ricks has displayed in this case with the employes, they would
+secure increased confidence from the people in the tribunals over which
+they preside.</p>
+
+<p>All fair-minded persons will agree that labor as well as capital must be
+subjected to proper restraints, and that the public will demand nothing
+unreasonable from either.</p>
+
+<p>Accidents are too frequent upon American railroads. The reports of the
+Interstate Commerce Commission give the following as the numbers killed
+and injured during the years named:</p>
+
+<div class="centered">
+<table border="0" width="90%" cellpadding="2" cellspacing="0" summary="png 445">
+  <tr>
+  <td class="tdc" width="12%" rowspan="2" style="border-top: .5pt black solid;">&nbsp;</td>
+  <td class="tdctl" colspan="2">1888</td>
+  <td class="tdctl" colspan="2">1889</td>
+  <td class="tdctl" colspan="2">1890</td>
+  <td class="tdctl" colspan="2">1891</td>
+  </tr>
+  <tr>
+  <td class="tdcl" width="11%">Killed.</td>
+  <td class="tdc" width="11%">Injured.</td>
+  <td class="tdcl" width="11%">Killed.</td>
+  <td class="tdc" width="11%">Injured.</td>
+  <td class="tdcl" width="11%">Killed.</td>
+  <td class="tdc" width="11%">Injured.</td>
+  <td class="tdcl" width="11%">Killed.</td>
+  <td class="tdc" width="11%">Injured.</td>
+  </tr>
+  <tr>
+  <td class="tdl" style="border-top: .5pt black solid;">Employees</td>
+  <td class="tdctl">2,070</td>
+  <td class="tdctl">20,148</td>
+  <td class="tdctl">1,972</td>
+  <td class="tdctl">20,028</td>
+  <td class="tdctl">2,451</td>
+  <td class="tdctl">22,396</td>
+  <td class="tdctl">2,660</td>
+  <td class="tdctl">26,140</td>
+  </tr>
+  <tr>
+  <td class="tdl">Passeng's</td>
+  <td class="tdcl">&nbsp;&nbsp;&nbsp;315</td>
+  <td class="tdcl">&nbsp;&nbsp;2,138</td>
+  <td class="tdcl">&nbsp;&nbsp;&nbsp;310</td>
+  <td class="tdcl">&nbsp;&nbsp;2,146</td>
+  <td class="tdcl">&nbsp;&nbsp;&nbsp;286</td>
+  <td class="tdcl">&nbsp;&nbsp;2,425</td>
+  <td class="tdcl">&nbsp;&nbsp;&nbsp;293</td>
+  <td class="tdcl">&nbsp;&nbsp;2,972</td>
+  </tr>
+  <tr>
+  <td class="tdl">Others</td>
+  <td class="tdcl">2,897</td>
+  <td class="tdcl">&nbsp;&nbsp;3,602</td>
+  <td class="tdcl">3,541</td>
+  <td class="tdcl">&nbsp;&nbsp;4,135</td>
+  <td class="tdcl">3,598</td>
+  <td class="tdcl">&nbsp;&nbsp;4,206</td>
+  <td class="tdcl">-</td>
+  <td class="tdcl">-</td>
+  </tr>
+  <tr>
+  <td class="tdl" style="border-top: .5pt black solid; border-bottom: .5pt black solid;">Total</td>
+  <td class="tdctlb">5,282</td>
+  <td class="tdctlb">25,888</td>
+  <td class="tdctlb">5,823</td>
+  <td class="tdctlb">26,309</td>
+  <td class="tdctlb">6,335</td>
+  <td class="tdctlb">29,027</td>
+  <td class="tdctlb">-</td>
+  <td class="tdctlb">-</td>
+  </tr>
+</table>
+</div>
+
+<p>For the year ending June 30, 1890, the total number of employes was
+749,801. There was, therefore, one death for every 306 men employed and
+one injury for every 33 men employed. For the previous year one was
+killed for every 357 men employed, and one was injured for every 35 men
+employed. While trainmen represent but 20 per cent, of the total number
+of employes, the casualties among them represent 58 per cent. of the
+total number of casualties.</p>
+
+<p>For the year 1888, one passenger was killed in every 1,523,133
+passengers carried, and one injured in every 220,024 carried.</p>
+
+<p>The corresponding rate in England for the year 1888 is one passenger
+killed for every 6,942,336 carried, and one injured for every 527,577
+carried.</p>
+
+<p>Railroads doing a large business should be compelled to adopt the most
+improved appliances for avoidance of accidents.</p>
+
+<p><span class='pagenum'><a name="Page_451" id="Page_451">[Pg 451]</a></span>The occupation of trainmen is especially hazardous, and too long
+continued service should not be required, but proper intervals of rest
+should be allowed. It is to the want of this, undoubtedly, that a great
+many of the serious accidents are owing.</p>
+
+<p>No more Sunday trains should be run than are absolutely necessary.
+Provision should be made by law to enable trainmen to procure insurance
+at the lowest rate possible, for indemnity against loss of health, life
+or limb.</p>
+
+<p>It was only a few days before the great disaster occurred on the Hudson
+River Railroad at Hastings, over a year ago, that an announcement had
+been made to the public of the extreme prosperity of the road during the
+year. The great slaughter that occurred there is another illustration of
+the disregard of public duty, and another instance of the sacrifice of
+life and limbs of passengers and employes by a railway corporation in
+order to secure large dividends on watered stock. It is not only gross,
+but criminal neglect for a company with such an immense income not to
+provide greater safety appliances, and the coroner's jury in this case
+was too modest when it decided that the management of the road was
+morally responsible for the disaster.</p>
+
+<p>Parliament has compelled the British railways to adopt, in the interest
+of the public safety, the block system and continuous brake, and great
+lines like the New York Central and Hudson River companies should be
+compelled to adopt such improvements.</p>
+
+<p>The traveling public has another grievous cause for complaint. There are
+but few companies that make any efforts to have their trains connect
+with those of rival roads. On the contrary, a good deal of scheming is
+often done by railroad companies to so arrange their time-tables <span class='pagenum'><a name="Page_452" id="Page_452">[Pg 452]</a></span>with
+reference to those of their rivals as to inconvenience passengers as
+much as possible by delays at competing points. To remedy this evil the
+State should require that every time-table should have the approval of
+proper authorities, and no change should be permitted without their
+approval.</p>
+
+<p>Railroad companies are chartered for the purpose of promoting the public
+welfare, and every violation of their charter should be punished.</p>
+
+<p>It should be the main object of railroad legislation to compel companies
+to fulfill their public obligations without depriving them of their
+efficiency. Above all things these companies should be stripped of the
+power to use their great wealth for the purposes of corruption or the
+attainment of political influence. Our railroads to-day probably
+represent no less than one-fourth of the personal property of the
+country, and this vast wealth is controlled by a comparatively small
+number of men, many of whom have in the course of time become so
+arrogant and despotic that they have little regard for popular rights or
+the expressed will of a free people.</p>
+
+<p>It is reported that when, a few years ago, a representative of the press
+directed Mr. Vanderbilt's attention to the fact that the public
+disapproved of his railroad policy, the latter gave vent to his contempt
+for public opinion by the no less profane than laconic reply: "The
+public be damned." Ex-Railroad Commissioner Coffin called on one of the
+Goulds to urge the adoption of the automatic car-coupler and other
+safety appliances for the roads controlled by them. He was very curtly
+told that not a cent would be expended by the Gould roads for such a
+purpose until the West had repealed its obnoxious railroad laws. The
+Gould dynasty thus intends to accomplish the <span class='pagenum'><a name="Page_453" id="Page_453">[Pg 453]</a></span>repeal of these laws by
+coercion. Railroad magnates and their lieutenants often show still
+greater arrogance in dealing directly with their employes.</p>
+
+<p>It may be difficult for railroad managers of the present school to adapt
+themselves to new conditions; it may be impossible for them to
+understand how any other practices than those which have long been
+established can succeed; yet in spite of them both the law and public
+sentiment have already undergone great changes, and still greater
+changes will follow. It may take years to accomplish this work; to bring
+about any great reform requires time and a deter, mined purpose on the
+part of its advocates. Yet I believe the era is not far off when
+railroads will be limited to their legitimate sphere as common carriers,
+when they will treat all persons and all places as impartially as does
+the Government in the mail service, when their chief factor in
+rate-making will be the cost of service, when they will respect the
+rights of the public and those of their stockholders, insuring perfect
+service to the former and fair profits upon the actual value of the
+lines operated to the latter.</p>
+
+<p>The fact should, finally, not be overlooked that it is in the power of
+the General Government to prevent many railroad abuses, and especially
+excessive freight charges, by the improvement of our rivers and harbors.
+That our water-courses act as levelers of interstate rates is apparent
+from the fact that railroad rates invariably rise with the freezing of
+the water-ways and fall with the opening of river and lake navigation.
+By connecting, wherever feasible, our large Western rivers with the
+great lakes, the Government could greatly extend the reign of
+competition in transportation, and thereby keep freight rates within
+reasonable bounds. Lake transportation even now plays an important role.
+In 1892 it was not less than <span class='pagenum'><a name="Page_454" id="Page_454">[Pg 454]</a></span>20,000,000,000 ton miles during the season
+of eight months' duration, and it is almost equal to one-fourth of the
+total ton mileage of all the railroads in the country for the entire
+year. The average rate of lake transportation has been reduced to 1.3
+mills per ton per mile, which is only about one-seventh of the average
+railroad freight rate in the United States.</p>
+
+<p>Where the masses hold the sovereign power, there, if anywhere, the
+welfare of the people should be the supreme law. Violent political
+commotions never disturb the government whose policy is to secure the
+greatest good to the greatest number. Thorold Rogers justly remarks that
+the strength of communism lies in the misconduct of administrations, the
+sustentation of odious and unjust privileges and the support of what are
+called vested interests. Lord Coleridge, in a remarkable article
+published not long ago, recommended a revision of the laws relating to
+property and contract, in order to facilitate the inevitable transition
+from feudalism to democracy, and laid down the rule that the laws of
+property should be made for the benefit of all, and not for the benefit
+of a class.</p>
+
+<p>During the middle ages, and even up to the beginning of the present
+century, nearly all the laws on the statute books looked towards the
+protection of the rights of the feudal lord. Provision was made for the
+expeditious collection of his dues and a severe punishment of his
+delinquent debtor. The peasant was forced to labor fifteen hours per day
+and three hundred and sixty-five days in the year to pay the baron's
+rentals and sustain life. The law permitted him to be flogged for
+failing to courtesy the feudal lord, and to be executed for injury to
+the lord's person, while to kill a peasant was no worse a <span class='pagenum'><a name="Page_455" id="Page_455">[Pg 455]</a></span>misdemeanor
+than to kill his lordship's favorite dog or falcon. In short, all laws
+were made to protect and perpetuate the wealth and power of the few by
+impoverishing, humbling and enslaving the masses.</p>
+
+<p>The age of feudalism has given way to an age of democratic liberty, but
+there is many a feudal feature left in our statutes and many a feudal
+doctrine is enunciated by our judges and learned expounders of modern
+jurisprudence. In his decision in the Iowa tariff case Judge Brewer
+said:</p>
+
+<div class="blockquot"><p>"I read also in the first section of the Bill of Rights of
+this State [Iowa] that 'all men are by nature free and equal
+and have certain inalienable rights, among which are those
+of enjoying and defending life and liberty, acquiring,
+possessing and protecting property and pursuing and
+obtaining safety and happiness,' and I know that while that
+remains as the supreme law of the State, no legislature can,
+directly or indirectly, lay its withering or destroying hand
+on a single dollar invested in the legitimate business of
+transportation."</p></div>
+
+<p>Had Judge Brewer taken the pains to read on, he would have found in
+section 2 of the Bill of Rights the following:</p>
+
+<div class="blockquot"><p>"All political power is inherent in the people; government
+is instituted for the protection, security and benefit of
+the people."</p></div>
+
+<p>It is strange that the learned Judge failed to see the difference
+between "men," the creatures of God, "by nature free and equal," and
+"possessing certain inalienable rights," and corporations, the creatures
+of man, having no rights except those which the State sees fit to give
+them. Had the learned Judge perused the whole of the document to which
+he refers, he would have found in article VIII, section 12, the
+following provision:</p>
+
+<div class="blockquot"><p>"The General Assembly shall have power to amend or repeal<span class='pagenum'><a name="Page_456" id="Page_456">[Pg 456]</a></span>
+all laws for the organization or creation of corporations,
+or granting of special or exclusive privileges or
+immunities, by a vote of two-thirds of each branch of the
+General Assembly."</p></div>
+
+<p>It should thus have been plain to the learned Judge that in Iowa
+corporations have not human or inalienable rights, and government was
+not instituted for their special protection, but for the protection,
+security and benefit of her people. Nor should it be otherwise.</p>
+
+<p>The corporation for pecuniary gain has neither body nor soul. Its
+corporeal existence is mythical and ethereal. It suffers neither from
+cold nor from hunger, has neither fear of future punishment nor hope of
+future reward. It takes no interest in schools or in churches. It knows
+neither charity nor love, neither pity nor sympathy, neither justice nor
+patriotism. It is deaf and blind to human woe and human happiness. Its
+only aim is pecuniary gain, to which it subordinates all else.</p>
+
+<p>Should the State sacrifice the welfare of all her people rather than lay
+its "withering or destroying" hand on a single dollar of corporate
+wealth? Are there no human rights, for the protection of which
+government was established, more sacred than the rights of a wealthy
+corporation's dollar? Have the people made the judiciary a co&ouml;rdinate
+branch of the Government in order that it may protect the vested or
+rather usurped rights of corporations against legislative attempts to
+curtail them? If the courts so interpret the power which has been
+delegated to them, they will awake one day to the painful reality that
+popular convictions of right are more potent than judicial decrees.</p>
+
+<p>It is the duty of the State not so much to defend the so-called vested
+rights of corporations as to make such just and beneficial laws as will
+temper inequality, mitigate <span class='pagenum'><a name="Page_457" id="Page_457">[Pg 457]</a></span>poverty, protect the weak against the
+strong, preserve life and health, and, in short, promote the welfare and
+the happiness of the masses. Constitutions have been made to accomplish
+these ends, to protect the lives, the liberty and the conscience of
+human beings, while laws have been sufficient to protect the dollars of
+corporations. It is a short-sighted policy on the part of the latter to
+take unfair advantage of their wealth and influence, for "As ye sow, so
+shall ye reap," is the inexorable law of Providence. There is no dynasty
+so mighty, no class so privileged, no interest so influential or wealthy
+as to obtain immunity from its operation.</p>
+
+<span class='pagenum'><a name="Page_458" id="Page_458">[Pg 458]</a></span>
+
+<br />
+<br /><span class='pagenum'><a name="Page_459" id="Page_459">[Pg 459]</a></span>
+<br />
+<br />
+
+<hr />
+<br />
+<h2>APPENDIX.</h2>
+<br />
+
+<p class="cen">TABLE No. 1.</p>
+
+<hr style="width: 10%;" />
+
+<p><span class="smcap">Compiled from the Sixth Annual Report of the Interstate Commerce
+Commission.</span></p>
+
+<div class="centered">
+<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="png454">
+  <tr>
+  <td class="tdl" width="85%">Mileage in the United States June 30, 1891</td>
+  <td class="tdr" width="15%">168,402.74</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of men employed</td>
+  <td class="tdr">784,285</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of employes per 100 miles</td>
+  <td class="tdr">486</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of locomotives per 100 miles</td>
+  <td class="tdr">19</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of passenger cars per 100 miles</td>
+  <td class="tdr">17</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of cars per 100 miles</td>
+  <td class="tdr">721</td>
+  </tr>
+  <tr>
+  <td class="tdl">Capital</td>
+  <td class="tdr">$9,829,475,015</td>
+  </tr>
+  <tr>
+  <td class="tdl">Capital per mile</td>
+  <td class="tdr">60,942</td>
+  </tr>
+  <tr>
+  <td class="tdl">Gross earnings</td>
+  <td class="tdr">1,096,761,395</td>
+  </tr>
+  <tr>
+  <td class="tdl">Gross earnings per mile</td>
+  <td class="tdr">6,801</td>
+  </tr>
+  <tr>
+  <td class="tdl">Operating expenses</td>
+  <td class="tdr">731,887,893</td>
+  </tr>
+  <tr>
+  <td class="tdl">Operating expenses per mile</td>
+  <td class="tdr">4,538</td>
+  </tr>
+  <tr>
+  <td class="tdl">Net income from operation</td>
+  <td class="tdr">364,873,502</td>
+  </tr>
+  <tr>
+  <td class="tdl">Net income per mile</td>
+  <td class="tdr">2,263</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="2">&nbsp;&nbsp;&nbsp;&nbsp;Of gross income 67.17 per cent. was earned on freight.</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="2">&nbsp;&nbsp;&nbsp;&nbsp;Of gross income 25.64 per cent. was earned on passengers.</td>
+  </tr>
+  <tr>
+  <td class="tdl">Received for carrying mails</td>
+  <td class="tdr">$&nbsp;&nbsp;24,870,015</td>
+  </tr>
+  <tr>
+  <td class="tdl">Received rentals from express companies</td>
+  <td class="tdr">21,594,349</td>
+  </tr>
+  <tr>
+  <td class="tdl">Received from investments</td>
+  <td class="tdr">133,911,126</td>
+  </tr>
+  <tr>
+  <td class="tdl">No. of passengers carried</td>
+  <td class="tdr">531,183,988</td>
+  </tr>
+  <tr>
+  <td class="tdl">No. of tons freight carried</td>
+  <td class="tdr">675,608,323</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average journey per passenger</td>
+  <td class="tdr">24.18 miles</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average haul per ton of freight</td>
+  <td class="tdr">120 miles</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average number passengers per train</td>
+  <td class="tdr">42</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average number tons freight per train</td>
+  <td class="tdr">181.67</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average revenue per passenger per mile</td>
+  <td class="tdr">2.142 cents</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average revenue per ton per mile of freight</td>
+  <td class="tdr">.895 cents</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average revenue per train mile, passenger</td>
+  <td class="tdr">$1.06</td>
+  </tr>
+  <tr>
+  <td class="tdl">Average revenue per train mile, freight</td>
+  <td class="tdr">1.64</td>
+  </tr>
+</table>
+</div>
+
+<br />
+<br /><span class='pagenum'><a name="Page_460" id="Page_460">[Pg 460]</a></span>
+
+TABLE No. 2.
+
+<p class="cen"><span class="smcap">Statistics of the Railways of the United Kingdom for The Year Ending
+Dec. 31, 1891.</span></p>
+
+<hr style="width: 10%;" />
+
+<p class="cen">From the English Reform Almanac for 1893 and from the Report of
+Commissioners R. Giffen and Courtenay Boyle to the Board of Trade.</p>
+
+<div class="centered">
+<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="Phosphate">
+  <tr>
+  <td class="tdl" width="85%">Mileage</td>
+  <td class="tdl" width="15%">20,191 miles</td>
+  </tr>
+  <tr>
+  <td class="tdl">Double, triple or quadruple</td>
+  <td class="tdr">10,853 miles</td>
+  </tr>
+  <tr>
+  <td class="tdl">Capital per mile</td>
+  <td class="tdr">&pound;45,536</td>
+  </tr>
+  <tr>
+  <td class="tdl">Gross income per mile</td>
+  <td class="tdr">3,873</td>
+  </tr>
+  <tr>
+  <td class="tdl">Net income per mile</td>
+  <td class="tdr">1,818</td>
+  </tr>
+  <tr>
+  <td class="tdl">Income from passenger traffic</td>
+  <td class="tdr">35,130,916</td>
+  </tr>
+  <tr>
+  <td class="tdl">Income from goods traffic</td>
+  <td class="tdr">43,230,717</td>
+  </tr>
+  <tr>
+  <td class="tdl">Income from miscellaneous</td>
+  <td class="tdr" style="border-bottom: .5pt black solid;">3,498,974</td>
+  </tr>
+  <tr>
+  <td class="tdl">Income, total</td>
+  <td class="tdr">&pound;81,860,607</td>
+  </tr>
+  <tr>
+  <td class="tdl">Operating expenses, 55 per cent.</td>
+  <td class="tdr">&pound;45,144,778</td>
+  </tr>
+  <tr>
+  <td class="tdl">Rates and taxes</td>
+  <td class="tdr">2,246,430</td>
+  </tr>
+  <tr>
+  <td class="tdl">Government duty</td>
+  <td class="tdr">321,260</td>
+  </tr>
+  <tr>
+  <td class="tdl">Paid for persons injured</td>
+  <td class="tdr">165,219</td>
+  </tr>
+  <tr>
+  <td class="tdl">Paid for damage and loss of goods</td>
+  <td class="tdr">257,804</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of first-class passengers</td>
+  <td class="tdr">30,423,776</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of second-class passengers</td>
+  <td class="tdr">63,378,397</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of third-class passengers</td>
+  <td class="tdr">751,661,495</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="2">&nbsp;&nbsp;&nbsp;&nbsp;Number of third-class passengers over 88 per cent. of all.</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of employes</td>
+  <td class="tdr">346,426</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of employes per 100 miles</td>
+  <td class="tdr">1,750</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of locomotives per 100 miles</td>
+  <td class="tdr">80</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of passenger cars per 100 miles</td>
+  <td class="tdr">249</td>
+  </tr>
+  <tr>
+  <td class="tdl">Number of freight and other cars</td>
+  <td class="tdr">2,595</td>
+  </tr>
+  <tr>
+  <td class="tdl">Revenue per train mile</td>
+  <td class="tdr">58.37d</td>
+  </tr>
+  <tr>
+  <td class="tdl">Expense per train mile</td>
+  <td class="tdr">30.54d</td>
+  </tr>
+  <tr>
+  <td class="tdl">Per cent. of earning on capital</td>
+  <td class="tdr">4.21</td>
+  </tr>
+</table>
+</div>
+
+<br />
+<br /><span class='pagenum'><a name="Page_461" id="Page_461">[Pg 461]</a></span>
+
+<p class="cen">TABLE No. 3.</p>
+
+<p class="cen"><span class="smcap">Showing Salaries and Wages Paid to Officials and Employes of<br />
+    State Railways in Europe.</span></p>
+
+<hr style="width: 10%;" />
+
+<p class="cen">Compiled from R&ouml;ll's Encyclop&auml;die des Eisenbahnwesens.</p>
+
+<div class="centered">
+<table border="0" width="100%" cellpadding="2" cellspacing="0" summary="png 456">
+  <tr>
+  <td class="tdctb smcap" width="32%">Position.</td>
+  <td class="tdctlb smcap" width="17%">Austria.</td>
+  <td class="tdctlb smcap" width="17%">Hungary.</td>
+  <td class="tdctlb smcap" width="17%">Prussia.</td>
+  <td class="tdctlb smcap" width="17%">Belgium.</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdcl">Fl., equal to about 33-1/3 cents.</td>
+  <td class="tdcl">Fl., equal to about 33-1/3 cents.</td>
+  <td class="tdcl">Mark, equal to about 24 cents.</td>
+  <td class="tdcl">Fr., equal to about 20 cents.</td>
+  </tr>
+  <tr>
+  <td class="tdl">President</td>
+  <td class="tdcl">7,000</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">10,500</td>
+  <td class="tdcl">9,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Directors and Superintendents</td>
+  <td class="tdcl">4,000-5,500</td>
+  <td class="tdcl">4,000-4,800</td>
+  <td class="tdcl">4,200-6,000</td>
+  <td class="tdcl">7,000-8,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Chief Engineer</td>
+  <td class="tdcl">1,600-2,000</td>
+  <td class="tdcl">1,900-2,500</td>
+  <td class="tdcl">3,600-4,800</td>
+  <td class="tdcl">2,700-5,500</td>
+  </tr>
+  <tr>
+  <td class="tdl">Clerks</td>
+  <td class="tdcl">500-1,200</td>
+  <td class="tdcl">640-1,000</td>
+  <td class="tdcl">1,000-2,700</td>
+  <td class="tdcl">900-3,100</td>
+  </tr>
+  <tr>
+  <td class="tdl">Station Agents in Cities, Division Superintendents</td>
+  <td class="tdcl" style="vertical-align: bottom;">2,200-2,600</td>
+  <td class="tdcl" style="vertical-align: bottom;">2,600-3,400</td>
+  <td class="tdcl" style="vertical-align: bottom;">&mdash;</td>
+  <td class="tdcl" style="vertical-align: bottom;">&mdash;</td>
+  </tr>
+  <tr>
+  <td class="tdl">Station Agents in Towns</td>
+  <td class="tdcl">500-850</td>
+  <td class="tdcl">520-880</td>
+  <td class="tdcl">1,500-3,200</td>
+  <td class="tdcl">1,600-4,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Locomotive Engineers</td>
+  <td class="tdcl">500-850</td>
+  <td class="tdcl">520-780</td>
+  <td class="tdcl">1,200-2,000</td>
+  <td class="tdcl">&mdash;</td>
+  </tr>
+  <tr>
+  <td class="tdl">Fireman</td>
+  <td class="tdcl">300-350</td>
+  <td class="tdcl">380-480</td>
+  <td class="tdcl">1,000-1,500</td>
+  <td class="tdcl">&mdash;</td>
+  </tr>
+  <tr>
+  <td class="tdl">Conductors</td>
+  <td class="tdcl">450-550</td>
+  <td class="tdcl">520-850</td>
+  <td class="tdcl">1,100-1,500</td>
+  <td class="tdcl">2,000-2,400</td>
+  </tr>
+  <tr>
+  <td class="tdl">Brakemen</td>
+  <td class="tdcl">300-350</td>
+  <td class="tdcl">380-480</td>
+  <td class="tdcl">800-1,200</td>
+  <td class="tdcl">1,200-2,000</td>
+  </tr>
+  <tr>
+  <td class="tdl">Section Men</td>
+  <td class="tdcl">288-336</td>
+  <td class="tdcl">270-370</td>
+  <td class="tdcl">700-900</td>
+  <td class="tdcl">&mdash;</td>
+  </tr>
+</table>
+</div>
+
+<br />
+<br /><span class='pagenum'><a name="Page_462" id="Page_462">[Pg 462]</a></span>
+
+<p class="cen">TABLE No. 4.</p>
+
+<p class="cen">Compiled from R&ouml;ll's Encyclop&auml;die des Eisenbahnwesens.</p>
+
+<hr style="width: 10%;" />
+
+<p class="cen"><i>FREIGHT TARIFFS.</i>&mdash;<span class="smcap">Belgium.</span></p>
+
+<p>All freight is divided into three general classes:</p>
+
+<p>1. <i>Express Freight</i>, which is delivered by special messengers. Parcels
+weighing 5 kg. (11 lbs.) and less, if prepaid, are carried for .80 fr.
+(16c.) for all distances. Parcels not prepaid and such as weigh from 6
+to 10 kg. pay .90 fr. for a distance of from 1 to 25 km.; 1 fr. for 26
+to 75 km.; 1.10 fr. for greater distances.</p>
+
+<p>2. <i>Fast Freight</i>, which may be made use of for consignments weighing up
+to 200 kg. (440 lbs.) Parcels weighing up to 5 kg. pay .50 fr. for all
+distances. Parcels not prepaid and such as weigh from 5 to 10 kg. pay
+.50 fr. for from 1 to 25 km.;.60 fr. for distances ranging from 26 to 75
+km., and .70 fr. over 75 km.</p>
+
+<p>3. <i>Common Freight</i>, which is again sub-divided into four classes: In
+Class I 400 kg., in Classes II and III 5,000 kg., and in Class IV 10,000
+kg. is recognized as the minimum weight.</p>
+
+<hr style='width: 10%;' />
+
+<p class="cen">TARIFF FOR THE FOUR DIFFERENT CLASSES OF COMMON FREIGHT.</p>
+
+<p class="cen"><i>Terminal Charges&mdash;Franc 1.00.</i></p>
+
+<div class="centered">
+<table border="0" width="90%" cellpadding="2" cellspacing="0" summary="png 457">
+  <tr>
+  <td class="tdl" colspan="3">I Class&mdash;For 1,000 kg. (2,250 lbs.)</td>
+  </tr>
+  <tr>
+  <td class="tdl" width="10%">&nbsp;</td>
+  <td class="tdl" width="40%">From 1 to 5 km.</td>
+  <td class="tdl" width="50%">Fr. 1.00</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 6 to 75 km., per km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.10</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 76 to 150 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.08 (per km. above &nbsp;&nbsp;75)</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 151 to 200 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.06 (per km. above 150)</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Above 300 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.06 (per km. above 200)</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">II Class&mdash;For 1,000 kg.<span class='pagenum'><a name="Page_463" id="Page_463">[Pg 463]</a></span></td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 1 to 5 km.</td>
+  <td class="tdl">Fr. 0.40</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 6 to 75 km., per km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.08</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 76to 125 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.04 (per km. above &nbsp;&nbsp;75)</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Above 125 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.02 (per km. above 125)</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">III Class&mdash;For 1,000 kg.</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 1 to 5 km.</td>
+  <td class="tdl">Fr. 0.30</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 6 to 75 km., per km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.06</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 76 to 100 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.03</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 101 to 125 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.02</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Above 125 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.01</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">IV Class&mdash;For 1,000 kg.</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 1 to 24 km., per km.</td>
+  <td class="tdl">Fr. 0.06</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 25 to 75 km., per km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.04</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 76 to 100 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.02</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 101 to 350 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.01</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Above 350 km.</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.02</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">For distances from 1 to 24 km. the terminal charges are only
+      .5 fr. for Class IV.</td>
+  </tr>
+</table>
+</div>
+
+<br />
+<br />
+
+<p class="cen">TABLE No. 5.</p>
+
+<hr style="width: 10%;" />
+
+<p class="cen"><span class="smcap">Germany.</span></p>
+
+<div class="centered">
+<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="png458">
+  <tr>
+  <td class="tdl" colspan="3">The tariff recognizes the following distinctions:</td>
+  </tr>
+  <tr>
+  <td class="tdl" width="5%">&nbsp;</td>
+  <td class="tdl" width="75%">1. Fast parcel freight</td>
+  <td class="tdl" width="20%">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">2. Fast carload freight</td>
+  <td class="tdl">&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">3. Parcel freight</td>
+  <td class="tdl">&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl" colspan="2">4. General carload Class A1, for shipments of at least 5,000 kg.</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl" colspan="2">5. General carload Class B, for shipments of at least 10,000 kg.</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">6.  Special tariffs</td>
+  <td class="tdl">&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="2"><i>Distance charges per ton per kilometer:</i><span class='pagenum'><a name="Page_464" id="Page_464">[Pg 464]</a></span></td>
+  <td class="tdl"><i>(Pfennig, 1/4 c.)</i></td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">1. For parcel</td>
+  <td class="tdl">11.0 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">2. For carload Class A1</td>
+  <td class="tdl">&nbsp;&nbsp;6.7 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">3. For carload Class B</td>
+  <td class="tdl">&nbsp;&nbsp;6.0 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">4. For special Tariff A2</td>
+  <td class="tdl">&nbsp;&nbsp;5.0 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">5. For Special Tariff I</td>
+  <td class="tdl">&nbsp;&nbsp;4.5 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">6. For Special Tariff II</td>
+  <td class="tdl">&nbsp;&nbsp;3.5 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">7. For Special Tariff III:</td>
+  <td class="tdl">&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For distances up to 100 km.</td>
+  <td class="tdl">&nbsp;&nbsp;2.6 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Distances above 100 km.</td>
+  <td class="tdl">&nbsp;&nbsp;2.6 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">8. For fast parcel freight</td>
+  <td class="tdl">22.0 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl" colspan="2">9. For fast carload freight, twice the rate of Classes A1 and B.</td>
+  </tr>
+  <tr>
+  <td class="tdc" colspan="3"><i>Terminal Charges.</i></td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">1. For parcels and carload Class A1:</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Up to 10 km.</td>
+  <td class="tdl">10 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 11 to 20 km.</td>
+  <td class="tdl">11 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 21 to 30 km.</td>
+  <td class="tdl">12 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 31 to 40 km.</td>
+  <td class="tdl">13 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 41 to 50 km.</td>
+  <td class="tdl">14 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 51 to 60 km.</td>
+  <td class="tdl">15 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 61 to 70 km.</td>
+  <td class="tdl">16 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 71 to 80 km.</td>
+  <td class="tdl">17 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 81 to 90 km.</td>
+  <td class="tdl">18 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 91 to 100 km.</td>
+  <td class="tdl">19 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Above 100 km.</td>
+  <td class="tdl">20 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">2. For carload Class B:</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Up to 10 km.</td>
+  <td class="tdl">&nbsp;&nbsp;8 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 11 to 20 km.</td>
+  <td class="tdl">&nbsp;&nbsp;9 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 21 to 30 km.</td>
+  <td class="tdl">10 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 31 to 40 km.</td>
+  <td class="tdl">11 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Above 40 km.</td>
+  <td class="tdl">12 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">3. For Special Tariffs A2, I, II and III:<span class='pagenum'><a name="Page_465" id="Page_465">[Pg 465]</a></span></td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Up to 10 km.</td>
+  <td class="tdl">&nbsp;&nbsp;8 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 11 to 100 km.</td>
+  <td class="tdl">&nbsp;&nbsp;9 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Above 100 km.</td>
+  <td class="tdl">12 pfennige</td>
+  </tr>
+  <tr>
+  <td class="tdc" colspan="3"><i>Charges for Live Stock.</i></td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">(a) Horses. Terminal charge per head, 1 m. (24c.)</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Distance charge per kl. for one head</td>
+  <td class="tdl">0.30 mark</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Charge per kl. for 2 head</td>
+  <td class="tdl">&nbsp;&nbsp;.40 mark</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Charge for each additional head</td>
+  <td class="tdl">&nbsp;&nbsp;.10 mark</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="2">(b) Cattle.</td>
+  <td class="tdl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Terminal charge, per head</td>
+  <td class="tdl">0.60 mark</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Distance charge per kl., for one head</td>
+  <td class="tdl">&nbsp;&nbsp;.10 mark</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Distance charge for each additional head</td>
+  <td class="tdl">&nbsp;&nbsp;.03 mark</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="2">(c) Sheep, Hogs, Calves, etc.:</td>
+  <td class="tdl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Terminal charge, per head</td>
+  <td class="tdl">0.20 mark</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Distance charge, per kl., for each of the first 10 heads</td>
+  <td class="tdl">.02 mark</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Distance charge, per kl., for each additional head</td>
+  <td class="tdl">.01 mark</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">If shipped in carloads the charges for live stock are .03 m.
+      per square meter per kilometer.</td>
+  </tr>
+</table>
+</div>
+
+<br />
+<span class='pagenum'><a name="Page_466" id="Page_466">[Pg 466]</a></span><br />
+<p class="cen">TABLE No. 6.</p>
+
+<hr style="width: 10%;" />
+
+<p class="cen"><span class="smcap">France.</span></p>
+
+<p>The French railroads divide all freight into six different classes. The
+following is the tariff adopted by a majority of the principal roads:</p>
+
+<p class="cen"><i>Common Freight.</i></p>
+
+<div class="centered">
+<table border="0" width="80%" cellpadding="2" cellspacing="0" summary="png 461">
+  <tr>
+  <td class="tdctb">&nbsp;</td>
+  <td class="tdctl" colspan="6">Centimes per Ton&mdash;Kilometer.</td>
+  </tr>
+  <tr>
+  <td class="tdl" width="40%" style="border-bottom: .5pt black solid;">Classes.</td>
+  <td class="tdctlb" width="10%">1</td>
+  <td class="tdctlb" width="10%">2</td>
+  <td class="tdctlb" width="10%">3</td>
+  <td class="tdctlb" width="10%">4</td>
+  <td class="tdctlb" width="10%">5</td>
+  <td class="tdctlb" width="10%">6</td>
+  </tr>
+  <tr>
+  <td class="tdl">Up to 25 km.</td>
+  <td class="tdcl">16</td>
+  <td class="tdcl">14</td>
+  <td class="tdcl">12</td>
+  <td class="tdcl">10</td>
+  <td class="tdcl">8</td>
+  <td class="tdcl">8&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 26 to 100 km.</td>
+  <td class="tdcl">16</td>
+  <td class="tdcl">14</td>
+  <td class="tdcl">12</td>
+  <td class="tdcl">10</td>
+  <td class="tdcl">8</td>
+  <td class="tdcl">4&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 101 to 150 km.</td>
+  <td class="tdcl">15</td>
+  <td class="tdcl">13</td>
+  <td class="tdcl">11</td>
+  <td class="tdcl">&nbsp;&nbsp;9</td>
+  <td class="tdcl">9</td>
+  <td class="tdcl">3.5</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 151 to 200 km.</td>
+  <td class="tdcl">15</td>
+  <td class="tdcl">13</td>
+  <td class="tdcl">11</td>
+  <td class="tdcl">&nbsp;&nbsp;9</td>
+  <td class="tdcl">7</td>
+  <td class="tdcl">3.5</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 201 to 300 km.</td>
+  <td class="tdcl">15</td>
+  <td class="tdcl">13</td>
+  <td class="tdcl">11</td>
+  <td class="tdcl">&nbsp;&nbsp;9</td>
+  <td class="tdcl">4</td>
+  <td class="tdcl">3.5</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 301 to 500 km.</td>
+  <td class="tdcl">14</td>
+  <td class="tdcl">12</td>
+  <td class="tdcl">10</td>
+  <td class="tdcl">&nbsp;&nbsp;8</td>
+  <td class="tdcl">4</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 501 to 600 km.</td>
+  <td class="tdcl">13</td>
+  <td class="tdcl">11</td>
+  <td class="tdcl">&nbsp;&nbsp;9</td>
+  <td class="tdcl">&nbsp;&nbsp;7</td>
+  <td class="tdcl">4</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 601 to 700 km.</td>
+  <td class="tdcl">12</td>
+  <td class="tdcl">10</td>
+  <td class="tdcl">&nbsp;&nbsp;8</td>
+  <td class="tdcl">&nbsp;&nbsp;6</td>
+  <td class="tdcl">4</td>
+  <td class="tdcl">2.5</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 701 to 800 km.</td>
+  <td class="tdcl">11</td>
+  <td class="tdcl">&nbsp;&nbsp;9</td>
+  <td class="tdcl">&nbsp;&nbsp;7</td>
+  <td class="tdcl">&nbsp;&nbsp;5</td>
+  <td class="tdcl">4</td>
+  <td class="tdcl">2.5</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 801 to 900 km.</td>
+  <td class="tdcl">10</td>
+  <td class="tdcl">&nbsp;&nbsp;8</td>
+  <td class="tdcl">&nbsp;&nbsp;6</td>
+  <td class="tdcl">&nbsp;&nbsp;4</td>
+  <td class="tdcl">4</td>
+  <td class="tdcl">2.5</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 901 to 1000 km.</td>
+  <td class="tdcl">&nbsp;&nbsp;9</td>
+  <td class="tdcl">&nbsp;&nbsp;7</td>
+  <td class="tdcl">&nbsp;&nbsp;5</td>
+  <td class="tdcl">&nbsp;&nbsp;4</td>
+  <td class="tdcl">4</td>
+  <td class="tdcl">2&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl" style="border-bottom: .5pt black solid;">Above 1,000 km.</td>
+  <td class="tdcl" style="border-bottom: .5pt black solid;">&nbsp;&nbsp;8</td>
+  <td class="tdcl" style="border-bottom: .5pt black solid;">&nbsp;&nbsp;6</td>
+  <td class="tdcl" style="border-bottom: .5pt black solid;">&nbsp;&nbsp;5</td>
+  <td class="tdcl" style="border-bottom: .5pt black solid;">&nbsp;&nbsp;4</td>
+  <td class="tdcl" style="border-bottom: .5pt black solid;">4</td>
+  <td class="tdcl" style="border-bottom: .5pt black solid;">2&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+</table>
+</div>
+<br />
+
+<div class="centered">
+<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="png 461b">
+  <tr>
+  <td class="tdl" colspan="3">The rates for fast parcel freight are, on all roads, for less than
+    40 kg., per ton, km.:</td>
+  </tr>
+  <tr>
+  <td class="tdl" width="5%">&nbsp;</td>
+  <td class="tdl" width="75%">Up to 200 km.</td>
+  <td class="tdr" width="20%">35 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 201 to 300 km.</td>
+  <td class="tdr">32 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 301 to 400 km.</td>
+  <td class="tdr">31 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 401 to 800 km.</td>
+  <td class="tdr">30 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 801 to 1,000 km.</td>
+  <td class="tdr">28 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Above 1,000 km.</td>
+  <td class="tdr">25 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="2">For more than 40 kg.:</td>
+  <td class="tdl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Up to 100 km.</td>
+  <td class="tdr">32 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 101 to 300 km.</td>
+  <td class="tdr">30 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 301 to 500 km.</td>
+  <td class="tdr">28 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 501 to 600 km.</td>
+  <td class="tdr">26 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 601 to 700 km.</td>
+  <td class="tdr">24 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 701 to 800 km.</td>
+  <td class="tdr">22 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 801 to 900 km.</td>
+  <td class="tdr">20 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">From 901 to 1,000 km.</td>
+  <td class="tdr">18 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Above 1,000 km.</td>
+  <td class="tdr">16 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">Express parcels weighing up to 3 kg. (6-3/5 lbs.), pay 1 fr. for
+      all distances, and parcels weighing from 3 to 5 kg. pay
+      fr. 1.20. Delivery to the house, 25 centimes (5c.)
+      additional.</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="3">Live Stock, per piece, per km.:</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Horses and cattle</td>
+  <td class="tdr">16 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Calves and hogs</td>
+  <td class="tdr">&nbsp;&nbsp;6 centimes</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdl">Sheep, etc.</td>
+  <td class="tdr">&nbsp;&nbsp;3 centimes</td>
+  </tr>
+</table>
+</div>
+
+<br />
+<br /><span class='pagenum'><a name="Page_467" id="Page_467">[Pg 467]</a></span>
+
+<p class="cen">TABLE No. 7.</p>
+
+<hr style="width: 10%;" />
+
+<p class="cen"><span class="smcap">Italy.</span>&mdash;<i>Freight Tariff.</i></p>
+
+<div class="centered">
+<table border="0" width="100%" cellpadding="2" cellspacing="0" summary="png 462a">
+  <tr>
+  <td class="tdctb smcap" width="36%" rowspan="2">Rates.</td>
+  <td class="tdctl smcap" colspan="8">General Classes.</td>
+  </tr>
+  <tr>
+  <td class="tdctlb" width="8%">1</td>
+  <td class="tdctlb" width="8%">2</td>
+  <td class="tdctlb" width="8%">3</td>
+  <td class="tdctlb" width="8%">4</td>
+  <td class="tdctlb" width="8%">5</td>
+  <td class="tdctlb" width="8%">6</td>
+  <td class="tdctlb" width="8%">7</td>
+  <td class="tdctlb" width="8%">8</td>
+  </tr>
+  <tr>
+  <td class="tdl">For the ton&mdash;km.</td>
+  <td class="tdcl">0.1632</td>
+  <td class="tdcl">0.1428</td>
+  <td class="tdcl">0.1224</td>
+  <td class="tdcl">0.1020</td>
+  <td class="tdcl">0.0816</td>
+  <td class="tdcl">0.0714</td>
+  <td class="tdcl">0.612</td>
+  <td class="tdcl">0.0510</td>
+  </tr>
+  <tr>
+  <td class="tdl" style="border-bottom: .5pt black solid;">Terminal charges, per ton</td>
+  <td class="tdclb">2.04&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">2.04&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">2.04&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">2.04&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">2.04&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">1.224&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">1.224</td>
+  <td class="tdclb">1.224&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl" colspan="9">The rate on merchandise sent as fast freight is .452 lire (9c.)
+    per ton kilometer.</td>
+  </tr>
+</table>
+</div>
+<br />
+
+<p class="cen"><i>Live Stock&mdash;(5 Classes.)</i></p>
+
+<div class="centered">
+<table border="0" width="100%" cellpadding="2" cellspacing="0" summary="png 462b">
+  <tr>
+  <td class="tdctb smcap" width="30%">First-Class.</td>
+  <td class="tdctlb" width="10%">Horses.</td>
+  <td class="tdctlb" width="10%">Cattle, Swine and Sheep.</td>
+  <td class="tdctlb smcap" width="30%">Second-Class.</td>
+  <td class="tdctlb" width="10%">Horses.</td>
+  <td class="tdctlb" width="10%">Cattle, Swine and Sheep.</td>
+  </tr>
+  <tr>
+  <td class="tdl">1 head, per km.</td>
+  <td class="tdcl">0.1530</td>
+  <td class="tdcl">0.136&nbsp;&nbsp;</td>
+  <td class="tdll">1 head, per km.</td>
+  <td class="tdcl">0.1530</td>
+  <td class="tdcl">0.1326&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">2 heads, per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0918</td>
+  <td class="tdcl">&nbsp;&nbsp;.0765</td>
+  <td class="tdll">2 heads, per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0816</td>
+  <td class="tdcl">&nbsp;&nbsp;.0714&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">3 heads, per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0816</td>
+  <td class="tdcl">&nbsp;&nbsp;.0714</td>
+  <td class="tdll">3 heads, per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0663</td>
+  <td class="tdcl">&nbsp;&nbsp;.0612&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">4 heads, per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0765</td>
+  <td class="tdcl">&nbsp;&nbsp;.0663</td>
+  <td class="tdll">4 heads,per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0612</td>
+  <td class="tdcl">&nbsp;&nbsp;.0561&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">5 heads, per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0714</td>
+  <td class="tdcl">&nbsp;&nbsp;.0612</td>
+  <td class="tdll">5 heads, per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0561</td>
+  <td class="tdcl">&nbsp;&nbsp;.0510&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">6 heads or more, per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0663</td>
+  <td class="tdcl">&nbsp;&nbsp;.0561</td>
+  <td class="tdll">6 heads or more, per km.</td>
+  <td class="tdcl">&nbsp;&nbsp;.0510</td>
+  <td class="tdcl">&nbsp;&nbsp;.0459&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;</td>
+  <td class="tdll">III Class</td>
+  <td class="tdcl">&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.02244</td>
+  </tr>
+  <tr>
+  <td class="tdl">&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;</td>
+  <td class="tdll">IV Class</td>
+  <td class="tdcl">&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.01224</td>
+  </tr>
+  <tr>
+  <td class="tdl" style="border-bottom: .5pt black solid;">&nbsp;</td>
+  <td class="tdclb">&nbsp;&nbsp;</td>
+  <td class="tdclb">&nbsp;&nbsp;</td>
+  <td class="tdll" style="border-bottom: .5pt black solid;">V Class</td>
+  <td class="tdclb">&nbsp;&nbsp;</td>
+  <td class="tdclb">&nbsp;&nbsp;.00612</td>
+  </tr>
+</table>
+</div>
+
+<br />
+<br /><span class='pagenum'><a name="Page_468" id="Page_468">[Pg 468]</a></span>
+<p class="cen">TABLE No. 8.</p>
+
+<hr style="width: 10%;" />
+
+<p class="cen"><i>Austrian Tariff (in kreutzers).&mdash;July 1, 1891.</i></p>
+
+<div class="centered">
+<table border="0" width="100%" cellpadding="2" cellspacing="0" summary="png 463">
+  <tr>
+  <td class="tdctb" width="30%" rowspan="2">&nbsp;</td>
+  <td class="tdctl" colspan="2">Fast Freight.</td>
+  <td class="tdctl" colspan="2">Parcel Rate.</td>
+  <td class="tdctl" colspan="3">Carload Rate.</td>
+  <td class="tdctl" colspan="3">Special Tariff Rate.</td>
+  <td class="tdctlb" width="10%" rowspan="2">Exceptional Rate.</td>
+  </tr>
+  <tr>
+  <td class="tdctlb" width="10%">Ordinary Rate.</td>
+  <td class="tdctlb" width="10%">Reduced Rate.</td>
+  <td class="tdctlb" width="5%">I</td>
+  <td class="tdctlb" width="5%">II</td>
+  <td class="tdctlb" width="5%">A</td>
+  <td class="tdctlb" width="5%">B</td>
+  <td class="tdctlb" width="5%">C</td>
+  <td class="tdctlb" width="5%">1</td>
+  <td class="tdctlb" width="5%">2</td>
+  <td class="tdctlb" width="5%">3</td>
+  </tr>
+  <tr>
+  <td class="tdl">1 to 50 km.</td>
+  <td class="tdcl">1.20</td>
+  <td class="tdcl">0.60</td>
+  <td class="tdcl">0.60</td>
+  <td class="tdcl">0.50</td>
+  <td class="tdcl">0.34</td>
+  <td class="tdcl">0.24</td>
+  <td class="tdcl">0.18</td>
+  <td class="tdcl">0.26</td>
+  <td class="tdcl">0.18</td>
+  <td class="tdcl">0.15</td>
+  <td class="tdcl">0.12</td>
+  </tr>
+  <tr>
+  <td class="tdl">50 to 150 km.</td>
+  <td class="tdcl">1.16</td>
+  <td class="tdcl">&nbsp;&nbsp;.58</td>
+  <td class="tdcl">&nbsp;&nbsp;.58</td>
+  <td class="tdcl">&nbsp;&nbsp;.46</td>
+  <td class="tdcl">&nbsp;&nbsp;.29</td>
+  <td class="tdcl">&nbsp;&nbsp;.22</td>
+  <td class="tdcl">&nbsp;&nbsp;.15</td>
+  <td class="tdcl">&nbsp;&nbsp;.23</td>
+  <td class="tdcl">&nbsp;&nbsp;.15</td>
+  <td class="tdcl">&nbsp;&nbsp;.13</td>
+  <td class="tdcl">&nbsp;&nbsp;.10</td>
+  </tr>
+  <tr>
+  <td class="tdl">150 to 300 km.</td>
+  <td class="tdcl">1.12</td>
+  <td class="tdcl">&nbsp;&nbsp;.56</td>
+  <td class="tdcl">&nbsp;&nbsp;.56</td>
+  <td class="tdcl">&nbsp;&nbsp;.42</td>
+  <td class="tdcl">&nbsp;&nbsp;.25</td>
+  <td class="tdcl">&nbsp;&nbsp;.18</td>
+  <td class="tdcl">&nbsp;&nbsp;.12</td>
+  <td class="tdcl">&nbsp;&nbsp;.19</td>
+  <td class="tdcl">&nbsp;&nbsp;.12</td>
+  <td class="tdcl">&nbsp;&nbsp;.10</td>
+  <td class="tdcl">&nbsp;&nbsp;.09</td>
+  </tr>
+  <tr>
+  <td class="tdl">For every addit'n'l km.</td>
+  <td class="tdcl">1.00</td>
+  <td class="tdcl">&nbsp;&nbsp;.50</td>
+  <td class="tdcl">&nbsp;&nbsp;.50</td>
+  <td class="tdcl">&nbsp;&nbsp;.30</td>
+  <td class="tdcl">&nbsp;&nbsp;.20</td>
+  <td class="tdcl">&nbsp;&nbsp;.12</td>
+  <td class="tdcl">&nbsp;&nbsp;.10</td>
+  <td class="tdcl">&nbsp;&nbsp;.15</td>
+  <td class="tdcl">&nbsp;&nbsp;.10</td>
+  <td class="tdcl">&nbsp;&nbsp;.08</td>
+  <td class="tdcl">&nbsp;&nbsp;.08</td>
+  </tr>
+  <tr>
+  <td class="tdc" colspan="12"><i>Terminal Charges.</i></td>
+  </tr>
+  <tr>
+  <td class="tdl">1 to 30 km.</td>
+  <td class="tdcl">6.0&nbsp;&nbsp;</td>
+  <td class="tdcl">3.0&nbsp;&nbsp;</td>
+  <td class="tdcl">3.0&nbsp;&nbsp;</td>
+  <td class="tdcl">3.0&nbsp;&nbsp;</td>
+  <td class="tdcl">3.0&nbsp;&nbsp;</td>
+  <td class="tdcl">2.0&nbsp;&nbsp;</td>
+  <td class="tdcl">2.0&nbsp;&nbsp;</td>
+  <td class="tdcl">2.0&nbsp;&nbsp;</td>
+  <td class="tdcl">2.0&nbsp;&nbsp;</td>
+  <td class="tdcl">2.0&nbsp;&nbsp;</td>
+  <td class="tdcl">2.0&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl">31 to 80 km.</td>
+  <td class="tdcl">6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdl" style="border-bottom: .5pt black solid;">Above 80 km.</td>
+  <td class="tdclb">8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+</table>
+</div>
+<p><i>Horses</i> and <i>mules</i> are placed in Class II, with a minimum weight of
+1,400 kg. for one head and 700 kg. for every additional head.</p>
+
+<p><i>Cattle</i> are placed in Class II, and are billed at actual weight.</p>
+
+<p><i>Potatoes</i>, hay, straw, wood, coal and coke enjoy the "exceptional rate"
+when shipped in carload lots.</p>
+
+<br />
+<br /><span class='pagenum'><a name="Page_469" id="Page_469">[Pg 469]</a></span>
+
+<p class="cen">TABLE No. 9.</p>
+
+<hr style="width: 10%" />
+
+<p class="cen"><i>Hungarian Tariff (in kreutzers).&mdash;January 1, 1891.</i></p>
+
+<div class="centered">
+<table border="0" width="100%" cellpadding="2" cellspacing="0" summary="png 464">
+  <tr>
+  <td class="tdctb" width="22%" rowspan="2">&nbsp;</td>
+  <td class="tdctl" colspan="2">Fast Freight.</td>
+  <td class="tdctl" colspan="2">Parcel Rate.</td>
+  <td class="tdctlb" width="6%" rowspan="2">"Sperrgüter."</td>
+  <td class="tdctl" colspan="3">Carload Rate.</td>
+  <td class="tdctl" colspan="3">Special Tariff.</td>
+  <td class="tdctl" colspan="2">Except'n'l Tariff.</td>
+  </tr>
+  <tr>
+  <td class="tdctlb" width="6%">Ordinary Rate.</td>
+  <td class="tdctlb" width="6%">Reduced Rate.</td>
+  <td class="tdctlb" width="6%">I</td>
+  <td class="tdctlb" width="6%">II</td>
+  <td class="tdctlb" width="6%">A</td>
+  <td class="tdctlb" width="6%">B</td>
+  <td class="tdctlb" width="6%">C Lumber</td>
+  <td class="tdctlb" width="6%">I</td>
+  <td class="tdctlb" width="6%">II</td>
+  <td class="tdctlb" width="6%">III</td>
+  <td class="tdctlb" width="6%">I</td>
+  <td class="tdctlb" width="6%">II</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 1 to 200 km.</td>
+  <td class="tdcl vb">1.3</td>
+  <td class="tdcl vb">0.6</td>
+  <td class="tdcl vb">0.72</td>
+  <td class="tdcl vb">0.52</td>
+  <td class="tdcl vb">0.9</td>
+  <td class="tdcl vb">0.32</td>
+  <td class="tdcl vb">0.21</td>
+  <td class="tdcl vb">0.16</td>
+  <td class="tdcl vb">0.27</td>
+  <td class="tdcl vb">0.16</td>
+  <td class="tdcl vb">0.13</td>
+  <td class="tdcl vb">0.13</td>
+  <td class="tdcl vb">0.11</td>
+  </tr>
+  <tr>
+  <td class="tdl">From 201 to 400 km.</td>
+  <td class="tdcl vb">1.&nbsp;&nbsp;</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.5</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.52</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.42</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.8</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.24</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.17</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.13</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.15</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.13</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.10</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.10</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.09</td>
+  </tr>
+  <tr>
+  <td class="tdl">Above 400 km.</td>
+  <td class="tdcl vb">1.&nbsp;&nbsp;</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.5</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.52</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.42</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.8</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.16</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.10</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.09</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.10</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.09</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.07</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.07</td>
+  <td class="tdcl vb">&nbsp;&nbsp;.06</td>
+  </tr>
+  <tr>
+  <td class="tdc" colspan="14"><i>Terminal Charges for 100 kg.</i></td>
+  </tr>
+  <tr>
+  <td class="tdl" style="border-bottom: .5pt black solid;">&nbsp;</td>
+  <td class="tdclb">&nbsp;&nbsp;.10</td>
+  <td class="tdclb">&nbsp;&nbsp;.10</td>
+  <td class="tdclb">&nbsp;&nbsp;.10</td>
+  <td class="tdclb">&nbsp;&nbsp;.10</td>
+  <td class="tdclb">&nbsp;&nbsp;.10</td>
+  <td class="tdclb">&nbsp;&nbsp;.06</td>
+  <td class="tdclb">&nbsp;&nbsp;.06</td>
+  <td class="tdclb">&nbsp;&nbsp;.04</td>
+  <td class="tdclb">&nbsp;&nbsp;.05</td>
+  <td class="tdclb">&nbsp;&nbsp;.04</td>
+  <td class="tdclb">&nbsp;&nbsp;.03</td>
+  <td class="tdclb">&nbsp;&nbsp;.03</td>
+  <td class="tdclb">&nbsp;&nbsp;.03</td>
+  </tr>
+</table>
+</div>
+
+<p>Exceptional Tariff I comprises coal, wood, potatoes, stone, hay and
+straw.</p>
+
+<p>Exceptional Tariff II comprises manure, earth and Hungarian ores.</p>
+
+<br />
+<br /><span class='pagenum'><a name="Page_470" id="Page_470">[Pg 470]</a></span>
+
+<p class="cen">TABLE No. 10.</p>
+
+<hr style="width: 10%;" />
+
+<p class="cen">STATE OF IOWA.</p>
+<br />
+
+<hr style="width: 10%;" />
+
+
+                               <p class="cen">SCHEDULE<br />
+                                 OF<br />
+                   REASONABLE MAXIMUM RATES OF CHARGES</p>
+<br />
+<br />
+
+                      <p class="cen"><span class="smcap">In Effect March 1, 1893,<br />
+                      for the transportation of</span></p>
+
+
+<p class="cen"><i>Freight and Cars on each of the Railroads in the State of Iowa,<br /> together
+          with a Classification of Freights, prepared by the Railroad
+                   Commissioners,<br /> in accordance with the Laws
+                           of the State of Iowa.</i></p>
+
+
+<hr style='width: 10%;' />
+
+<p>Superseding all former schedules on the said railroads, including all
+bridges and ferries used or operated in connection with any railroad;
+and, also, all the roads in use by any corporation, receiver, trustee or
+other person operating a railroad, whether owned or operated under
+contract, agreement, lease or otherwise, or which may hereafter be
+purchased, leased, acquired or operated within the State of Iowa.</p>
+
+<p>The classification of freights applies to all the lines, regardless of
+class. The schedule of maximum rates applies to all Class "A" roads. The
+rates on Class "B" roads will be <span class="smcap">FIFTEEN</span> per cent. higher, and
+the rates on Class "C" roads <span class="smcap">THIRTY</span> per cent. higher than the
+rates named for Class "A" roads. The respective roads have <span class='pagenum'><a name="Page_471" id="Page_471">[Pg 471]</a></span>been
+classified by the Executive Council of the State as follows, which
+classification is adopted by the Railroad Commissioners, and made part
+of this schedule:</p>
+
+<div class="blockquot"><p class="cen">CLASSIFICATION OF ROADS.</p>
+
+<p class="cen">CLASS "A."</p>
+
+<p>Where gross annual earnings, per mile, shall be $4,000 or
+more.&mdash;Burlington, Cedar Rapids and Northern Railway; Chicago and
+Northwestern Railway; Chicago, Burlington and Quincy Railroad; Chicago,
+Milwaukee and St. Paul Railway; Chicago, Rock Island and Pacific
+Railway; Chicago and Great Western Railway (operating the Chicago, St.
+Paul and Kansas City Railway); Dubuque and Sioux City Railroad; Chicago,
+St. Paul, Minneapolis and Omaha Railway; Sioux City and Northern
+Railway; Chicago, Santa Fe and California Railway; Sioux City and
+Pacific Railroad; Toledo, Peoria and Western Railway; Union Pacific
+Railway.</p>
+
+
+<p class="cen">CLASS "B."</p>
+
+<p>Where gross earnings are $3,000 or over and less than $4,000 per
+mile.&mdash;Iowa Central Railway; Kansas City, St. Joseph and Council Bluffs
+Railroad; Omaha and St. Louis Railway.</p>
+
+
+<p class="cen">CLASS "C."</p>
+
+<p>Where annual earnings are less than $3,000 per mile.&mdash;Chicago,
+Burlington and Kansas City Railway; Chicago, Ft. Madison and Des Moines
+Railway; Chicago, Iowa and Dakota Railway; Crooked Creek Railroad and
+Coal Company; Des Moines and Kansas City Railway; Des Moines, Northern
+and Western Railway; Humeston and Shenandoah Railroad; Iowa Northern
+Railway; Mason City and Fort Dodge Railroad; Minneapolis and St. Louis
+Railway; St. Louis, Keokuk and Northwestern Railroad; Tabor and Northern
+Railway; Wabash Railroad; Winona and Southwestern Railway; Keokuk and
+Western Railway.</p>
+
+<p>Burlington and Western; Burlington and Northwestern; Ames and College;
+Albia and Centerville.</p></div>
+
+<div class="centered">
+<table border="0" width="100%" cellpadding="2" cellspacing="0" summary="png 466">
+  <tr>
+  <td class="tdctb smcap" width="10%" rowspan="2">Miles.<span class='pagenum'><a name="Page_472" id="Page_472">[Pg 472]</a></span></td>
+  <td class="tdctl smcap" colspan="4">merchandise in cents per 100 lbs.</td>
+  <td class="tdctl smcap" colspan="6">special carload classes in cents per 100 lbs.</td>
+  </tr>
+  <tr>
+  <td class="tdctlb" width="9%">First Class.</td>
+  <td class="tdctlb" width="9%">Second Class.</td>
+  <td class="tdctlb" width="9%">Third Class.</td>
+  <td class="tdctlb" width="9%">Fourth Class.</td>
+  <td class="tdctlb" width="9%">Fifth Class.</td>
+  <td class="tdctlb" width="9%">Class A.</td>
+  <td class="tdctlb" width="9%">Class B.</td>
+  <td class="tdctlb" width="9%">Class C.</td>
+  <td class="tdctlb" width="9%">Class D.</td>
+  <td class="tdctlb" width="9%">Class E.</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;5</td>
+  <td class="tdcl">14&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">11.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.34</td>
+  <td class="tdcl">7&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.9&nbsp;&nbsp;</td>
+  <td class="tdcl">5&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;3.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;2.8&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;10</td>
+  <td class="tdcl">14.8</td>
+  <td class="tdcl">12.58</td>
+  <td class="tdcl">10.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.18</td>
+  <td class="tdcl">&nbsp;&nbsp;5.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.18</td>
+  <td class="tdcl">&nbsp;&nbsp;4.44</td>
+  <td class="tdcl">&nbsp;&nbsp;3.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;2.96</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;15</td>
+  <td class="tdcl">15.6</td>
+  <td class="tdcl">13.26</td>
+  <td class="tdcl">10.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.46</td>
+  <td class="tdcl">&nbsp;&nbsp;5.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.46</td>
+  <td class="tdcl">&nbsp;&nbsp;4.68</td>
+  <td class="tdcl">&nbsp;&nbsp;3.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;3.12</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;20</td>
+  <td class="tdcl">16.4</td>
+  <td class="tdcl">13.94</td>
+  <td class="tdcl">10.94</td>
+  <td class="tdcl">&nbsp;&nbsp;8.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.74</td>
+  <td class="tdcl">&nbsp;&nbsp;5.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.74</td>
+  <td class="tdcl">&nbsp;&nbsp;4.92</td>
+  <td class="tdcl">&nbsp;&nbsp;4.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;3.25</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;25</td>
+  <td class="tdcl">17&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">14.45</td>
+  <td class="tdcl">11.34</td>
+  <td class="tdcl">&nbsp;&nbsp;8.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.95</td>
+  <td class="tdcl">6&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.95</td>
+  <td class="tdcl">&nbsp;&nbsp;5.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.25</td>
+  <td class="tdcl">&nbsp;&nbsp;3.4&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;30</td>
+  <td class="tdcl">17.6</td>
+  <td class="tdcl">14.96</td>
+  <td class="tdcl">11.73</td>
+  <td class="tdcl">&nbsp;&nbsp;8.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.16</td>
+  <td class="tdcl">&nbsp;&nbsp;6.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.16</td>
+  <td class="tdcl">&nbsp;&nbsp;5.28</td>
+  <td class="tdcl">&nbsp;&nbsp;4.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;3.52</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;35</td>
+  <td class="tdcl">18.2</td>
+  <td class="tdcl">15.47</td>
+  <td class="tdcl">12.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.37</td>
+  <td class="tdcl">&nbsp;&nbsp;6.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.37</td>
+  <td class="tdcl">&nbsp;&nbsp;5.46</td>
+  <td class="tdcl">&nbsp;&nbsp;4.55</td>
+  <td class="tdcl">&nbsp;&nbsp;3.64</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;40</td>
+  <td class="tdcl">18.8</td>
+  <td class="tdcl">15.98</td>
+  <td class="tdcl">12.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.58</td>
+  <td class="tdcl">&nbsp;&nbsp;6.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.58</td>
+  <td class="tdcl">&nbsp;&nbsp;5.64</td>
+  <td class="tdcl">&nbsp;&nbsp;4.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;3.76</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;45</td>
+  <td class="tdcl">19.4</td>
+  <td class="tdcl">16.49</td>
+  <td class="tdcl">13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.79</td>
+  <td class="tdcl">&nbsp;&nbsp;6.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.79</td>
+  <td class="tdcl">&nbsp;&nbsp;5.82</td>
+  <td class="tdcl">&nbsp;&nbsp;4.85</td>
+  <td class="tdcl">&nbsp;&nbsp;3.88</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;50</td>
+  <td class="tdcl">20&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">13.34</td>
+  <td class="tdcl">10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">7&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.05</td>
+  <td class="tdcl">7&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;55</td>
+  <td class="tdcl">20.4</td>
+  <td class="tdcl">17.34</td>
+  <td class="tdcl">13.6&nbsp;&nbsp;</td>
+  <td class="tdcl">10.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.14</td>
+  <td class="tdcl">&nbsp;&nbsp;7.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.14</td>
+  <td class="tdcl">&nbsp;&nbsp;6.12</td>
+  <td class="tdcl">&nbsp;&nbsp;5.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.08</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;60</td>
+  <td class="tdcl">20.8</td>
+  <td class="tdcl">17.68</td>
+  <td class="tdcl">13.87</td>
+  <td class="tdcl">10.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.28</td>
+  <td class="tdcl">&nbsp;&nbsp;7.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.28</td>
+  <td class="tdcl">&nbsp;&nbsp;6.24</td>
+  <td class="tdcl">&nbsp;&nbsp;5.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.16</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;65</td>
+  <td class="tdcl">21.2</td>
+  <td class="tdcl">18.02</td>
+  <td class="tdcl">14.14</td>
+  <td class="tdcl">10.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.42</td>
+  <td class="tdcl">&nbsp;&nbsp;7.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.42</td>
+  <td class="tdcl">&nbsp;&nbsp;6.36</td>
+  <td class="tdcl">&nbsp;&nbsp;5.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.25</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;70</td>
+  <td class="tdcl">21.6</td>
+  <td class="tdcl">18.36</td>
+  <td class="tdcl">14.4&nbsp;&nbsp;</td>
+  <td class="tdcl">10.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.56</td>
+  <td class="tdcl">&nbsp;&nbsp;7.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.56</td>
+  <td class="tdcl">&nbsp;&nbsp;6.48</td>
+  <td class="tdcl">&nbsp;&nbsp;5.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.32</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;75</td>
+  <td class="tdcl">22&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">18.7&nbsp;&nbsp;</td>
+  <td class="tdcl">14.67</td>
+  <td class="tdcl">11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.4&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;80</td>
+  <td class="tdcl">22.4</td>
+  <td class="tdcl">19.04</td>
+  <td class="tdcl">14.94</td>
+  <td class="tdcl">11.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.84</td>
+  <td class="tdcl">&nbsp;&nbsp;8.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.84</td>
+  <td class="tdcl">&nbsp;&nbsp;6.72</td>
+  <td class="tdcl">&nbsp;&nbsp;5.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.48</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;85</td>
+  <td class="tdcl">22.8</td>
+  <td class="tdcl">19.38</td>
+  <td class="tdcl">15.2&nbsp;&nbsp;</td>
+  <td class="tdcl">11.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.98</td>
+  <td class="tdcl">&nbsp;&nbsp;8.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.98</td>
+  <td class="tdcl">&nbsp;&nbsp;6.84</td>
+  <td class="tdcl">&nbsp;&nbsp;5.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.56</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;90</td>
+  <td class="tdcl">23.2</td>
+  <td class="tdcl">19.72</td>
+  <td class="tdcl">15.47</td>
+  <td class="tdcl">11.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8.12</td>
+  <td class="tdcl">&nbsp;&nbsp;8.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8.12</td>
+  <td class="tdcl">&nbsp;&nbsp;6.96</td>
+  <td class="tdcl">&nbsp;&nbsp;5.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.64</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;95</td>
+  <td class="tdcl">23.6</td>
+  <td class="tdcl">20.06</td>
+  <td class="tdcl">15.73</td>
+  <td class="tdcl">11.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8.26</td>
+  <td class="tdcl">&nbsp;&nbsp;8.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8.26</td>
+  <td class="tdcl">&nbsp;&nbsp;7.08</td>
+  <td class="tdcl">&nbsp;&nbsp;5.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.72</td>
+  </tr>
+  <tr>
+  <td class="tdc">100</td>
+  <td class="tdcl">24&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">20.4&nbsp;&nbsp;</td>
+  <td class="tdcl">16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.8&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">105</td>
+  <td class="tdcl">24.8</td>
+  <td class="tdcl">20.89</td>
+  <td class="tdcl">16.35</td>
+  <td class="tdcl">12.33</td>
+  <td class="tdcl">&nbsp;&nbsp;8.69</td>
+  <td class="tdcl">&nbsp;&nbsp;9.35</td>
+  <td class="tdcl">&nbsp;&nbsp;8.63</td>
+  <td class="tdcl">&nbsp;&nbsp;7.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.17</td>
+  <td class="tdcl">&nbsp;&nbsp;4.96</td>
+  </tr>
+  <tr>
+  <td class="tdc">110</td>
+  <td class="tdcl">25.6</td>
+  <td class="tdcl">21.38</td>
+  <td class="tdcl">16.7&nbsp;&nbsp;</td>
+  <td class="tdcl">12.66</td>
+  <td class="tdcl">&nbsp;&nbsp;8.98</td>
+  <td class="tdcl">&nbsp;&nbsp;9.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8.86</td>
+  <td class="tdcl">&nbsp;&nbsp;7.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.34</td>
+  <td class="tdcl">&nbsp;&nbsp;5.12</td>
+  </tr>
+  <tr>
+  <td class="tdc">115</td>
+  <td class="tdcl">26.4</td>
+  <td class="tdcl">21.87</td>
+  <td class="tdcl">17.05</td>
+  <td class="tdcl">12.99</td>
+  <td class="tdcl">&nbsp;&nbsp;9.27</td>
+  <td class="tdcl">10.05</td>
+  <td class="tdcl">&nbsp;&nbsp;9.09</td>
+  <td class="tdcl">&nbsp;&nbsp;7.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.51</td>
+  <td class="tdcl">&nbsp;&nbsp;5.28</td>
+  </tr>
+  <tr>
+  <td class="tdc">120</td>
+  <td class="tdcl">27.2</td>
+  <td class="tdcl">22.36</td>
+  <td class="tdcl">17.4&nbsp;&nbsp;</td>
+  <td class="tdcl">13.32</td>
+  <td class="tdcl">&nbsp;&nbsp;9.56</td>
+  <td class="tdcl">10.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.32</td>
+  <td class="tdcl">&nbsp;&nbsp;8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.68</td>
+  <td class="tdcl">&nbsp;&nbsp;5.44</td>
+  </tr>
+  <tr>
+  <td class="tdc">125</td>
+  <td class="tdcl">28&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">22.85</td>
+  <td class="tdcl">17.75</td>
+  <td class="tdcl">13.65</td>
+  <td class="tdcl">&nbsp;&nbsp;9.85</td>
+  <td class="tdcl">10.75</td>
+  <td class="tdcl">&nbsp;&nbsp;9.55</td>
+  <td class="tdcl">&nbsp;&nbsp;8.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.85</td>
+  <td class="tdcl">&nbsp;&nbsp;5.6&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">130</td>
+  <td class="tdcl">28.8</td>
+  <td class="tdcl">23.34</td>
+  <td class="tdcl">18.1&nbsp;&nbsp;</td>
+  <td class="tdcl">13.98</td>
+  <td class="tdcl">10.14</td>
+  <td class="tdcl">11.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.78</td>
+  <td class="tdcl">&nbsp;&nbsp;8.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.02</td>
+  <td class="tdcl">&nbsp;&nbsp;5.76</td>
+  </tr>
+  <tr>
+  <td class="tdc">135</td>
+  <td class="tdcl">29.6</td>
+  <td class="tdcl">23.83</td>
+  <td class="tdcl">18.45</td>
+  <td class="tdcl">14.31</td>
+  <td class="tdcl">10.43</td>
+  <td class="tdcl">11.45</td>
+  <td class="tdcl">10.01</td>
+  <td class="tdcl">&nbsp;&nbsp;8.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.19</td>
+  <td class="tdcl">&nbsp;&nbsp;5.92</td>
+  </tr>
+  <tr>
+  <td class="tdc">140</td>
+  <td class="tdcl">30.4</td>
+  <td class="tdcl">24.32</td>
+  <td class="tdcl">18.8&nbsp;&nbsp;</td>
+  <td class="tdcl">14.64</td>
+  <td class="tdcl">10.72</td>
+  <td class="tdcl">11.8&nbsp;&nbsp;</td>
+  <td class="tdcl">10.24</td>
+  <td class="tdcl">&nbsp;8.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.36</td>
+  <td class="tdcl">&nbsp;&nbsp;6.08</td>
+  </tr>
+  <tr>
+  <td class="tdc">145</td>
+  <td class="tdcl">31.2</td>
+  <td class="tdcl">24.81</td>
+  <td class="tdcl">19.15</td>
+  <td class="tdcl">14.97</td>
+  <td class="tdcl">11.01</td>
+  <td class="tdcl">12.15</td>
+  <td class="tdcl">10.47</td>
+  <td class="tdcl">&nbsp;&nbsp;9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.53</td>
+  <td class="tdcl">&nbsp;&nbsp;6.24</td>
+  </tr>
+  <tr>
+  <td class="tdc">150</td>
+  <td class="tdcl">32&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">25.3&nbsp;&nbsp;</td>
+  <td class="tdcl">19.5&nbsp;&nbsp;</td>
+  <td class="tdcl">15.3&nbsp;&nbsp;</td>
+  <td class="tdcl">11.3&nbsp;&nbsp;</td>
+  <td class="tdcl">12.5&nbsp;&nbsp;</td>
+  <td class="tdcl">10.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.4&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">155</td>
+  <td class="tdcl">32.8</td>
+  <td class="tdcl">25.79</td>
+  <td class="tdcl">19.85</td>
+  <td class="tdcl">15.63</td>
+  <td class="tdcl">11.59</td>
+  <td class="tdcl">12.84</td>
+  <td class="tdcl">10.93</td>
+  <td class="tdcl">&nbsp;&nbsp;9.39</td>
+  <td class="tdcl">&nbsp;&nbsp;7.87</td>
+  <td class="tdcl">&nbsp;&nbsp;6.56</td>
+  </tr>
+  <tr>
+  <td class="tdc">160</td>
+  <td class="tdcl">33.6</td>
+  <td class="tdcl">26.28</td>
+  <td class="tdcl">20.2&nbsp;&nbsp;</td>
+  <td class="tdcl">15.96</td>
+  <td class="tdcl">11.88</td>
+  <td class="tdcl">13.18</td>
+  <td class="tdcl">11.16</td>
+  <td class="tdcl">&nbsp;&nbsp;9.58</td>
+  <td class="tdcl">&nbsp;&nbsp;8.04</td>
+  <td class="tdcl">&nbsp;&nbsp;6.72</td>
+  </tr>
+  <tr>
+  <td class="tdc">165</td>
+  <td class="tdcl">34.4</td>
+  <td class="tdcl">26.77</td>
+  <td class="tdcl">20.55</td>
+  <td class="tdcl">16.29</td>
+  <td class="tdcl">12.17</td>
+  <td class="tdcl">13.52</td>
+  <td class="tdcl">11.39</td>
+  <td class="tdcl">&nbsp;&nbsp;9.77</td>
+  <td class="tdcl">&nbsp;&nbsp;8.21</td>
+  <td class="tdcl">&nbsp;&nbsp;6.88</td>
+  </tr>
+  <tr>
+  <td class="tdc">170</td>
+  <td class="tdcl">35.2</td>
+  <td class="tdcl">27.26</td>
+  <td class="tdcl">20.9&nbsp;&nbsp;</td>
+  <td class="tdcl">16.62</td>
+  <td class="tdcl">12.46</td>
+  <td class="tdcl">13.86</td>
+  <td class="tdcl">11.62</td>
+  <td class="tdcl">&nbsp;&nbsp;9.96</td>
+  <td class="tdcl">&nbsp;&nbsp;8.38</td>
+  <td class="tdcl">&nbsp;&nbsp;7.04</td>
+  </tr>
+  <tr>
+  <td class="tdc">175</td>
+  <td class="tdcl">36&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">27.75</td>
+  <td class="tdcl">21.25</td>
+  <td class="tdcl">16.95</td>
+  <td class="tdcl">12.75</td>
+  <td class="tdcl">14.2&nbsp;&nbsp;</td>
+  <td class="tdcl">11.85</td>
+  <td class="tdcl">10.15</td>
+  <td class="tdcl">&nbsp;&nbsp;8.55</td>
+  <td class="tdcl">&nbsp;&nbsp;7.2&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">180</td>
+  <td class="tdcl">36.8</td>
+  <td class="tdcl">28.24</td>
+  <td class="tdcl">21.6&nbsp;&nbsp;</td>
+  <td class="tdcl">17.28</td>
+  <td class="tdcl">13.04</td>
+  <td class="tdcl">14.54</td>
+  <td class="tdcl">12.08</td>
+  <td class="tdcl">10.34</td>
+  <td class="tdcl">&nbsp;&nbsp;8.72</td>
+  <td class="tdcl">&nbsp;&nbsp;7.36</td>
+  </tr>
+  <tr>
+  <td class="tdc">185</td>
+  <td class="tdcl">37.6</td>
+  <td class="tdcl">28.73</td>
+  <td class="tdcl">21.95</td>
+  <td class="tdcl">17.61</td>
+  <td class="tdcl">13.33</td>
+  <td class="tdcl">14.88</td>
+  <td class="tdcl">12.31</td>
+  <td class="tdcl">10.53</td>
+  <td class="tdcl">&nbsp;&nbsp;8.89</td>
+  <td class="tdcl">&nbsp;&nbsp;7.52</td>
+  </tr>
+  <tr>
+  <td class="tdc">190</td>
+  <td class="tdcl">38.4</td>
+  <td class="tdcl">29.22</td>
+  <td class="tdcl">22.3&nbsp;&nbsp;</td>
+  <td class="tdcl">17.94</td>
+  <td class="tdcl">13.62</td>
+  <td class="tdcl">15.22</td>
+  <td class="tdcl">12.45</td>
+  <td class="tdcl">10.72</td>
+  <td class="tdcl">&nbsp;&nbsp;9.06</td>
+  <td class="tdcl">&nbsp;&nbsp;7.68</td>
+  </tr>
+  <tr>
+  <td class="tdc">195</td>
+  <td class="tdcl">39.2</td>
+  <td class="tdcl">29.71</td>
+  <td class="tdcl">22.65</td>
+  <td class="tdcl">18.27</td>
+  <td class="tdcl">13.91</td>
+  <td class="tdcl">15.56</td>
+  <td class="tdcl">12.77</td>
+  <td class="tdcl">10.91</td>
+  <td class="tdcl">&nbsp;&nbsp;9.23</td>
+  <td class="tdcl">&nbsp;&nbsp;7.84</td>
+  </tr>
+  <tr>
+  <td class="tdc">200</td>
+  <td class="tdcl">40&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">30.2&nbsp;&nbsp;</td>
+  <td class="tdcl">23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">18.6&nbsp;&nbsp;</td>
+  <td class="tdcl">14.2&nbsp;&nbsp;</td>
+  <td class="tdcl">15.9&nbsp;&nbsp;</td>
+  <td class="tdcl">13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">11.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.39</td>
+  <td class="tdcl">&nbsp;&nbsp;8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;></td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">210</td>
+  <td class="tdcl">41.6</td>
+  <td class="tdcl">31.18</td>
+  <td class="tdcl">23.7&nbsp;&nbsp;</td>
+  <td class="tdcl">19.24</td>
+  <td class="tdcl">14.78</td>
+  <td class="tdcl">16.56</td>
+  <td class="tdcl">13.45</td>
+  <td class="tdcl">11.49</td>
+  <td class="tdcl">&nbsp;&nbsp;9.71</td>
+  <td class="tdcl">&nbsp;&nbsp;8.3&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">220</td>
+  <td class="tdcl">43.2</td>
+  <td class="tdcl">32.16</td>
+  <td class="tdcl">24.4&nbsp;&nbsp;</td>
+  <td class="tdcl">19.88</td>
+  <td class="tdcl">15.36</td>
+  <td class="tdcl">17.22</td>
+  <td class="tdcl">13.9&nbsp;&nbsp;</td>
+  <td class="tdcl">11.88</td>
+  <td class="tdcl">10.03</td>
+  <td class="tdcl">&nbsp;&nbsp;8.6&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">230</td>
+  <td class="tdcl">44.8</td>
+  <td class="tdcl">33.14</td>
+  <td class="tdcl">25.1&nbsp;&nbsp;</td>
+  <td class="tdcl">20.52</td>
+  <td class="tdcl">15.94</td>
+  <td class="tdcl">17.88</td>
+  <td class="tdcl">14.35</td>
+  <td class="tdcl">12.27</td>
+  <td class="tdcl">10.35</td>
+  <td class="tdcl">&nbsp;&nbsp;8.9&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">240</td>
+  <td class="tdcl">46.4</td>
+  <td class="tdcl">34.12</td>
+  <td class="tdcl">25.8&nbsp;&nbsp;</td>
+  <td class="tdcl">21.6&nbsp;&nbsp;</td>
+  <td class="tdcl">16.52</td>
+  <td class="tdcl">18.54</td>
+  <td class="tdcl">14.8&nbsp;&nbsp;</td>
+  <td class="tdcl">12.66</td>
+  <td class="tdcl">10.67</td>
+  <td class="tdcl">&nbsp;&nbsp;9.2&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">250</td>
+  <td class="tdcl">48&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">35.1&nbsp;&nbsp;</td>
+  <td class="tdcl">26.5&nbsp;&nbsp;</td>
+  <td class="tdcl">21.8&nbsp;&nbsp;</td>
+  <td class="tdcl">17.1&nbsp;&nbsp;</td>
+  <td class="tdcl">19.2&nbsp;&nbsp;</td>
+  <td class="tdcl">15.25</td>
+  <td class="tdcl">13.05</td>
+  <td class="tdcl">10.99</td>
+  <td class="tdcl">&nbsp;&nbsp;9.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">260<span class='pagenum'><a name="Page_473" id="Page_473">[Pg 473]</a></span></td>
+  <td class="tdcl">49.6</td>
+  <td class="tdcl">36.08</td>
+  <td class="tdcl">27.2&nbsp;&nbsp;</td>
+  <td class="tdcl">22.44</td>
+  <td class="tdcl">17.68</td>
+  <td class="tdcl">19.86</td>
+  <td class="tdcl">15.7&nbsp;&nbsp;</td>
+  <td class="tdcl">13.44</td>
+  <td class="tdcl">11.31</td>
+  <td class="tdcl">&nbsp;&nbsp;9.8&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">270</td>
+  <td class="tdcl">51.2</td>
+  <td class="tdcl">37.06</td>
+  <td class="tdcl">27.9&nbsp;&nbsp;</td>
+  <td class="tdcl">23.08</td>
+  <td class="tdcl">18.26</td>
+  <td class="tdcl">20.52</td>
+  <td class="tdcl">16.15</td>
+  <td class="tdcl">13.83</td>
+  <td class="tdcl">11.63</td>
+  <td class="tdcl">10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">280</td>
+  <td class="tdcl">52.8</td>
+  <td class="tdcl">38.4&nbsp;&nbsp;</td>
+  <td class="tdcl">28.6&nbsp;&nbsp;</td>
+  <td class="tdcl">23.72</td>
+  <td class="tdcl">18.84</td>
+  <td class="tdcl">21.18</td>
+  <td class="tdcl">16.6&nbsp;&nbsp;</td>
+  <td class="tdcl">14.22</td>
+  <td class="tdcl">11.95</td>
+  <td class="tdcl">10.4&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">290</td>
+  <td class="tdcl">54.4</td>
+  <td class="tdcl">39.02</td>
+  <td class="tdcl">29.3&nbsp;&nbsp;</td>
+  <td class="tdcl">24.36</td>
+  <td class="tdcl">19.42</td>
+  <td class="tdcl">21.84</td>
+  <td class="tdcl">17.05</td>
+  <td class="tdcl">14.61</td>
+  <td class="tdcl">12.27</td>
+  <td class="tdcl">10.7&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">300</td>
+  <td class="tdcl">56&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">40&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">30&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">22.5&nbsp;&nbsp;</td>
+  <td class="tdcl">17.5&nbsp;&nbsp;</td>
+  <td class="tdcl">15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">12.5&nbsp;&nbsp;</td>
+  <td class="tdcl">11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">310</td>
+  <td class="tdcl">56.5</td>
+  <td class="tdcl">40.5&nbsp;&nbsp;</td>
+  <td class="tdcl">30.5&nbsp;&nbsp;</td>
+  <td class="tdcl">25.5&nbsp;&nbsp;</td>
+  <td class="tdcl">20.5&nbsp;&nbsp;</td>
+  <td class="tdcl">23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">15.5&nbsp;&nbsp;</td>
+  <td class="tdcl">13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">11.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">320</td>
+  <td class="tdcl">57&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">41&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">23.5&nbsp;&nbsp;</td>
+  <td class="tdcl">18.5&nbsp;&nbsp;</td>
+  <td class="tdcl">16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">13.5&nbsp;&nbsp;</td>
+  <td class="tdcl">12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">330</td>
+  <td class="tdcl">57.5</td>
+  <td class="tdcl">41.5&nbsp;&nbsp;</td>
+  <td class="tdcl">31.5&nbsp;&nbsp;</td>
+  <td class="tdcl">26.5&nbsp;&nbsp;</td>
+  <td class="tdcl">21.5&nbsp;&nbsp;</td>
+  <td class="tdcl">24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">16.5&nbsp;&nbsp;</td>
+  <td class="tdcl">14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">12.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">340</td>
+  <td class="tdcl">58&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">42&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">32&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">27&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">24.5&nbsp;&nbsp;</td>
+  <td class="tdcl">19.5&nbsp;&nbsp;</td>
+  <td class="tdcl">17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">14.5&nbsp;&nbsp;</td>
+  <td class="tdcl">13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">350</td>
+  <td class="tdcl">58.5</td>
+  <td class="tdcl">42.5&nbsp;&nbsp;</td>
+  <td class="tdcl">32.5&nbsp;&nbsp;</td>
+  <td class="tdcl">27.5&nbsp;&nbsp;</td>
+  <td class="tdcl">22.5&nbsp;&nbsp;</td>
+  <td class="tdcl">25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">17.5&nbsp;&nbsp;</td>
+  <td class="tdcl">15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">13.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">360</td>
+  <td class="tdcl">59&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">43&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">33&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">28&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">25.5&nbsp;&nbsp;</td>
+  <td class="tdcl">20.5&nbsp;&nbsp;</td>
+  <td class="tdcl">18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">15.5&nbsp;&nbsp;</td>
+  <td class="tdcl">14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">370</td>
+  <td class="tdcl">59.5</td>
+  <td class="tdcl">43.5&nbsp;&nbsp;</td>
+  <td class="tdcl">33.5&nbsp;&nbsp;</td>
+  <td class="tdcl">28.5&nbsp;&nbsp;</td>
+  <td class="tdcl">23.5&nbsp;&nbsp;</td>
+  <td class="tdcl">26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">18.5&nbsp;&nbsp;</td>
+  <td class="tdcl">16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">14.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">380</td>
+  <td class="tdcl">60&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">44&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">34&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">29&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">26.5&nbsp;&nbsp;</td>
+  <td class="tdcl">21.5&nbsp;&nbsp;</td>
+  <td class="tdcl">19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">16.5&nbsp;&nbsp;</td>
+  <td class="tdcl">15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+   <tr>
+  <td class="tdc">390</td>
+  <td class="tdcl">60.5</td>
+  <td class="tdcl">44.5&nbsp;&nbsp;</td>
+  <td class="tdcl">34.5&nbsp;&nbsp;</td>
+  <td class="tdcl">29.5&nbsp;&nbsp;</td>
+  <td class="tdcl">24.5&nbsp;&nbsp;</td>
+  <td class="tdcl">27&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">19.5&nbsp;&nbsp;</td>
+  <td class="tdcl">17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">15.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">400</td>
+  <td class="tdcl">61&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">45&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">35&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">30&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">27.5&nbsp;&nbsp;</td>
+  <td class="tdcl">22.5&nbsp;&nbsp;</td>
+  <td class="tdcl">20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">17.5&nbsp;&nbsp;</td>
+  <td class="tdcl">16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">410</td>
+  <td class="tdcl">61.5</td>
+  <td class="tdcl">45.5&nbsp;&nbsp;</td>
+  <td class="tdcl">35.5&nbsp;&nbsp;</td>
+  <td class="tdcl">30.5&nbsp;&nbsp;</td>
+  <td class="tdcl">25.5&nbsp;&nbsp;</td>
+  <td class="tdcl">28&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">20.5&nbsp;&nbsp;</td>
+  <td class="tdcl">18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">16.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">420</td>
+  <td class="tdcl">62&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">46&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">36&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">28.5&nbsp;&nbsp;</td>
+  <td class="tdcl">23.5&nbsp;&nbsp;</td>
+  <td class="tdcl">21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">18.5&nbsp;&nbsp;</td>
+  <td class="tdcl">17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">430</td>
+  <td class="tdcl">62.5</td>
+  <td class="tdcl">46.5&nbsp;&nbsp;</td>
+  <td class="tdcl">36.5&nbsp;&nbsp;</td>
+  <td class="tdcl">31.5&nbsp;&nbsp;</td>
+  <td class="tdcl">26.5&nbsp;&nbsp;</td>
+  <td class="tdcl">29&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">21.5&nbsp;&nbsp;</td>
+  <td class="tdcl">19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">17.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">440</td>
+  <td class="tdcl">63&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">47&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">37&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">32&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">27&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">29.5&nbsp;&nbsp;</td>
+  <td class="tdcl">24.5&nbsp;&nbsp;</td>
+  <td class="tdcl">22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">19.5&nbsp;&nbsp;</td>
+  <td class="tdcl">18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">450</td>
+  <td class="tdcl">63.5</td>
+  <td class="tdcl">47.5&nbsp;&nbsp;</td>
+  <td class="tdcl">37.5&nbsp;&nbsp;</td>
+  <td class="tdcl">32.5&nbsp;&nbsp;</td>
+  <td class="tdcl">27.5&nbsp;&nbsp;</td>
+  <td class="tdcl">30&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">22.5&nbsp;&nbsp;</td>
+  <td class="tdcl">20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">18.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">460</td>
+  <td class="tdcl">64&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">48&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">38&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">33&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">28&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">30.5&nbsp;&nbsp;</td>
+  <td class="tdcl">25.5&nbsp;&nbsp;</td>
+  <td class="tdcl">23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">20.5&nbsp;&nbsp;</td>
+  <td class="tdcl">19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">470</td>
+  <td class="tdcl">64.5</td>
+  <td class="tdcl">48.5&nbsp;&nbsp;</td>
+  <td class="tdcl">38.5&nbsp;&nbsp;</td>
+  <td class="tdcl">33.5&nbsp;&nbsp;</td>
+  <td class="tdcl">28.5&nbsp;&nbsp;</td>
+  <td class="tdcl">31&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">23.5&nbsp;&nbsp;</td>
+  <td class="tdcl">21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">19.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">480</td>
+  <td class="tdcl">65&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">49&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">39&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">34&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">29&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">31.5&nbsp;&nbsp;</td>
+  <td class="tdcl">26.5&nbsp;&nbsp;</td>
+  <td class="tdcl">24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">21.5&nbsp;&nbsp;</td>
+  <td class="tdcl">20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">490</td>
+  <td class="tdcl">65.5</td>
+  <td class="tdcl">49.5&nbsp;&nbsp;</td>
+  <td class="tdcl">39.5&nbsp;&nbsp;</td>
+  <td class="tdcl">34.5&nbsp;&nbsp;</td>
+  <td class="tdcl">29.5&nbsp;&nbsp;</td>
+  <td class="tdcl">32&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">27&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">24.5&nbsp;&nbsp;</td>
+  <td class="tdcl">22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">20.5&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc" style="border-bottom: .5pt black solid;">500</td>
+  <td class="tdclb">66&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">50&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">40&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">35&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">30&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">32.5&nbsp;&nbsp;</td>
+  <td class="tdclb">27.5&nbsp;&nbsp;</td>
+  <td class="tdclb">25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdclb">22.5&nbsp;&nbsp;</td>
+  <td class="tdclb">21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  </tr>
+</table>
+</div>
+
+<p><span class="smcap">Note.</span>&mdash;When rates are not shown in this table for the exact
+distance, the rates given for the next greater distance will prevail.
+When these rates and the classification conflict, these rates will
+govern.</p>
+
+<br /><span class='pagenum'><a name="Page_474" id="Page_474">[Pg 474]</a></span>
+
+<p class="noin">
+  KEY:<br />
+  A = Wheat, flour, millet, flaxseed.<br />
+  B = Corn, oats, barley, other grain and mill stuffs.<br />
+  C = Hard and soft lumber, lath, shingles, sash, doors and blinds.<br />
+  D = Salt, lime, cement, plaster, stucco.<br />
+  E = Horses and mules in carloads&mdash;minimum weight 20,000 lbs.,
+        31-foot cars, inside measurement.<br />
+  F = Fat cattle in carloads&mdash;minimum weight 19,000 lbs.,
+        31-foot cars, inside measurement.<br />
+  G = Hogs (single deck) in carloads&mdash;minimum weight 15,000 lbs.,
+        31-foot cars, inside measurement.<br />
+  H = Sheep (single deck) in carloads&mdash;minimum weight 15,000 lbs.,
+        31-foot cars, inside measurement.<br />
+  &nbsp;I = Hard coal.<br />
+  &nbsp;J = Soft coal, lump and nut.<br />
+  K = Soft coal, pea and slack.<br /></p>
+
+<div class="centered">
+<table border="0" width="100%" cellpadding="2" cellspacing="0" summary="png 469">
+  <tr>
+  <td class="tdctb" width="8%" rowspan="2">Miles.</td>
+  <td class="tdctl" colspan="4">CARLOAD CLASSES IN CENTS PER 100 LBS.</td>
+  <td class="tdctl" colspan="4">LIVE STOCK IN CENTS PER 100 LBS.</td>
+  <td class="tdctl" colspan="3">COAL IN CENTS PER TON OF 2,000 LBS.</td>
+  </tr>
+  <tr>
+  <td class="tdctlb" width="8%">A</td>
+  <td class="tdctlb" width="8%">B</td>
+  <td class="tdctlb" width="8%">C</td>
+  <td class="tdctlb" width="8%">D</td>
+  <td class="tdctlb" width="8%">E</td>
+  <td class="tdctlb" width="8%">F</td>
+  <td class="tdctlb" width="8%">G</td>
+  <td class="tdctlb" width="9%">H</td>
+  <td class="tdctlb" width="9%">I</td>
+  <td class="tdctlb" width="9%">J</td>
+  <td class="tdctlb" width="9%">K</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;&nbsp;&nbsp;5</td>
+  <td class="tdcl">&nbsp;&nbsp;4.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;3.75</td>
+  <td class="tdcl">&nbsp;&nbsp;3.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;3.25</td>
+  <td class="tdcl">&nbsp;&nbsp;5.37</td>
+  <td class="tdcl">&nbsp;&nbsp;5.13</td>
+  <td class="tdcl">&nbsp;&nbsp;5.67</td>
+  <td class="tdcl">&nbsp;&nbsp;8.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.60</td>
+  <td class="tdcl">&nbsp;&nbsp;.30&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.25&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;10</td>
+  <td class="tdcl">&nbsp;&nbsp;4.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;3.92</td>
+  <td class="tdcl">&nbsp;&nbsp;3.66</td>
+  <td class="tdcl">&nbsp;&nbsp;3.39</td>
+  <td class="tdcl">&nbsp;&nbsp;5.75</td>
+  <td class="tdcl">&nbsp;&nbsp;5.53</td>
+  <td class="tdcl">&nbsp;&nbsp;6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.64</td>
+  <td class="tdcl">&nbsp;&nbsp;.34&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.28&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;15</td>
+  <td class="tdcl">&nbsp;&nbsp;4.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.09</td>
+  <td class="tdcl">&nbsp;&nbsp;3.82</td>
+  <td class="tdcl">&nbsp;&nbsp;3.53</td>
+  <td class="tdcl">&nbsp;&nbsp;6.12</td>
+  <td class="tdcl">&nbsp;&nbsp;5.92</td>
+  <td class="tdcl">&nbsp;&nbsp;6.33</td>
+  <td class="tdcl">&nbsp;&nbsp;9.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.68</td>
+  <td class="tdcl">&nbsp;&nbsp;.38&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.31&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;20</td>
+  <td class="tdcl">&nbsp;&nbsp;5.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.26</td>
+  <td class="tdcl">&nbsp;&nbsp;3.98</td>
+  <td class="tdcl">&nbsp;&nbsp;3.67</td>
+  <td class="tdcl">&nbsp;&nbsp;6.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.32</td>
+  <td class="tdcl">&nbsp;&nbsp;6.67</td>
+  <td class="tdcl">&nbsp;&nbsp;9.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.72</td>
+  <td class="tdcl">&nbsp;&nbsp;.42&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.34&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;25</td>
+  <td class="tdcl">&nbsp;&nbsp;5.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.43</td>
+  <td class="tdcl">&nbsp;&nbsp;4.14</td>
+  <td class="tdcl">&nbsp;&nbsp;3.81</td>
+  <td class="tdcl">&nbsp;&nbsp;6.87</td>
+  <td class="tdcl">&nbsp;&nbsp;6.71</td>
+  <td class="tdcl">&nbsp;&nbsp;7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.76</td>
+  <td class="tdcl">&nbsp;&nbsp;.46&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.37&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;30</td>
+  <td class="tdcl">&nbsp;&nbsp;5.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;3.95</td>
+  <td class="tdcl">&nbsp;&nbsp;7.25</td>
+  <td class="tdcl">&nbsp;&nbsp;7.11</td>
+  <td class="tdcl">&nbsp;&nbsp;7.33</td>
+  <td class="tdcl">10.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.80</td>
+  <td class="tdcl">&nbsp;&nbsp;.50&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.40&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;35</td>
+  <td class="tdcl">&nbsp;&nbsp;5.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.77</td>
+  <td class="tdcl">&nbsp;&nbsp;4.45</td>
+  <td class="tdcl">&nbsp;&nbsp;4.09</td>
+  <td class="tdcl">&nbsp;&nbsp;7.62</td>
+  <td class="tdcl">&nbsp;&nbsp;7.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.67</td>
+  <td class="tdcl">10.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.84</td>
+  <td class="tdcl">&nbsp;&nbsp;.54&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.43&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;40</td>
+  <td class="tdcl">&nbsp;&nbsp;5.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.93</td>
+  <td class="tdcl">&nbsp;&nbsp;4.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.23</td>
+  <td class="tdcl">&nbsp;&nbsp;8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.89</td>
+  <td class="tdcl">&nbsp;&nbsp;8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">11.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.88</td>
+  <td class="tdcl">&nbsp;&nbsp;.58&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.46&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;45</td>
+  <td class="tdcl">&nbsp;&nbsp;6.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.09</td>
+  <td class="tdcl">&nbsp;&nbsp;4.75</td>
+  <td class="tdcl">&nbsp;&nbsp;4.37</td>
+  <td class="tdcl">&nbsp;&nbsp;8.37</td>
+  <td class="tdcl">&nbsp;&nbsp;8.29</td>
+  <td class="tdcl">&nbsp;&nbsp;8.33</td>
+  <td class="tdcl">11.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.92</td>
+  <td class="tdcl">&nbsp;&nbsp;.62&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.49&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;50</td>
+  <td class="tdcl">&nbsp;&nbsp;6.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.25 </td>
+  <td class="tdcl">&nbsp;&nbsp;4.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;4.51</td>
+  <td class="tdcl">&nbsp;&nbsp;8.75</td>
+  <td class="tdcl">&nbsp;&nbsp;8.68</td>
+  <td class="tdcl">&nbsp;&nbsp;8.67</td>
+  <td class="tdcl">12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.96</td>
+  <td class="tdcl">&nbsp;&nbsp;.66&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.52&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;55</td>
+  <td class="tdcl">&nbsp;&nbsp;6.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.04</td>
+  <td class="tdcl">&nbsp;&nbsp;4.65</td>
+  <td class="tdcl">&nbsp;&nbsp;9.12</td>
+  <td class="tdcl">&nbsp;&nbsp;8.95</td>
+  <td class="tdcl">&nbsp;&nbsp;9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">12.4&nbsp;&nbsp;</td>
+  <td class="tdcl">1.00</td>
+  <td class="tdcl">&nbsp;&nbsp;.70&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.55&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;60</td>
+  <td class="tdcl">&nbsp;&nbsp;6.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.55</td>
+  <td class="tdcl">&nbsp;&nbsp;5.18</td>
+  <td class="tdcl">&nbsp;&nbsp;4.79</td>
+  <td class="tdcl">&nbsp;&nbsp;9.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.21</td>
+  <td class="tdcl">&nbsp;&nbsp;9.33</td>
+  <td class="tdcl">12.8&nbsp;&nbsp;</td>
+  <td class="tdcl">1.04</td>
+  <td class="tdcl">&nbsp;&nbsp;.74&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.58&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;65</td>
+  <td class="tdcl">&nbsp;&nbsp;6.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.32</td>
+  <td class="tdcl">&nbsp;&nbsp;4.93</td>
+  <td class="tdcl">&nbsp;&nbsp;9.87</td>
+  <td class="tdcl">&nbsp;&nbsp;9.47</td>
+  <td class="tdcl">&nbsp;&nbsp;9.67</td>
+  <td class="tdcl">13.2&nbsp;&nbsp;</td>
+  <td class="tdcl">1.08</td>
+  <td class="tdcl">&nbsp;&nbsp;.78&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.60&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;70</td>
+  <td class="tdcl">&nbsp;&nbsp;7.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.85</td>
+  <td class="tdcl">&nbsp;&nbsp;5.46</td>
+  <td class="tdcl">&nbsp;&nbsp;5.07</td>
+  <td class="tdcl">10.25</td>
+  <td class="tdcl">&nbsp;&nbsp;9.74</td>
+  <td class="tdcl">10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">13.6&nbsp;&nbsp;</td>
+  <td class="tdcl">1.12</td>
+  <td class="tdcl">&nbsp;&nbsp;.82&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.62&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;75</td>
+  <td class="tdcl">&nbsp;&nbsp;7.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.2&nbsp;&nbsp;</td>
+  <td class="tdcl">10.62</td>
+  <td class="tdcl">10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">10.16</td>
+  <td class="tdcl">14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">1.16</td>
+  <td class="tdcl">&nbsp;&nbsp;.85&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.64&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;80</td>
+  <td class="tdcl">&nbsp;&nbsp;7.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.15</td>
+  <td class="tdcl">&nbsp;&nbsp;5.74</td>
+  <td class="tdcl">&nbsp;&nbsp;5.33</td>
+  <td class="tdcl">11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">10.26</td>
+  <td class="tdcl">10.32</td>
+  <td class="tdcl">14.4&nbsp;&nbsp;</td>
+  <td class="tdcl">1.20</td>
+  <td class="tdcl">&nbsp;&nbsp;.88&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.66&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;85</td>
+  <td class="tdcl">&nbsp;&nbsp;7.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.88</td>
+  <td class="tdcl">&nbsp;&nbsp;5.46</td>
+  <td class="tdcl">11.37</td>
+  <td class="tdcl">10.53</td>
+  <td class="tdcl">10.48</td>
+  <td class="tdcl">14.8&nbsp;&nbsp;</td>
+  <td class="tdcl">1.24</td>
+  <td class="tdcl">&nbsp;&nbsp;.91&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.68&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;90</td>
+  <td class="tdcl">&nbsp;&nbsp;7.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.45</td>
+  <td class="tdcl">&nbsp;&nbsp;6.02</td>
+  <td class="tdcl">&nbsp;&nbsp;5.59</td>
+  <td class="tdcl">11.75</td>
+  <td class="tdcl">10.79</td>
+  <td class="tdcl">10.64</td>
+  <td class="tdcl">15.2&nbsp;&nbsp;</td>
+  <td class="tdcl">1.28</td>
+  <td class="tdcl">&nbsp;&nbsp;.94&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.70&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;&nbsp;95</td>
+  <td class="tdcl">&nbsp;&nbsp;8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.16</td>
+  <td class="tdcl">&nbsp;&nbsp;5.72</td>
+  <td class="tdcl">12.12</td>
+  <td class="tdcl">11.05</td>
+  <td class="tdcl">10.8&nbsp;&nbsp;</td>
+  <td class="tdcl">15.6&nbsp;&nbsp;</td>
+  <td class="tdcl">1.32</td>
+  <td class="tdcl">&nbsp;&nbsp;.97&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.72&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">100</td>
+  <td class="tdcl">&nbsp;&nbsp;8.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.75</td>
+  <td class="tdcl">&nbsp;&nbsp;6.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;5.85</td>
+  <td class="tdcl">12.5&nbsp;&nbsp;</td>
+  <td class="tdcl">11.32</td>
+  <td class="tdcl">10.96</td>
+  <td class="tdcl">16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">1.36</td>
+  <td class="tdcl">1.00&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.74&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">105</td>
+  <td class="tdcl">&nbsp;&nbsp;8.24</td>
+  <td class="tdcl">&nbsp;&nbsp;6.87</td>
+  <td class="tdcl">&nbsp;&nbsp;6.42</td>
+  <td class="tdcl">&nbsp;&nbsp;5.95</td>
+  <td class="tdcl">12.75</td>
+  <td class="tdcl">11.53</td>
+  <td class="tdcl">11.12</td>
+  <td class="tdcl">16.3&nbsp;&nbsp;</td>
+  <td class="tdcl">1.40</td>
+  <td class="tdcl">1.015</td>
+  <td class="tdcl">&nbsp;&nbsp;.755</td>
+  </tr>
+  <tr>
+  <td class="tdc">110</td>
+  <td class="tdcl">&nbsp;&nbsp;8.38</td>
+  <td class="tdcl">&nbsp;&nbsp;6.99</td>
+  <td class="tdcl">&nbsp;&nbsp;6.52</td>
+  <td class="tdcl">&nbsp;&nbsp;6.05</td>
+  <td class="tdcl">13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">11.74</td>
+  <td class="tdcl">11.28</td>
+  <td class="tdcl">16.6&nbsp;&nbsp;</td>
+  <td class="tdcl">1.44</td>
+  <td class="tdcl">1.03&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.77&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">115</td>
+  <td class="tdcl">&nbsp;&nbsp;8.52</td>
+  <td class="tdcl">&nbsp;&nbsp;7.11</td>
+  <td class="tdcl">&nbsp;&nbsp;6.63</td>
+  <td class="tdcl">&nbsp;&nbsp;6.15</td>
+  <td class="tdcl">13.25</td>
+  <td class="tdcl">11.95</td>
+  <td class="tdcl">11.44</td>
+  <td class="tdcl">16.9&nbsp;&nbsp;</td>
+  <td class="tdcl">1.48</td>
+  <td class="tdcl">1.045</td>
+  <td class="tdcl">&nbsp;&nbsp;.785</td>
+  </tr>
+  <tr>
+  <td class="tdc">120</td>
+  <td class="tdcl">&nbsp;&nbsp;8.66</td>
+  <td class="tdcl">&nbsp;&nbsp;7.23</td>
+  <td class="tdcl">&nbsp;&nbsp;6.74</td>
+  <td class="tdcl">&nbsp;&nbsp;6.25</td>
+  <td class="tdcl">13.5&nbsp;&nbsp;</td>
+  <td class="tdcl">12.16</td>
+  <td class="tdcl">11.6&nbsp;&nbsp;</td>
+  <td class="tdcl">17.2&nbsp;&nbsp;</td>
+  <td class="tdcl">1.52</td>
+  <td class="tdcl">1.06&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.80&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">125</td>
+  <td class="tdcl">&nbsp;&nbsp;8.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.35</td>
+  <td class="tdcl">&nbsp;&nbsp;6.85</td>
+  <td class="tdcl">&nbsp;&nbsp;6.35</td>
+  <td class="tdcl">13.75</td>
+  <td class="tdcl">12.37</td>
+  <td class="tdcl">11.8&nbsp;&nbsp;</td>
+  <td class="tdcl">17.5&nbsp;&nbsp;</td>
+  <td class="tdcl">1.55</td>
+  <td class="tdcl">1.075</td>
+  <td class="tdcl">&nbsp;&nbsp;.815</td>
+  </tr>
+  <tr>
+  <td class="tdc"></td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">130</td>
+  <td class="tdcl">&nbsp;&nbsp;8.94</td>
+  <td class="tdcl">&nbsp;&nbsp;7.46</td>
+  <td class="tdcl">&nbsp;&nbsp;6.96</td>
+  <td class="tdcl">&nbsp;&nbsp;6.45</td>
+  <td class="tdcl">14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">12.58</td>
+  <td class="tdcl">12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">17.8&nbsp;&nbsp;</td>
+  <td class="tdcl">1.58</td>
+  <td class="tdcl">1.09&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.83&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">135</td>
+  <td class="tdcl">&nbsp;&nbsp;9.08</td>
+  <td class="tdcl">&nbsp;&nbsp;7.57</td>
+  <td class="tdcl">&nbsp;&nbsp;7.07</td>
+  <td class="tdcl">&nbsp;&nbsp;6.55</td>
+  <td class="tdcl">14.25</td>
+  <td class="tdcl">12.79</td>
+  <td class="tdcl">12.2&nbsp;&nbsp;</td>
+  <td class="tdcl">18.1&nbsp;&nbsp;</td>
+  <td class="tdcl">1.61</td>
+  <td class="tdcl">1.105</td>
+  <td class="tdcl">&nbsp;&nbsp;.845</td>
+  </tr>
+  <tr>
+  <td class="tdc">140</td>
+  <td class="tdcl">&nbsp;&nbsp;9.22</td>
+  <td class="tdcl">&nbsp;&nbsp;7.69</td>
+  <td class="tdcl">&nbsp;&nbsp;7.18</td>
+  <td class="tdcl">&nbsp;&nbsp;6.65</td>
+  <td class="tdcl">14.5&nbsp;&nbsp;</td>
+  <td class="tdcl">13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">12.4&nbsp;&nbsp;</td>
+  <td class="tdcl">18.4&nbsp;&nbsp;</td>
+  <td class="tdcl">1.64</td>
+  <td class="tdcl">1.12&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.86&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">145</td>
+  <td class="tdcl">&nbsp;&nbsp;9.36</td>
+  <td class="tdcl">&nbsp;&nbsp;7.79</td>
+  <td class="tdcl">&nbsp;&nbsp;7.29</td>
+  <td class="tdcl">&nbsp;&nbsp;6.75</td>
+  <td class="tdcl">14.75</td>
+  <td class="tdcl">13.21</td>
+  <td class="tdcl">12.6&nbsp;&nbsp;</td>
+  <td class="tdcl">18.7&nbsp;&nbsp;</td>
+  <td class="tdcl">1.67</td>
+  <td class="tdcl">1.135</td>
+  <td class="tdcl">&nbsp;&nbsp;.875</td>
+  </tr>
+  <tr>
+  <td class="tdc">150</td>
+  <td class="tdcl">&nbsp;&nbsp;9.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.85</td>
+  <td class="tdcl">15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">13.42</td>
+  <td class="tdcl">12.8&nbsp;&nbsp;</td>
+  <td class="tdcl">19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">1.70</td>
+  <td class="tdcl">1.15&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.89&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">155</td>
+  <td class="tdcl">&nbsp;&nbsp;9.63</td>
+  <td class="tdcl">&nbsp;&nbsp;8.01</td>
+  <td class="tdcl">&nbsp;&nbsp;7.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;6.95</td>
+  <td class="tdcl">15.25</td>
+  <td class="tdcl">13.63</td>
+  <td class="tdcl">13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">19.3&nbsp;&nbsp;</td>
+  <td class="tdcl">1.73</td>
+  <td class="tdcl">1.165</td>
+  <td class="tdcl">&nbsp;&nbsp;.905</td>
+  </tr>
+  <tr>
+  <td class="tdc">160</td>
+  <td class="tdcl">&nbsp;&nbsp;9.79</td>
+  <td class="tdcl">&nbsp;&nbsp;8.12</td>
+  <td class="tdcl">&nbsp;&nbsp;7.6&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.05</td>
+  <td class="tdcl">15.5&nbsp;&nbsp;</td>
+  <td class="tdcl">13.84</td>
+  <td class="tdcl">13.2&nbsp;&nbsp;</td>
+  <td class="tdcl">19.6&nbsp;&nbsp;</td>
+  <td class="tdcl">1.76</td>
+  <td class="tdcl">1.18&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.92&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">165</td>
+  <td class="tdcl">&nbsp;&nbsp;9.89</td>
+  <td class="tdcl">&nbsp;&nbsp;8.23</td>
+  <td class="tdcl">&nbsp;&nbsp;7.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.15</td>
+  <td class="tdcl">15.75</td>
+  <td class="tdcl">14.05</td>
+  <td class="tdcl">13.4&nbsp;&nbsp;</td>
+  <td class="tdcl">19.9&nbsp;&nbsp;</td>
+  <td class="tdcl">1.79</td>
+  <td class="tdcl">1.195</td>
+  <td class="tdcl">&nbsp;&nbsp;.935</td>
+  </tr>
+  <tr>
+  <td class="tdc">170</td>
+  <td class="tdcl">10.02</td>
+  <td class="tdcl">&nbsp;&nbsp;8.34</td>
+  <td class="tdcl">&nbsp;&nbsp;7.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.25</td>
+  <td class="tdcl">16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">14.26</td>
+  <td class="tdcl">13.6&nbsp;&nbsp;</td>
+  <td class="tdcl">20.2&nbsp;&nbsp;</td>
+  <td class="tdcl">1.82</td>
+  <td class="tdcl">1.21&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.95&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">175</td>
+  <td class="tdcl">10.15</td>
+  <td class="tdcl">&nbsp;&nbsp;8.45</td>
+  <td class="tdcl">&nbsp;&nbsp;7.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.35</td>
+  <td class="tdcl">16.25</td>
+  <td class="tdcl">14.47</td>
+  <td class="tdcl">13.8&nbsp;&nbsp;</td>
+  <td class="tdcl">20.5&nbsp;&nbsp;</td>
+  <td class="tdcl">1.85</td>
+  <td class="tdcl">1.225</td>
+  <td class="tdcl">&nbsp;&nbsp;.965</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">180<span class='pagenum'><a name="Page_475" id="Page_475">[Pg 475]</a></span></td>
+  <td class="tdcl">10.28</td>
+  <td class="tdcl">&nbsp;&nbsp;8.56</td>
+  <td class="tdcl">&nbsp;&nbsp;8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.44</td>
+  <td class="tdcl">16.5&nbsp;&nbsp;</td>
+  <td class="tdcl">14.68</td>
+  <td class="tdcl">14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">20.8&nbsp;&nbsp;</td>
+  <td class="tdcl">1.88</td>
+  <td class="tdcl">1.24&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;.98&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">185</td>
+  <td class="tdcl">10.41</td>
+  <td class="tdcl">&nbsp;&nbsp;8.67</td>
+  <td class="tdcl">&nbsp;&nbsp;8.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.53</td>
+  <td class="tdcl">16.75</td>
+  <td class="tdcl">14.89</td>
+  <td class="tdcl">14.2&nbsp;&nbsp;</td>
+  <td class="tdcl">21.1&nbsp;&nbsp;</td>
+  <td class="tdcl">1.91</td>
+  <td class="tdcl">1.255</td>
+  <td class="tdcl">&nbsp;&nbsp;.995</td>
+  </tr>
+  <tr>
+  <td class="tdc">190</td>
+  <td class="tdcl">10.54</td>
+  <td class="tdcl">&nbsp;&nbsp;8.78</td>
+  <td class="tdcl">&nbsp;&nbsp;8.2&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.62</td>
+  <td class="tdcl">17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">15.11</td>
+  <td class="tdcl">14.4&nbsp;&nbsp;</td>
+  <td class="tdcl">21.4&nbsp;&nbsp;</td>
+  <td class="tdcl">1.94</td>
+  <td class="tdcl">1.27&nbsp;&nbsp;</td>
+  <td class="tdcl">1.01&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">195</td>
+  <td class="tdcl">10.67</td>
+  <td class="tdcl">&nbsp;&nbsp;8.89</td>
+  <td class="tdcl">&nbsp;&nbsp;8.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.71</td>
+  <td class="tdcl">17.25</td>
+  <td class="tdcl">15.32</td>
+  <td class="tdcl">14.6&nbsp;&nbsp;</td>
+  <td class="tdcl">21.7&nbsp;&nbsp;</td>
+  <td class="tdcl">1.97</td>
+  <td class="tdcl">1.285</td>
+  <td class="tdcl">1.025</td>
+  </tr>
+  <tr>
+  <td class="tdc">200</td>
+  <td class="tdcl">10.8&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;8.4&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;7.8&nbsp;&nbsp;</td>
+  <td class="tdcl">17.5&nbsp;&nbsp;</td>
+  <td class="tdcl">15.53</td>
+  <td class="tdcl">14.8&nbsp;&nbsp;</td>
+  <td class="tdcl">22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">2.00</td>
+  <td class="tdcl">1.30&nbsp;&nbsp;</td>
+  <td class="tdcl">1.04&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">210</td>
+  <td class="tdcl">11.07</td>
+  <td class="tdcl">&nbsp;&nbsp;9.23</td>
+  <td class="tdcl">&nbsp;&nbsp;8.61</td>
+  <td class="tdcl">&nbsp;&nbsp;8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">17.87</td>
+  <td class="tdcl">16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">15.22</td>
+  <td class="tdcl">22.3&nbsp;&nbsp;</td>
+  <td class="tdcl">2.04</td>
+  <td class="tdcl">1.32&nbsp;&nbsp;</td>
+  <td class="tdcl">1.06&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">220</td>
+  <td class="tdcl">11.34</td>
+  <td class="tdcl">&nbsp;&nbsp;9.46</td>
+  <td class="tdcl">&nbsp;&nbsp;8.82</td>
+  <td class="tdcl">&nbsp;&nbsp;8.2&nbsp;&nbsp;</td>
+  <td class="tdcl">18.25</td>
+  <td class="tdcl">16.47</td>
+  <td class="tdcl">15.64</td>
+  <td class="tdcl">22.7&nbsp;&nbsp;</td>
+  <td class="tdcl">2.08</td>
+  <td class="tdcl">1.34&nbsp;&nbsp;</td>
+  <td class="tdcl">1.08&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">230</td>
+  <td class="tdcl">11.61</td>
+  <td class="tdcl">&nbsp;&nbsp;9.69</td>
+  <td class="tdcl">&nbsp;&nbsp;9.03</td>
+  <td class="tdcl">&nbsp;&nbsp;8.4&nbsp;&nbsp;</td>
+  <td class="tdcl">18.62</td>
+  <td class="tdcl">16.95</td>
+  <td class="tdcl">16.06</td>
+  <td class="tdcl">23.1&nbsp;&nbsp;</td>
+  <td class="tdcl">2.12</td>
+  <td class="tdcl">1.36&nbsp;&nbsp;</td>
+  <td class="tdcl">1.10&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">240</td>
+  <td class="tdcl">11.88</td>
+  <td class="tdcl">&nbsp;&nbsp;9.92</td>
+  <td class="tdcl">&nbsp;&nbsp;9.24</td>
+  <td class="tdcl">&nbsp;&nbsp;8.6&nbsp;&nbsp;</td>
+  <td class="tdcl">19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">17.42</td>
+  <td class="tdcl">16.48</td>
+  <td class="tdcl">23.5&nbsp;&nbsp;</td>
+  <td class="tdcl">2.16</td>
+  <td class="tdcl">1.38&nbsp;&nbsp;</td>
+  <td class="tdcl">1.12&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">250</td>
+  <td class="tdcl">12.15</td>
+  <td class="tdcl">10.15</td>
+  <td class="tdcl">&nbsp;&nbsp;9.45</td>
+  <td class="tdcl">&nbsp;&nbsp;8.8&nbsp;&nbsp;</td>
+  <td class="tdcl">19.37</td>
+  <td class="tdcl">17.89</td>
+  <td class="tdcl">16.9&nbsp;&nbsp;</td>
+  <td class="tdcl">23.9&nbsp;&nbsp;</td>
+  <td class="tdcl">2.20</td>
+  <td class="tdcl">1.40&nbsp;&nbsp;</td>
+  <td class="tdcl">1.14&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">260</td>
+  <td class="tdcl">12.42</td>
+  <td class="tdcl">10.37</td>
+  <td class="tdcl">&nbsp;&nbsp;9.66</td>
+  <td class="tdcl">&nbsp;&nbsp;8.99</td>
+  <td class="tdcl">19.75</td>
+  <td class="tdcl">18.37</td>
+  <td class="tdcl">17.32</td>
+  <td class="tdcl">24.3&nbsp;&nbsp;</td>
+  <td class="tdcl">2.24</td>
+  <td class="tdcl">1.42&nbsp;&nbsp;</td>
+  <td class="tdcl">1.16&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">270</td>
+  <td class="tdcl">12.69</td>
+  <td class="tdcl">10.59</td>
+  <td class="tdcl">&nbsp;&nbsp;9.87</td>
+  <td class="tdcl">&nbsp;&nbsp;9.18</td>
+  <td class="tdcl">20.12</td>
+  <td class="tdcl">18.84</td>
+  <td class="tdcl">17.74</td>
+  <td class="tdcl">24.7&nbsp;&nbsp;</td>
+  <td class="tdcl">2.28</td>
+  <td class="tdcl">1.44&nbsp;&nbsp;</td>
+  <td class="tdcl">1.18&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">280</td>
+  <td class="tdcl">12.96</td>
+  <td class="tdcl">10.81</td>
+  <td class="tdcl">10.08</td>
+  <td class="tdcl">&nbsp;&nbsp;9.37</td>
+  <td class="tdcl">20.5&nbsp;&nbsp;</td>
+  <td class="tdcl">19.32</td>
+  <td class="tdcl">18.16</td>
+  <td class="tdcl">25.1&nbsp;&nbsp;</td>
+  <td class="tdcl">2.32</td>
+  <td class="tdcl">1.46&nbsp;&nbsp;</td>
+  <td class="tdcl">1.20&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">290</td>
+  <td class="tdcl">13.26</td>
+  <td class="tdcl">11.03</td>
+  <td class="tdcl">10.29</td>
+  <td class="tdcl">&nbsp;&nbsp;9.56</td>
+  <td class="tdcl">20.87</td>
+  <td class="tdcl">19.79</td>
+  <td class="tdcl">18.58</td>
+  <td class="tdcl">25.5&nbsp;&nbsp;</td>
+  <td class="tdcl">2.36</td>
+  <td class="tdcl">1.48&nbsp;&nbsp;</td>
+  <td class="tdcl">1.22&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">300</td>
+  <td class="tdcl">13.53</td>
+  <td class="tdcl">11.25</td>
+  <td class="tdcl">10.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&nbsp;&nbsp;9.75</td>
+  <td class="tdcl">21.25</td>
+  <td class="tdcl">20.26</td>
+  <td class="tdcl">19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">25.9&nbsp;&nbsp;</td>
+  <td class="tdcl">2.40</td>
+  <td class="tdcl">1.50&nbsp;&nbsp;</td>
+  <td class="tdcl">1.24&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">310</td>
+  <td class="tdcl">13.8&nbsp;&nbsp;</td>
+  <td class="tdcl">11.48</td>
+  <td class="tdcl">10.71</td>
+  <td class="tdcl">&nbsp;&nbsp;9.95</td>
+  <td class="tdcl">21.6&nbsp;&nbsp;</td>
+  <td class="tdcl">20.53</td>
+  <td class="tdcl">19.13</td>
+  <td class="tdcl">26.7&nbsp;&nbsp;</td>
+  <td class="tdcl">2.44</td>
+  <td class="tdcl">1.52&nbsp;&nbsp;</td>
+  <td class="tdcl">1.25&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">320</td>
+  <td class="tdcl">14.07</td>
+  <td class="tdcl">11.71</td>
+  <td class="tdcl">10.92</td>
+  <td class="tdcl">10.15</td>
+  <td class="tdcl">21.95</td>
+  <td class="tdcl">20.79</td>
+  <td class="tdcl">19.25</td>
+  <td class="tdcl">27.1&nbsp;&nbsp;</td>
+  <td class="tdcl">2.48</td>
+  <td class="tdcl">1.54&nbsp;&nbsp;</td>
+  <td class="tdcl">1.26&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">330</td>
+  <td class="tdcl">14.34</td>
+  <td class="tdcl">11.94</td>
+  <td class="tdcl">11.13</td>
+  <td class="tdcl">10.35</td>
+  <td class="tdcl">23.3&nbsp;&nbsp;</td>
+  <td class="tdcl">21.05</td>
+  <td class="tdcl">19.37</td>
+  <td class="tdcl">27.5&nbsp;&nbsp;</td>
+  <td class="tdcl">2.52</td>
+  <td class="tdcl">1.56&nbsp;&nbsp;</td>
+  <td class="tdcl">1.27&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">340</td>
+  <td class="tdcl">14.61</td>
+  <td class="tdcl">12.17</td>
+  <td class="tdcl">11.34</td>
+  <td class="tdcl">10.55</td>
+  <td class="tdcl">22.65</td>
+  <td class="tdcl">21.32</td>
+  <td class="tdcl">19.5&nbsp;&nbsp;</td>
+  <td class="tdcl">27.9&nbsp;&nbsp;</td>
+  <td class="tdcl">2.56</td>
+  <td class="tdcl">1.58&nbsp;&nbsp;</td>
+  <td class="tdcl">1.28&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">350</td>
+  <td class="tdcl">14.88</td>
+  <td class="tdcl">12.4&nbsp;&nbsp;</td>
+  <td class="tdcl">11.55</td>
+  <td class="tdcl">10.75</td>
+  <td class="tdcl">23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">21.58</td>
+  <td class="tdcl">19.62</td>
+  <td class="tdcl">28.3&nbsp;&nbsp;</td>
+  <td class="tdcl">2.60</td>
+  <td class="tdcl">1.60&nbsp;&nbsp;</td>
+  <td class="tdcl">1.29&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">360</td>
+  <td class="tdcl">15.15</td>
+  <td class="tdcl">12.62</td>
+  <td class="tdcl">11.76</td>
+  <td class="tdcl">10.94</td>
+  <td class="tdcl">23.35</td>
+  <td class="tdcl">21.84</td>
+  <td class="tdcl">19.75</td>
+  <td class="tdcl">28.7&nbsp;&nbsp;</td>
+  <td class="tdcl">2.64</td>
+  <td class="tdcl">1.62&nbsp;&nbsp;</td>
+  <td class="tdcl">1.30&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">370</td>
+  <td class="tdcl">15.42</td>
+  <td class="tdcl">12.84</td>
+  <td class="tdcl">11.97</td>
+  <td class="tdcl">11.13</td>
+  <td class="tdcl">23.7&nbsp;&nbsp;</td>
+  <td class="tdcl">22.11</td>
+  <td class="tdcl">19.87</td>
+  <td class="tdcl">29.1&nbsp;&nbsp;</td>
+  <td class="tdcl">2.68</td>
+  <td class="tdcl">1.64&nbsp;&nbsp;</td>
+  <td class="tdcl">1.31&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">380</td>
+  <td class="tdcl">15.68</td>
+  <td class="tdcl">13.06</td>
+  <td class="tdcl">12.18</td>
+  <td class="tdcl">11.32</td>
+  <td class="tdcl">24.05</td>
+  <td class="tdcl">22.37</td>
+  <td class="tdcl">20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">29.5&nbsp;&nbsp;</td>
+  <td class="tdcl">2.72</td>
+  <td class="tdcl">1.66&nbsp;&nbsp;</td>
+  <td class="tdcl">1.32&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">390</td>
+  <td class="tdcl">15.94</td>
+  <td class="tdcl">13.28</td>
+  <td class="tdcl">12.39</td>
+  <td class="tdcl">11.51</td>
+  <td class="tdcl">24.4&nbsp;&nbsp;</td>
+  <td class="tdcl">22.63</td>
+  <td class="tdcl">20.5&nbsp;&nbsp;</td>
+  <td class="tdcl">29.9&nbsp;&nbsp;</td>
+  <td class="tdcl">2.76</td>
+  <td class="tdcl">1.68&nbsp;&nbsp;</td>
+  <td class="tdcl">1.33&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">400</td>
+  <td class="tdcl">16.2&nbsp;&nbsp;</td>
+  <td class="tdcl">13.5&nbsp;&nbsp;</td>
+  <td class="tdcl">12.6&nbsp;&nbsp;</td>
+  <td class="tdcl">11.7&nbsp;&nbsp;</td>
+  <td class="tdcl">24.75</td>
+  <td class="tdcl">22.89</td>
+  <td class="tdcl">21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">30.3&nbsp;&nbsp;</td>
+  <td class="tdcl">2.80</td>
+  <td class="tdcl">1.70&nbsp;&nbsp;</td>
+  <td class="tdcl">1.34&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">410</td>
+  <td class="tdcl">16.47</td>
+  <td class="tdcl">13.72</td>
+  <td class="tdcl">12.81</td>
+  <td class="tdcl">11.89</td>
+  <td class="tdcl">25.1&nbsp;&nbsp;</td>
+  <td class="tdcl">23.15</td>
+  <td class="tdcl">21.12</td>
+  <td class="tdcl">30.7&nbsp;&nbsp;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  </tr>
+  <tr>
+  <td class="tdc">420</td>
+  <td class="tdcl">16.73</td>
+  <td class="tdcl">13.94</td>
+  <td class="tdcl">13.02</td>
+  <td class="tdcl">12.08</td>
+  <td class="tdcl">25.45</td>
+  <td class="tdcl">23.41</td>
+  <td class="tdcl">21.25</td>
+  <td class="tdcl">31.1&nbsp;&nbsp;</td>
+  <td class="tdcl">2.88</td>
+  <td class="tdcl">1.74&nbsp;&nbsp;</td>
+  <td class="tdcl">1.36&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">430</td>
+  <td class="tdcl">17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">14.16</td>
+  <td class="tdcl">13.23</td>
+  <td class="tdcl">12.22</td>
+  <td class="tdcl">25.80</td>
+  <td class="tdcl">23.67</td>
+  <td class="tdcl">21.37</td>
+  <td class="tdcl">31.5&nbsp;&nbsp;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  </tr>
+  <tr>
+  <td class="tdc">440</td>
+  <td class="tdcl">17.27</td>
+  <td class="tdcl">14.38</td>
+  <td class="tdcl">13.44</td>
+  <td class="tdcl">12.46</td>
+  <td class="tdcl">26.15</td>
+  <td class="tdcl">23.93</td>
+  <td class="tdcl">21.5&nbsp;&nbsp;</td>
+  <td class="tdcl">31.9&nbsp;&nbsp;</td>
+  <td class="tdcl">2.96</td>
+  <td class="tdcl">1.78&nbsp;&nbsp;</td>
+  <td class="tdcl">1.38&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">450</td>
+  <td class="tdcl">17.54</td>
+  <td class="tdcl">14.60</td>
+  <td class="tdcl">13.65</td>
+  <td class="tdcl">12.65</td>
+  <td class="tdcl">26.5&nbsp;&nbsp;</td>
+  <td class="tdcl">24.19</td>
+  <td class="tdcl">21.62</td>
+  <td class="tdcl">32.3&nbsp;&nbsp;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  </tr>
+  <tr>
+  <td class="tdc">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  <td class="tdcl">&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">460</td>
+  <td class="tdcl">17.80</td>
+  <td class="tdcl">14.82</td>
+  <td class="tdcl">13.86</td>
+  <td class="tdcl">12.84</td>
+  <td class="tdcl">26.85</td>
+  <td class="tdcl">24.45</td>
+  <td class="tdcl">21.75</td>
+  <td class="tdcl">32.7&nbsp;&nbsp;</td>
+  <td class="tdcl">3.04</td>
+  <td class="tdcl">1.82&nbsp;&nbsp;</td>
+  <td class="tdcl">1.40&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">470</td>
+  <td class="tdcl">18.06</td>
+  <td class="tdcl">15.04</td>
+  <td class="tdcl">14.07</td>
+  <td class="tdcl">13.03</td>
+  <td class="tdcl">27.2&nbsp;&nbsp;</td>
+  <td class="tdcl">24.71</td>
+  <td class="tdcl">21.87</td>
+  <td class="tdcl">33.1&nbsp;&nbsp;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  </tr>
+  <tr>
+  <td class="tdc">480</td>
+  <td class="tdcl">18.33</td>
+  <td class="tdcl">15.26</td>
+  <td class="tdcl">14.28</td>
+  <td class="tdcl">13.22</td>
+  <td class="tdcl">27.55</td>
+  <td class="tdcl">24.97</td>
+  <td class="tdcl">22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
+  <td class="tdcl">33.5&nbsp;&nbsp;</td>
+  <td class="tdcl">3.12</td>
+  <td class="tdcl">1.86&nbsp;&nbsp;</td>
+  <td class="tdcl">1.42&nbsp;&nbsp;</td>
+  </tr>
+  <tr>
+  <td class="tdc">490</td>
+  <td class="tdcl">18.60</td>
+  <td class="tdcl">15.48</td>
+  <td class="tdcl">14.49</td>
+  <td class="tdcl">13.41</td>
+  <td class="tdcl">27.9&nbsp;&nbsp;</td>
+  <td class="tdcl">25.23</td>
+  <td class="tdcl">22.12</td>
+  <td class="tdcl">33.9&nbsp;&nbsp;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  <td class="tdcl">&mdash;</td>
+  </tr>
+  <tr>
+  <td class="tdc" style="border-bottom: .5pt black solid;">500</td>
+  <td class="tdclb">18.87</td>
+  <td class="tdclb">15.70</td>
+  <td class="tdclb">14.70</td>
+  <td class="tdclb">13.60</td>
+  <td class="tdclb">28.15</td>
+  <td class="tdclb">25.49</td>
+  <td class="tdclb">22.25</td>
+  <td class="tdclb">34.3&nbsp;&nbsp;</td>
+  <td class="tdclb">3.20</td>
+  <td class="tdclb">1.90&nbsp;&nbsp;</td>
+  <td class="tdclb">1.44&nbsp;&nbsp;</td>
+  </tr>
+</table>
+</div>
+
+<p>* Stock cattle or feeders and calves take 75 per cent. of fat cattle
+rate; 31-foot car (internal measurement) is adopted as the standard for
+minimum weight, as per heading in table; 28-foot cars, 90 per cent. of
+above; 33-foot 6-inch cars, 108 per cent. of above; other lengths of
+cars to take same proportion as above.</p>
+
+<br />
+<br /><span class='pagenum'><a name="Page_476" id="Page_476">[Pg 476]</a></span>
+<br />
+<br /><span class='pagenum'><a name="Page_477" id="Page_477">[Pg 477]</a></span>
+<hr />
+<br />
+<h2>INDEX</h2>
+
+
+<ul><li>  Abbett, Gov., <a href="#Page_113">113</a></li>
+
+<li>  Absentee ownership, <a href="#Page_287">287</a></li>
+
+<li>  Abuses, <a href="#Page_101">101</a>
+  <ul class="nest">
+  <li>    cardinal, <a href="#Page_134">134</a></li>
+  <li>    for protection against, must resort to polls and not to courts, <a href="#Page_332">332</a></li>
+  <li>    increased, <a href="#Page_129">129</a></li>
+  <li>    of railroads, <a href="#Page_124">124</a></li>
+  <li>    origin of, <a href="#Page_434">434</a></li>
+  <li>    still practiced, <a href="#Page_400">400</a></li>
+  </ul>
+</li>
+
+<li>  Accidents, <a href="#Page_450">450</a></li>
+
+<li>  Acworth, Mr. W. M., <a href="#Page_276">276</a></li>
+
+<li>  Adams, C. F., Jr., heresy, <a href="#Page_260">260</a>
+  <ul class="nest">
+  <li>    difficulty not in legislation, <a href="#Page_258">258</a></li>
+  <li>    favors pooling, <a href="#Page_260">260</a></li>
+  <li>    on character of railroad men, <a href="#Page_257">257</a></li>
+  <li>    on Iowa law, <a href="#Page_332">332</a></li>
+  <li>    H. C., motive for ownership, <a href="#Page_436">436</a></li>
+  </ul>
+</li>
+
+<li>  Africa, <a href="#Page_61">61</a>
+  <ul class="nest">
+  <li>    roads constructed, <a href="#Page_22">22</a></li>
+  </ul>
+</li>
+
+<li>  Agriculture among Babylonians and Assyrians, <a href="#Page_19">19</a></li>
+
+<li>  Albany <i>Evening Argus</i>, <a href="#Page_340">340</a></li>
+
+<li>  Albia, <a href="#Page_324">324</a></li>
+
+<li>  Algiers, <a href="#Page_62">62</a></li>
+
+<li>  Algona, <a href="#Page_328">328</a></li>
+
+<li>  American colonies, <a href="#Page_100">100</a>
+  <ul class="nest">
+  <li>    experience, <a href="#Page_303">303</a></li>
+  <li>    investments a reproach, <a href="#Page_313">313</a></li>
+  </ul>
+</li>
+
+<li>  Americans would avail themselves of low rates, <a href="#Page_445">445</a></li>
+
+<li>  American Transfer Company, <a href="#Page_119">119</a></li>
+
+<li>  Amsterdam, <a href="#Page_97">97</a>
+  <ul class="nest">
+  <li>    owes to canal, <a href="#Page_32">32</a></li>
+  </ul>
+</li>
+
+<li>  Ann Arbor Strikers, <a href="#Page_449">449</a></li>
+
+<li>  Area of land grants, <a href="#Page_329">329</a></li>
+
+<li>  Argentine Republic, <a href="#Page_68">68</a></li>
+
+<li>  Arrogance, <a href="#Page_453">453</a></li>
+
+<li>  Asia, <a href="#Page_59">59</a>
+  <ul class="nest">
+  <li>    early nations of, <a href="#Page_18">18</a></li>
+  </ul>
+</li>
+
+<li>  Athens connected with Pir&aelig;ns, protected road, <a href="#Page_24">24</a></li>
+
+<li>  Atkinson, Edward, <a href="#Page_248">248</a>
+  <ul class="nest">
+  <li>    fallacious argument of, <a href="#Page_249">249</a></li>
+  <li>    relies upon a figurehead commission, <a href="#Page_249">249</a></li>
+  </ul>
+</li>
+
+<li>  Atlantic nurseryman, <a href="#Page_148">148</a></li>
+
+<li>  Attorney-General held that legislature had not the power to prescribe rates, <a href="#Page_330">330</a></li>
+
+<li>  Attorney, slow to accept fee, <a href="#Page_402">402</a></li>
+
+<li>  Augustus instituted postal service, <a href="#Page_27">27</a></li>
+
+<li>  Australia, <a href="#Page_64">64</a></li>
+
+<li>  Austria, <a href="#Page_54">54</a></li>
+
+<li>  Average fares per mile, <a href="#Page_444">444</a><br /><br /></li>
+
+
+<li>  B. &amp; M. Co., <a href="#Page_324">324</a></li>
+
+<li>  Baker, C. W., <a href="#Page_262">262</a></li>
+
+<li>  Balkan Peninsula, <a href="#Page_59">59</a>
+  <ul class="nest">
+  <li>    physical features, important factor, <a href="#Page_24">24</a></li>
+  </ul>
+</li>
+
+<li>  Ballou, H. S., <a href="#Page_139">139</a></li>
+
+<li>  Baltimore and Ohio, watered stock, <a href="#Page_172">172</a></li>
+
+<li>  <i>Bankers' Magazine</i>, <a href="#Page_301">301</a></li>
+
+<li>  Banks and insurance, not private, <a href="#Page_403">403</a></li>
+
+<li>  Barosz, M., <a href="#Page_441">441</a></li>
+
+<li>  B., C. R. &amp; N. Railroad Co., increased prosperity of, <a href="#Page_344">344</a></li>
+
+<li>  Beach, C. F., Jr., <a href="#Page_395">395</a>
+  <ul class="nest">
+  <li>    law of private corporations, <a href="#Page_316">316</a></li>
+  </ul>
+</li>
+
+<li>  Bering Strait, <a href="#Page_89">89</a></li>
+
+<li>  Belgium, <a href="#Page_56">56</a>, <a href="#Page_409">409</a>
+  <ul class="nest">
+  <li>    cost of right of way, <a href="#Page_370">370</a></li>
+  </ul>
+</li>
+
+<li>  Bessemer's invention, <a href="#Page_374">374</a></li>
+
+<li>  Blackstone, T. B., <a href="#Page_413">413</a></li>
+
+<li>  Blatchford, Justice, <a href="#Page_213">213</a>, <a href="#Page_290">290</a><span class='pagenum'><a name="Page_478" id="Page_478">[Pg 478]</a></span></li>
+
+<li>  Blinkensop, <a href="#Page_48">48</a></li>
+
+<li>  Board of Railroad Commissioners, <a href="#Page_428">428</a></li>
+
+<li>  Bolles, A. S., <a href="#Page_303">303</a></li>
+
+<li>  Bonded debt of M. &amp; M. R. R., <a href="#Page_322">322</a></li>
+
+<li>  Bonham, John M., <a href="#Page_268">268</a></li>
+
+<li>  Boone, <a href="#Page_327">327</a></li>
+
+<li>  Boston <i>Advertiser</i>, <a href="#Page_340">340</a></li>
+
+<li>  Bradley, Justice, <a href="#Page_213">213</a></li>
+
+<li>  Braithwaite, <a href="#Page_49">49</a></li>
+
+<li>  Branch roads, <a href="#Page_306">306</a></li>
+
+<li>  Brazil, <a href="#Page_69">69</a></li>
+
+<li>  Brewer, Justice, <a href="#Page_214">214</a>, <a href="#Page_215">215</a>, <a href="#Page_455">455</a>
+  <ul class="nest">
+  <li>    doctrine, <a href="#Page_376">376</a></li>
+  <li>    opinion of reasonable rates, <a href="#Page_360">360</a></li>
+  <li>    reply to ruling of, <a href="#Page_364">364</a></li>
+  </ul>
+</li>
+
+<li>  Bridge across the Mississippi, <a href="#Page_319">319</a></li>
+
+<li>  British railways, cost of right of way, <a href="#Page_370">370</a></li>
+
+<li>  Brown, Justice, <a href="#Page_214">214</a></li>
+
+<li>  Bryce, Prof., <a href="#Page_391">391</a>
+  <ul class="nest">
+  <li>    on decadence of bar, <a href="#Page_222">222</a></li>
+  <li>    on lobby, <a href="#Page_222">222</a></li>
+  </ul>
+</li>
+
+<li>  Budd vs. N. Y., <a href="#Page_213">213</a>, <a href="#Page_290">290</a>, <a href="#Page_295">295</a></li>
+
+<li>  Buddha, commended roads to care of pious, <a href="#Page_18">18</a></li>
+
+<li>  Burmah, <a href="#Page_61">61</a></li>
+
+<li>  Burstall, <a href="#Page_49">49</a><br /><br /></li>
+
+
+<li>  California railways, <a href="#Page_122">122</a></li>
+
+<li>  Calmar, <a href="#Page_328">328</a></li>
+
+<li>  Camden and Amboy charter, <a href="#Page_113">113</a></li>
+
+<li>  Camden and Amboy Railroad Company, <a href="#Page_102">102</a></li>
+
+<li>  Canada, <a href="#Page_73">73</a>
+  <ul class="nest">
+  <li>    canals, <a href="#Page_43">43</a></li>
+  </ul>
+</li>
+
+<li>  Canadian Pacific, <a href="#Page_74">74</a></li>
+
+<li>  Canal, Erie, <a href="#Page_40">40</a>
+  <ul class="nest">
+  <li>    from Bitter Lake to Red Sea, <a href="#Page_23">23</a></li>
+  <li>    Nicaragua, <a href="#Page_44">44</a>, <a href="#Page_174">174</a></li>
+  </ul>
+</li>
+
+<li>  Canals, Canadian, <a href="#Page_43">43</a>
+  <ul class="nest">
+  <li>    in Great Britain, <a href="#Page_33">33</a></li>
+  <li>    Italian, <a href="#Page_34">34</a></li>
+  <li>    private companies, <a href="#Page_42">42</a></li>
+  <li>    Spanish, <a href="#Page_34">34</a></li>
+  </ul>
+</li>
+
+<li>  Candidates, railroad, <a href="#Page_226">226</a>
+  <ul class="nest">
+  <li>    servile to railroads, <a href="#Page_206">206</a></li>
+  </ul>
+</li>
+
+<li>  Cape Colony, <a href="#Page_63">63</a></li>
+
+<li>  Capitalization of railroads, <a href="#Page_86">86</a></li>
+
+<li>  Capital of Standard Oil Company, <a href="#Page_121">121</a></li>
+
+<li>  Carey, H. C., <a href="#Page_110">110</a></li>
+
+<li>  Carload lots, <a href="#Page_386">386</a>
+  <ul class="nest">
+  <li>    rates, <a href="#Page_140">140</a></li>
+  </ul>
+</li>
+
+<li>  Carthage, harbor, fleets, roads, <a href="#Page_24">24</a></li>
+
+<li>  Carthaginians, <a href="#Page_91">91</a>
+  <ul class="nest">
+  <li>    commerce of, constructed roads, <a href="#Page_22">22</a></li>
+  </ul>
+</li>
+
+<li>  Cars refused, <a href="#Page_120">120</a></li>
+
+<li>  Cassat, Mr., testimony of, <a href="#Page_121">121</a></li>
+
+<li>  C., B. &amp; Q. R. R. strike, <a href="#Page_285">285</a></li>
+
+<li>  Cedar Rapids and Missouri River R. R. Co., <a href="#Page_324">324</a></li>
+
+<li>  Central America, <a href="#Page_70">70</a></li>
+
+<li>  Central Pacific, <a href="#Page_175">175</a>
+  <ul class="nest">
+  <li>    scheme, <a href="#Page_347">347</a></li>
+  </ul>
+</li>
+
+<li>  Ceylon, <a href="#Page_61">61</a></li>
+
+<li>  Charlemagne repaired and built roads, <a href="#Page_28">28</a></li>
+
+<li>  Chicago and Milwaukee system, cost of, <a href="#Page_235">235</a>
+  <ul class="nest">
+  <li>    and Omaha pool, <a href="#Page_194">194</a></li>
+  <li>    convention, <a href="#Page_224">224</a></li>
+  <li>    Iowa and Nebraska Railroad, <a href="#Page_328">328</a></li>
+  <li>    third-rate lawyer, <a href="#Page_222">222</a></li>
+  </ul>
+</li>
+
+<li>  Chile, <a href="#Page_68">68</a></li>
+
+<li>  Chinese built roads before the Christian era, <a href="#Page_21">21</a></li>
+
+<li>  Classification, <a href="#Page_363">363</a>
+  <ul class="nest">
+  <li>    rule, <a href="#Page_361">361</a></li>
+  <li>    unjust features, <a href="#Page_151">151</a></li>
+  </ul>
+</li>
+
+<li>  Clay, Mr., <a href="#Page_303">303</a></li>
+
+<li>  Clews, Henry, <a href="#Page_304">304</a>
+  <ul class="nest">
+  <li>    pictures evils, <a href="#Page_404">404</a></li>
+  <li>    "Twenty-eight Years in Wall Street," <a href="#Page_185">185</a></li>
+  </ul>
+</li>
+
+<li>  Clear Lake, <a href="#Page_328">328</a></li>
+
+<li>  Clerk of U. S. Court, <a href="#Page_217">217</a></li>
+
+<li>  Cleveland, President, <a href="#Page_359">359</a></li>
+
+<li>  Clinton, <a href="#Page_328">328</a></li>
+
+<li>  Club address of C. F. Adams, Jr., <a href="#Page_257">257</a></li>
+
+<li>  C., M. &amp; St. P. R. R. Co. vs. Minn., <a href="#Page_213">213</a></li>
+
+<li>  Coal and kindred articles, <a href="#Page_386">386</a></li>
+
+<li>  Coffin, Mr. L. S., <a href="#Page_452">452</a></li>
+
+<li>  Colbert, idea of postal service, <a href="#Page_30">30</a></li>
+
+<li>  Coleridge, Lord, <a href="#Page_454">454</a></li>
+
+<li>  Combinations, <a href="#Page_189">189</a>
+  <ul class="nest">
+  <li>    regulate, <a href="#Page_299">299</a></li>
+  </ul>
+</li>
+
+<li>  Commission evil, <a href="#Page_420">420</a><span class='pagenum'><a name="Page_479" id="Page_479">[Pg 479]</a></span></li>
+
+<li>  Commission received, <a href="#Page_119">119</a></li>
+
+<li>  Commissioner system, <a href="#Page_246">246</a></li>
+
+<li>  Commission, Interstate, reviews Judge Brewer's rule, <a href="#Page_365">365</a></li>
+
+<li>  Commissions acquire expert knowledge, <a href="#Page_384">384</a></li>
+
+<li>  Commission's decisions, <a href="#Page_359">359</a>
+  <ul class="nest">
+  <li>    acts subject to judicial review, <a href="#Page_381">381</a></li>
+  <li>    become a pliant tool, <a href="#Page_429">429</a></li>
+  <li>    character of, <a href="#Page_359">359</a></li>
+  </ul>
+</li>
+
+<li>  Commission system adopted in Iowa, <a href="#Page_335">335</a></li>
+
+<li>  Committee bill passed, <a href="#Page_354">354</a></li>
+
+<li>  Commodities, character of, <a href="#Page_373">373</a></li>
+
+<li>  Common law, sufficient in theory but fails in practice, <a href="#Page_268">268</a></li>
+
+<li>  Competition, <a href="#Page_190">190</a>, <a href="#Page_196">196</a>
+  <ul class="nest">
+  <li>    a great educator, <a href="#Page_260">260</a></li>
+  <li>    and enhanced rates, <a href="#Page_352">352</a></li>
+  <li>    in United States depended upon, <a href="#Page_129">129</a></li>
+  <li>    the death of trade, <a href="#Page_298">298</a></li>
+  <li>    vicious, <a href="#Page_300">300</a></li>
+  </ul>
+</li>
+
+<li>  Communism, strength of, <a href="#Page_454">454</a></li>
+
+<li>  Conduit company, <a href="#Page_117">117</a></li>
+
+<li>  Confiscation of railroads, <a href="#Page_293">293</a></li>
+
+<li>  Conflicts between labor and capital, <a href="#Page_448">448</a></li>
+
+<li>  Congress, appropriations for improving rivers, <a href="#Page_44">44</a>
+  <ul class="nest">
+  <li>    in three camps, <a href="#Page_352">352</a></li>
+  <li>    responds to demand of Pacific road, <a href="#Page_183">183</a></li>
+  <li>    to cease futile attempts, <a href="#Page_299">299</a></li>
+  </ul>
+</li>
+
+<li>  Congressmen imposed upon, <a href="#Page_17">17</a></li>
+
+<li>  Connecticut railroad construction, <a href="#Page_288">288</a></li>
+
+<li>  Conscientious managers cannot retain business, <a href="#Page_399">399</a></li>
+
+<li>  Consolidation of C., R. I. &amp; P. R. R. Co., <a href="#Page_323">323</a>
+  <ul class="nest">
+  <li>    tendency to, <a href="#Page_262">262</a></li>
+  </ul>
+</li>
+
+<li>  Conspiracies should not be legalized, <a href="#Page_260">260</a></li>
+
+<li>  Conspiracy, <a href="#Page_296">296</a></li>
+
+<li>  Constitutions made for, <a href="#Page_457">457</a></li>
+
+<li>  Contests, expense of in Great Britain, <a href="#Page_371">371</a></li>
+
+<li>  Contributions to Pacific roads, <a href="#Page_180">180</a></li>
+
+<li>  Control, suggestions for, <a href="#Page_425">425</a></li>
+
+<li>  Cooley, Judge, <a href="#Page_315">315</a>, <a href="#Page_359">359</a>
+  <ul class="nest">
+  <li>    in reference to State and National Commissions, <a href="#Page_426">426</a></li>
+  </ul>
+</li>
+
+<li>  Corporations, danger from, <a href="#Page_223">223</a>
+  <ul class="nest">
+  <li>    willing to pay for questionable services, <a href="#Page_222">222</a></li>
+  </ul>
+</li>
+
+<li>  Corrupt practice act in Mass., <a href="#Page_223">223</a></li>
+
+<li>  Cost of American roads, <a href="#Page_187">187</a>
+  <ul class="nest">
+  <li>    of building roads at present, <a href="#Page_186">186</a></li>
+  <li>    of existing railway system, <a href="#Page_422">422</a></li>
+  <li>    of operating M. &amp; M. R. R., <a href="#Page_322">322</a></li>
+  <li>    of railroads, <a href="#Page_172">172</a>, <a href="#Page_370">370</a>, <a href="#Page_417">417</a></li>
+  </ul>
+</li>
+
+<li>  Council Bluffs, <a href="#Page_324">324</a>
+  <ul class="nest">
+  <li>    line completed to, <a href="#Page_323">323</a></li>
+  </ul>
+</li>
+
+<li>  Courteous employes, <a href="#Page_447">447</a></li>
+
+<li>  Courts ordered restoration of Erie securities, <a href="#Page_170">170</a>
+  <ul class="nest">
+  <li>    should not aid, <a href="#Page_381">381</a></li>
+  </ul>
+</li>
+
+<li>  C., R. I. &amp; P. Railroad, <a href="#Page_284">284</a></li>
+
+<li>  Crosby, J. O., story of tramp, <a href="#Page_178">178</a></li>
+
+<li>  Crusaders, <a href="#Page_92">92</a></li>
+
+<li>  Cuba, <a href="#Page_70">70</a></li>
+
+<li>  Cullom committee report, <a href="#Page_131">131</a>
+  <ul class="nest">
+  <li>    Senator, <a href="#Page_353">353</a></li>
+  </ul>
+</li>
+
+<li>  Customs laws, <a href="#Page_15">15</a><br /><br /></li>
+
+
+<li>  Dabney, W. D., drift toward railroad centralization, <a href="#Page_261">261</a>
+  <ul class="nest">
+  <li>    favors pooling, <a href="#Page_261">261</a></li>
+  <li>    favors State control, <a href="#Page_261">261</a></li>
+  </ul>
+</li>
+
+<li>  Darius I., work on canal, <a href="#Page_23">23</a></li>
+
+<li>  Dartmouth College case, <a href="#Page_315">315</a>
+  <ul class="nest">
+  <li>    decision, <a href="#Page_259">259</a></li>
+  </ul>
+</li>
+
+<li>  Davis, C. Wood, <a href="#Page_413">413</a>
+  <ul class="nest">
+  <li>    on cost of roads, <a href="#Page_187">187</a></li>
+  </ul>
+</li>
+
+<li>  Dows, David, &amp; Co., <a href="#Page_138">138</a></li>
+
+<li>  Davis, Jefferson, plea, <a href="#Page_276">276</a></li>
+
+<li>  Delegates to conventions, <a href="#Page_224">224</a></li>
+
+<li>  Demand in other States for reform, <a href="#Page_331">331</a></li>
+
+<li>  Denmark, <a href="#Page_35">35</a>, <a href="#Page_58">58</a>
+  <ul class="nest">
+  <li>    first-class passenger rates, <a href="#Page_439">439</a></li>
+  </ul>
+</li>
+
+<li>  Depew, Mr., <a href="#Page_138">138</a></li>
+
+<li>  Depew says all railroad men are politicians, <a href="#Page_366">366</a><span class='pagenum'><a name="Page_480" id="Page_480">[Pg 480]</a></span></li>
+
+<li>  Devices, various, <a href="#Page_296">296</a></li>
+
+<li>  Differentials, <a href="#Page_296">296</a></li>
+
+<li>  Discriminations, <a href="#Page_118">118</a>, <a href="#Page_137">137</a>, <a href="#Page_143">143</a>, <a href="#Page_156">156</a>, <a href="#Page_147">147</a>, <a href="#Page_160">160</a>
+  <ul class="nest">
+  <li>    damaging, <a href="#Page_248">248</a></li>
+  <li>    in classifications, <a href="#Page_148">148</a></li>
+  <li>    in Iowa, <a href="#Page_337">337</a></li>
+  <li>    practiced openly, <a href="#Page_331">331</a></li>
+  </ul>
+</li>
+
+<li>  Dillon, Judge, <a href="#Page_411">411</a>
+  <ul class="nest">
+  <li>    Sidney, <a href="#Page_273">273</a></li>
+  <li>    on cost of Pacific roads, <a href="#Page_185">185</a></li>
+  </ul>
+</li>
+
+<li>  Directors and officials of corporations, <a href="#Page_316">316</a>
+  <ul class="nest">
+  <li>    character of, <a href="#Page_406">406</a></li>
+  <li>    with personal interests <a href="#Page_317">317</a></li>
+  </ul>
+</li>
+
+<li>  Director-General, <a href="#Page_431">431</a>
+  <ul class="nest">
+  <li>    should have power to remove managers, <a href="#Page_432">432</a></li>
+  </ul>
+</li>
+
+<li>  Distance disregarded, <a href="#Page_331">331</a></li>
+
+<li>  Dividends, <a href="#Page_164">164</a>, <a href="#Page_187">187</a>
+  <ul class="nest">
+  <li>    by fluctuations, <a href="#Page_302">302</a></li>
+  <li>    Standard Oil Company, <a href="#Page_121">121</a></li>
+  </ul>
+</li>
+
+<li>  Donations, <a href="#Page_329">329</a>
+  <ul class="nest">
+  <li>    for benefit of public, <a href="#Page_376">376</a></li>
+  <li>    made by railroad companies, <a href="#Page_446">446</a></li>
+  <li>    to Pacific roads, <a href="#Page_176">176</a></li>
+  <li>    to railroads, <a href="#Page_125">125</a></li>
+  </ul>
+</li>
+
+<li>  Donation to road completed, <a href="#Page_320">320</a></li>
+
+<li>  Doud amendment, <a href="#Page_331">331</a></li>
+
+<li>  Dual government, <a href="#Page_401">401</a></li>
+
+<li>  Dual sovereignty must be recognized, <a href="#Page_425">425</a></li>
+
+<li>  Dubuque &amp; S. C. Co., <a href="#Page_324">324</a></li>
+
+<li>  Dutch East India Company, <a href="#Page_97">97</a></li>
+
+<li>  Duties of common carriers, <a href="#Page_315">315</a></li>
+
+<li>  Duty of state, <a href="#Page_456">456</a><br /><br /></li>
+
+
+<li>  Earnings diverted, <a href="#Page_403">403</a>
+  <ul class="nest">
+  <li>    of first Iowa railroad, <a href="#Page_320">320</a></li>
+  <li>    gross, larger in United States, <a href="#Page_281">281</a></li>
+  <li>    of C., B. &amp; Q., <a href="#Page_175">175</a></li>
+  <li>    of Iowa roads increased, <a href="#Page_264">264</a></li>
+  <li>    of Massachusetts railroads, <a href="#Page_175">175</a></li>
+  <li>    of Lake Shore, <a href="#Page_175">175</a></li>
+  </ul>
+</li>
+
+<li>  Earnings of Liverpool and Manchester, <a href="#Page_50">50</a>
+  <ul class="nest">
+  <li>    of Terre Haute, <a href="#Page_175">175</a></li>
+  <li>    of railroads, <a href="#Page_86">86</a></li>
+  <li>    per employe, <a href="#Page_372">372</a></li>
+  <li>    per train mile in the United States and United Kingdom, <a href="#Page_270">270</a></li>
+  <li>    per train mile larger in United States, <a href="#Page_281">281</a></li>
+  </ul>
+</li>
+
+<li>  East India Company, <a href="#Page_99">99</a>, <a href="#Page_303">303</a></li>
+
+<li>  Economy of fuel, <a href="#Page_375">375</a></li>
+
+<li>  Editors, <a href="#Page_221">221</a>, <a href="#Page_231">231</a>
+  <ul class="nest">
+  <li>    controlled by counting-room, <a href="#Page_339">339</a></li>
+  </ul>
+</li>
+
+<li>  Egyptians, commerce of, constructed roads, <a href="#Page_22">22</a></li>
+
+<li>  Electoral Commission, <a href="#Page_215">215</a></li>
+
+<li>  Eminent domain, <a href="#Page_314">314</a>
+  <ul class="nest">
+  <li>    Spelling on, <a href="#Page_317">317</a></li>
+  </ul>
+</li>
+
+<li>  Employes fare better under Government management, <a href="#Page_412">412</a>
+  <ul class="nest">
+  <li>    in Iowa, compensation, <a href="#Page_344">344</a></li>
+  <li>    in Iowa, number, <a href="#Page_344">344</a></li>
+  <li>    number of, in various countries, <a href="#Page_371">371</a></li>
+  <li>    number of, per mile of road, <a href="#Page_269">269</a></li>
+  <li>    number of, as related to gross earnings, <a href="#Page_269">269</a></li>
+  <li>    organized for political work, <a href="#Page_277">277</a></li>
+  <li>    quasi-public officers, <a href="#Page_447">447</a></li>
+  <li>    should have passes, <a href="#Page_209">209</a></li>
+  </ul>
+</li>
+
+<li>  England, <a href="#Page_99">99</a>
+  <ul class="nest">
+  <li>    roads maintained by statute and parish labor, <a href="#Page_32">32</a></li>
+  </ul>
+</li>
+
+<li>  English landlords, <a href="#Page_287">287</a></li>
+
+<li>  Entrance into railway service regulated, <a href="#Page_448">448</a></li>
+
+<li>  Ericsson, <a href="#Page_449">449</a></li>
+
+<li>  Erie Canal, <a href="#Page_40">40</a>
+  <ul class="nest">
+  <li>    Railroad, <a href="#Page_170">170</a></li>
+  </ul>
+</li>
+
+<li>  European and American investments compared, <a href="#Page_371">371</a></li>
+
+<li>  European history began in Greece, <a href="#Page_24">24</a></li>
+
+<li>  Evans, Oliver, <a href="#Page_47">47</a></li>
+
+<li>  Executive charged with construction and maintenance of roads and canals, <a href="#Page_22">22</a><span class='pagenum'><a name="Page_481" id="Page_481">[Pg 481]</a></span></li>
+
+<li>  Executives influenced, <a href="#Page_225">225</a></li>
+
+<li>  Experiments with wooden rail, <a href="#Page_46">46</a></li>
+
+<li>  Extortion, effects of, <a href="#Page_111">111</a><br /><br /></li>
+
+
+<li>  Farmers' Alliance, <a href="#Page_300">300</a></li>
+
+<li>  Farmers' pool, <a href="#Page_300">300</a></li>
+
+<li>  Federal agencies, need of improved, <a href="#Page_430">430</a></li>
+
+<li>  Federal courts, influence of, <a href="#Page_212">212</a></li>
+
+<li>  Ferocity of public opinion in the West, <a href="#Page_312">312</a></li>
+
+<li>  Feudal features, <a href="#Page_455">455</a></li>
+
+<li>  Field, Justice, <a href="#Page_214">214</a>, <a href="#Page_269">269</a></li>
+
+<li>  Fink, Albert, <a href="#Page_200">200</a></li>
+
+<li>  First rail tracks, <a href="#Page_46">46</a></li>
+
+<li>  First railroad survey in Iowa, <a href="#Page_319">319</a></li>
+
+<li>  Fort Dodge, <a href="#Page_325">325</a></li>
+
+<li>  Fortunes, great, <a href="#Page_400">400</a>
+  <ul class="nest">
+  <li>    made, <a href="#Page_301">301</a></li>
+  </ul>
+</li>
+
+<li>  France, <a href="#Page_54">54</a>
+  <ul class="nest">
+  <li>    duty of employes, <a href="#Page_447">447</a></li>
+  <li>    first system of roads, first artificial waterways, <a href="#Page_30">30</a></li>
+  <li>    large number of canals, <a href="#Page_30">30</a></li>
+  <li>    rates on freight and passengers, <a href="#Page_293">293</a></li>
+  </ul>
+</li>
+
+<li>  Frederick the Great built turnpikes and canals, <a href="#Page_31">31</a></li>
+
+<li>  Frederick William IV., <a href="#Page_53">53</a></li>
+
+<li>  Free competition, <a href="#Page_407">407</a></li>
+
+<li>  Freight agents, <a href="#Page_383">383</a></li>
+
+<li>  Freight carried by railroads in the United States, <a href="#Page_292">292</a></li>
+
+<li>  Friction under Iowa law, <a href="#Page_341">341</a><br /><br /></li>
+
+
+<li>  Galena and Chicago Union, <a href="#Page_164">164</a></li>
+
+<li>  Gallatin advocated roads and canals, <a href="#Page_38">38</a></li>
+
+<li>  Garfield, President, <a href="#Page_224">224</a>
+  <ul class="nest">
+  <li>    on Dartmouth College case, <a href="#Page_316">316</a></li>
+  </ul>
+</li>
+
+<li>  Garrett, J. W., <a href="#Page_83">83</a></li>
+
+<li>  Germany, first mail service, <a href="#Page_31">31</a>
+  <ul class="nest">
+  <li>    first railroad, <a href="#Page_53">53</a></li>
+  </ul>
+</li>
+
+<li>  German instructions to employes, <a href="#Page_447">447</a></li>
+
+<li>  Georgia prescribed rates, <a href="#Page_289">289</a></li>
+
+<li>  Glenwood, <a href="#Page_337">337</a></li>
+
+<li>  Gibbon, <a href="#Page_92">92</a></li>
+
+<li>  Gibbon concerning postal service, <a href="#Page_27">27</a></li>
+
+<li>  Goodman, Mr., testimony of, <a href="#Page_138">138</a></li>
+
+<li>  Gospel of wealth, <a href="#Page_404">404</a></li>
+
+<li>  G&ouml;ta canal, <a href="#Page_35">35</a></li>
+
+<li>  Gould's bulldozing, <a href="#Page_452">452</a></li>
+
+<li>  Gould, Jay, <a href="#Page_212">212</a>, <a href="#Page_224">224</a>, <a href="#Page_269">269</a>
+  <ul class="nest">
+  <li>    on cost of Pacific roads, <a href="#Page_184">184</a></li>
+  </ul>
+</li>
+
+<li>  Governor called extra session of General Assembly, <a href="#Page_321">321</a>
+  <ul class="nest">
+  <li>    importuned, <a href="#Page_228">228</a></li>
+  <li>    of Iowa, <a href="#Page_311">311</a></li>
+  <li>    influenced, <a href="#Page_227">227</a></li>
+  </ul>
+</li>
+
+<li>  Government ownership drawbacks, <a href="#Page_412">412</a></li>
+
+<li>  Granger cases, <a href="#Page_212">212</a></li>
+
+<li>  Granger, Judge, <a href="#Page_229">229</a></li>
+
+<li>  Granger law did not retard construction, <a href="#Page_335">335</a>
+  <ul class="nest">
+  <li>    of Iowa, <a href="#Page_332">332</a></li>
+  </ul>
+</li>
+
+<li>  Granger laws, moderate, <a href="#Page_322">322</a>
+  <ul class="nest">
+  <li>    repealed, <a href="#Page_246">246</a></li>
+  </ul>
+</li>
+
+<li>  Granger movement, <a href="#Page_84">84</a>
+  <ul class="nest">
+  <li>    a necessary one, <a href="#Page_258">258</a></li>
+  <li>    spread, <a href="#Page_332">332</a></li>
+  </ul>
+</li>
+
+<li>  Granger system in Wisconsin, <a href="#Page_245">245</a></li>
+
+<li>  Grant and Conkling, <a href="#Page_224">224</a></li>
+
+<li>  Grant, Judge, <a href="#Page_411">411</a></li>
+
+<li>  Great Britain, canals, <a href="#Page_33">33</a>
+  <ul class="nest">
+  <li>    crossed by Roman roads, <a href="#Page_27">27</a></li>
+  <li>    recent origin of public roads and postal service, <a href="#Page_32">32</a></li>
+  </ul>
+</li>
+
+<li>  Great Northern Railroad Co., <a href="#Page_185">185</a></li>
+
+<li>  Grecian civilization passed to Romans and then to other nations, <a href="#Page_24">24</a></li>
+
+<li>  Greek geographers, praise of highways of Hindostan, <a href="#Page_19">19</a></li>
+
+<li>  Gresham, Judge, <a href="#Page_212">212</a></li>
+
+<li>  Grinnell, Hon. J. B., <a href="#Page_411">411</a></li>
+
+<li>  Gross and net earnings in Iowa, <a href="#Page_344">344</a>
+  <ul class="nest">
+  <li>    earnings, increase in Iowa, <a href="#Page_287">287</a>, <a href="#Page_293">293</a></li>
+  <li>    earnings of Iowa roads, <a href="#Page_265">265</a></li>
+  </ul>
+<br />
+</li>
+
+
+<li>  Hadley, Prof. A. T., <a href="#Page_245">245</a>
+  <ul class="nest">
+  <li>    on passenger rates, <a href="#Page_278">278</a></li>
+  <li>    on State legislation, <a href="#Page_286">286</a></li>
+  </ul>
+</li>
+
+<li>  Hadley's address before Bankers' Association, <a href="#Page_284">284</a><span class='pagenum'><a name="Page_482" id="Page_482">[Pg 482]</a></span>
+  <ul class="nest">
+  <li>    ignorance, <a href="#Page_287">287</a></li>
+  <li>    mistake, <a href="#Page_290">290</a></li>
+  </ul>
+</li>
+
+<li>  Hadrian improved postal service, <a href="#Page_27">27</a></li>
+
+<li>  Hagar, Mr., <a href="#Page_109">109</a></li>
+
+<li>  Hackworth, <a href="#Page_49">49</a></li>
+
+<li>  Hale, Lord Chief Justice, <a href="#Page_316">316</a></li>
+
+<li>  Harrison, President, <a href="#Page_214">214</a>
+  <ul class="nest">
+  <li>    on watered stocks, <a href="#Page_174">174</a></li>
+  <li>    on Nicaragua Canal, <a href="#Page_44">44</a></li>
+  </ul>
+</li>
+
+<li>  Hanseatic League, <a href="#Page_94">94</a>
+  <ul class="nest">
+  <li>    object, extent, power, <a href="#Page_95">95</a></li>
+  </ul>
+</li>
+
+<li>  Haul, length of, compared, <a href="#Page_372">372</a></li>
+
+<li>  Hayes-Tilden contest, <a href="#Page_215">215</a></li>
+
+<li>  Hayti, <a href="#Page_71">71</a></li>
+
+<li>  Hepburn committee, <a href="#Page_137">137</a>, <a href="#Page_146">146</a></li>
+
+<li>  Hindoo culture and broad statesmanship, <a href="#Page_18">18</a></li>
+
+<li>  Hoe printing-press, <a href="#Page_231">231</a></li>
+
+<li>  Holland, <a href="#Page_98">98</a>
+  <ul class="nest">
+  <li>    largest canal of, <a href="#Page_31">31</a></li>
+  </ul>
+</li>
+
+<li>  Hoyt, J., &amp; Co., <a href="#Page_138">138</a></li>
+
+<li>  Hudson, J. F., <a href="#Page_250">250</a>, <a href="#Page_266">266</a>, <a href="#Page_407">407</a></li>
+
+<li>  Hudson River Railroad accident, <a href="#Page_451">451</a>
+  <ul class="nest">
+  <li>    Co., <a href="#Page_167">167</a></li>
+  <li>    stock watering, <a href="#Page_167">167</a></li>
+  </ul>
+</li>
+
+<li>  Humboldt said of roads of Incas, <a href="#Page_36">36</a></li>
+
+<li>  Hungary, <a href="#Page_54">54</a></li>
+
+<li>  Hungarian zone system, <a href="#Page_282">282</a>, <a href="#Page_440">440</a></li>
+
+<li>  Huntington, C. P., <a href="#Page_347">347</a>
+  <ul class="nest">
+  <li>    letter of, <a href="#Page_346">346</a></li>
+  </ul>
+<br />
+</li>
+
+
+<li>  Illinois canals, <a href="#Page_42">42</a>
+  <ul class="nest">
+  <li>    Granger laws, <a href="#Page_331">331</a></li>
+  </ul>
+</li>
+
+<li>  Importance of transportation facilities, <a href="#Page_17">17</a></li>
+
+<li>  Improved appliances should be used, <a href="#Page_450">450</a></li>
+
+<li>  Income of railroads, <a href="#Page_128">128</a>
+  <ul class="nest">
+  <li>    per capita, <a href="#Page_292">292</a></li>
+  </ul>
+</li>
+
+<li>  Increase of traffic under zone system, <a href="#Page_442">442</a></li>
+
+<li>  India supplied Nineveh and Babylon, Greece and Rome, <a href="#Page_18">18</a></li>
+
+<li>  Individual entitled to full use, <a href="#Page_392">392</a></li>
+
+<li>  Inflation, <a href="#Page_163">163</a></li>
+
+<li>  Influences at work to create public sentiment, <a href="#Page_294">294</a></li>
+
+<li>  Iniquitous taxation, <a href="#Page_307">307</a></li>
+
+<li>  Injunction asked for, <a href="#Page_323">323</a></li>
+
+<li>  Inspection service should be established, <a href="#Page_432">432</a></li>
+
+<li>  Insurance provided for, <a href="#Page_451">451</a></li>
+
+<li>  Interchangeable 1,000-mile tickets, <a href="#Page_445">445</a></li>
+
+<li>  Interstate Commerce Act, <a href="#Page_85">85</a>, <a href="#Page_319">319</a>
+  <ul class="nest">
+  <li>    amended, <a href="#Page_358">358</a></li>
+  <li>    approved, <a href="#Page_354">354</a></li>
+  </ul>
+</li>
+
+<li>  Interstate Commerce Commission, sixth annual report, <a href="#Page_160">160</a></li>
+
+<li>  Interstate Commerce law attacked, <a href="#Page_162">162</a></li>
+
+<li>  Intimidation of railroad employes, <a href="#Page_226">226</a></li>
+
+<li>  Inventors, <a href="#Page_126">126</a></li>
+
+<li>  Investments, none pay so well, <a href="#Page_248">248</a></li>
+
+<li>  Iowa attorney, <a href="#Page_210">210</a>
+  <ul class="nest">
+  <li>    Bill of Rights, <a href="#Page_445">445</a></li>
+  <li>    Central Air Line, <a href="#Page_324">324</a></li>
+  <li>    City, road built to, <a href="#Page_319">319</a></li>
+  <li>    Commissioners enjoined, <a href="#Page_343">343</a></li>
+  <li>    Commissioners' valuable service, <a href="#Page_336">336</a></li>
+  <li>    Falls &amp; S. C. Co., <a href="#Page_325">325</a></li>
+  <li>    General Assembly passed maximum tariff act, <a href="#Page_264">264</a></li>
+  <li>    General Assembly passed act authorizing commissioners to make <i>prima facie</i> rates, <a href="#Page_264">264</a></li>
+  <li>    law, features of, <a href="#Page_341">341</a></li>
+  <li>    misunderstanding of, <a href="#Page_342">342</a></li>
+  <li>    vindicated, <a href="#Page_266">266</a></li>
+  <li>    legislation, <a href="#Page_319">319</a></li>
+  <li>    politics, <a href="#Page_311">311</a></li>
+  <li>    prosperity accelerated, <a href="#Page_345">345</a></li>
+  <li>    railroad construction, <a href="#Page_288">288</a></li>
+  <li>    the queen, <a href="#Page_348">348</a></li>
+  </ul>
+</li>
+
+<li>  Irish tenants, <a href="#Page_287">287</a></li>
+
+<li>  Iron strap rail, <a href="#Page_46">46</a></li>
+
+<li>  Itaki Atabeck, road seen to this day, <a href="#Page_19">19</a></li>
+
+<li>  Italy, <a href="#Page_57">57</a>
+  <ul class="nest">
+  <li>    canals, <a href="#Page_34">34</a></li>
+  </ul>
+<br />
+</li>
+
+<li>  Jackson, President, <a href="#Page_367">367</a></li>
+
+<li>  Japan, <a href="#Page_60">60</a></li>
+
+<li>  Java, <a href="#Page_61">61</a></li>
+
+<li>  Jeans, Mr. J. S., <a href="#Page_269">269</a>
+  <ul class="nest">
+  <li>    on railroad revenues, <a href="#Page_437">437</a></li>
+  <li>    on state railroad, <a href="#Page_410">410</a></li>
+  </ul>
+</li>
+
+<li>  Jefferson's inquiries, <a href="#Page_37">37</a><span class='pagenum'><a name="Page_483" id="Page_483">[Pg 483]</a></span></li>
+
+<li>  Judges, servile, <a href="#Page_162">162</a>
+  <ul class="nest">
+  <li>    use passes, <a href="#Page_208">208</a></li>
+  </ul>
+</li>
+
+<li>  Jurists, eminent, <a href="#Page_234">234</a><br /><br /></li>
+
+
+<li>  Kansas Midland, <a href="#Page_187">187</a></li>
+
+<li>  Kent, <a href="#Page_314">314</a></li>
+
+<li>  Kirkman, M. M., <a href="#Page_239">239</a><br /><br /></li>
+
+
+<li>  Labor organizations, <a href="#Page_448">448</a></li>
+
+<li>  Labor-saving causes, <a href="#Page_375">375</a></li>
+
+<li>  Lake transportation, <a href="#Page_453">453</a></li>
+
+<li>  Land grant policy, wisdom of, <a href="#Page_320">320</a>
+  <ul class="nest">
+  <li>    to Dubuque &amp; S. C. R. R., <a href="#Page_325">325</a></li>
+  </ul>
+</li>
+
+<li>  Land grants to Iowa railroads, <a href="#Page_320">320</a>
+  <ul class="nest">
+  <li>    value of, <a href="#Page_325">325</a></li>
+  </ul>
+</li>
+
+<li>  Languedoc Canal, <a href="#Page_30">30</a></li>
+
+<li>  Lawyer and farmer, <a href="#Page_209">209</a></li>
+
+<li>  Lawyers, briefless, <a href="#Page_219">219</a>
+  <ul class="nest">
+  <li>    political, <a href="#Page_223">223</a></li>
+  <li>    third-rate, <a href="#Page_222">222</a></li>
+  </ul>
+</li>
+
+<li>  Legislation, <a href="#Page_299">299</a>
+  <ul class="nest">
+  <li>    of California, <a href="#Page_123">123</a></li>
+  </ul>
+</li>
+
+<li>  Legislative campaign of 1887, <a href="#Page_339">339</a>
+  <ul class="nest">
+  <li>    reform needed, <a href="#Page_405">405</a></li>
+  <li>    reports, <a href="#Page_110">110</a></li>
+  </ul>
+</li>
+
+<li>  Lincoln, President, <a href="#Page_216">216</a>
+  <ul class="nest">
+  <li>    story of the Irishman, and the pig, <a href="#Page_271">271</a></li>
+  </ul>
+</li>
+
+<li>  Lines projected, <a href="#Page_288">288</a></li>
+
+<li>  Lobbies frowned out of legislative halls, <a href="#Page_402">402</a></li>
+
+<li>  Lobby, <a href="#Page_219">219</a>
+  <ul class="nest">
+  <li>    formidable, <a href="#Page_339">339</a></li>
+  </ul>
+</li>
+
+<li>  Locomotive, early inventors, <a href="#Page_47">47</a>
+  <ul class="nest">
+  <li>    reward for, <a href="#Page_49">49</a></li>
+  </ul>
+</li>
+
+<li>  Long and short haul clause, <a href="#Page_297">297</a>
+  <ul class="nest">
+  <li>    of Iowa law, <a href="#Page_341">341</a></li>
+  </ul>
+</li>
+
+<li>  Louis XIV., <a href="#Page_98">98</a></li>
+
+<li>  Louis XI. transferred postal service to state, <a href="#Page_30">30</a></li>
+
+<li>  Lowest rates in Europe, <a href="#Page_409">409</a><br /><br /></li>
+
+
+<li>  Mails carried free in France, <a href="#Page_373">373</a></li>
+
+<li>  Managers arrogant, <a href="#Page_331">331</a>
+  <ul class="nest">
+  <li>    concede necessity of regulation, <a href="#Page_369">369</a></li>
+  <li>    have lost influence, <a href="#Page_230">230</a></li>
+  <li>    make law odious, <a href="#Page_333">333</a></li>
+  <li>    naturally despotical, <a href="#Page_151">151</a></li>
+  <li>    of great parties, <a href="#Page_144">144</a></li>
+  </ul>
+</li>
+
+<li>  M. &amp; M. R. R. Co., <a href="#Page_319">319</a></li>
+
+<li>  Marshall, Chief Justice, <a href="#Page_350">350</a></li>
+
+<li>  Marshalltown, <a href="#Page_324">324</a></li>
+
+<li>  Massachusetts Commission, <a href="#Page_428">428</a></li>
+
+<li>  Mathews, Judge Stanley, <a href="#Page_269">269</a></li>
+
+<li>  Maximilian established postal route, <a href="#Page_31">31</a></li>
+
+<li>  Maximum charges, <a href="#Page_331">331</a></li>
+
+<li>  McDill, Hon. J. W., as a lobbyist, <a href="#Page_238">238</a></li>
+
+<li>  McGregor grant resumed, <a href="#Page_326">326</a>, <a href="#Page_327">327</a></li>
+
+<li>  McGregor Western R. R. Co., <a href="#Page_325">325</a></li>
+
+<li>  Means employed to control legislation, <a href="#Page_218">218</a></li>
+
+<li>  Mesopotamia, inhabitants perfect cart, <a href="#Page_19">19</a></li>
+
+<li>  Methods for control, <a href="#Page_402">402</a>
+  <ul class="nest">
+  <li>    impracticable, <a href="#Page_425">425</a></li>
+  </ul>
+</li>
+
+<li>  Mexico, <a href="#Page_72">72</a></li>
+
+<li>  Mileage of the future, <a href="#Page_389">389</a>
+  <ul class="nest">
+  <li>    to area, <a href="#Page_112">112</a>, <a href="#Page_389">389</a></li>
+  <li>    to population, <a href="#Page_292">292</a></li>
+  </ul>
+</li>
+
+<li>  Minneapolis and Chicago conventions, <a href="#Page_224">224</a></li>
+
+<li>  Minnesota case, <a href="#Page_295">295</a>
+  <ul class="nest">
+  <li>    Granger laws, <a href="#Page_331">331</a></li>
+  <li>    politics, <a href="#Page_311">311</a></li>
+  </ul>
+</li>
+
+<li>  Missouri Pacific, <a href="#Page_187">187</a></li>
+
+<li>  Mitchell, Alexander, <a href="#Page_232">232</a></li>
+
+<li>  Modern doctrine, Kent's rule, <a href="#Page_314">314</a></li>
+
+<li>  Monopoly, <a href="#Page_317">317</a>
+  <ul class="nest">
+  <li>    in transportation, <a href="#Page_90">90</a></li>
+  </ul>
+</li>
+
+<li>  Morgan, Appleton, <a href="#Page_250">250</a></li>
+
+<li>  Mortgaging prohibited, <a href="#Page_434">434</a></li>
+
+<li>  Munn vs. Illinois, <a href="#Page_213">213</a>, <a href="#Page_290">290</a></li>
+
+<li>  Muscatine, branch line to, <a href="#Page_319">319</a></li>
+
+<li>  Mushroom millionaires, <a href="#Page_307">307</a><br /><br /></li>
+
+
+<li>  National banking system, <a href="#Page_303">303</a></li>
+
+<li>  National bureau should be established, <a href="#Page_431">431</a></li>
+
+<li>  National control, <a href="#Page_424">424</a></li>
+
+<li>  Nation inclined to follow beaten tracks, <a href="#Page_425">425</a></li>
+
+<li>  Nations should profit by experience, <a href="#Page_367">367</a></li>
+
+<li>  Napoleon Company, <a href="#Page_108">108</a></li>
+
+<li>  Navigation act, <a href="#Page_98">98</a></li>
+
+<li>  Nebraska maximum tariff, <a href="#Page_346">346</a></li>
+
+<li>  Net earnings increased in Iowa, <a href="#Page_265">265</a>
+  <ul class="nest">
+  <li>    in 1890 and 1891, <a href="#Page_187">187</a></li>
+  </ul>
+</li>
+
+<li>  Netherlands, canals, <a href="#Page_31">31</a></li>
+
+<li>  Net profit of passenger traffic in United Kingdom, <a href="#Page_270">270</a></li>
+
+<li>  Nevada, <a href="#Page_324">324</a><span class='pagenum'><a name="Page_484" id="Page_484">[Pg 484]</a></span></li>
+
+<li>  New England railroad construction, <a href="#Page_288">288</a></li>
+
+<li>  New Orleans Cotton Exchange case, <a href="#Page_360">360</a></li>
+
+<li>  Newton, <a href="#Page_47">47</a></li>
+
+<li>  New York canals, <a href="#Page_41">41</a></li>
+
+<li>  New York Central, gross earnings, <a href="#Page_167">167</a>
+  <ul class="nest">
+  <li>    stock watering, <a href="#Page_165">165</a></li>
+  </ul>
+</li>
+
+<li>  New York delegation, <a href="#Page_224">224</a></li>
+
+<li>  Nicaragua, <a href="#Page_70">70</a>
+  <ul class="nest">
+  <li>    Canal, <a href="#Page_44">44</a>, <a href="#Page_174">174</a></li>
+  </ul>
+</li>
+
+<li>  Nile, canals, roads, people, <a href="#Page_23">23</a></li>
+
+<li>  Notice given when rates are changed, <a href="#Page_388">388</a></li>
+
+<li>  Number of employes per mile, <a href="#Page_372">372</a>
+  <ul class="nest">
+  <li>    of hours' work of employes, <a href="#Page_372">372</a></li>
+  </ul>
+<br />
+</li>
+
+
+<li>  Office of railroad public, <a href="#Page_368">368</a></li>
+
+<li>  Officers of railroads should not be allowed to use proxies, <a href="#Page_432">432</a>
+  <ul class="nest">
+  <li>    should take oath, <a href="#Page_432">432</a></li>
+  </ul>
+</li>
+
+<li>  Officials not likely to resist temptation, <a href="#Page_436">436</a></li>
+
+<li>  Ohio canals, <a href="#Page_42">42</a></li>
+
+<li>  Oliver Cromwell, <a href="#Page_98">98</a></li>
+
+<li>  Operating expenses reduced, <a href="#Page_375">375</a><br /><br/></li>
+
+
+<li>  Pacific railroad, <a href="#Page_81">81</a>
+  <ul class="nest">
+  <li>    diplomacy, <a href="#Page_180">180</a></li>
+  <li>    prejudice, <a href="#Page_45">45</a></li>
+  </ul>
+</li>
+
+<li>  Pacific roads before boards of equalization, <a href="#Page_186">186</a>
+  <ul class="nest">
+  <li>    comparative cost, <a href="#Page_186">186</a></li>
+  <li>    cost to duplicate, <a href="#Page_185">185</a></li>
+  <li>    easy grade, <a href="#Page_185">185</a></li>
+  <li>    indebtedness to Government, <a href="#Page_184">184</a></li>
+  </ul>
+</li>
+
+<li>  Papin, constructed steamboat, <a href="#Page_47">47</a></li>
+
+<li>  Parliament compelled British railways, <a href="#Page_451">451</a></li>
+
+<li>  Party organs, <a href="#Page_221">221</a></li>
+
+<li>  Pass abuse, ruling of commission, <a href="#Page_362">362</a></li>
+
+<li>  Pass, purposes for which given, <a href="#Page_209">209</a>
+  <ul class="nest">
+  <li>    should be discarded, <a href="#Page_446">446</a></li>
+  </ul>
+</li>
+
+<li>  Passenger rate-making principle wrong, <a href="#Page_439">439</a></li>
+
+<li>  Passenger rates not reduced, <a href="#Page_375">375</a></li>
+
+<li>  Passenger rates too high, <a href="#Page_438">438</a></li>
+
+<li>  Passengers carried by railroads in the United States, <a href="#Page_292">292</a></li>
+
+<li>  Passengers, English third-class, <a href="#Page_270">270</a>
+  <ul class="nest">
+  <li>    killed and injured, <a href="#Page_450">450</a></li>
+  <li>    third-class, <a href="#Page_269">269</a></li>
+  </ul>
+</li>
+
+<li>  Passes, <a href="#Page_207">207</a>, <a href="#Page_208">208</a>
+  <ul class="nest">
+  <li>    plentiful, <a href="#Page_420">420</a></li>
+  <li>    to delegates, <a href="#Page_226">226</a></li>
+  </ul>
+</li>
+
+<li>  Pauper tickets for the clergy should be abolished, <a href="#Page_446">446</a></li>
+
+<li>  Pausanias shown well-kept road, <a href="#Page_19">19</a></li>
+
+<li>  Pedigree of a proverb, <a href="#Page_298">298</a></li>
+
+<li>  Peik vs. Chicago, <a href="#Page_213">213</a></li>
+
+<li>  Pennsylvania canals, <a href="#Page_41">41</a></li>
+
+<li>  Pennsylvania Central R. R. Co., <a href="#Page_171">171</a></li>
+
+<li>  People prone to believe, <a href="#Page_245">245</a></li>
+
+<li>  People's parties called into existence, <a href="#Page_404">404</a></li>
+
+<li>  People will not tolerate, <a href="#Page_397">397</a></li>
+
+<li>  Perquisites abolished, <a href="#Page_446">446</a></li>
+
+<li>  Persian Empire, magnitude, <a href="#Page_20">20</a></li>
+
+<li>  Peru, <a href="#Page_67">67</a>
+  <ul class="nest">
+  <li>    roads, <a href="#Page_35">35</a></li>
+  </ul>
+</li>
+
+<li>  Ph&oelig;nicians, <a href="#Page_90">90</a>
+  <ul class="nest">
+  <li>    built great roads,</li>
+  <li>    traders of antiquity, <a href="#Page_20">20</a></li>
+  <li>    first great maritime nation, <a href="#Page_19">19</a></li>
+  </ul>
+</li>
+
+<li>  Pipe line, <a href="#Page_116">116</a>, <a href="#Page_119">119</a></li>
+
+<li>  Plan capable of being improved, <a href="#Page_433">433</a></li>
+
+<li>  Policy of delay, <a href="#Page_381">381</a></li>
+
+<li>  Political campaigns in Iowa, <a href="#Page_339">339</a></li>
+
+<li>  Politicians as railroad employes, <a href="#Page_229">229</a></li>
+
+<li>  Pooling, <a href="#Page_261">261</a>, <a href="#Page_398">398</a>
+  <ul class="nest">
+  <li>    committee does not recommend prohibition, <a href="#Page_354">354</a></li>
+  <li>    contracts void, <a href="#Page_317">317</a></li>
+  <li>    grave effects of, <a href="#Page_268">268</a></li>
+  <li>    means of swelling railroad earnings, <a href="#Page_267">267</a></li>
+  <li>    should be prohibited, <a href="#Page_203">203</a></li>
+  </ul>
+</li>
+
+<li>  Pools, <a href="#Page_85">85</a>, <a href="#Page_194">194</a>, <a href="#Page_195">195</a>, <a href="#Page_251">251</a>, <a href="#Page_297">297</a>
+  <ul class="nest">
+  <li>    defended by Mr. Hadley, <a href="#Page_247">247</a></li>
+  <li>    defended by Mr. Morgan, <a href="#Page_250">250</a></li>
+  <li>    maintained in Iowa, <a href="#Page_336">336</a></li>
+  <li>    suppress competition, <a href="#Page_198">198</a></li>
+  </ul>
+</li>
+
+<li>  Poor's, H., opinion, <a href="#Page_187">187</a>
+  <ul class="nest">
+  <li>    estimate of cost, <a href="#Page_86">86</a>, <a href="#Page_173">173</a>, <a href="#Page_247">247</a></li>
+  </ul>
+</li>
+
+<li>  Poor's estimate of watered stock, <a href="#Page_186">186</a><span class='pagenum'><a name="Page_485" id="Page_485">[Pg 485]</a></span></li>
+
+<li>  Porter, Horace, <i>North American Review</i> article, <a href="#Page_290">290</a></li>
+
+<li>  Porter, John, <a href="#Page_104">104</a></li>
+
+<li>  Portugal, <a href="#Page_58">58</a></li>
+
+<li>  Portuguese, <a href="#Page_96">96</a></li>
+
+<li>  Postal communication, royal road from Susa to Sardes, <a href="#Page_21">21</a></li>
+
+<li>  Postal service not carried on by state, <a href="#Page_30">30</a></li>
+
+<li>  Potential value of interstate law, <a href="#Page_367">367</a></li>
+
+<li>  Powderly, T. V., <a href="#Page_449">449</a></li>
+
+<li>  Prediction of Mr. Walker, <a href="#Page_299">299</a></li>
+
+<li>  Predictions of railroad men, <a href="#Page_332">332</a></li>
+
+<li>  Press abuse, <a href="#Page_221">221</a></li>
+
+<li>  Press, efforts of railroads to control, <a href="#Page_271">271</a>
+  <ul class="nest">
+  <li>    servile to railroads, <a href="#Page_228">228</a></li>
+  </ul>
+</li>
+
+<li>  <i>Prima facie</i> rates, <a href="#Page_341">341</a></li>
+
+<li>  Prize worth contending for, <a href="#Page_380">380</a></li>
+
+<li>  Procopius, statement of, concerning Via Appia, <a href="#Page_27">27</a></li>
+
+<li>  Problem would be solved if abuses, <a href="#Page_297">297</a></li>
+
+<li>  Providence, <a href="#Page_136">136</a></li>
+
+<li>  Psammitichus cuts canal, <a href="#Page_33">33</a></li>
+
+<li>  Ptolemaic kings built canals, <a href="#Page_24">24</a></li>
+
+<li>  Public at mercy of managers, <a href="#Page_381">381</a>
+  <ul class="nest">
+  <li>    not unreasonable, <a href="#Page_450">450</a></li>
+  </ul>
+</li>
+
+<li>  Public opinion dormant, <a href="#Page_400">400</a>
+  <ul class="nest">
+  <li>    efforts to influence, <a href="#Page_273">273</a></li>
+  <li>    rules, <a href="#Page_400">400</a></li>
+  </ul>
+</li>
+
+<li>  Publicity advantageous, <a href="#Page_402">402</a></li>
+
+<li>  Purchasers of land made the donation, <a href="#Page_321">321</a><br /><br /></li>
+
+
+<li>  Question not settled until settled right, <a href="#Page_377">377</a><br /><br /></li>
+
+
+<li>  Railroad attorneys, <a href="#Page_214">214</a></li>
+
+<li>  Railroad-building after 1873, <a href="#Page_246">246</a></li>
+
+<li>  Railroad business not private, <a href="#Page_403">403</a>
+  <ul class="nest">
+  <li>    safe, <a href="#Page_436">436</a></li>
+  <li>    changes in Iowa, <a href="#Page_393">393</a></li>
+  <li>    company public agent, <a href="#Page_388">388</a></li>
+  <li>    competition, <a href="#Page_190">190</a>, <a href="#Page_338">338</a></li>
+  <li>    consolidation, <a href="#Page_82">82</a></li>
+  <li>    construction, <a href="#Page_287">287</a></li>
+  <li>    diplomate, <a href="#Page_228">228</a></li>
+  <li>    first line, <a href="#Page_77">77</a></li>
+  <li>    first steam engine, <a href="#Page_47">47</a></li>
+  <li>    improved highway, <a href="#Page_339">339</a></li>
+  <li>    like common road, <a href="#Page_391">391</a></li>
+  <li>    literature, <a href="#Page_231">231</a></li>
+  <li>    magazine literature, <a href="#Page_273">273</a></li>
+  <li>    managers do not do things by halves, <a href="#Page_223">223</a></li>
+  <li>    managers' opportunities to speculate, <a href="#Page_399">399</a></li>
+  <li>    men always oppose reductions of rates, <a href="#Page_283">283</a></li>
+  <li>    officials, <a href="#Page_257">257</a></li>
+  <li>    papers, <a href="#Page_340">340</a></li>
+  <li>    precursor of, <a href="#Page_46">46</a></li>
+  <li>    president's letters, <a href="#Page_229">229</a></li>
+  </ul>
+</li>
+
+<li>  Railroads, abandoned, <a href="#Page_79">79</a>
+  <ul class="nest">
+  <li>    bonded for more than cost, <a href="#Page_175">175</a></li>
+  <li>    capitalization of, <a href="#Page_86">86</a></li>
+  <li>    but few that do not pay, <a href="#Page_52">52</a></li>
+  <li>    cost to build, <a href="#Page_186">186</a></li>
+  <li>    earnings of, <a href="#Page_86">86</a></li>
+  <li>    in Asia, <a href="#Page_59">59</a></li>
+  <li>    in Austria, <a href="#Page_54">54</a></li>
+  <li>    in Belgium, <a href="#Page_56">56</a></li>
+  <li>    in Denmark, <a href="#Page_58">58</a></li>
+  <li>    in France, <a href="#Page_54">54</a></li>
+  <li>    in Germany, <a href="#Page_53">53</a></li>
+  <li>    in Granger States did not comply with law, <a href="#Page_246">246</a></li>
+  <li>    in Hungary, <a href="#Page_54">54</a></li>
+  <li>    in Italy, <a href="#Page_57">57</a></li>
+  <li>    in politics, <a href="#Page_205">205</a></li>
+  <li>    in Portugal, <a href="#Page_58">58</a></li>
+  <li>    in Russia, <a href="#Page_58">58</a></li>
+  <li>    in Switzerland, <a href="#Page_56">56</a></li>
+  <li>    in Spain, <a href="#Page_57">57</a></li>
+  <li>    in the Balkan Peninsula, <a href="#Page_59">59</a></li>
+  <li>    in the Scandinavian Peninsula, <a href="#Page_58">58</a></li>
+  <li>    in the United States, <a href="#Page_76">76</a></li>
+  <li>    in Turkey, <a href="#Page_60">60</a></li>
+  <li>    land grants to, <a href="#Page_80">80</a></li>
+  <li>    partake of two natures, <a href="#Page_392">392</a></li>
+  <li>    propitiate judiciary, <a href="#Page_211">211</a></li>
+  <li>    public tax collectors, <a href="#Page_396">396</a></li>
+  <li>    rebelled against Iowa law, <a href="#Page_344">344</a></li>
+  </ul>
+</li>
+
+<li>  Railroad stations, number of, <a href="#Page_190">190</a><span class='pagenum'><a name="Page_486" id="Page_486">[Pg 486]</a></span></li>
+
+<li>  Railroad tax, amount of, <a href="#Page_393">393</a></li>
+
+<li>  Railway acts, first in England, <a href="#Page_127">127</a></li>
+
+<li>  <i>Railway Age</i>, <a href="#Page_288">288</a></li>
+
+<li>  Railway benefits, <a href="#Page_231">231</a>
+  <ul class="nest">
+  <li>    employes in politics, <a href="#Page_308">308</a></li>
+  <li>    first act, <a href="#Page_49">49</a></li>
+  <li>    organs, <a href="#Page_229">229</a></li>
+  <li>    Pan-American, <a href="#Page_88">88</a></li>
+  </ul>
+</li>
+
+<li>  Railways, highways, <a href="#Page_13">13</a>
+  <ul class="nest">
+  <li>    weakened their arguments, <a href="#Page_237">237</a></li>
+  </ul>
+</li>
+
+<li>  Railway system, growth of, <a href="#Page_87">87</a>
+  <ul class="nest">
+  <li>    length of in the world, <a href="#Page_87">87</a></li>
+  </ul>
+</li>
+
+<li>  Rate-making a legislative and not a judicial function, <a href="#Page_332">332</a></li>
+
+<li>  Rate-making difficult, <a href="#Page_244">244</a>
+  <ul class="nest">
+  <li>    not a judicial question, <a href="#Page_378">378</a></li>
+  </ul>
+</li>
+
+<li>  Rate of 1870, <a href="#Page_248">248</a>, <a href="#Page_249">249</a>
+  <ul class="nest">
+  <li>    per ton per mile on Camden and Amboy Railroad, <a href="#Page_109">109</a></li>
+  <li>    question, <a href="#Page_370">370</a></li>
+  </ul>
+</li>
+
+<li>  Rates, fixing of by commission demanded, <a href="#Page_430">430</a>
+  <ul class="nest">
+  <li>    fundamental principles in making, <a href="#Page_385">385</a></li>
+  <li>    in France, <a href="#Page_293">293</a></li>
+  <li>    lower will prevail, <a href="#Page_256">256</a></li>
+  <li>    lower, reason for, <a href="#Page_374">374</a></li>
+  <li>    might be reduced, <a href="#Page_417">417</a></li>
+  <li>    on Milwaukee road, <a href="#Page_233">233</a></li>
+  <li>    reduced by zone tariff in Austria-Hungary, <a href="#Page_283">283</a></li>
+  <li>    should be lower here than in Europe, <a href="#Page_373">373</a></li>
+  <li>    should be referred to National and State boards, <a href="#Page_379">379</a></li>
+  <li>    under Granger laws, <a href="#Page_246">246</a></li>
+  <li>    under Wisconsin Granger laws, <a href="#Page_236">236</a></li>
+  <li>    what are reasonable, <a href="#Page_376">376</a></li>
+  </ul>
+</li>
+
+<li>  Reagan, John H., bill of, <a href="#Page_352">352</a></li>
+
+<li>  Reform demanded, <a href="#Page_295">295</a></li>
+
+<li>  Reasonable rates, <a href="#Page_376">376</a>, <a href="#Page_387">387</a>
+  <ul class="nest">
+  <li>    fixing of, <a href="#Page_361">361</a></li>
+  </ul>
+</li>
+
+<li>  Rebates Standard Oil Company, <a href="#Page_115">115</a></li>
+
+<li>  Redfield, J. F., <a href="#Page_312">312</a></li>
+
+<li>  Reduced rates on Government business in France, <a href="#Page_293">293</a>
+  <ul class="nest">
+  <li>    increased business, <a href="#Page_282">282</a></li>
+  </ul>
+</li>
+
+<li>  Refineries closed, <a href="#Page_116">116</a></li>
+
+<li>  Reforms needed, <a href="#Page_438">438</a></li>
+
+<li>  Remedies, <a href="#Page_389">389</a>
+  <ul class="nest">
+  <li>    proposed by committee, <a href="#Page_352">352</a></li>
+  </ul>
+</li>
+
+<li>  Remedy proposed by Mr. Hudson of doubtful efficiency, <a href="#Page_268">268</a></li>
+
+<li>  Reorganization of the M. &amp;. M. R. R., <a href="#Page_322">322</a></li>
+
+<li>  Report of Cullom committee, <a href="#Page_353">353</a></li>
+
+<li>  Reports of Interstate Commission, <a href="#Page_366">366</a></li>
+
+<li>  Revenues increased by Granger law, <a href="#Page_246">246</a>, <a href="#Page_332">332</a>
+  <ul class="nest">
+  <li>    uniform, <a href="#Page_437">437</a></li>
+  </ul>
+</li>
+
+<li>  Revolution and anarchy, <a href="#Page_299">299</a></li>
+
+<li>  Rhenish League, <a href="#Page_94">94</a></li>
+
+<li>  Ricks, Judge, <a href="#Page_449">449</a></li>
+
+<li>  Ridgeway, Jacob, <a href="#Page_106">106</a></li>
+
+<li>  Right of control rests upon firmer ground, <a href="#Page_318">318</a></li>
+
+<li>  Right of way, cost of, <a href="#Page_370">370</a></li>
+
+<li>  River and harbor improvements, <a href="#Page_453">453</a></li>
+
+<li>  Rivers, improvement of, <a href="#Page_44">44</a></li>
+
+<li>  Robber knights, <a href="#Page_93">93</a>, <a href="#Page_149">149</a></li>
+
+<li>  Robbers and feudal knights, depredations being tax, <a href="#Page_29">29</a></li>
+
+<li>  Rob Roy, <a href="#Page_258">258</a>
+  <ul class="nest">
+  <li>    policy, <a href="#Page_102">102</a></li>
+  </ul>
+</li>
+
+<li>  Robinson, H. P., railway in politics, <a href="#Page_308">308</a></li>
+
+<li>  Rocket, the, <a href="#Page_49">49</a></li>
+
+<li>  Rogers, Thorold, <a href="#Page_454">454</a></li>
+
+<li>  Roman Empire, after downfall roads destroyed, <a href="#Page_28">28</a></li>
+
+<li>  Roman postal service, <a href="#Page_27">27</a></li>
+
+<li>  Romans learned art of paving roads from Carthaginians, <a href="#Page_24">24</a></li>
+
+<li>  Rome, <a href="#Page_91">91</a>
+  <ul class="nest">
+  <li>    connecting link between antiquity and medi&aelig;valism, <a href="#Page_24">24</a></li>
+  <li>    extent, population, roads, etc., <a href="#Page_25">25</a></li>
+  </ul>
+</li>
+
+<li>  Roads built from proceeds of stocks and bonds, <a href="#Page_373">373</a></li>
+
+<li>  Roads built only when immediately profitable, <a href="#Page_328">328</a><span class='pagenum'><a name="Page_487" id="Page_487">[Pg 487]</a></span>
+  <ul class="nest">
+  <li>    early, <a href="#Page_37">37</a></li>
+  <li>    pioneers of enlightenment and political eminence, <a href="#Page_17">17</a></li>
+  <li>    subject to legislative control, <a href="#Page_327">327</a></li>
+  <li>    utility of good, recognized in colonial times, <a href="#Page_36">36</a></li>
+  </ul>
+</li>
+
+<li>  Russia, <a href="#Page_58">58</a>
+  <ul class="nest">
+  <li>    roads, <a href="#Page_35">35</a></li>
+  </ul>
+</li>
+
+<li>  Rutter, J. H., agent of New York Central, <a href="#Page_116">116</a><br /><br /></li>
+
+
+<li>  Salaries, American railways pay the highest, <a href="#Page_420">420</a></li>
+
+<li>  Saloon men politicians, <a href="#Page_366">366</a></li>
+
+<li>  San Domingo, <a href="#Page_71">71</a></li>
+
+<li>  San Salvador, <a href="#Page_70">70</a></li>
+
+<li>  Sanspareil, the, <a href="#Page_49">49</a></li>
+
+<li>  Savings under Government management, <a href="#Page_422">422</a></li>
+
+<li>  Scandinavian Peninsula, <a href="#Page_58">58</a></li>
+
+<li>  Scandinavian roads and canals, <a href="#Page_35">35</a></li>
+
+<li>  Schedule rates made by Iowa Commission, <a href="#Page_342">342</a></li>
+
+<li>  Schedules should be submitted to bureau, <a href="#Page_432">432</a></li>
+
+<li>  Scriptures, roads of the, <a href="#Page_22">22</a></li>
+
+<li>  Second-class passenger rates,
+  <ul class="nest">
+  <li>    why not successful, <a href="#Page_282">282</a></li>
+  </ul>
+</li>
+
+<li>  Secrecy a source of evils, <a href="#Page_402">402</a></li>
+
+<li>  Select committee, <a href="#Page_353">353</a></li>
+
+<li>  Select Committee on Transportation, <a href="#Page_351">351</a></li>
+
+<li>  Senate committee, <a href="#Page_172">172</a></li>
+
+<li>  Senators and Congressmen raise campaign funds, <a href="#Page_436">436</a></li>
+
+<li>  Servility of Interstate Commerce Commission, <a href="#Page_203">203</a></li>
+
+<li>  Sesostris cut canal, <a href="#Page_23">23</a></li>
+
+<li>  Shippers given favors, <a href="#Page_219">219</a>, <a href="#Page_221">221</a>
+  <ul class="nest">
+  <li>    powerless, <a href="#Page_382">382</a></li>
+  </ul>
+</li>
+
+<li>  Sioux City, <a href="#Page_325">325</a></li>
+
+<li>  Smyth Judge, <a href="#Page_229">229</a></li>
+
+<li>  South America, <a href="#Page_66">66</a></li>
+
+<li>  Southern Pacific Railroad Company, <a href="#Page_122">122</a></li>
+
+<li>  Southern pool, <a href="#Page_200">200</a></li>
+
+<li>  Southern Railway and Steamship Association, <a href="#Page_194">194</a></li>
+
+<li>  South Sea Company, <a href="#Page_303">303</a></li>
+
+<li>  Spain, <a href="#Page_57">57</a>
+  <ul class="nest">
+  <li>    canals, <a href="#Page_34">34</a></li>
+  </ul>
+</li>
+
+<li>  Spain and Gaul, roads of, <a href="#Page_27">27</a></li>
+
+<li>  Special arrangements, <a href="#Page_295">295</a></li>
+
+<li>  Special-car aristocracy, <a href="#Page_445">445</a></li>
+
+<li>  Special contracts, <a href="#Page_137">137</a>
+  <ul class="nest">
+  <li>    rate agreement, <a href="#Page_141">141</a></li>
+  <li>    rates, <a href="#Page_120">120</a>, <a href="#Page_138">138</a></li>
+  </ul>
+</li>
+
+<li>  Speed of railroads, <a href="#Page_279">279</a></li>
+
+<li>  Spelling, T. Carl, <a href="#Page_317">317</a></li>
+
+<li>  Speculative element should be removed, <a href="#Page_433">433</a></li>
+
+<li>  Speculators and gamblers, <a href="#Page_434">434</a></li>
+
+<li>  Spirit of Interstate Law, <a href="#Page_369">369</a></li>
+
+<li>  Standard Oil monopoly, <a href="#Page_114">114</a>
+  <ul class="nest">
+  <li>    discrimination, <a href="#Page_160">160</a>, <a href="#Page_362">362</a></li>
+  </ul>
+</li>
+
+<li>  State control encourages building, <a href="#Page_130">130</a>
+  <ul class="nest">
+  <li>    in Iowa asserted early, <a href="#Page_330">330</a></li>
+  <li>    Spelling on, <a href="#Page_318">318</a></li>
+  </ul>
+</li>
+
+<li>  State, duty of, <a href="#Page_391">391</a>
+  <ul class="nest">
+  <li>    management, advantages of, <a href="#Page_410">410</a></li>
+  <li>    ownership and regulation, <a href="#Page_409">409</a></li>
+  <li>    with private management, <a href="#Page_422">422</a></li>
+  <li>    railway system, <a href="#Page_277">277</a></li>
+  </ul>
+</li>
+
+<li>  States to cease futile attempts, <a href="#Page_299">299</a></li>
+
+<li>  Steam engine, first account, <a href="#Page_47">47</a></li>
+
+<li>  Stephenson, <a href="#Page_48">48</a></li>
+
+<li>  Stevens, Mr., <a href="#Page_107">107</a></li>
+
+<li>  Stewart, A. T., &amp; Co., <a href="#Page_138">138</a></li>
+
+<li>  Stickney, A. B., criticises President Mitchell's letter, <a href="#Page_23">23</a>
+  <ul class="nest">
+  <li>    his criticism of Iowa rates, <a href="#Page_343">343</a></li>
+  <li>    his error, <a href="#Page_256">256</a></li>
+  <li>    favors entire control by Nation, <a href="#Page_255">255</a></li>
+  <li>    on interstate law, <a href="#Page_255">255</a></li>
+  <li>    on national control, <a href="#Page_424">424</a></li>
+  </ul>
+</li>
+
+<li>  Stock a bonus, <a href="#Page_434">434</a></li>
+
+<li>  Stock and bond inflation, <a href="#Page_163">163</a></li>
+
+<li>  Stockholders, <a href="#Page_131">131</a>
+  <ul class="nest">
+  <li>    dissatisfied, <a href="#Page_112">112</a></li>
+  <li>    interested in publicity, <a href="#Page_403">403</a></li>
+  </ul>
+</li>
+
+<li>  Stock market controlled by few, <a href="#Page_308">308</a></li>
+
+<li>  Stocks, fluctuations of, <a href="#Page_435">435</a><span class='pagenum'><a name="Page_488" id="Page_488">[Pg 488]</a></span>
+  <ul class="nest">
+  <li>    should be paid in full, <a href="#Page_438">438</a></li>
+  <li>    shrinkage of value, <a href="#Page_284">284</a></li>
+  </ul>
+</li>
+
+<li>  Stockton, R. F., <a href="#Page_103">103</a></li>
+
+<li>  Stock watered 50 per cent., <a href="#Page_307">307</a></li>
+
+<li>  Stock-watering, <a href="#Page_164">164</a>, <a href="#Page_165">165</a>
+  <ul class="nest">
+  <li>    in America, <a href="#Page_270">270</a></li>
+  <li>    English, <a href="#Page_371">371</a></li>
+  </ul>
+</li>
+
+<li>  Stock wiped out, <a href="#Page_326">326</a></li>
+
+<li>  Stone, Governor, <a href="#Page_324">324</a></li>
+
+<li>  Subordinates have to suffer for superiors, <a href="#Page_203">203</a></li>
+
+<li>  Subsidies, <a href="#Page_329">329</a>
+  <ul class="nest">
+  <li>    to press, <a href="#Page_271">271</a></li>
+  </ul>
+</li>
+
+<li>  Sunday trains restricted, <a href="#Page_451">451</a></li>
+
+<li>  Superintendents responsible for uncivil subordinates, <a href="#Page_447">447</a></li>
+
+<li>  Supreme Court, <a href="#Page_215">215</a>, <a href="#Page_289">289</a></li>
+
+<li>  Switzerland, <a href="#Page_56">56</a><br /><br /></li>
+
+
+<li>  Taney, Justice, <a href="#Page_216">216</a></li>
+
+<li>  Tariff, a tax, <a href="#Page_135">135</a>
+  <ul class="nest">
+  <li>    prepared by sworn officials, <a href="#Page_381">381</a></li>
+  </ul>
+</li>
+
+<li>  Tariffs impeachable, <a href="#Page_382">382</a>
+  <ul class="nest">
+  <li>    official, should stand until proved unreasonable, <a href="#Page_382">382</a></li>
+  </ul>
+</li>
+
+<li>  Texas legislation, <a href="#Page_346">346</a></li>
+
+<li>  Text books, <a href="#Page_312">312</a></li>
+
+<li>  Thiers, M., <a href="#Page_51">51</a></li>
+
+<li>  Third-class passengers in Europe, <a href="#Page_443">443</a></li>
+
+<li>  <i>Times</i>, New York, <a href="#Page_340">340</a></li>
+
+<li>  Tipping, <a href="#Page_447">447</a></li>
+
+<li>  Traffic associations, <a href="#Page_149">149</a>, <a href="#Page_300">300</a></li>
+
+<li>  Trainmen should be allowed rest, <a href="#Page_451">451</a></li>
+
+<li>  Train mile earnings, <a href="#Page_269">269</a></li>
+
+<li>  Trains, number of, per mile, per annum, <a href="#Page_281">281</a>
+  <ul class="nest">
+  <li>    should connect, <a href="#Page_451">451</a></li>
+  </ul>
+</li>
+
+<li>  Transportation not a commodity, <a href="#Page_368">368</a></li>
+
+<li>  Trevithick, Richard, <a href="#Page_48">48</a></li>
+
+<li>  <i>Tribune</i>, Chicago, <a href="#Page_244">244</a>
+  <ul class="nest">
+  <li>    New York, <a href="#Page_340">340</a></li>
+  </ul>
+</li>
+
+<li>  Turkey, <a href="#Page_60">60</a></li>
+
+<li>  Turnpike, first American, <a href="#Page_37">37</a></li>
+
+<li>  Turnpikes in Great Britain, <a href="#Page_32">32</a></li>
+
+<li>  Turnpike tolls, <a href="#Page_396">396</a></li>
+
+<li>  Twelfth General Assembly, <a href="#Page_323">323</a>, <a href="#Page_330">330</a><br /><br /></li>
+
+
+<li>  Umpires, high-priced, <a href="#Page_420">420</a></li>
+
+<li>  Unanimous vote on Iowa law, <a href="#Page_341">341</a></li>
+
+<li>  Union Pacific, <a href="#Page_175">175</a></li>
+
+<li>  United States Bank, <a href="#Page_303">303</a>, <a href="#Page_366">366</a></li>
+
+<li>  Unscrupulous men attracted, <a href="#Page_390">390</a><br /><br /></li>
+
+
+<li>  Value of land grants, <a href="#Page_329">329</a></li>
+
+<li>  Vanderbilt, <a href="#Page_82">82</a>, <a href="#Page_452">452</a></li>
+
+<li>  Vedas, testimony of, <a href="#Page_18">18</a></li>
+
+<li>  Venetian council, <a href="#Page_253">253</a></li>
+
+<li>  Venezuela, <a href="#Page_66">66</a></li>
+
+<li>  Venice, <a href="#Page_93">93</a></li>
+
+<li>  Via Appia and other roads, <a href="#Page_26">26</a></li>
+
+<li>  Violations of law encouraged by courts, <a href="#Page_430">430</a><br /><br /></li>
+
+
+<li>  Wabash Railroad, <a href="#Page_212">212</a></li>
+
+<li>  Walker, A. F., <a href="#Page_294">294</a>, <a href="#Page_295">295</a>, <a href="#Page_311">311</a></li>
+
+<li>  Wall Street, defense of, <a href="#Page_340">340</a>
+  <ul class="nest">
+  <li>    managers, <a href="#Page_346">346</a></li>
+  <li>    method, <a href="#Page_302">302</a></li>
+  </ul>
+</li>
+
+<li>  War, <a href="#Page_399">399</a></li>
+
+<li>  War rule, <a href="#Page_331">331</a></li>
+
+<li>  Washington among the first to advocate internal improvements, <a href="#Page_39">39</a></li>
+
+<li>  Water courses as levelers, <a href="#Page_453">453</a></li>
+
+<li>  Watering stock, Mr. Jeans on, <a href="#Page_270">270</a>
+  <ul class="nest">
+  <li>    methods of, <a href="#Page_174">174</a></li>
+  </ul>
+</li>
+
+<li>  Water transportation, <a href="#Page_145">145</a></li>
+
+<li>  Watered stocks, <a href="#Page_172">172</a>
+  <ul class="nest">
+  <li>    Hadley on, <a href="#Page_247">247</a></li>
+  </ul>
+</li>
+
+<li>  Watt and Stephenson's inventions, <a href="#Page_126">126</a></li>
+
+<li>  Watt, James, <a href="#Page_47">47</a></li>
+
+<li>  Weak roads helped, <a href="#Page_344">344</a></li>
+
+<li>  Western candidates, <a href="#Page_224">224</a></li>
+
+<li>  Water classification, <a href="#Page_343">343</a></li>
+
+<li>  West Indies, <a href="#Page_71">71</a></li>
+
+<li>  Western politician outwitted, <a href="#Page_225">225</a>
+  <ul class="nest">
+  <li>    pool, failure of, <a href="#Page_200">200</a></li>
+  <li>    Traffic Association, <a href="#Page_299">299</a></li>
+  <li>    Union Telegraph Company, <a href="#Page_127">127</a></li>
+  </ul>
+</li>
+
+<li>  White House, the, <a href="#Page_215">215</a></li>
+
+<li>  Whitney, Asa, <a href="#Page_81">81</a></li>
+
+<li>  Whitney's cotton gin, <a href="#Page_231">231</a></li>
+
+<li>  Why Western people do not invest in railroad stocks, <a href="#Page_308">308</a></li>
+
+<li>  Wells, David A., <a href="#Page_374">374</a></li>
+
+<li>  Windom committee, <a href="#Page_351">351</a></li>
+
+<li>  Wisconsin Granger laws, <a href="#Page_331">331</a></li>
+
+<li>  Witnesses recusant, <a href="#Page_134">134</a></li>
+
+<li>  Wrecking roads, <a href="#Page_305">305</a></li>
+
+<li>  Wrought-iron rails patented, <a href="#Page_47">47</a></li>
+
+<li>  <i>World</i>, New York, <a href="#Page_340">340</a><br /><br /></li>
+
+
+<li>  Zone tariff, <a href="#Page_409">409</a>
+  <ul class="nest">
+  <li>    ridiculed, <a href="#Page_441">441</a></li>
+  </ul>
+</li>
+</ul>
+
+<br />
+<br />
+<br />
+<br />
+
+<hr />
+<br />
+<h2>A Standard Book on an Important Subject.</h2>
+<br />
+
+<div class="img">
+<img border="0" src="images/book.jpg" width="15%" alt="Book Cover" />
+</div>
+
+<h4>..THE..</h4>
+
+<h2>RAILROAD QUESTION.</h2>
+
+<br />
+<h3>A HISTORICAL AND PRACTICAL TREATISE</h3>
+
+<h3>ON</h3>
+
+<h3>RAILROADS, AND REMEDIES FOR THEIR ABUSES.</h3>
+
+<h3>BY</h3>
+
+<h2><i>William Larrabee</i>,</h2>
+
+<h4>Late Governor of Iowa.</h4>
+<br />
+
+<p class="cen">12mo, cloth extra, gilt top (488 pages), $1.50.</p>
+
+<hr style="width: 10%;" />
+
+<p>I.&mdash;History of Transportation. II.&mdash;The History of Railroads.
+III.&mdash;History of Railroads in the United States. IV.&mdash;Monopoly in
+Transportation. V.&mdash;Railroad Abuses. VI.&mdash;Stock and Bond Inflation.
+VII.&mdash;Combinations. VIII.&mdash;Railroads in Politics. IX., X.&mdash;Railroad
+Literature. XI.&mdash;Railroads and Railroad Legislation in Iowa. XII.&mdash;The
+Inter-State Commerce Act. XIII.&mdash;The Rate Question. XIV.&mdash;Remedies.
+Appendix:&mdash;Tables and Statistics. There is also a bibliography on the
+subject of Railroads, embracing ninety-eight titles, and a carefully
+prepared alphabetical index.</p>
+<br />
+
+<h3>Opinions of the Press.</h3>
+
+<p>"No work has ever before told so completely and clearly what the public
+want to know, and ought to know, about the secret management and true
+legal status of railroads. What journalists and magazine writers have
+studiously left unsaid, whether from lack of knowledge or from motives
+of 'revenue only,' Governor Larrabee has said, and said it
+well."&mdash;<i>Western Rural.</i></p>
+
+<p>"This book is evidently the result of long study and experience and much
+thinking. While it is radical in its treatment of the question, no side
+of it has been overlooked. It deserves careful reading by every person
+who is interested in this great question. No subject is more worthy the
+profound study of the statesman, the man of affairs, the scholar and the
+citizen. Surely all who are trying to understand the good and evil of
+railroads can turn to the pages of this book with the certain
+expectation of learning much both in the way of fact and
+suggestion."&mdash;<i>Bankers' Magazine.</i></p>
+
+<p>"Perhaps the most interesting chapters are the two in which the author
+reviews and criticises former publications on railway questions, and the
+one in which he reviews the various remedies which have been from time
+to time advanced for railway abuses. The book is concisely and clearly
+written."&mdash;<i>Engineering News.</i></p>
+
+<p>"Ex.-Gov. Larrabee of Iowa has written a highly meaty book on the
+railroad question. It is a topic he is well qualified to handle, viewing
+that he was no small part of the movement in former days to repress
+railroad abuses in the West, and particularly in his own
+State."&mdash;<i>Chicago Tribune.</i></p>
+
+<p>"A careful study of an important question, fortified by facts and
+figures which are both interesting and valuable."&mdash;<i>New York Recorder.</i></p>
+
+<p>Hon. Thomas M. Cooley says: "I have read the book with interest,
+especially that part which discusses State ownership and management. I
+have not before seen the side you advocate so clearly and so ably
+presented."</p>
+
+<p>"The book is the most valuable work yet issued on its subject."&mdash;<i>Des
+Moines News.</i></p>
+
+<p>"Mr. Larrabee is eminently fitted for the task to which he has set
+himself. He is not a mere theorizer. He brings to the discussion the
+ripe knowledge that comes from long experience in dealing with the
+railroad question, not only as a State Senator and Governor, but also
+'as a shipper and as a railroad promoter, owner and stockholder,' and
+likewise as 'a director, president and manager of a railroad company.'
+In his treatment of the railroad problem, moreover, Mr. Larrabee
+displays a breadth of view and an earnestness of purpose that must
+command respect even where they fail to carry conviction."&mdash;<i>Public
+Opinion.</i></p>
+
+<p>"It is devoid of the animus which usually enters into the works of the
+reformers, but on the contrary is written in admirable style, enhanced
+by happy anecdotes, and altogether is a much more readable book than one
+is accustomed to find upon so practical a question."&mdash;<i>Kansas City
+Journal.</i></p>
+
+<p>"It justifies a claim to a place among the standard books upon the
+railroad problem. It is particularly in those portions of the work which
+deal with the relations of the Government to the railroads and the
+solution of the difficulties that have arisen between the railways and
+the people that the experience of the author both in guiding and
+executing the railway legislation of Iowa comes into prominent
+play."&mdash;<i>Omaha Bee.</i></p>
+
+<p>"We commend the book to the careful reading of the railroad
+stockholder."&mdash;<i>Railroad Record and Investor's Guide.</i></p>
+
+<p>"A thoughtful volume, showing careful research and
+reflection."&mdash;<i>Chicago Inter-Ocean.</i></p>
+
+<p>"A most interesting, valuable and timely book. Every student of the
+subject will need to read it, and the popular vein of narrative makes it
+very interesting and instructive to the general reader."&mdash;<i>New England
+Home.</i></p>
+
+<p>"This work will present Governor Larrabee in a new and novel light
+before the public. Heretofore he has been known as the successful man of
+affairs and business; as the earnest and zealous legislator; as the
+persistent and vigorous executive; and now he comes as the laborious
+student upon a great economic and practical question who has aptly and
+clearly put his views into a book."&mdash;<i>Dubuque Herald.</i></p>
+
+<p>"A thorough treatise by an able mind. The authorities quoted are the
+best in print."&mdash;<i>Coming Nation.</i></p>
+
+<p>"By far the best work on the popular side of the railroad
+question."&mdash;<i>Gen. M. M. Trumbull in the Open Court.</i></p>
+
+<p>"Gov. Larrabee's book will rank among the greatest productions of the
+day on that question."&mdash;<i>Cedar Rapids Gazette.</i></p>
+
+<p>"The book is the result of extraordinary observation, great reading and
+careful study. * * * This element of completeness, of massing so much
+information between the covers of a book of ordinary size, makes it
+invaluable for reference. Of all the many books called out by the
+agitation of the railroad question, this one will be oftenest referred
+to, not so much for its opinions as for its stores of facts."&mdash;
+<i>Davenport Democrat.</i></p>
+
+<p>"Governor Larrabee has always been a careful and conscientious student
+of the railroad question, and in exposing the abuses to which the
+railroad system has committed itself he renders a service from which the
+public may derive great benefit."&mdash;<i>Good Roads.</i></p>
+
+<p>"The high character and well known reputation of the author will create
+a demand for this book, aside from the fact that it contains a vast
+amount of information as well as sound reasoning on the railroad
+question."&mdash;<i>American Journal of Politics.</i></p>
+
+<p>"The author's attitude, while firm, is by no means a sinister or
+fantastic one. He writes obviously from honest conviction, and he writes
+with skill and force."&mdash;<i>Philadelphia Press.</i></p>
+
+<p>"A temperate and instructive contribution to railroad
+literature."&mdash;<i>Chicago Times.</i></p>
+
+<p>"A mine of facts gathered by a man who has made a specialty of his
+subject and who is evidently in earnest in his desire to lessen the
+burdens of the American people."&mdash;<i>San Francisco Chronicle.</i></p>
+
+<p>"In point of authenticity the book is absolutely to be relied
+upon."&mdash;<i>St. Louis Post-Dispatch.</i></p>
+
+<p>"Governor Larrabee came to Iowa before any railroad had reached the
+Mississippi. Engaging in manufacturing, the inconveniences which he
+suffered from want of transportation facilities instilled liberal
+opinions concerning railroads. He made private donations to new roads
+and he advocated public aid to them. As a legislator he introduced a
+bill authorizing a 5 per cent. tax in aid of railroad construction. He
+believed that the common law and competition could be relied upon to
+correct abuses and to solve the rate problem. It has not been until
+since these efforts were made that he has become convinced, as he says
+in his preface, that 'where combination is possible competition is
+impossible.' The object of this work is explained to be to set forth the
+objections which lie against the management of railroads as private
+property. They are used by their managers for speculative purposes. They
+cannot perform their proper functions so long as they are used only for
+the interests of their stockholders. In order to serve their real
+purpose, 'they must become in fact what they are in theory, highways to
+be controlled by the Government as thoroughly and effectively as the
+common road, the turnpike and the ferry, the post-office and the
+custom-house.'"&mdash;<i>Council Bluffs Nonpareil.</i></p>
+
+
+<h3>"THE RAILROAD QUESTION"</h3>
+
+<p class="noin">
+<span style="margin-left: 11em;">may be ordered through any bookseller,</span><br />
+<span style="margin-left: 11em;">or will be sent by mail to any address,</span><br />
+<span style="margin-left: 11em;">on receipt of price, by the publishers.</span><br /></p>
+<br />
+<p class="cen"><span class="smcap">The Schulte Publishing Company,<br />
+334 dearborn street,<br />
+chicago.</span></p>
+<br />
+<br />
+<br />
+<br />
+
+<div class="tr">
+<p class="cen"><a name="TN" id="TN"></a>Transcriber's Note</p>
+<br />
+
+Some inconsistent hyphenation and spelling in
+the original document has been preserved.<br />
+<br />
+Roman numeral page numbers in the Appendix
+have been changed to Arabic numerals.<br />
+<br />
+Typographical errors corrected in the text:<br />
+<br />
+Page&nbsp;&nbsp;&nbsp;  13&nbsp;  Ackworth changed to Acworth<br />
+Page&nbsp;&nbsp;&nbsp;  25&nbsp;  Jerusalen changed to Jerusalem<br />
+Page&nbsp;&nbsp;&nbsp;  26&nbsp;  Brundusium changed to Brundisium<br />
+Page&nbsp;&nbsp;&nbsp;  27&nbsp;  af changed to of<br />
+Page&nbsp;&nbsp;&nbsp;  27&nbsp;  if changed to of<br />
+Page&nbsp;&nbsp;&nbsp;  29&nbsp;  Strasburg changed to Strasbourg<br />
+Page&nbsp;&nbsp;&nbsp;  37&nbsp;  Pittsburg changed to Pittsburgh<br />
+Page&nbsp;&nbsp;&nbsp;  45&nbsp;  subsides changed to subsidies<br />
+Page&nbsp;&nbsp;&nbsp;  65&nbsp;  Williamston changed to Williamstown<br />
+Page&nbsp;&nbsp;&nbsp;  70&nbsp;  Cabello changed to Caballo<br />
+Page&nbsp; 107&nbsp;  resolulution changed to resolution<br />
+Page&nbsp; 215&nbsp;  prejudiee changed to prejudice<br />
+Page&nbsp; 232&nbsp;  aquainted changed to acquainted<br />
+Page&nbsp; 236&nbsp;  omiting changed to omitting<br />
+Page&nbsp; 252&nbsp;  Bastile changed to Bastille<br />
+Page&nbsp; 266&nbsp;  possiple changed to possible<br />
+Page&nbsp; 342&nbsp;  Is changed to It<br />
+Page&nbsp; 346&nbsp;  their changed to there<br />
+Page&nbsp; 350&nbsp;  cammerce changed to commerce<br />
+Page&nbsp; 361&nbsp;  upan changed to upon<br />
+Page&nbsp; 368&nbsp;  iujustice changed to injustice<br />
+Page&nbsp; 373&nbsp;  Eurpean changed to European<br />
+Page&nbsp; 407&nbsp; despatcher changed to dispatcher<br />
+Page&nbsp; 408&nbsp;  despatcher changed to dispatcher<br />
+Page&nbsp; 417&nbsp;  Sante changed to Santa<br />
+Page&nbsp; 422&nbsp;  aquire changed to acquire<br />
+Page&nbsp; 478&nbsp;  reasonaable changed to reasonable<br />
+Page&nbsp; 482&nbsp;  addres changed to address<br />
+Page&nbsp; 485&nbsp;  Potuguese changed to Portuguese<br />
+</div>
+
+
+
+
+
+
+
+
+<pre>
+
+
+
+
+
+End of Project Gutenberg's The Railroad Question, by William Larrabee
+
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+The Project Gutenberg EBook of The Railroad Question, by William Larrabee
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+Title: The Railroad Question
+       A historical and practical treatise on railroads, and
+       remedies for their abuses
+
+Author: William Larrabee
+
+Release Date: July 2, 2009 [EBook #29294]
+
+Language: English
+
+Character set encoding: ASCII
+
+*** START OF THIS PROJECT GUTENBERG EBOOK THE RAILROAD QUESTION ***
+
+
+
+
+Produced by Peter Vachuska, Barbara Kosker, Chuck Greif
+and the Online Distributed Proofreading Team at
+https://www.pgdp.net
+
+
+
+
+
+
+
+
+
+
+The Railroad Question.
+
+
+
+
+  THE RAILROAD QUESTION
+
+
+  A HISTORICAL AND PRACTICAL TREATISE ON
+  RAILROADS, AND REMEDIES FOR THEIR ABUSES
+
+
+  BY
+
+  WILLIAM LARRABEE,
+  LATE GOVERNOR OF IOWA.
+
+
+  _Salus populi suprema lex._
+
+
+  NINTH EDITION.
+
+
+  CHICAGO:
+  THE SCHULTE PUBLISHING COMPANY.
+  1898.
+
+
+
+
+  Copyright, 1893,
+
+  BY
+
+  WILLIAM LARRABEE.
+
+
+
+
+
+PREFACE.
+
+
+The people of the United States are engaged in the solution of the
+railroad problem. The main question to be determined is: Shall the
+railroads be owned and operated as public or as private property? Shall
+these great arteries of commerce be owned and controlled by a few
+persons for their own private use and gain, or shall they be made
+highways to be kept under strict government control and to be open for
+the use of all for a fixed, equal and reasonable compensation?
+
+In a new and sparsely settled country which is rich in natural resources
+there may be no great danger in pursuing a _laissez-faire_ policy in
+governmental affairs, but as the population of a commonwealth becomes
+denser, the quickened strife for property and the growing complexity of
+social and industrial interests make an extension of the functions of
+the state absolutely necessary to secure protection to property and
+freedom to the individual.
+
+The American people have shown themselves capable of solving any
+political question yet presented to them, and the author has no doubt
+that with full information upon the subject they will find the proper
+solution of the railroad problem. The masses have an honest purpose and
+a keen sense of right and wrong. With them a question is not settled
+until it is settled right.
+
+It must be conceded that of all the great inventions of modern times
+none has contributed as much to the prosperity and happiness of mankind
+as the railroad.
+
+Our age is under lasting obligations to Watt and Stephenson and many
+other heroes of industry who have aided in bringing the railroad to its
+present state of perfection. Their genius is the product of our
+civilization, and their legacies should be shared by all the people to
+the greatest extent possible. An earnest desire to aid in attaining this
+end has prompted this contribution to the literature on the subject.
+
+The author is not an entire novice in railroad affairs. He has had
+experience as a shipper and as a railroad promoter, owner and
+stockholder, and has even had thrust upon him for a short time the
+responsibility of a director, president and manager of a railroad
+company. He has, moreover, had every opportunity to familiarize himself
+with the various phases of the subject during his more than twenty
+years' connection with active legislation.
+
+He came to the young State of Iowa before any railroad had reached the
+Mississippi. Engaging early in manufacturing, he suffered all the
+inconveniences of pioneer transportation, and his experience instilled
+into him liberal opinions concerning railroads and their promoters. He
+extended to them from the beginning all the assistance in his power,
+making not only private donations to new roads, but advocating also
+public aid upon the ground that railroads are public roads.
+
+As a member of the Iowa Senate he introduced and fathered the bill for
+the act enabling townships, incorporated towns and cities to vote a five
+per cent. tax in aid of railroad construction. He favored always such
+legislation as would most encourage the building of railroads, believing
+that with an increase of competitive lines the common law and
+competition could be relied upon to correct abuses and solve the rate
+problem. He has since become convinced of the falsity of this doctrine,
+and now realizes the truth of Stephenson's saying that where
+combination is possible competition is impossible.
+
+It is the object of this work to show that as long as the railroads are
+permitted to be managed as private property and are used by their
+managers for speculative purposes or other personal gain, or as long
+even as they are used with regard only for the interest of stockholders,
+they are not performing their proper functions; and that they will not
+serve their real purpose until they become in fact what they are in
+theory, highways to be controlled by the government as thoroughly and
+effectually as the common road, the turnpike and the ferry, or the
+post-office and the custom-house.
+
+This book has been written at such odd hours as the author could snatch
+from his time, which is largely occupied with other business. He is
+under obligations to many of our ministers and consuls abroad for
+statistics and other valuable information concerning foreign railroads,
+as well as to a number of personal friends for other assistance,
+consisting chiefly in rendering the railroad literature of Europe
+accessible to him.
+
+  WILLIAM LARRABEE.
+  _Clermont, Iowa, May, 1893._
+
+
+
+
+CONTENTS.
+
+
+     I. HISTORY OF TRANSPORTATION                        17
+
+    II. THE HISTORY OF RAILROADS                         46
+
+   III. HISTORY OF RAILROADS IN THE UNITED STATES        76
+
+    IV. MONOPOLY IN TRANSPORTATION                       90
+
+     V. RAILROAD ABUSES                                 124
+
+    VI. STOCK AND BOND INFLATION                        163
+
+   VII. COMBINATIONS                                    189
+
+  VIII. RAILROADS IN POLITICS                           205
+
+    IX. RAILROAD LITERATURE                             231
+
+     X. RAILROAD LITERATURE--_Continued_                273
+
+    XI. RAILROADS AND RAILROAD LEGISLATION IN IOWA      319
+
+   XII. THE INTERSTATE COMMERCE ACT                     349
+
+  XIII. THE RATE QUESTION                               370
+
+   XIV. REMEDIES                                        389
+
+  APPENDIX--TABLES AND STATISTICS                       459
+
+
+
+
+LIST OF AUTHORS AND WORKS CONSULTED AND QUOTED
+
+
+  ACWORTH, W. M.             The Railways of England
+
+  ADAMS, C. F., JR.          Railroads, Their Origin and Problems
+
+  ADAMS, H. C.               Public Debts
+
+  ADAMS, HENRY               History of the United States
+
+  ATKINSON, EDWARD           The Distribution of Products
+
+  BAGEHOT, WALTER            The English Constitution
+
+  BAKER, C. W.               Monopolies and the People
+
+  BEACH, CHARLES F., JR.     On Private Corporations
+
+  BLACKSTONE, W.             Commentaries on Laws of England
+
+  BOISTED, C. A.             The Interference Theory of Government
+
+  BOLLES, ALBERT S.          Bankers' Magazine
+
+  BONHAM, JOHN M.            Railway Secrecy and Trusts
+
+  BRYCE, JAMES               The American Commonwealth
+
+  BUCKLE, H. T.              History of Civilization of England
+
+  CAREY, H. C.               Principles of Social Science
+
+       "      "              Unity of Law
+
+  CARY, M.                   View of System of Pennsylvania Internal
+                               Improvements.
+
+  CLOUD, D. C.               Monopolies and the People
+
+  CLEWS, HENRY               Twenty-eight Years in Wall Street
+
+  COOLEY, THOMAS M.          Constitutional Limitations
+
+  CONGRESSIONAL RECORD.
+
+  COMPILATION OF ENGLISH LAWS UPON RAILWAYS.
+
+  DABNEY W. D.               The Public Regulation of Railways
+
+  DILLON, SIDNEY             North American Review
+
+  DORN, ALEXANDER            Aufgaben der Eisenbahnpolitik
+
+  DRAPER, J. W.              Intellectual Development of Europe
+
+  ENCYCLOPEDIA, AMERICAN.
+
+  ENCYCLOPEDIA BRITANNICA.
+
+  ENCYCLOPAeDIE (ROeLL'S) DES EISENBAHNWESENS, 1892.
+
+  FINDLAY, GEORGE            Working and Management of English Railways.
+
+  FINK, ALBERT               Cost of Railroad Transportation, etc.
+
+  FISHER, G. P.              Outlines of Universal History
+
+  FISK, JOHN                 American Political Ideas
+
+      "         "            Critical Period of American History
+
+  FOREIGN COMMERCE OF AMERICAN REPUBLICS AND COLONIES.
+
+  GRAHAM, WM.                Socialism Old and New
+
+  GIBBON, EDWARD             Decline and Fall of the Roman Empire
+
+  GREEN, JOHN K.             History of English People
+
+  GILPIN, WM.                The Cosmopolitan Railway
+
+  GRINNELL, J. B.            Men and Events of Forty Years
+
+  GUNTON, GEORGE             Wealth and Progress
+
+  GUIZOT, M.                 History of Civilization
+
+  HABOUR, THEODOR            Geschichte des Eisenbahnwesens
+
+  HADLEY, A. T.              Railway Transportation
+
+  HALL'S LIFE OF PRINCE BISMARCK.
+
+  HUDSON, J. T.              The Railways and the Republic
+
+  JEANS, J. S.               Railway Problems
+
+  JERVIS, JOHN B.            Railway Property
+
+  JEVONS, W. S.              Methods of Social Reform
+
+  KENT, JAMES                Commentaries on American Law
+
+  KIRKMAN, M. M.             Railway Rates and Government Control and other
+                               works.
+
+  LECKEY, W. E. H.           England in Eighteenth Century
+
+  LIEBER, FRANCIS            Political Ethics
+
+      "      "               Civil Liberty and Self-Government
+
+      "      "               Miscellaneous Essays
+
+  LODGE, H. C.               Life of General Washington
+
+  MARTINEAU, HARRIET History of England
+
+  MCMASTER, J. B.            History of People of United States
+
+  MACAULAY, T. B.            History of England
+
+  MOTLEY, J. L.              The Dutch Republic
+
+      "      "               The United Netherlands
+
+  PAINE, CHARLES             The Elements of Railroading
+
+  PATTEN, J. H.              Natural Resources of the United States
+
+  PEFFER, W. A.              The Farmer's Side
+
+  POOR'S RAILWAY MANUAL.
+
+  PORTER, HORACE             North American Review
+
+  RAWLINSON, GEORGE          Seven Great Monarchies
+
+  REDFIELD                   On Law of Railways
+
+  RECORDS OF CENTRAL IOWA TRAFFIC ASSOCIATION, 1886-1887.
+
+  RECORDS OF ASSOCIATION OF GENERAL FREIGHT AGENTS OF THE WEST.
+
+  RECORDS OF JOINT WESTERN CLASSIFICATION COMMITTEES.
+
+  REPORTS OF STATE BOARDS OF COMMISSIONERS.
+
+  REPORT OF HEPBURN COMMITTEE.
+
+  REPORTS OF UNITED STATES CENSUS.
+
+  REPORT OF WINDOM COMMITTEE.
+
+  REPORT OF BANKERS' ASSOCIATION, 1892.
+
+  REPORT OF CULLOM COMMITTEE.
+
+  ROEMER, JEAN               Origin of English People, etc.
+
+  REUBEAUX, F.               Der Weltverkehr und seine Mittel
+
+  RICHARDSON, D. N.          A Girdle Round the Earth
+
+  ROGERS, JAMES E. THOROLD   Economic Interpretation of History.
+
+  ROSCHER, WM.               Political Economy
+
+  SCHREIBER                  Die Preussischen Eisenbahnen
+
+  SCHURZ, CARL               Life of Henry Clay
+
+  SMITH, ADAM                Wealth of Nations
+
+  SPELLING, T. CARL          On Private Corporations
+
+  SPENCER, HERBERT           Synthetic Philosophy
+
+  STERN, SIMON.              Constitutional History and Political
+                               Development of the United States.
+
+  STICKNEY, A. B.            The Railroad Problem
+
+  STATISTIQUES DES CHEMINS DE FER DE L'EUROPE, 1882.
+
+  TAYLOR, HANNIS             Origin and Growth of the English Constitution.
+
+  THE AMERICAN RAILWAY.      Published by Charles Scribner's Sons.
+
+  VERSCHOYLE, REV. J.        History of Ancient Civilization
+
+  VON WEBER, M. M.           Privat-, Staats- und Reichs-Bahnen
+
+      "     "    "  "        Nationalitaet und Eisenbahn Politik
+
+  VON DER LEGEN, ALFRED      Die Nordamerikanischen Eisenbahnen.
+
+  WALKER, ALDACE F.          The Forum
+
+  WEEDEN, W. B.              Economic and Social History of New England.
+
+
+
+
+THE RAILROAD QUESTION.
+
+
+
+
+CHAPTER I.
+
+HISTORY of TRANSPORTATION.
+
+
+While the prosperity of a country depends largely upon its
+productiveness, the importance of proper facilities for the expeditious
+transportation and ready exchange of its various products can scarcely
+be overrated. The free circulation of commercial commodities is as
+essential to the welfare of a people as is the unimpaired circulation of
+the blood to the human organism.
+
+The interest taken by man in the improvement of the roads over which he
+must travel is one of the chief indications of civilization, and it
+might even be said that the condition of the roads of a country shows
+the degree of enlightenment which its people have reached. The trackless
+though very fertile regions of Central Africa have for thousands of
+years remained the seat of savages; but no nation that established a
+system of public thoroughfares through its dominion ever failed to make
+a distinguished figure in the theater of the world. There are some
+authors who go even so far as to call the high roads of commerce the
+pioneers of enlightenment and political eminence. It is true that as
+roads and canals developed the commerce of Eastern Asia and Europe, the
+attention of their people was turned to those objects which distinguish
+cultured nations and lead to political consequence among the powers of
+the world. The systems of roads and canals which we find among those
+ancients who achieved an advanced state of civilization might well put
+to shame the roads which disgraced not a few of the European states as
+late as the eighteenth century.
+
+Among the early nations of Asia of whose internal affairs we have any
+historic knowledge are the Hindoos, the Assyrians and Babylonians, the
+Phoenicians, the Persians and the Chinese.
+
+The wealth of India was proverbial long before the Christian era. She
+supplied Nineveh and Babylon, and later Greece and Rome, with steel,
+zinc, pearls, precious stones, cotton, silk, sugar-cane, ivory, indigo,
+pepper, cinnamon, incense and other commodities. If we accept the
+testimony of the Vedas, the religious books of the ancient Hindoos, a
+high degree of culture must have prevailed on the shores of the Ganges
+more than three thousand years ago. Highways were constructed by the
+state and connected the interior of the realm with the sea and the
+countries to the northeast and northwest. For this purpose forests were
+cleared, hills leveled, bridges built and tunnels dug. But the broad
+statesmanship of the Hindoo did not pause here. To administer to the
+convenience and comfort of the wayfaring public, and thus still more
+encourage travel and the exchange of commodities, the state proceeded to
+line these public roads with shade trees, to set out mile-stones, and to
+establish stations provided with shady seats of repose, and wells at
+which humane priests watered the thirsty beasts.
+
+At intervals along these routes were also found commodious and
+cleanly-kept inns to give shelter to the traveler at night. Buddha, the
+great religious reformer of the Hindoos, commended the roads and
+mountain passes of the country to the care of the pious, and the Greek
+geographers speak with high praise of the excellence of the public
+highways of Hindostan.
+
+Among the Babylonians and Assyrians agriculture, trade and commerce
+flourished at an almost equally remote period. The ancient inhabitants
+of Mesopotamia cultivated the soil with the aid of dikes and canals, and
+were experts in the manufacture of delicate fabrics, as linen, muslin
+and silk. To them is attributed the invention, or at least the
+perfection, of the cart, and the first use of domestic animals as beasts
+of burden. Their cities had well-built and commodious streets, and the
+roads which connected them with their dependencies aided to make them
+the busy marts of Southeastern Asia.
+
+During the later Babylonian Empire immense lakes were dug for retaining
+the water of the Euphrates, whence a net-work of canals distributed it
+over the plains to irrigate the land; and quays and breakwaters were
+constructed along the Persian Gulf for the encouragement of commerce.
+While highways among the Babylonians served the development of
+agriculture and the exchange of industrial commodities, they were
+constructed chiefly for strategic purposes by the more warlike
+Assyrians, whose many wars made a system of good roads a necessity. The
+Greek geographer Pausanias was shown a well-kept military road upon
+which Memnon was said to have marched with an Assyrian army from Susa to
+Troy to rescue King Priam. Traces of this road, called by the natives
+"Itaki Atabeck," may be seen to this day.
+
+The Phoenicians, who were the first of the great historic maritime
+nations of antiquity, occupied the narrow strip of territory between the
+mountains of Northern Palestine and the Mediterranean Sea. From their
+situation they learned to rely upon the sea as their principal highway.
+They transported to the islands of the Mediterranean as well as the
+coast of Northern Africa and Southern Europe heavy cargoes consisting of
+the product of their own skill and industry as well as of the manifold
+exports of the east. They sailed even beyond the "Pillars of Hercules"
+into the Atlantic Ocean and the North Sea. Through their hands "passed
+the gold and pearls of the east and the purple of Tyre, slaves, ivory,
+lion and panther skins from the interior of Africa, frankincense from
+Arabia, the linen of Egypt, the pottery and fine wares of Greece, the
+copper of Cyprus, the silver of Spain, tin from England, and iron from
+Elba."
+
+But while the Phoenicians for their commercial intercourse with other
+nations relied chiefly upon the sea, the great highway of nature, they
+neglected by no means road-building at home. They connected their great
+cities, Sidon and Tyre, by a coast road, which they extended in time as
+far as the Isthmus of Suez. They also established great commercial
+routes by which their merchants penetrated the interior of Europe and
+Asia. Caravan roads extended south to Arabia and east to Mesopotamia and
+Armenia, penetrating the whole Orient as far as India, and even the
+frontiers of China. The Phoenicians thus became the traders of
+antiquity, Tyre being the link between the east and the west.
+
+The Persian Empire, which under Darius stretched from east to west for a
+distance of 3,000 miles and comprised no less than two million square
+miles, with a population of seventy or eighty millions, had, with the
+exception of the Romans, perhaps the best system of roads known to
+ancient history. Indeed, it is doubtful whether without it such a vast
+empire, more than half as large as modern Europe, could have been held
+together. Each satrap, or prefect of a province, was obliged to make
+regular reports to the king, who was also kept informed by spies of what
+was taking place in every part of the empire. To aid the administration
+of the government, postal communication for the exclusive use of the
+king and his trusted servants connected the capital with the distant
+provinces. This postal service was, four or five centuries later,
+patterned after by the Romans. From Susa to Sardes led a royal road
+along which were erected caravansaries at certain intervals. Over this
+road, 1,700 miles long, the couriers of the king rode in six or seven
+days. Under Darius the roads of the empire were surveyed and distances
+marked by means of mile-stones, many of which are still found on the
+road which led from Ecbatana to Babylon. These roads crossed the wildest
+regions of that great monarchy. They connected the cities of Ionia with
+Sardes in Lydia, with Babylon and with the royal city of Susa; they led
+from Syria into Mesopotamia, from Ecbatana to Persepolis, from Armenia
+into Southern Persia, and thence to Bactria and India.
+
+The Chinese commenced road-building long before the Christian era. They
+graded the roadway and then covered the whole with hewn blocks of stone,
+carefully jointed and cemented together so that the entire surface
+presented a perfectly smooth plane. Such roads, although very costly to
+build, are almost indestructible by time. In China, as well as in
+several other countries of Asia, the executive power has always charged
+itself with both the construction and maintenance of roads and navigable
+canals. In the instructions which are given to the governors of the
+various provinces these objects, it is said, are constantly commanded to
+them, and the judgment which the court forms of the conduct of each is
+very much regulated by the attention which he appears to have paid to
+this part of his instructions. This solicitude of the sovereign for the
+internal thoroughfares is easily accounted for when it is considered
+that his revenue arises almost entirely from a land-tax, or rent, which
+rises and falls with the increase and decrease of the annual produce of
+the land. The greatest interest of the sovereign, his revenue, is
+therefore directly connected with the cultivation of the land, with the
+extent of its produce and its value. But in order to render that produce
+as great and as valuable as possible, it is necessary to procure for it
+as extensive a market as possible, and, consequently, to establish the
+freest, the easiest and the least expensive communication between all
+the different parts of the country, which can be done only by means of
+the best roads and the best navigable canals.
+
+In Africa the Egyptians and Carthaginians are the only nations of
+antiquity of which we have much historic knowledge. The former kept up a
+very active commerce not only with the south, but also with the tribes
+of Lydia on the west and with Palestine and the adjoining countries on
+the east. To facilitate commerce, they constructed and maintained a
+number of excellent highways leading in all directions. One of the most
+important among these was the old royal road on the coast of the
+Mediterranean Sea, or the "Road of the Philistines" of the Scriptures.
+This road crossed the Isthmus of Suez and led through the land of the
+Philistines and Samaria to Tyre and Sidon. Another road led, in a
+northwesterly direction, from Rameses to Pelusium. This, however,
+crossed marshes, lagoons and a whole system of canals, and was used only
+by travelers without baggage, while the Pharaohs, accompanied by their
+horses, chariots and troops, preferred the former road. A third road
+led from Coptos, on the Nile, to Berenice, on the Red Sea. There were
+between these two cities ten stations, about twenty-five miles apart
+from each other, where travelers might rest with their camels each day,
+after traveling all night, to avoid the heat. Still another road led
+from the town of Babylon, opposite Memphis, along the east bank of the
+Nile, into Nubia. Much of the commerce of Egypt in ancient times, as in
+our day, was conducted on the Nile and its canals. The boatman and the
+husbandman were, in fact, the founders of the gentle manners of the
+people who flourished four thousand years ago in the blessed valley of
+the Nile. There is one canal among the many which deserves special
+mention. It flowed from the Bitter Lakes into the Red Sea near the city
+of Arsinoe. It was first cut by Sesostris before the Trojan times, or,
+according to other writers, by the son of Psammitichus, who only began
+the work and then died. Darius I. set about to complete it, but gave up
+the undertaking when it was nearly finished, influenced by the erroneous
+opinion that the level of the Red Sea was higher than Egypt, and that if
+the whole of the intervening isthmus were cut through, the country would
+be overflowed by the sea. The Ptolemaic kings, however, did cut it
+through and placed locks upon the canal.
+
+Carthage was a Phoenician colony. The city was remarkable for its
+situation. It was surrounded by a very fertile territory and had a
+harbor deep enough for the anchorage of the largest vessels. Two long
+piers reached out into the sea, forming a double harbor, the outer for
+merchant ships and the inner for the navy. This city early became the
+head of a North African empire, and her fleets plied in all navigable
+waters known to antiquity. Her navy was the largest in the world, and
+in the sea-fight with Regulus comprised three hundred and fifty vessels,
+carrying one hundred and fifty thousand men. Though we have but meager
+accounts of the internal affairs of Carthage, there can be no doubt that
+much attention was given, both at home and in the colonies, to the
+construction of highways, which were distinguished for their solidity.
+It is said that the Romans learned from the Carthaginians the art of
+paving roads.
+
+European history began in Greece, the civilization of whose people
+passed to the Romans and from them to the other Aryan nations which have
+played an important role in the great historical drama of modern times.
+The physical features of the Balkan Peninsula were an important factor
+in the formation of the character of its inhabitants. The coast has a
+large number of well-protected bays, most of which form good harbors.
+Navigation and commerce were greatly stimulated in a country thus
+favored by Nature. Nearly all the principal cities of Hellas could be
+reached by ships, and the need of internal thoroughfares was but little
+felt. Nevertheless, public highways connected all of the larger towns
+with the national sanctuaries and oracles, as Olympia, the Isthmus,
+Delphi and Dodona. Athens, after the Persian wars the metropolis of
+Greece, was by the so-called Long Walls connected with the Piraeus, its
+harbor. This highway, protected by high walls built two hundred yards
+apart, was over four miles long, and enabled the Athenians, as long as
+they held the command of the sea, to bring supplies to their city, even
+when it was surrounded by an enemy on the land.
+
+Rome is the connecting link between antiquity and mediaevalism. The great
+empire sprang from a single city, whose power and dominion grew until
+it comprised every civilized nation living upon the three continents
+then known. Under the emperors, the Roman empire extended from the
+Atlantic to the Euphrates, a distance of more than three thousand miles,
+and from the Danube and the English Channel to the cataracts of the Nile
+and the Desert of Sahara. Its population was from eighty to one hundred
+and twenty millions. The empire was covered with a net-work of excellent
+roads, which stimulated, together with the safety and peace which
+followed the civil wars, traffic and intercourse between the different
+regions united under the imperial government. More than 50,000 miles of
+solidly constructed highways connected the various provinces of this
+vast realm. There was one great chain of communication of 4,080 Roman
+miles in length from the Wall of Antoninus in the northwest to Rome, and
+thence to Jerusalem, a southeastern point of the empire. There were
+several thousand miles of road in Italy alone. Rome's highways were
+constructed for the purpose of facilitating military movements, but the
+benefits which commerce derived from them cannot easily be
+overestimated. These military roads were usually laid out in straight
+lines from one station to another. Natural obstacles were frequently
+passed by means of very extensive works, as excavations, bridges, and,
+in some instances, long tunnels. The resources of the Roman Empire were
+almost inexhaustible, and no public expenditures were larger than those
+made on account of the construction of new roads. The fact that many of
+these roads have borne the traffic of almost two thousand years without
+material injury is abundant proof of the unsurpassed solidity of their
+construction. The Roman engineers always secured a firm bottom, which
+was done, when necessary, by ramming the ground with small stones, or
+fragments of brick. Upon this foundation was placed a pavement of large
+stones, which were firmly set in cement. These stones were sometimes
+square, but more frequently irregular. They were, however, always
+accurately fitted to each other. Many varieties of stone were used, but
+the preference was given to basalt. Where large blocks could not be
+conveniently obtained, small stones of hard quality were sometimes
+cemented together with lime, forming a kind of concrete, of which masses
+extending to a depth of several feet are still in existence. The
+strength of the pavements is illustrated by the fact that the substrata
+of some have been so completely washed away by water, without disturbing
+the surface, that a man may creep under the road from side to side while
+carriages pass over the pavement as over a bridge. The roads were
+generally raised above the ordinary surface of the ground. They
+frequently had two wagon-tracks, which were separated by a raised
+foot-path in the center, and blocks of stone at intervals, to enable
+travelers to mount on horseback. Furthermore, each mile was marked by a
+numbered post, the distance being counted from the gate of the wall of
+Servius. The mile-post was at first a roughly hewn stone, which in time
+was exchanged for a monument, especially in the vicinity of Rome and
+other large cities. The most celebrated road of Italy, which has always
+excited the admiration of the student of antiquity, was the Via Appia,
+the remains of which are still an object of wonder. It was first built
+from Rome to Capua by Appius Claudius Caecus in the fourth century before
+Christ, and was afterwards continued as far as Brundisium. It was broad
+enough for two carriages to pass each other, and was built of solid
+stone. The stones were hewn sharp and smooth, and their corners fitted
+into one another without the aid of any connecting material, so that,
+according to Procopius, the whole appeared to be one natural stone. Each
+side of the street had a high border for foot-passengers, on which were
+also placed alternately seats and mile-stones. In spite of its age and
+heavy traffic parts of this road are still in a good state of
+preservation. After the completion of the Via Appia similar roads were
+constructed, so that under the emperors seven great highways started
+from Rome, viz.: the Via Appia and Latina to the south; two, Valeria and
+Salaria, to the Adriatic; two, Cassia and Aurelia, to the northwest; and
+the Via AEmilia, serving for both banks of the Po.
+
+Nor were the provinces by any means neglected. During the last Punic war
+a paved road was constructed from Spain through Gaul to the Alps, and
+similar roads were afterwards built in every part of Spain and Gaul,
+through Illyricum, Macedonia and Thrace, to Constantinople, and along
+the Danube to its mouths on the Black Sea. So, likewise, were the
+islands of Sardinia, Corsica, Sicily and Great Britain crossed by them.
+It has justly been said that the roads of the Roman Empire, whose strong
+net-work enlaced the known world, were the architectural glory of its
+people. These military roads caused in the various parts of the empire a
+wonderful social and commercial revolution. They made it possible for
+civilization to penetrate into the most remote retreats and to conquer
+their inhabitants more completely than could Caesar at the head of his
+legions.
+
+The Romans also had an efficient postal service, which was first
+instituted by Augustus and greatly improved by Hadrian. The former, as
+Gibbon states in his "Decline and Fall of the Roman Empire," placed
+upon all roads leading away from the golden milestone of the Forum, at
+short distances, relays of young men to serve as couriers, and later
+provided vehicles to hurry information from the provinces. These posts
+facilitated communication through all parts of the empire, and while
+they were originally established in the interest of the government, they
+proved serviceable to individuals as well, for there is no doubt, that,
+together with the official dispatches, every courier carried private
+letters also.
+
+The expenses of the post were largely defrayed by the cities through
+which it passed, these cities being obliged to provide the stations
+established within their territories with the necessary stores. At the
+principal stations were found inns, where the proprietors were held
+responsible for injuries suffered by travelers while in their houses.
+
+The communication of the Roman Empire was scarcely less free and open by
+sea than it was by land. Italy has by nature few safe harbors, but the
+energy and industry of the Romans corrected the deficiencies of nature
+by the construction of several artificial ports.
+
+After the downfall of the Roman Empire its roads were either destroyed
+by the people through whose territories they led or by the conquerors,
+to render more difficult the approach of an enemy.
+
+Civilization and commerce greatly suffered through the downfall of Rome,
+and did not again revive until after the struggles of the Northern
+Christian races with the Southern and Eastern nations, which had become
+Mohammedan. The sixth and seventh centuries were the darkest in the
+history of Europe. Charlemagne, toward the close of the eighth century,
+caused many of the old Roman roads to be repaired and new ones to be
+constructed. He, as well as several of his immediate successors, made
+use of mounted messengers to send imperial mandates from one part of the
+realm to the other. The rulers of the succeeding centuries did not
+profit, however, by this example, and the roads of the empire again fell
+into decay. Moreover, the public safety was greatly impaired by robbers
+and feudal knights, whose depredations were so heavy a tax upon commerce
+as to greatly discourage it. Trade under these circumstances would have
+been entirely destroyed, had it not been for the merchants' unions which
+were formed by the larger cities for the protection of their interests.
+These organizations maintained the most important thoroughfares, and
+even furnished armed escorts to wayfaring merchants. Commerce thus
+flourished in, and commercial relations were kept up among, the cities
+immediate between Venice and Genoa, as well as the cities on the Rhine
+and Danube. Florence, Verona, Milan, Strasbourg, Mayence, Augsburg, Ulm,
+Ratisbon, Vienna and Nuremberg were flourishing marts, and through them
+flowed the currents of trade between the north and the south. Out of
+these commercial unions grew in time the Hanseatic League, which from
+the thirteenth to the fifteenth century controlled the commerce of the
+northern part of Europe on both the water and the land. The object of
+this league, which at the height of its power included eighty-five
+cities, was to protect its members against the feudal lords on the land
+and against pirates on the sea. Its power extended from Norway to
+Belgium and from England to Russia. In all the principal towns on the
+highways of commerce the flag of the Hansa floated over its counting
+houses. Wherever its influence reached, its members controlled roads,
+mines, agriculture and manufactures. It often dictated terms to kings,
+and almost succeeded in monopolizing the trade of Europe north of
+Italy.
+
+It is characteristic of the social and political condition of this time
+that the postal service was not carried on by the state, but was in the
+hands of the various municipalities, convents and universities. During
+the fifteenth and sixteenth centuries national power and national life
+made themselves felt, and with a change in the political system the
+system of communication and transportation changed also. Louis XI. of
+France took the first step toward making a nation of the French when he
+transferred the postal service from the cities and other feudal
+authorities to the state. Two or three centuries later, France obtained
+a national system of roads and canals. The idea was largely due to
+Colbert, the minister of Louis XIV. It was, however, not executed in
+detail until the middle of the last century. Many abuses grew up in
+connection with it, but on the whole it was probably the soundest and
+most efficient part of the French administration. A system of lines of
+communication, radiating from Paris, was constructed by skilled
+engineers, and placed under the supervision of men of talent, especially
+trained for the purpose at the Ecole des Fonts et Chaussees. The whole
+system was further improved by Napoleon, and has served as a basis for
+the present system of railroad supervision.
+
+The first artificial waterway constructed in France was the Languedoc
+Canal, connecting the Bay of Biscay with the Mediterranean. This
+gigantic work, designed by Riquet, was commenced in 1666, and completed
+in 1681. The canal is 148 miles long and its summit level is 600 feet
+above the sea, the works along its line embracing over one hundred locks
+and fifty aqueducts. A large number of canals have since been
+constructed, and France has at present over 4,000 miles of artificial
+waterways, or more than any other country of Europe.
+
+Nowhere else was the same completeness of organization possible. The
+regular mail service of Germany dates back to the year of 1516, when
+Emperor Maximilian established a postal route between Brussels and
+Vienna and made Francis Count of Taxis Imperial Postmaster-General. The
+postal service of the empire greatly improved up to the time of the
+Thirty Years' War, which completely demoralized it. After the war the
+individual states and free cities, usurping imperial prerogatives,
+established postal routes of their own and thereby crippled the national
+service. The same war also did great damage to the public thoroughfares,
+and the commercial and manufacturing interests of the German empire were
+until the end of the eighteenth century in a deplorable condition.
+Frederick the Great, recognizing the fact that the industrial paralysis
+of Germany was owing chiefly to its defective means of communication,
+commenced to construct turnpikes and canals in Prussia, and the minor
+German princes one by one imitated his example, until the Napoleonic
+wars again put an end to internal improvements. The good work was
+resumed, however, after the downfall of Napoleon, and in 1830 Germany
+was intercrossed by from three to four thousand miles of turnpike.
+
+In the Netherlands canals were constructed as early as the twelfth
+century. Being particularly well adapted to the flat country of Holland,
+they were rapidly extended until they connected all the cities, towns
+and villages of the country, and to a large extent took the place of
+roads. The largest canal of Holland is the one which connects the city
+of Amsterdam with the North Sea. It was constructed between the years
+of 1819 and 1825 at an expense of more than four million dollars. The
+city of Amsterdam owes to this canal its present commercial prosperity.
+
+Public roads and the state postal service are of comparatively recent
+origin in Great Britain. The first public postal route was established
+in 1635, during the reign of Charles I. In 1678 a public stage-coach
+route was established between Edinburgh and Glasgow. The distance is
+only forty-four miles, but the roads were so bad that, though the coach
+was drawn by six able horses, the journey took three days. It was
+considered a great improvement when in 1750 it could be completed in
+half the time originally required. In 1763 a mail-coach made only
+monthly trips between London and Edinburgh, eight long days being
+required for the journey, which to-day is made in less than twelve
+hours. The number of stage passengers between these two capitals
+averaged about twenty-five a month, and rose to fifty on extraordinary
+occasions. In those days coaches were very heavy and without springs,
+and travelers not unfrequently cut short their journeys for want of
+conveniences.
+
+Turnpikes in Great Britain do not even date as far back as
+stage-coaches. It is true the first turnpike act was passed as early as
+1653, but the system was not extensively adopted until a century later.
+Previous to that time the roads of England, such as they were, were
+maintained by parish and statute labor. In the latter half of the last
+century, under improved methods of construction, turnpike roads
+multiplied rapidly. Both roads and vehicles attained, previous to the
+advent of the railroads, such a degree of perfection that the
+stage-coach made the journey between London and Manchester, 178 miles,
+in 19 hours; between London and Liverpool, 203 miles, in less than 21
+hours; and between London and Holyhead, 261 miles, in less than 27
+hours.
+
+In spite of these improved facilities, the transportation of merchandise
+continued to be very expensive. Goods had to be conveyed from town to
+town by heavy wagons, and the cost of land-carriage between Manchester
+and Liverpool, a distance of thirty miles, was at times as high as forty
+shillings per ton.
+
+The various disadvantages of land transportation directed, toward the
+middle of the last century, the attention of the British people to the
+importance of a system of canals. They realized that these water
+highways would open an easier and cheaper communication between distant
+parts of the country, thus enabling manufacturers to collect their
+materials and fuel from remote districts with less labor and expense,
+and to convey their goods to a more distant and more profitable market.
+It would also facilitate the conveyance of farm produce to a greater
+distance and would thereby benefit both the producer and consumer. The
+canal era was formally inaugurated in 1761, when the Duke of Bridgewater
+presented to Parliament a petition for a bill to construct the canal
+which has since borne his name. The canal was commenced in 1767 and was
+completed in 1772. The next forty years were a period of great activity
+in canal building, but it was left to private enterprise, with very
+little aid from the government. Over a hundred canal acts were passed by
+Parliament before the year 1800. The largest canal of the British Isles
+is the Caledonian, extending from Inverness to Fort William, a distance
+of sixty-three miles. It was commenced in 1803 and completed in 1847,
+and cost L1,256,000. Other canals of importance are the Great Canal,
+which connects the North Sea with the Atlantic Ocean, and the Grand
+Function Canal, which is over one hundred miles long and connects most
+of the water-ways of central England with the Thames River. It is
+estimated that there were over 2,200 miles of navigable canals in Great
+Britain before the introduction of railroads.
+
+Canal-building in Spain dates back to the beginning of the sixteenth
+century, when Charles V. built the Imperial Canal of Aragon, which is
+over sixty miles long. The political and commercial decline of the
+country during the seventeenth and eighteenth centuries, however,
+brought the development of her highways to a standstill, and, with the
+exception of Turkey, probably no European country has at the present
+time more deficient transportation facilities than Spain.
+
+The comparatively high state of civilization which existed in the
+Italian cities during the middle ages, their commercial and industrial
+thrift and the importance of Rome as the metropolis of the Catholic
+Church combined to maintain many of the excellent ancient highways of
+Italy. A number of canals were built in Northern Italy as early as the
+fifteenth century, and it is claimed by some writers that locks were
+first used on the Milanese canals in 1497. But while public
+thoroughfares have always been well maintained in Northern Italy and
+even as far south as Naples, they were during the past two or three
+centuries permitted to greatly deteriorate in the southern part of the
+peninsula, to the great detriment of both agriculture and commerce. The
+condition of the large Italian islands is still more lamentable, Sicily
+and Sardinia being almost entirely devoid of roads. She that was the
+granary of ancient Rome to-day scarcely produces enough grain to supply
+her own people.
+
+Denmark and the Scandinavian peninsula had a good system of highways
+long before the railroad era. Among the many excellent canals of Sweden
+may be mentioned the Goeta Canal, which was commenced by Charles XII. in
+the early part of the last century, but was not entirely completed until
+1832. It is, inclusive of the lakes, 118 miles long, and its
+construction cost $3,750,000, three-fifths of which was contributed by
+the state. This canal connects the Baltic Sea with Lake Wener, as well
+as, through the Goeta-Elf, with the North Sea.
+
+Next to Turkey and Spain, no country of Europe has been as slow to
+appreciate the advantages of a system of highways as Russia. At the
+beginning of the nineteenth century the vast empire of the Czar had but
+a few roads connecting its principal cities, and these were almost
+impassable in the spring and fall. Much progress has, however, been made
+since then, and at present Russia has over 75,000 miles of wagon-road
+and artificial waterway, and 19,000 miles of railroad. A road has been
+built through Siberia, extending from the Ural Mountains to the city of
+Jakutsk on the Lena and sending out many branch roads north and south.
+The development of Russia's resources has kept pace with that of her
+system of highways, and the agricultural and mineral products of that
+country are in the markets of the world constantly gaining ground in
+their competition with the products of Western Europe and America.
+
+Passing now to the Western Hemisphere, we find that in ancient Peru the
+Incas built great roads, the remains of which still attest their
+magnificence. Probably the most remarkable were the two which extended
+from Quito to Cuzco, and thence on toward Chile, one passing over the
+great Plateau, the other following the coast, Humboldt, in his "Aspects
+of Nature," says of this mountain road: "But what above all things
+relieves the severe aspect of the deserts of the Cordilleras are the
+remains, as marvelous as unexpected, of a gigantic road, the work of the
+Incas. In the pass of the Andes between Mausi and Loja we found on the
+plain of Puttal much difficulty in making a way for the mules over a
+marshy piece of ground, while for more than a German mile our sight
+continually rested on the superb remains of a paved road of the Incas,
+twenty feet wide, which we marked resting on its deep foundations, and
+paved with well-cut, dark porphyritic stone. This road was wonderful and
+does not fall behind the most imposing Roman ways which I have seen in
+France, Spain and Italy. By barometrical observation I found that this
+colossal work was at an elevation of 12,440 feet." The length of this
+road, of which only parts remain, is variously estimated at from 1,500
+to 2,000 miles. It was built of stone and was, in some parts at least,
+covered with a bituminous cement, which time had made harder than the
+stone itself. All the difficulties which a mountainous country presents
+to the construction of roads were here overcome. Suspension bridges led
+over mountain torrents, stairways cut in the rock made possible the
+climbing of steep precipices, and mounds of solid masonry facilitated
+the crossing of ravines. Under the rule of the Spaniards the roads of
+the Incas went to ruin. In fact, throughout South America but little, if
+anything, was done by the mother country to aid transportation.
+
+North America, or at least that part of it which was settled by the
+Anglo-Saxon race, fared much better in this respect. The great utility
+of good roads was universally recognized even in the colonial times, but
+the scarcity of capital, the great extent of territory as compared with
+the population, and the want of harmonious action among the various
+colonies, delayed extensive road and canal building until after the
+establishment of the Union. Mistaken local interests but too often
+wrecked well-advanced plans, and what road-building was done during the
+colonial times was almost entirely left to individual exertion, without
+any direct aid from the government.
+
+The first American turnpike was built in Pennsylvania in 1790. From
+there the system extended into New York and Southern New England. Up to
+1822 more than six million dollars had been expended in Pennsylvania for
+turnpikes, one-third of which sum, or over $1,000 a mile, had been
+contributed by the commonwealth.
+
+In 1800 three wagon-roads connected the Atlantic coast with the country
+west of the Alleghanies, one leading from Philadelphia to Pittsburgh,
+one from the Potomac to the Monongahela, and a third passed through
+Virginia to Knoxville, in Tennessee. Much as was done during this period
+for the improvement of the roads, stage-coach travel remained for years
+comparatively slow. In 1792 Mr. Jefferson, then Secretary of State,
+wrote to the Postmaster-General to know if the post, which was then
+carried at the rate of fifty miles a day, could not be expedited to one
+hundred. Even this latter rate was considered slow on the great
+post-roads forty years later. In the year 1800 one general mail-route
+was extended from Maine to Georgia, the trip being made in twenty days.
+From Philadelphia a line went to Lexington in sixteen and to Nashville
+in twenty-two days. The government of the United States, appreciating
+the importance, for military purposes, of good roads leading to the
+frontiers, commenced the construction of national, or military, roads.
+A road was thus built from Baltimore through Cincinnati to St. Louis,
+and another from Bangor to Houlton, in Maine. In 1807 Albert Gallatin,
+Secretary of the Treasury, advocated the extensive construction of
+public roads and canals by the general government. Mr. Gallatin took the
+ground that the inconveniences, complaints, and perhaps dangers,
+resulting from a vast extent of territory cannot otherwise be radically
+removed than by opening speedy and easy communications through all its
+parts; that good roads and canals would shorten distances, facilitate
+commercial and personal intercourse, and unite by a still more intimate
+community of interests the most remote quarters of the United States,
+and that no other single operation within the power of the government
+could more effectually tend to strengthen and perpetuate that union
+which secured external independence, domestic peace and internal
+liberty. The principal improvements recommended by Mr. Gallatin were the
+following:
+
+1. Canals opening an inland navigation from Massachusetts to North
+Carolina.
+
+2. Improvement of the navigation of the four great Atlantic rivers,
+including canals parallel to them.
+
+3. Great inland navigation by canals from the North River to Lake
+Ontario.
+
+4. Inland navigation from the North River to Lake Champlain.
+
+5. Canal around the Falls and Rapids of Niagara.
+
+6. A great turnpike road from Maine to Georgia, along the whole extent
+of the Atlantic sea-coast.
+
+7. Four turnpike roads from the four great Atlantic rivers across the
+mountains to the four corresponding Western rivers.
+
+8. Improvement of the roads to Detroit, St. Louis and New Orleans.
+
+Mr. Gallatin also recommended that a sufficient number of local
+improvements, consisting either of roads or canals, be undertaken so as
+to do substantial justice to all parts of the country. The expenditure
+necessary for these improvements was estimated at twenty million
+dollars. Local jealousy and State rights prejudice practically defeated
+this movement, the Cumberland road, or National Pike, being the only
+result of any importance. The failure of the government to provide the
+country with adequate roads left the construction of turnpike roads to
+private enterprise, and these roads, before the general introduction of
+railroads, often yielded much profit to capitalists. Great as were the
+conveniences afforded by the turnpike, they were entirely inadequate for
+the development of the resources of the interior of the country. The
+products of a forest or a mine could not be transported upon them to any
+great extent. The crossing of a single water-shed, owing to the
+necessity for largely increased motive power, would often materially
+decrease the value of the goods to be transported.
+
+These drawbacks of land transportation directed, toward the close of the
+last century, the attention of the people of the United States to the
+necessity of providing for a system of canals that should bind together
+the various parts of their extended country in the interest of commerce.
+General Washington was among the first to urge upon his countrymen the
+introduction of this great highway of interstate traffic, although but
+little was done in this direction until after the War of 1812. The
+people of New York had from an early period of the settlement of their
+State been impressed with the importance of connecting the Hudson with
+the Western lakes. In 1768 the provincial legislature discussed this
+subject, but the political agitations of the times and the following
+revolutionary struggle arrested further proceedings. After the war the
+project was frequently brought before the legislature, but nothing was
+done until 1808, when the assembly appointed a committee to investigate
+the subject and to solicit the cooperation of the general government, if
+the project should be found practicable. The report of the committee
+concerning the practicability of the undertaking was in every respect
+favorable, and in 1810 the legislature provided for a survey of the
+entire route from the Hudson River to Lake Erie. The survey was made,
+but, the expected aid from the national government not being
+forthcoming, the matter rested until after the war with England. In 1816
+a new board of commissioners was appointed, and the following year an
+act was passed providing for a system of internal improvements in the
+State. On the 4th day of July next the excavation of the Erie Canal was
+commenced, and on the 26th of October, 1825, the first boat passed from
+Lake Erie to the Hudson. The canal was 378 miles long and four feet
+deep. It had a width of 40 feet at the surface and 28 feet on the
+bottom, and carried boats of 76 tons burden. Owing to the rapid increase
+of trade, the capacity of the canal was found inadequate within ten
+years after its opening, and in 1835 measures were taken to enlarge it
+to a width of 70 and 56 feet by a depth of seven feet, thus allowing the
+passage of boats of 240 tons. The total length of the canal was,
+however, subsequently shortened 12-1/2 miles, making its present length
+365-1/2 miles. This enlargement was completed in 1862, and cost the
+State over $7,000,000, making the total cost of the canal about
+$50,000,000. New York has, inclusive of branches, some ten other canals
+in operation, among them the Champlain Canal, extending from the head of
+Lake Champlain to its junction with the Erie Canal at Waterford; the
+Oswego Canal, from Lake Ontario at the city of Oswego to the Erie Canal
+at Syracuse; the Black River Canal, from Rome to Lyon Falls; the Cayuga
+and Seneca canals, extending from the Erie Canal to the Seneca and
+Cayuga lakes. The State has expended for the construction of canals not
+less than $70,000,000.
+
+Canal-building in the State of Pennsylvania commenced about the time
+that the original Erie Canal was completed in New York. In 1824 the
+legislature authorized the appointment of commissioners to explore canal
+routes from Philadelphia to Pittsburgh and the West. A year later
+surveys were authorized to be made from Philadelphia to Pittsburgh, from
+Allegheny to Erie, from Philadelphia to the northern boundary of the
+State, and also south to the Potomac River. The construction of the main
+lines of communication between the east and the west and the coal fields
+in the north was soon commenced. Large loans were repeatedly made, and
+the work was vigorously prosecuted. In 1834 Pennsylvania had 589 miles
+of State canals, among them the Central Division Canal, 172 miles long,
+and the Western Division Canal, 104 miles long. Public opinion strongly
+favored an extended system of internal improvements, and it was believed
+that these water-ways would soon become a source of revenue to the
+State. These expectations might have been realized had the State carried
+on enterprises on a less extensive and more economical basis. In 1840
+the financial condition of the State had become such that canal-building
+had to be abandoned. The amount expended by the State of Pennsylvania
+for canals, including the Columbia Railroad, was about $40,000,000,
+while the difference between net earnings and interest paid by the State
+up to that time is estimated at $30,000,000. In 1857 and 1858 these
+works were sold to the Pennsylvania Railroad Company and the Sunbury and
+Erie Railway Company for $11,375,000, or about one-sixth of their cost
+to the State.
+
+In Ohio the legislature authorized the survey of a canal from Lake Erie
+to the Ohio River. In 1825 an act was passed providing for the
+construction of the Ohio Canal and a number of feeders. In 1831 the
+canal was in operation from Cleveland to Newark, a distance of 176
+miles, and the whole system was finished in 1833.
+
+The State of Illinois completed in 1848 the Illinois and Michigan Canal,
+connecting Chicago with La Salle on the Illinois River. This canal is
+102 miles long, 60 feet wide and six feet deep. The construction by the
+general government of the Hennepin Ship Canal, connecting the
+Mississippi with Lake Michigan, has long been agitated in the Northwest.
+Such a canal would be one of the most important channels of commerce in
+the country, and it is to be hoped that this great project will be
+completed at no distant day.
+
+We have besides in the United States a large number of canals that were
+constructed, and are still operated, by private companies, as the
+Delaware and Hudson in New York and Pennsylvania, the Schuylkill, Lehigh
+and Union canals in Pennsylvania, the Morris Canal in New Jersey, the
+Chesapeake and Ohio and Maryland, etc. A large number of canals, some
+public and others private property, have since the construction of
+railroads been abandoned. Thus in New York 356 miles of canals, costing
+$10,235,000; in Pennsylvania 477 miles, costing $12,745,000; in Ohio 205
+miles, costing $3,000,000; in Indiana 379 miles, costing $6,325,000, are
+no longer in use. All the canals that were ever built in New England
+have likewise been abandoned for commercial purposes.
+
+Nor was Canada slow in realizing the advantages which a system of canals
+connecting the great lakes with the Atlantic Ocean promised to give her.
+The construction of the Welland and St. Lawrence canals made it possible
+for vessels to clear from Chicago direct for Liverpool, and this has to
+a considerable extent diverted grain shipments to Montreal, giving the
+Canadian dealers a decided advantage in this traffic.
+
+It is a strange fact that, at least in this country, the zenith of the
+canal-building era is found in the decade following the invention of the
+steam railroad. For many years it was not believed that under ordinary
+circumstances the iron horse could ever compete with the canal boat in
+rates. The most sagacious business men had unlimited faith in the
+destiny of the canal as a prime commercial factor and invested largely
+in canal stocks. To many these investments proved a disappointment. The
+marvelous improvements in locomotives and other rolling stock, the
+unprecedented reductions in the prices of iron and steel, and above all
+the fact that in our climate canal carriage is unavailable during five
+months of the year, gave the railroads a decided advantage in their
+competition with canal transportation. There can be no doubt, however,
+that the presence of this competition was one of the chief causes of the
+great reduction of railroad rates on through routes. In this respect
+alone the canals have accomplished a very important mission. In the
+transportation of many of the raw products of the soil and the mine
+canals still compete successfully with the railroads, and it is still an
+open question whether future inventions may not enable them to regain
+lost ground in the carriage of other goods. It would certainly be a
+short-sighted policy for our people to discourage the construction of
+new canals.
+
+For the improvement of navigable rivers, appropriations have been made
+by Congress ever since the establishment of our national government, and
+these appropriations now amount to millions of dollars annually. Since
+the introduction of railroads the usefulness of these national highways
+of commerce has ceased to depend upon the tonnage carried upon them, but
+the influence which they exert upon the cost of transportation is so
+great that it is not likely that the policy of making annual
+appropriations for the improvement of these water ways will be abandoned
+by the American people for many years to come.
+
+There has recently been a strong agitation in some portions of the
+United States in favor of extending government aid to the Nicaragua Ship
+Canal, and there seem to be indeed many arguments in favor of such a
+policy. President Harrison said in his annual message to Congress in
+December, 1891:
+
+      "The annual report of the Maritime Canal Company of
+      Nicaragua shows that much costly and necessary preparatory
+      work has been done during the past year in the construction
+      of shops, railroad tracks and harbor piers and breakwaters,
+      and that the work of canal construction has made some
+      progress. I deem it to be a matter of the highest concern to
+      the United States that this canal, connecting the waters of
+      the Atlantic and Pacific oceans, and giving to us a short
+      water communication between our ports upon those two great
+      seas, should be speedily constructed, and at the smallest
+      practical limit of cost. The gain in freights to the people
+      and the direct saving to the government of the United
+      States in the use of its naval vessels would pay the entire
+      cost of the work within a short series of years. The report
+      of the Secretary of the Navy shows the saving in our naval
+      expenditures which would result. The Senator from Alabama,
+      Mr. Morgan, in his argument upon this subject before the
+      Senate of the last session, did not overestimate the
+      importance of the work when he said that 'The canal is the
+      most important subject now connected with the commercial
+      growth and progress of the United States.'"
+
+And in his message of 1892 that:
+
+      "It is impossible to overestimate the value from every
+      standpoint of this great enterprise, and I hope that there
+      will be time, even in this Congress, to give it an impetus
+      that will insure the early completion of the canal and
+      secure to the United States its proper relation to it when
+      completed."
+
+It is sincerely to be hoped that the people of the United States can be
+convinced of the advisability of extending government aid to this
+enterprise. It must be admitted that the experience of our government
+with the Pacific railroads has created a strong prejudice among the
+masses against such subsidies as were granted to those corporations, but
+it is probable, with the people on the alert, that Congress would not
+again permit great impositions to be practiced against the government.
+When the great advantages to be derived by the people of the United
+States from the use of this canal and the small outlay required are
+considered, it would seem to be a wise policy for our government at once
+to take such steps as are necessary to secure the early completion and
+the future control of this great international highway.
+
+
+
+
+CHAPTER II.
+
+THE HISTORY OF RAILROADS.
+
+
+In making inquiry into those inventions and improvements which were the
+precursors of the modern railroad, we meet early the desire to render
+the movement of wagons easier by a smooth roadway. Traces of this may be
+found even in ancient times. The Romans constructed tracks consisting of
+two lines of cut stones, and in the older Italian cities stone tracks
+may still be seen in the streets, corresponding to wagon tracks, and
+evidently designed for the purpose of rendering the movement of the
+wheels easier.
+
+The first rail tracks of which we have any knowledge were constructed at
+the end of the sixteenth century. These rails, which were made of wood,
+appear to have been an invention of miners in the Hartz Mountains. They
+were the result of pressing necessity, for, as mines were usually so
+situated that roads could only with great difficulty and expense have
+been built to them, some cheaper sort of communication with the high
+road had to be contrived.
+
+After various experiments the wooden railway was adopted, and the
+product of the mine was carried upon them to the place of shipment by
+means of small cars. Queen Elizabeth had miners brought into England, to
+develop the English mines, and through them the rail track was
+introduced into Great Britain. Later the wooden rail was covered with an
+iron strap to prevent the rapid wear of the wood, and about the year
+1768 cast-iron rails commenced to be used. At the end of the last
+century wheels were constructed with flanges, to prevent derailing.
+More attention was also paid to the substructure, wood, iron and stone
+being used for this purpose. Wrought-iron rails were patented in 1820.
+
+The first authentic account of heat or steam engines is found in the
+"Pneumatica" of Hero of Alexandria, who lived in the second century
+before Christ. Hero describes a number of contrivances by which steam
+was utilized as a source of power. Although these contrivances were at
+the time of very little practical value, they are interesting as the
+prototypes of the modern steam engine. The attempts to move wheels by
+steam date back to the seventeenth century, when a number of experiments
+were made, but their exact nature is not known, because they were all
+soon abandoned, either on account of unsuccessful results or lack of
+means. At the beginning of the eighteenth century Denis Papin
+constructed a small steamboat, upon which he sailed in 1707 on the Fulda
+River from Cassel to Munden, a distance of about fifteen miles.
+
+The construction of locomotives engaged the attention of ingenious minds
+a century and a half ago. It is claimed that Newton experimented with a
+steam motor in 1680. Dr. Robinson described in 1759, in his "Mechanical
+Philosophy," a steam vehicle. The Glasgow engineer James Watt devoted
+himself from 1769 to 1785, with great energy, to the development of the
+steam engine, and succeeded in inventing the system which became the
+parent of the modern engine. An American, Oliver Evans, constructed at
+the beginning of the present century a carriage propelled by steam, and
+exhibited it, in 1804, in the streets of Philadelphia, before twenty
+thousand spectators. While Evans' invention was never put to any
+practical use, he prophesied that the time would come when steam cars
+would be considered the most perfect means of transportation. On
+Christmas eve, 1801, Richard Trevithick exhibited at Camborne, England,
+a steam coach, and soon afterwards he and his cousin, A. Vivian,
+obtained an English patent on a "steam engine for propelling carriages."
+Seven years later a Mr. Blinkensop, of Middleton Colliery, near Leeds,
+constructed another locomotive engine, upon which he obtained a patent
+in 1811. These and a number of other inventors of steam engines vainly
+expended great ingenuity in attempting to overcome a purely imaginary
+difficulty. They believed that the adhesion between the face of the
+wheel and the surface of the road was so slight that a considerable
+portion of the propelling power would be lost by the slipping of the
+wheels. It was not until about the year 1813 that the important fact was
+ascertained that the friction of the wheels with the rails was
+sufficient to propel the locomotive and even drag after it a load of
+considerable weight. On the other hand these inventors failed to provide
+in their engines adequate heating-power for the production of steam. In
+1814 George Stephenson commenced to apply himself to the construction of
+an improved locomotive. When, owing to his invention of the tubular
+boiler, he saw, after fifteen years of arduous toil, his labors crowned
+with success, the civilized world entered upon a new era of social,
+industrial and commercial life. The first line upon which Stephenson's
+invention was used was the Liverpool and Manchester Railway. In the year
+1821, a number of Liverpool merchants formulated a plan for the
+construction of a tramway between their city and Manchester. The
+question of motive power was left open as between horses and the steam
+engine, with which Mr. Stephenson was then experimenting. After much
+opposition on the part of Parliament and the public a charter was
+obtained in 1826. When the construction of the road was nearly
+completed, the directors of the company, after having determined upon
+the use of steam engines, offered a prize of L500 for the best
+locomotive engine to run at a public trial on the Liverpool and
+Manchester Railway. This proposal was announced in the spring of 1829,
+and the trial took place at Rainhill on the 6th of October of that year.
+The competing engines were the Rocket, constructed by Mr. Stephenson;
+the Sanspareil, by Hackworth; the Perseverance, by Burstall, and the
+Novelty, by Messrs. Braithwaite and Ericsson. Both Braithwaite and
+Ericsson became subsequently residents of the United States, and the
+latter achieved immortal fame as the inventor of the screw propeller and
+the builder of the Monitor. The Rocket was the only engine that
+performed the complete journey proposed, and obtained the prize. It is
+claimed by the biographers of John Ericsson that he had really built a
+much faster locomotive than Stephenson, and that, although it had to be
+constructed very hastily and therefore broke down during the trial, the
+superiority of the principle involved in it was universally recognized
+by the engineers of that time. The Stephenson engines became the motive
+power of the Liverpool and Manchester road, which was opened for public
+traffic on the 16th of September, 1830. This line was, however, neither
+the first public railway nor even the first steam railway. The first
+railway or tramway act was passed in England in 1758, and in 1824 no
+less than thirty-three private railway or tramway companies had been
+chartered. In 1824 a charter was granted by Parliament authorizing the
+construction of the Darlington and Stockton Railway, to be worked with
+"men and horses, or otherwise." By a subsequent act the company was
+empowered to work its railway with locomotive engines. The road was
+opened in September, 1825, and was practically the first public carrier
+of goods and passengers. The Monklands Railway in Scotland, opened in
+1826, and several other small lines soon followed the example of the
+Darlington and Stockton line and adopted steam traction, but the
+Liverpool and Manchester Railway was the first to convince the world
+that a revolution in traveling had taken place.
+
+The road was from the very first successful, its traffic and income
+greatly exceeding the expectations of its managers. It should also be
+noted here that the cost of construction fell largely below the
+elaborate estimates made by several distinguished engineers. The company
+had expected to earn about L10,000 a year from passenger traffic, and
+the very first year the receipts from that source were L101,829. The
+gross annual receipts from freight had been estimated at L50,000, but
+were L80,000 in 1833. From the first the stockholders obtained a
+dividend of eight per cent., which soon rose to nine and to ten per
+cent. It has since been demonstrated that the revenues of new roads
+almost always exceed expectations.
+
+The success of this railway stimulated railway enterprise throughout
+Europe and America. But while railroad projects created much enthusiasm
+on one side, they also met with bitter opposition on the other. The
+prejudice of the short-sighted and the avarice of those whose interests
+were threatened by a change in the mode of transportation used every
+weapon in their power against the proposed innovation. The arguments
+used were often most absurd. It was said that the smoke of the engine
+was injurious to both man and beast, and that the sparks escaping from
+it would set fire to the buildings along the line of road, the cows
+would be scared and would cease to give their milk, that horses would
+depreciate in value, and that their race would finally become extinct.
+Nor did many of the European governments favor the new system of
+transportation. Some openly opposed it as revolutionary and productive
+of infinitely more evil than good. The Austrian court and statesmen
+especially looked upon the new contrivance with undisguised distrust;
+and from their point of view this distrust was perhaps well founded. The
+rapid movement of the iron horse seemed to savor of dangerous
+radicalism, not to say revolution. When the Emperor finally, in 1836,
+concluded to sign a railroad charter, he based his action upon the
+dubious ground that "the thing cannot maintain itself, anyhow." It may
+be said that the history of the railroad is a conspicuous illustration
+of human short-sightedness. The Prussian Postmaster-General Von Nagler
+opposed the construction of a railroad between Berlin and Potsdam upon
+the ground that the passenger business between those two cities was not
+sufficient to keep even the stage-coach always full. It never occurred
+to the Postmaster-General, as it does not occur to many railroad men of
+to-day, that new and cheaper means of transportation increase the
+traffic. Even so wise a statesman as Thiers said when railroad
+construction was first agitated in France: "I do not see how railroads
+can compete with our stage-coaches." M. Thiers also opposed for years
+the building of a railroad between Paris and Versailles, declaring that
+on account of a railroad not one passenger more would make the journey
+between these two places.
+
+But railroads came whether monarchical governments liked them or not.
+The success of the Liverpool and Manchester Railroad stimulated railroad
+building in England to a marvelous extent. Between 1830 and 1843 no
+less than seventy-one different companies were organized, representing
+about 2,100 miles. During the next four years 637 more roads, with an
+authorized length of 9,400 miles, were chartered. The construction of
+each new road required a special act of Parliament. These early roads
+averaged only fifteen to thirty miles in length. The competition which
+ensued soon led to the consolidation of roads, which continued until now
+the 14,000 miles of railway in England and Wales are practically owned
+by only a dozen companies. The total number of miles of railroad in
+Great Britain and Ireland is at present over 20,000.
+
+The news of the opening of the first steam railway in England spread
+through Europe comparatively slowly. There were in those days but few
+newspapers printed on the continent, and these were read very sparingly.
+Railroad discussions were confined to merchants and manufacturers. Even
+after the success of the railroad was assured in England, a large number
+of people would not believe that, except between the largest cities,
+railroads on the continent could ever be profitable. But few railroads
+have ever been built which with honest, efficient and economical
+management would not pay a fair rate of interest on actual cost of
+construction. But in spite of this we have to this day a large number of
+otherwise well-informed people who question the financial success of
+every new railroad that is proposed.
+
+In those days it occurred only to the most sagacious minds that with
+increased facilities commerce would expand. The missionaries of railroad
+enterprise found it therefore a difficult matter to interest capital in
+their projects. Railroad committees were in time formed in all cities of
+any importance, but, with capital cowardly, as usual, and governments
+distrustful, their task was often a thankless one. Railroad projects
+matured very slowly, and, when matured, were often wrecked by jealous
+and short-sighted governments. After the formation of a company five and
+even ten years would often pass away before a charter could be secured
+and the work of construction commenced. It is true, there were some
+laudable exceptions to this rule. Thus the governments of France and
+Belgium led the people in railroad construction; but upon the whole it
+can be said that the railroad forced itself by its intrinsic merit upon
+monarchical governments. It soon became evident even to the most stupid
+of autocratic ministries that it was a choice between the new mode of
+transportation and national atrophy.
+
+The first German line was built between the cities of Nuremberg and
+Furth in 1835. It was only about four miles long, but the success of the
+experiment gave an impetus to railroad building in other parts of
+Germany. The Leipzig and Dresden line followed in 1837, and the
+Berlin-Potsdam and Brunswick-Wolfenbuttel lines in 1838. At the end of
+1840 Germany had 360 miles of railroad. In that year Frederick William
+IV. succeeded to the throne of Prussia and inaugurated a new and
+exceedingly liberal railroad policy in his realm. In 1843 the Prussian
+government concluded to guarantee certain railroad companies a dividend
+of 3-1/2 per cent. on the capital actually invested. The state also
+secured considerable influence in the administration of the roads as
+well as in the right to assume the management of the various lines under
+certain conditions. The governments of the states of Southern Germany
+now commenced to build state roads, and their example was, chiefly for
+strategic reasons, soon imitated by Prussia. The system has since grown
+to over 26,000 miles, and no less than eighty-seven per cent. of the
+mileage is under state control. In all the states and provinces of the
+empire, except Bavaria, the rates for transportation of passengers and
+freight on all lines are controlled absolutely by the government.
+
+In Austria, as has already been indicated, the building of railways was
+greatly discouraged by the government until 1836. In that year the
+Emperor rather reluctantly granted Baron Rothschild a charter for a
+railway from Vienna into the province of Galicia. Another charter was
+granted to a Baron Sina for a line from Vienna to Raab and Gloggnitz.
+The policy then adopted in Austria guaranteed to each railroad company a
+monopoly in its own district during the period for which the charter was
+granted. Soon after the state also commenced building lines, but the
+growth of the Austrian system was slow until after the war of 1866. An
+era of railroad speculation was then inaugurated, which ended with the
+crisis of 1873. The total length of the railroads of Austria-Hungary was
+10,790 miles in 1875. At present that monarchy has nearly 16,400 miles
+of railway, 8,600 of which are owned by private companies.
+
+It has been the policy of Austria to reduce rates, and several roads,
+especially those built in mountainous districts, have a certain revenue
+guaranteed to them by the government.
+
+The zone system recently adopted in Hungary reduced both the passenger
+and freight rates of the government roads at least one-third, and this
+reduction has, contrary to expectation, greatly increased their net
+revenues.
+
+In France railroad agitation commenced in 1832. A few short lines were
+opened, as those from Paris to St. Germain and to Versailles; but,
+owing to the conservatism of French capitalists, but little more was
+done until the state took the matter in hand. Thiers proposed a scheme
+by which the state was to furnish about half the cost while private
+companies were to build the lines and operate them. The Western
+Railroad, the first line of any great extent, was opened in 1837 between
+Paris and Rouen, and the Eastern Railroad was opened two years later.
+There were in 1859 six large companies operating their lines with
+profit, but, to induce them to build additional lines that were needed,
+the state guaranteed the interest on the capital required to make their
+improvements. In 1884 there were about 17,000 miles of railroad in
+operation. To bring about the construction of another 7,000 miles of
+road, and to thus complete the railroad system of the country, the
+government now guaranteed each company a dividend equal to the average
+of recent years, but not to exceed seven per cent. It is doubtful
+whether this system of monopoly has in all respects been favorable to
+the encouragement of enterprise in the railroad circles of France. In
+granting charters the state has, however, reserved valuable rights which
+at a future period it will have an opportunity to assert for the public
+benefit. The railroad companies have generally a lease for ninety-nine
+years, and their lines become the property of the state after the
+expiration of that period. To extinguish the bonded debt and stock, a
+sinking fund has been created, from which a certain portion of the
+shares and outstanding bonds is annually paid off and canceled. The
+government requires of the companies the free carriage of the mails and
+the transportation of military and other employes at very low rates.
+Besides this the state levies upon the traffic of the railroads a duty
+of ten per cent. of their gross earnings from passengers and from all
+goods carried by fast trains. These facts are usually overlooked by our
+railroad men when they indulge in making comparisons between the
+railroad rates of this country and those of France. The French Republic
+had 13,400 miles of road in 1875, and 22,600 in 1890. When all of the
+proposed lines are completed, the total mileage of that country will be
+over 25,000.
+
+Belgium has the best-developed track system on the continent. The state
+commenced the construction of railroads as early as 1834, and the first
+line (Brussels Malines) was opened May 5th, 1835. Four great state lines
+were constructed in different directions, and between these lines
+private roads were permitted to be built. Between 1850 and 1870 the
+private lines increased from 200 to 1,400 miles, and competition between
+them and the state lines became so active as to reduce rates to the
+lowest possible point. In 1870 the government decided to buy a large
+number of competing lines. In 1874 it had acquired more than half, and
+at present, with a few exceptions, they are all owned and controlled by
+the state. The exceptions to this are a few short lines that were built
+in the early days of railroad construction. The total mileage is now
+3,210. Rates have, however, not been increased since this consolidation,
+and they are still lower than any other country in Europe. The
+transportation of mails is free, and troops, military materials and
+prison vans are carried at reduced rates.
+
+Railroads were originally built in Switzerland merely for the
+accommodation of tourists and the local traffic. The first line, between
+Zurich and Aarau, was completed in 1847, but general railroad enterprise
+did not develop until after 1860. The St. Gothard route was then
+projected, which opened a direct through line between Italy and
+Germany. The roads are all owned by private companies, but are under
+strict government control. Great publicity of their affairs is required.
+The total mileage of Switzerland was 2,043 in 1891.
+
+In Italy railroad enterprises have received attention since 1853. The
+first roads were those of Lombardy, being commenced while that province
+was still under Austrian rule. The treaties of Zurich in 1859 and of
+Vienna in 1866 delivered these roads and the Venetian lines to the
+kingdom of Italy. Between 1860 and 1870 the systematic construction of a
+railroad net was commenced which connected the various lines with each
+other and with Rome. Nearly all the railroads of Italy fell into the
+hands of the government, but in 1885 they were leased for a term of
+sixty years to three companies, terminable at the end of twenty or forty
+years by either party upon two years' notice. Under the lease the state
+received two per cent. of the gross receipts. The tariffs are fixed by
+the state, are uniform and can be reduced by the state. A Council of
+Tariffs, composed of delegates for the government, for agriculture,
+commerce and industry, and for the railroad companies, all elected by
+their own boards, has been instituted to study the wants and best
+interests of the country. The total number of miles of railroad in Italy
+was 8,110 in 1889.
+
+The first road in Spain was opened in 1848 between Barcelona and Mataro.
+The government greatly encouraged railroad construction by subsidies,
+and during the decade following 1855 the development of the railway
+system of the country was rapid. More than thirty companies have been
+formed, which have built about twenty main lines, aggregating 6,200
+miles.
+
+In Portugal very little railroad building was done previous to 1863,
+when a little over three hundred miles of road was constructed. The
+government owns nearly half of the roads of the country, the remaining
+lines being the property of private companies. The total number of miles
+operated in the kingdom in 1889 was 1,280. The service and the financial
+condition of the roads of Portugal are far from being satisfactory.
+
+In Denmark the first railroad was built on the island of Seeland in
+1847. Previous to 1880 the larger part of the roads of the kingdom was
+owned by private companies. Since then several of the most important
+private roads have been purchased by the state, which in 1889 owned 963
+miles, while only 251 miles remained in private control. Only about
+thirty miles more have since been constructed. The roads are well
+managed, but their net earnings are less than two per cent. of the
+capital invested.
+
+On the Scandinavian Peninsula the railroad system has developed rather
+slowly. Norway built the first line from Christiana to Eidsvold in 1854,
+and Sweden commenced railroad building two years later. The narrow-gauge
+system is fully developed here. While in Norway the greater part of the
+lines is owned by the state, the roads of Sweden are chiefly in the
+hands of private companies which on an average control but little more
+than twenty-five miles each. The total mileage of Sweden is 5,970, and
+that of Norway 970.
+
+The first line of railroad in the Russian Empire was constructed from
+St. Petersburg, sixteen miles, to Tsarskoji-Sielo, in 1842. The St.
+Petersburg and Moscow line was opened in 1851. Railroad building then
+stagnated until after the Crimean War, when a large number of lines
+were constructed at once. The roads were surveyed by the government, but
+constructed and operated by private companies.
+
+State aid was, however, freely given. During the past ten years the
+Russian government has directed its attention to the development of the
+railroad system in its Asiatic possessions. A railway between the Black
+and Caspian seas was completed in 1883, and the Siberian railroad is
+extended as fast as the financial condition of the empire permits. There
+are now about 20,000 miles of road in the Russian Empire operated by
+private companies. The construction of a large number of the Russian
+railways was dictated by military rather than commercial considerations.
+Maximum rates are specified in charter, and every change of rates must
+be approved by the Minister of Finance.
+
+In the Balkan Peninsula railroad facilities are still ill provided for.
+A few lines have been built, but these are, as a rule, badly managed.
+Trains are slow, and rates often so high as to be prohibitory. Roumania
+has undoubtedly the best railroad system of any of the Balkan states,
+the government controlling 1,000 miles of road. Greece is also making
+some progress and has at the present time 610 miles of railway. There is
+reason to believe that through communication will soon be established in
+these countries on a larger scale.
+
+The introduction of the railway into Asia has been, except in the
+Russian and English possessions, a very difficult task. The conservatism
+or ignorance of the governments and the superstition of the people
+combined to throw numberless obstacles before those who proposed to pave
+the way for the iron horse. British India opened her first railway for
+public traffic between Bombay and Tannah on November 18, 1852. In 1855
+she had 841 miles of road, which increased to 6,515 miles in 1875 and to
+15,828 miles in 1889, of which 8,423 miles were owned and operated by
+the state. The total cost of these roads was $880,000,000.
+
+In Asiatic Turkey the first line was opened between Smyrna and Trianda
+on the 24th day of December, 1860. This line was in 1866 extended to
+Aiden, and in 1882 to Sarakio. There are at present five lines with a
+total extent of 446 miles, all owned by English companies. New lines,
+covering in all 3,952 miles, have recently been projected.
+
+The first line in Persia, only seven miles long, and extending from
+Teheran to Schah-Abdal-Azzim, was opened on the 25th day of June, 1888.
+Another line, from the Caspian Sea to Amol, is now in process of
+construction. A line was opened last September between Joppa and
+Jerusalem. It is 53 miles in length.
+
+Japan may be said to be already thoroughly familiar with the European
+system. The first and principal line was opened on the island of Napon,
+between Tokio and Yokohama, on the 14th of October, 1872. Two other
+short lines followed in 1874 and 1876, when the total extent of the
+Japanese roads was about 135 miles. In 1883 the construction of the
+Grand Trunk Railroad, from Tokio to Kioto, was commenced, which line has
+been in operation for the past five years. Other lines, aggregating over
+400 miles, will soon be opened for traffic. The total extent of road in
+operation in 1888 was 580 miles, 310 of which were controlled by the
+state, and the remainder by private companies. In 1890 the total number
+of miles exceeded 900. The total average cost per mile was $58,000.
+
+No nation has probably opposed the introduction of the railway as
+stubbornly as the Chinese. The first railroad, scarcely seven miles
+long, was built by an English company near Kaiping to facilitate the
+transportation of coal from the mines in that vicinity. In 1886 a
+Chinese company purchased this line and has since extended it to
+Tientsin, making its present length about eighty-four miles. The Chinese
+government has recently authorized the further extension of this line to
+Yangchou, a place but a few miles distant from Pekin.
+
+Of the Asiatic islands Java has the largest and oldest railroad system.
+On the 10th of August, 1867, the first line was opened between Samarang
+and Tangveng. Other coast lines have since been constructed, but
+communication is still sadly neglected in the interior. In 1889 there
+were operated on the island nearly 800 miles of road, the greater part
+being the property of private companies.
+
+A road was opened upon the island of Ceylon between Colombo and Kandy in
+1867, to which several branch lines and extensions have since been
+added. The total system comprises at present about 180 miles.
+
+Short lines have also been built in Burmah (1889); in the Malay
+Peninsula (1885), in Sumatra (1876), and in Cochin China (1885). A line
+from Bangkok to Bianghsen, in Siam, is being projected at the present
+time.
+
+In Africa, if we except its northern coast, the construction of
+railroads has only kept pace with the slow development of the resources
+of that continent. Its European colonies are still but thinly inhabited,
+and their industrial and commercial life still resembles much that of
+the American colonies of the seventeenth century. There can be little
+doubt, however, that with the increasing immigration the growing demand
+for better transportation facilities will speedily be met by European
+capital.
+
+The first railroad upon African soil was built by the Egyptian
+government from Alexandria to Cairo, and from there through the desert
+to Suez. A part of this line, 130 miles long, was opened to traffic in
+1856, and the remaining ninety miles the year following. Nothing further
+was done until after Ismail Pasha ascended the throne, in 1863. The
+railroad system of Lower Egypt, between Alexandria in the west, Cairo in
+the south, and Ismaila in the east, was then greatly extended and the
+service materially improved.
+
+After the opening of the Suez Canal the line through the desert to Suez
+was abandoned. The railroad system of Egypt comprises at present about
+1,250 miles, all of which belongs to the government except two short
+lines which are private property.
+
+The beginning of the railroad system of Algiers dates back to 1860, when
+the French government gave a charter to the Companie des Chemins de Fer
+Algerians, authorizing it to build a number of lines connecting the
+principal cities of the province with the Mediterranean. The line from
+Algiers to Blidah, thirty-two miles long, was opened on September 8,
+1862. Further construction was then delayed until 1863, when the charter
+of the original company was transferred to the Paris, Lyons and
+Mediterranean Railroad Company. The original plans were then in the main
+carried out, until the disturbances caused by the Franco-Prussian war
+again put an end to railroad enterprises. In 1874 three new companies
+were chartered and railroad building was resumed. In 1888 the Algerian
+railroad system comprised 1,350 miles.
+
+The first road in Tunis was built in 1872 from the city of Tunis to
+Bardo and Gouletta by English capitalists. It was, in 1880, sold to an
+Italian company to which the Italian government for political reasons
+had seen fit to guarantee certain dividends. Other small lines have
+since been constructed, and more important ones have been prospected.
+The number of miles at present in operation is 153.
+
+The French colony on the Senegal River has a number of short lines, of
+which the first was opened in July, 1883. These lines aggregate at
+present about 200 miles. It is now contemplated to extend this system to
+the upper Niger. This would necessitate the construction of 240
+additional miles of road.
+
+The Cape Colony has the largest mileage of any of the European colonies
+in Africa, the absence of navigable rivers rendering railroads here more
+necessary than elsewhere. The first line was opened on the 13th of
+February, 1862. It then extended from Cape Town to Earste River, but was
+extended to Wellington the following year. The number of miles of road
+in operation in 1875 was 906, and in 1891 it had increased to 2,067. All
+the roads of the colony, excepting a line of 93 miles belonging to the
+Cape Copper Mining Company, are operated by the colonial government.
+Their net revenue in 1886 was 2.84 per cent. of the capital actually
+invested.
+
+Port Natal built her first railroad in 1860. It was only two miles long
+and extended from the city of Durban to its harbor. Since then several
+inland lines, aggregating over four hundred miles, have been constructed
+at a cost of twenty-two million dollars. The roads are operated by the
+colonial government and yielded in 1891 a net revenue of 4.4 per cent.
+on the capital expended.
+
+Short lines have also been built on Mauritius and Reunion, and there is
+now every indication that Portuguese Africa and the Congo State will be
+provided with railroad facilities in the near future.
+
+The introduction of railroads into Australia dates back to the sixth
+decade of the present century. The total number of miles of road
+reported in 1889 by the several colonies was 8,883. If we estimate the
+population of the continent at 3,000,000 for that year it will be seen
+that Australia has more miles of road per capita than any other grand
+division of the globe, save North America.
+
+New South Wales, the mother colony of the Australian continent, opened
+its first road on September 26, 1855, between Sydney and Paramalta. This
+road was built by a private company, but was soon after its completion
+purchased by the colonial government, and was in 1869 extended to
+Goulbourn. In 1875 the colony had only 436 miles of road in operation.
+The mountains, however, which separated the wide plains of the interior
+from the coast had been surmounted, and the government commenced to push
+the construction of new roads with great vigor. At the end of the year
+1886 New South Wales had no less than 1,888 miles of road in operation,
+for which the colony had expended $113,000,000. The net revenue during
+that year was 2.9 per cent. on the capital invested. The total number of
+miles of railroad in this colony was 2,247 in 1889.
+
+Victoria, the smallest of the colonies, has made by far the greatest
+progress in railroad building. The first road in the colony, and, in
+fact, the first road upon the Australian continent, was built in 1854
+between the city of Melbourne and its port, a distance of two and
+one-half miles. Within the next five years four other lines were
+constructed, connecting Melbourne with Williamstown, St. Kilda,
+Brighton and Echuca, respectively. In 1870 there were in the colony 275
+miles of railroad, which had increased to 1,198 miles in 1880, and to
+2,283 miles in 1889. Several of the roads were originally owned by
+private companies, but all of them were in time acquired by the colonial
+government, the last one in 1878. The total capital invested in 1887 was
+$125,000,000, which yielded a net revenue of $5,800,000. All lines are
+under the control of a board so constituted as to be entirely removed
+from political influence.
+
+In South Australia a short line was built in 1856 from the city of
+Adelaide to Port Adelaide. Another line was constructed in 1857 from
+Adelaide to Salisbury, which three years later was extended to Kapunda.
+The colony had then forty miles of road. The increase during the next
+decade was only ninety-three miles. Since then the development has been
+much more rapid, the whole system of railroads comprising 1,752 miles in
+1889. All the roads save a few suburban lines are owned and operated by
+the colony. Their total cost is not far from $60,000,000, and their net
+annual revenue is about two and one-half per cent. of the capital
+invested.
+
+The colony of Queensland has only a system of narrow-gauge roads, with
+the construction of which it commenced in 1865. Up to September, 1887,
+the colonial government had constructed 1,641 miles of road at a total
+cost of $47,700,000. The total number of miles has since been increased
+to 2,058. The net revenue of the roads was a little over one million
+dollars in 1886.
+
+The transportation facilities of West Australia are still far behind
+those of her sister colonies. The first line was opened in 1873, and the
+total number of miles of road operated in the colony in 1889 was only
+496. The government controls nearly all the railroads of the colony.
+
+Of the islands of Australasia, Tasmania and New Zealand are as yet the
+only ones that have railroad communication. The former built its first
+road in 1870 and had at the end of the year 1890 about 1,900 miles in
+operation. New Zealand opened its first railroad between Christchurch
+and Lyttleton on December 1, 1863. The development of the system was
+slow at first, there being but 25 miles of road in operation in 1870. In
+1891 the number of miles of road had increased to 1,916, all but 92
+miles being operated by the colonial government. The total amount
+expended by the government for railroads is $55,000,000. The net revenue
+in 1887 was about 2-1/2 per cent of the amount invested.
+
+In South America railroad building is of comparatively recent date. The
+first road was built in 1851, but the line was short and remained the
+only one for several years. With thirty million people the South
+American states have at present but little more than 16,000 miles of
+railroad, a condition which must at least in part be ascribed to the
+peculiar conservatism of the Latin race.
+
+The United States of Colombia possesses less than 250 miles of road. Its
+first line was the Panama Railroad, from Colon to Aspinwall. It connects
+the Pacific with the Atlantic ocean, is 48 miles long and was
+constructed in 1855. This, as well as the several other roads of
+Colombia, is the property of private companies. A number of new roads
+have recently been surveyed.
+
+Venezuela opened in 1866 a road, 56 miles long, from Puerto Caballo to
+Palito, which in 1870 was extended to Aroa. A number of other short
+roads, aggregating about 350 miles, have since been constructed. The
+total extent of railroad in Venezuela was 432 miles in 1889, of which
+the greater part was operated by private companies. Several important
+lines are in the process of construction, and will connect Caracas with
+Carabobo, San Carlos and the port of La Guayra.
+
+The Republic of Ecuador constructed in 1876 a road from Jaguachi to
+Puente de Chimbo, a distance of 43 miles. This line was recently
+extended to Siambe, and has now a total length of 94 miles. In 1886 a
+charter was granted to a North American company, authorizing the
+construction of a road from San Lorenzo to Esmeraldas and guaranteeing
+certain dividends on the investment. At the close of the year 1889
+Ecuador had 167 miles of road.
+
+The first railroad in Peru was built in 1851, connecting the seaport
+Callao with the capital, Lima. After this but little was done for more
+than twenty years. At the beginning of the seventies an extensive
+railroad system was projected at the instigation of President Don Manuel
+Pardo, and the construction of the principal road of the system from
+Mollendo on the Pacific Ocean to Santa Rosa was at once entered upon.
+This road ascends the Western Cordillera, crosses a number of prodigious
+mountain passes, reaches Lake Titicaca, and then proceeds in a
+northwesterly direction to Santa Rosa. It is over 300 miles long, and
+reaches near Puna an altitude of 14,700 feet. An extension of this line
+from Santa Rosa to the old Inca city Cuzco was opened in 1875, but was
+subsequently destroyed in the war with Chile, and has not been reopened.
+Another road, extending from Callao to San Mateo, was opened in 1876. It
+is eighty-seven miles long, and reaches with its enormous grades a
+height of over 13,000 feet. It belongs, with the Santa Rosa road, to the
+boldest creations of railroad engineering. Since the war with Chile
+railroad enterprise has been checked. The number of miles of road in
+operation rose from 962 in 1875 to 1,615 in 1880, but was, owing to the
+abandonment of certain lines, diminished to 813 in 1884. Since that time
+about 400 miles of new road have been opened.
+
+In the Republic of Bolivia the first railroad was built about twenty
+years ago from Antofogasta to Solar. After the cession of the province
+of Antofogasta to Chile there remained but thirty-five miles of road in
+Bolivia. More than 200 miles have since been added by the construction
+of several short roads, chiefly the property of mining companies.
+
+The Republic of Chile was the first of the South American states to
+initiate the construction of railways. The building of a line from the
+seaport Caldera to Copiapo was commenced in May, 1850, and was completed
+on January 2, 1852. This line was constructed and operated by a private
+company. The first state road, extending from Valparaiso to Santiago,
+was opened on the 15th of September, 1865. To this road has since been
+added an extension to Talcahuana, as well as several branch lines. The
+total amount that has been expended by the Chilean government for the
+construction of railroads is $43,000,000. The total number of miles of
+road operated in Chile in 1887 was 1,674, of which 992 were the property
+of private companies and 682 miles were owned by the state. Two hundred
+and fifty miles of road have since been constructed, and the
+construction of 700 additional miles of railroad has been authorized by
+the government.
+
+The Argentine Republic opened its first road, extending from Buenos
+Ayres to Belgrano, in December, 1862. Several other lines soon
+followed, and in 1870 over 600 miles of road had been constructed. This
+number had increased to 1,440 in 1880 and to 5,100 in 1889. Since then
+several new lines have been completed, aggregating over 600 miles. Among
+the principal lines of the Argentine Republic is the transcontinental
+road which connects the Atlantic with the Pacific Ocean. The whole line
+is 880 miles long, of which 665 miles are in the Argentine Republic and
+the remaining 115 miles in Chile. Of the 3,705 miles of road which were
+in operation at the beginning of the year 1887 the republic owned 1,148,
+the province of Buenos Ayres 572, the province of Santa Fe 102, and
+private companies 1,888 miles. The total amount invested in railroads
+was $154,000,000 in 1887, which yielded an average dividend of 3.9 per
+cent.
+
+The oldest railroad in Brazil is the Petropolis road. It was built by a
+private company and opened on December 16, 1856. In 1881 the total
+number of miles in operation was 2,422, and in 1889 it had increased to
+5,766. Furthermore charters had been granted for the additional
+construction of 2,271 miles of road. Of the lines in operation about
+1,200 miles are the property of the state, yielding a revenue of nearly
+3 per cent. on the capital invested. The state gives aid, besides, to
+several private roads. The most important road of Brazil is the state
+road Dom Pedro I., which connects the three richest provinces of the
+country, Rio de Janeiro, Minas Gerals and Sao Paolo, with the national
+capital. It was opened in 1883, and has a total extent of 544 miles.
+
+The principal roads of Uruguay were built between 1865 and 1875. In the
+latter year the total number of miles in operation in Uruguay was 190,
+which in 1880 had increased to 230, and in 1889 to 469 miles.
+
+In the remaining political divisions of South America the railroad
+extended its dominion still more slowly. Paraguay opened as early as
+1863 a line 45 miles long from Asuncion to Itangua, and in 1892 her
+railroad system had increased to 159 miles in extent. British Guiana
+completed in 1866 a line from Georgetown to New Amsterdam, but not one
+mile of railroad has been built in that colony since. Of the islands of
+South America Trinidad is the only one into which the railroad has been
+introduced. The island has at present 50 miles of road, to 16 in 1878.
+
+Central America has less than 600 miles of railway. The causes which
+have retarded the development of the railroad system in South America
+are also operative here. Of the five republics of Central America Costa
+Rica has the largest number of miles of railroad, viz.: 161. It has
+three different lines, of which the Limon and Carillo line, seventy
+miles long, is the most important. This road, which connects with a New
+York line of steamers at Limon, has greatly furthered the cultivation of
+bananas in the Santa Clara valley.
+
+Nicaragua completed its first road in 1880 between Corinto and
+Chinandega, and has at present about 100 miles of railway in operation.
+The Nicaragua Canal Company is constructing a road from Juan del Norte
+to Ochoa, a distance of thirty-two miles, to be used in the construction
+of the canal.
+
+Honduras opened in 1871 its only line, thirty-seven miles long, between
+Puerto Caballo and San Jago. In recent years an extension of nine miles
+has been added to it.
+
+San Salvador has, besides a street-car line between the cities of San
+Salvador and Santa Tecla, only one line of railroad between Acajutla
+and Armea, which was constructed with public funds and opened for
+traffic on July 15, 1882.
+
+Guatemala was the last of the Central American States to introduce the
+railroad. Its first road, seventy-four miles long, and extending from
+San Jose on the Pacific Ocean to the capital, Guatemala, was built by a
+San Francisco company and opened on August 20, 1884. The state has at
+the present time about 100 miles of road, with several short but quite
+important lines under construction.
+
+The West Indies have between 1,200 and 1,400 miles of railway, of which
+more than 1,000 are in Cuba. The first road upon this island, 179 miles
+long and extending from Habana to Guanajay, was opened as early as 1837.
+The next ten years developed almost the whole of the railroad system of
+the western half of Cuba. A number of important roads have since been
+opened in the central and eastern portions of the island, whose railroad
+mileage is at present larger per capita than that of any other political
+division of the Western Hemisphere save that of Canada and the United
+States. The second of the West India islands to construct a railroad was
+Jamaica. A line connecting Kingston and Spanishtown was opened on the
+21st of November, 1845. Two branch lines have since been added, making
+the total number of miles of road on this island seventy-six at the
+present time. About twenty-five miles more are now in the process of
+construction. San Domingo and Hayti have also recently commenced to
+build railroads. In the former republic a line from Sanchez to LaVega,
+sixty-two and one-half miles long, is now open to traffic, and Hayti is
+constructing a line from Gonaives, on the western coast, to Porte de
+Paix, on the eastern coast of the island. The Spanish government in
+1888 also granted a charter for the construction of a railroad on the
+island of Porto Rica.
+
+Of our neighbors on the North American continent, Mexico and Canada, the
+former has been by far the slower to avail herself of the advantages of
+railroad communication. The slow growth of the railroad system of Mexico
+must be ascribed chiefly to the frequent political disturbances of the
+country as well as to the many topographical obstacles which presented
+themselves to the railroad engineer. The first Mexican railway,
+excepting tramways, was the one which connects the capital with the city
+of Vera Cruz. It was constructed by an English company and was opened on
+the first day of January, 1873. In 1875 the total number of miles of
+road in Mexico was 327, and five years later somewhat less than 700.
+Since then the development of the system has been much more rapid. In
+1880 several companies were formed for the purpose of building a system
+of roads which would connect the Mexican capital with the United States
+as well as with the most important harbors of the gulfs of Mexico and
+California. The projectors of these lines, who were citizens of the
+United States, received the hearty cooperation of the Mexican
+government, and the work was at once pushed very vigorously. At the end
+of the year 1885 more than 2,500 miles of new road were open for
+traffic, and a thousand miles more at the end of the following year. In
+1889 Mexico had 5,332 miles of road. The principal one of the newly
+constructed roads is the Mexican Central, which connects Paso del Norte
+with the City of Mexico. This line will also, when its branches are
+completed, form a through route between the Gulf of Mexico and the
+Pacific Ocean. Another scarcely less important through line north and
+south is the National Mexican Railway, which is 722 miles long and
+connects Laredo, on the Rio Grande, with the capital and the southern
+states. Another line has recently been opened from Torreon to Durango.
+The number of miles of road at present in operation in the Republic of
+Mexico is about 6,800, with a number of new lines rapidly nearing
+completion. The development of Mexico's resources has, during the past
+decade, kept pace with the rapid expansion of its railroad system.
+
+In the Dominion of Canada about fifteen miles of railroad line were
+built as early as 1837, but only forty-three miles was added during the
+next ten years. In 1852 there was still only 212 miles of railroad in
+all of the British possessions in North America. At that time the
+construction of the Grand Trunk system was commenced, the first section
+of the system, Portland-Montreal, being opened in 1853. After this
+railroads increased very rapidly in Canada, reaching an extent of 2,087
+miles in 1860, 4,826 miles in 1875, 6,891 miles in 1880, and 10,150
+miles in 1890. The majority of Canadian railroads are in the hands of
+private companies, some of which have been very materially aided by the
+government. One of the conditions upon which the union of the several
+British provinces, except Newfoundland and Prince Edward Island, was
+effected in 1867, was the construction of a railroad by the Dominion
+government connecting the provinces of Ontario, Quebec, Nova Scotia and
+New Brunswick. This road, the main line of which extends from Point
+Levis, opposite Quebec, to Halifax, was accordingly built, and is still
+operated by the Canadian government. Its cost was about 46,000,000.
+
+But the most important enterprise in which the government is interested
+is the Canadian Pacific Railway. Like the intercolonial railway, this
+line was a result of the political union of the colonies. Its
+construction was commenced by the government, but was subsequently
+assigned to a private corporation, the Canadian Pacific Railway Company,
+all that had been done by the government being turned over to the
+company as a gift. It is estimated that the direct gifts of money, the
+land grant and other privileges conferred by the Dominion government
+upon the Pacific Railway Company exceed $100,000,000 in value, and that,
+with the amount of bonds and stock guaranteed by the government, the par
+value of its various aids amounts to $215,000,000, or $48,000,000 more
+than the cost of the road, as will be shown by the following table,
+taken from the report of the Interstate Commerce Committee of the Senate
+of the Fifty-first Congress:
+
+  Subsidy granted by the act of Parliament of
+    February 13, 1881                                 $25,000,000
+  Seven hundred and fourteen miles of railroad
+    constructed by the Dominion Government, original
+    cost and interest                                  36,760,785
+  Capital stock guaranteed                             65,000,000
+  Loan to the company authorized by Parliament of
+    1884, in part                                      29,880,912
+  Balance of above loan                                15,000 000
+  Bonds, interest guaranteed by the Dominion for
+    50 years at 3-1/2 per cent                         15,000,000
+  Land grant bonds                                     25,000,000
+  Subsidy of $186,000 a year, for 20 years              3,720,000
+                                                     ------------
+  Total                                              $215,361,697
+
+  Total cost of road, according to the company's
+    balance sheet of December, 1888                  $131,350,019
+
+The Dominion Government owns and operates four railways, the cost of
+which up to June 30, 1890, was $52,800,000. It has also granted to
+railroad companies cash subsidies which to June 30, 1889, amounted to
+over $46,000,000. The total number of miles of railroad in Canada was
+14,004 in 1890. The people of Canada have, since the political union of
+the colonies, pursued an exceedingly liberal policy toward their
+railroads, but it appears that the great indulgence of the government
+only bred license in railroad circles. The evil increased from year to
+year, until the many complaints on the part of the public against
+railroad management caused Parliament in 1886 to appoint a commission to
+examine into the alleged abuses and to report as to the advisability of
+the adoption of a general railroad law, and the appointment of a Board
+of Railroad Commissioners. The committee reported to the
+Governor-General of Canada on the 14th of January, 1888, and, acting
+upon its recommendation, Parliament passed the Railway Act of May 22,
+1888. This act, containing 309 paragraphs, provides for the complete
+regulation of railroad affairs, and for this purpose creates a Board of
+Railroad Commissioners, consisting of the Minister for Railroads and
+Canals, the Minister of Justice and two or more members of the Privy
+Council. The act also repeals all former railroad laws. Though it has
+been in force less than five years, its beneficial effects are already
+extensively felt by the Canadian public.
+
+
+
+
+CHAPTER III.
+
+HISTORY OF RAILROADS IN THE UNITED STATES.
+
+
+In no country in the world has the growth of railroads been so rapid as
+in the United States. With a population less than one-fifth as large as
+that of Europe this country has a larger number of miles of railroad
+than that continent. While European countries generally opposed the
+introduction of the new system of transportation, our people extended to
+it a hearty welcome. This difference of sentiment can easily be
+accounted for. At the time of the invention of railroads Europe had a
+system of turnpikes and canals which, at least for the time being,
+answered every purpose. It became necessary for the railroads to enter
+into competition with these well-established agencies of transportation,
+which had the test of time, popular prejudice and governmental sanction
+in their favor. Moreover, the railroad as a new and unknown quantity
+caused a feeling of uneasiness in all conservative circles. It seemed to
+make war against time-honored principles of statecraft and society, and
+threatened to bring about a revolution the outcome of which no one could
+foresee.
+
+The condition of things was entirely different in the United States.
+There were but few good roads and still fewer turnpikes and canals. A
+vast territory in the interior awaited cultivation. Excepting the coast
+and a few cities situated on the large navigable rivers, the East and
+the West and the North and the South were practically without commercial
+relations, and were only held together by a community of political
+traditions and the artificial cement of a common constitution. Even had
+the country had a system of turnpikes and canals, the Mississippi River
+would still have been a forty days', and the extreme Northwest a three
+months' journey distant from New York. It seems extremely doubtful
+whether the different sections of so large a realm, having so little
+community of commercial interests, could long be kept together under a
+republican system of government. The settlement of the central portion
+of the country and the development of its resources seemed to be the
+task of future centuries. The railroad under these circumstances made
+its appearance at a most opportune time for America, and the American
+people were not slow to make the best of the opportunities presented to
+them.
+
+In the United States, as in England, the railroad was preceded by the
+tram-road. The first tram-road in this country was opened in 1826. It
+connected the granite quarries of Quincy with the Neponset River, and
+was operated by horsepower. The second road of this kind was the Mauch
+Chunk tramway, in Pennsylvania, opened in 1826, for the transportation
+of coal. The trains were drawn up an inclined plane by stationary
+engines and were moved down by their own weight. During the same year
+the Delaware and Hudson Canal Company opened the Carbondale and
+Homesdale tramway, connecting their mines with the Delaware and Hudson
+Canal. It appears that an English locomotive was imported for use on
+this line in 1828, but that it did not answer its purpose.
+
+During the same year was commenced the construction of the first line of
+importance in this country, the Baltimore and Ohio. The line was opened
+for traffic in 1830, having then an extent of fourteen miles. In 1831 it
+was extended sixty-one miles, and the year following sixty-seven miles.
+For a year the road was operated by horsepower, but in 1831 the company
+purchased for its road an American locomotive.
+
+The first road upon which a locomotive engine of American manufacture
+was used was the South Carolina Railroad, which was commenced in 1830.
+The engine was manufactured at West Point and was placed upon the road
+in December of the same year. The line had then an extent of ten miles.
+In 1832 it had increased to sixty-two miles, and in 1833 to 136 miles.
+The construction of the Mohawk and Hudson was commenced in August, 1830,
+and the road was opened in September of the following year. Its first
+locomotive engine was also imported from England, but, being found too
+heavy, was soon replaced by an American engine of half its weight. In
+1831 two other New York roads were commenced, the Saratoga and the New
+York and Harlem. A small portion of the latter was opened during the
+same year, and the former in July, 1832. The Camden and Amboy Railroad
+in New Jersey was likewise commenced in 1831, but its completion was not
+reached till 1834. The New Castle and Frenchtown Railroad was completed
+in 1832, the Philadelphia and Trenton in 1833, and the New Jersey in
+1834. In 1835 the Washington branch of the Baltimore and Ohio was
+opened, and the entire line had at the end of that year attained an
+extent of 115 miles. During the same year three Massachusetts roads,
+connecting Boston with Providence, Worcester and Lowell respectively,
+were opened. In 1836 the New York Central route was opened to Utica. In
+1837 the Richmond, Fredericksburg and Potomac Railroad was completed
+from Richmond to Fredericksburg. In 1838 the Richmond and Petersburg and
+the Philadelphia, Wilmington and Baltimore railroads were opened. The
+Wilmington and Weldon Railroad was completed in 1840, and the Petersburg
+and Roanoke three years later. There was now a continuous line of
+railway from the Potomac to Wilmington, North Carolina. In 1842 the
+whole line of the Boston and Albany road was completed, which thus
+became the first important through route in America.
+
+The construction of railroads in the United States was from the first
+carried on without a system. Railroads in an early day were purely local
+affairs. Each locality operated its own road in its own interest and
+without any supervision from the State which had granted its charter.
+Acts of incorporation or charters were granted as a matter of course.
+Railroads were looked upon as the natural feeders of canals, and their
+future importance was foreseen by very few men. The early roads were a
+heavy burden on the capital of the country. A number of small roads were
+built that proved unprofitable and had to be abandoned. After the
+financial panic of 1837 there was, except in New England, a very
+perceptible stagnation in railroad enterprise, which lasted until the
+discovery of gold in California, in 1848. The average number of miles of
+road constructed per annum during the ten years preceding 1848 was 380,
+while it was nearly 1,800 per annum during the seven years following.
+
+It may be said that with the discovery of gold in the West ends the
+first or formative period of railroad construction. From the first
+opening of the Baltimore and Ohio to the beginning of the year 1848, a
+period of eighteen years, there were constructed in the United States
+5,205 miles of railroad, or an average of 289 miles per annum. The
+discovery of gold on the Pacific gave a new impetus to railroad
+construction throughout the country. Railroads now ceased to be local
+works and became interstate or national thoroughfares. Extensive new
+lines were built and through routes were formed by the coalition of
+local roads. It was during this period that railroad companies first
+became conscious of the importance of their mission and that they
+commenced to compete with river and canal carriers. In 1848 a through
+route was completed between Cincinnati and Lake Erie. A more direct
+line, the Cleveland, Columbus and Cincinnati road, was opened in 1851.
+During the same year the Erie Railroad reached Lake Erie and connected
+the lake with the Hudson, and a year later Chicago received railroad
+connection with the East by the completion of the Michigan Central and
+Michigan Southern. In 1854 the Chicago and Rock Island reached the
+Mississippi River, and in 1855 the Chicago and Galena was opened. One
+year later the Illinois Central reached the Mississippi at Cairo, and
+the Chicago, Burlington and Quincy Railroad was opened to Quincy. The
+Ohio and Mississippi, between Cincinnati and St. Louis, was completed at
+about the same time. The Pittsburgh, Fort Wayne and Chicago, an
+extension of the Pennsylvania road, was completed to Chicago in 1858. At
+the beginning of 1859 the Hannibal and St. Joseph Railroad reached the
+Missouri River, and eight years later the Cedar Rapids and Missouri was
+completed to the Missouri at Council Bluffs.
+
+To encourage the extension of railroads into new and thinly settled
+territories, and to thus hasten their settlement and the development of
+their resources, the people of the United States began at the
+commencement of this period to favor the policy of land grants. Such
+grants had repeatedly been made to roads and canals prior to the crisis
+of 1837. The first railroad that received a land grant was the Illinois
+Central. The scheme was proposed as early as 1836, but the act making
+the grant was not passed until September 20, 1850. Other grants followed
+in 1852 in Missouri, in 1853 in Arkansas, in 1856 in Michigan,
+Wisconsin, Iowa, Florida and Louisiana. As a rule these lands were
+granted by the National Government to the States, and by them to the
+railroads. The land grants made during President Fillmore's
+administration amounted to eight million, and those made during Pierce's
+administration to nineteen million acres. The financial crisis of 1857
+and the War of the Rebellion again checked railroad building, but this
+period developed a new phase of railroad enterprise as well as of the
+land grant policy. In those times of national trial a railroad to the
+Pacific Coast seemed a political necessity. The project of connecting
+the Atlantic and Pacific oceans by a line of railroads was first brought
+prominently before the American people by Asa Whitney of New York. At a
+meeting held under his auspices in Philadelphia on the 23d day of
+December, 1846, a movement was inaugurated for the purpose of
+interesting the people in this enterprise and securing the aid of the
+government for its accomplishment. Various plans were urged, and earnest
+discussions followed, in which the ablest minds of the nation
+participated. The continual agitation of the subject finally led, on the
+1st of July, 1862, to the passage by Congress of an act incorporating
+the Union Pacific Railway Company and the adoption of the central route.
+The Union and the Central Pacific companies received a virtual money
+subsidy of $30,000,000 and a land grant aggregating nearly twenty-three
+million acres, a domain almost equal to the State of Indiana. Other
+direct grants of territorial lands soon followed. The Northern Pacific
+received, just before the close of the war, a grant of forty-seven
+million acres of land. In the Southwest public lands were also freely
+given to new Pacific lines. The various grants made to railroads
+comprise no less than 300,000 square miles, equal to four and a half
+times the area of New England, or six times that of the State of New
+York, or equal to the total area of Iowa, Wisconsin, Illinois, Indiana,
+Michigan and Ohio. Where these grants were not deemed sufficient
+inducement for the construction of roads, counties, cities and towns
+freely voted subsidies, while private citizens made donations to or
+subscribed for the securities of the new railroads.
+
+As has already been stated, the consolidation of connecting lines and
+their transformation into a few large through routes was one of the
+characteristic features of this period. As through traffic, and
+particularly through freight, grew in importance, it became more and
+more apparent that frequent transhipment was an expense to the railroads
+as well as a burden to the public. The system of railroad ownership and
+management soon adapted itself to the necessities of business. The
+change seems to have been inevitable, for it occurred in all parts of
+the world at about the same time. Sagacious men early recognized the
+importance of railroads as national lines of communication. This idea no
+doubt controlled the projectors of the Baltimore and Ohio, of the Erie,
+and of the Boston and Albany roads. The first consolidation of any
+importance took place in 1853, when eleven different roads between
+Albany and Buffalo were united to form the New York Central. Five branch
+roads were added to the system between 1855 and 1858. In 1864 Cornelius
+Vanderbilt secured control of the Hudson River road, and in 1867 of the
+New York Central, which lines he consolidated in 1869. By gaining soon
+afterward control of the Lake Shore and Michigan Central and Southern
+Canadian roads, he united under one management over 4,000 miles of
+railroad between New York and Chicago, and thus created the first
+through line between the East and the West.
+
+As has already been stated, the Pennsylvania road gained control of the
+Pittsburgh, Fort Wayne and Chicago in 1858 and thus extended its system
+as far as Chicago. Through the absorption of other lines it reached an
+extent of over 7,000 miles. The creation of this through route was
+chiefly the work of Thomas A. Scott, at that time vice-president, and
+later president, of the Pennsylvania railroad.
+
+In 1874 the Baltimore and Ohio, under the management of John W. Garrett,
+extended its system to Chicago, and became a competitor of the two older
+lines in the transportation of through freight. At about the same time
+two other parallel trunk lines were developed, the Grand Trunk on the
+north, and the Erie, between the Lake Shore and Pennsylvania lines.
+There were, therefore, in 1874 five rival trunk lines competing for the
+business between the West and the seaboard.
+
+During the same period large rival lines developed west of Chicago and
+St. Louis. From the former city radiate the St. Paul and Northwestern
+systems, each with from 6,000 to 8,000 miles; the Atchison, Topeka and
+Santa Fe with over 9,000 miles; then the Rock Island, the Chicago,
+Burlington and Quincy, the Illinois Central, the Chicago Great-Western,
+and the Chicago and Alton, their systems ranging from 1,000 to 6,000
+miles in extent. From St. Louis radiate the various branches of the
+Missouri Pacific and the closely allied Wabash system, controlling
+together some 10,000 miles of road.
+
+This process of consolidation also went on in the Southern States,
+though to a less extent. Their systems do not run parallel, like the
+trunk lines, nor do they radiate from a common center, like the roads of
+the Northwest, but they radiate from the principal ports of the Atlantic
+and the Gulf of Mexico toward the interior.
+
+We now enter upon the third period of the history of American railroads,
+the period of combinations. During the time of great activity in
+railroad construction following the War of the Rebellion many abuses in
+railroad management had been developed, which caused general complaint
+and led to what is known as the Granger movement. Laws were demanded,
+especially in the agricultural States of the West, which should regulate
+the rates, methods of operation, and the political relations of the
+railroads. The friends of this movement were successful in the political
+contests that followed, and Granger legislatures were elected in the
+States of Illinois, Wisconsin, Iowa and Minnesota. Laws were passed
+fixing the rates on different classes of roads and providing penalties
+for their violation. The companies contested these acts in the courts,
+but were defeated at every step, until in 1877 the Supreme Court of the
+United States sustained the constitutionality of the Granger laws. In
+the meantime railroad managers tried their utmost to render, by shrewd
+manipulation, these laws obnoxious, and they finally succeeded in having
+them repealed or so amended as to render them largely ineffectual.
+
+It was the principal object of the Granger movement to do away with the
+many discriminating tariffs which so injuriously affected local points.
+It is true, discriminations between individuals were practiced at
+business centers, but rates upon the whole were low at such points as
+compared with those which obtained at local stations. While the Granger
+contest was still going on in the West, a new evil developed in the
+East, which became characteristic of the period and finally grew into
+one of the most intolerable abuses of railroad management. Railroad men
+had gradually learned that it was in their power to maintain high rates
+at competitive as well as at non-competitive points, provided all the
+roads centering at such points could be induced to cooperate, or rather
+to conspire for that purpose. The final solution of the problem was,
+after some experimentation, found in the device to control the prices of
+transportation generally known as the pool. It is doubtful whether any
+contrivance connected with railroad management ever threatened to
+subvert long-established principles of the common law more completely
+than this. Within a few years it extended its dominion over the whole
+country, exacting a heavy tribute from its commerce, until the people's
+patience finally became exhausted and their determined demand for
+railroad reform led to the enactment of the Interstate Commerce Act in
+1887.
+
+When this act passed, dire results were predicted by nearly every
+railroad man in the country. Prophecies were freely made that it would
+ruin half of the roads and seriously cripple and sadly interfere with
+the usefulness of the other half, that it would derange the business of
+the country, greatly depreciate all railroad securities and put an end
+to railroad construction. Nearly seven years have passed since the
+adoption of the law, but not one of these prophecies has come to pass.
+There are at present probably less bankrupt roads in the United States
+than there have been at any time for twenty years, our business
+interests have been improved, the securities of honestly managed roads
+are in better repute than they were previous to the passage of the law,
+and the railroad mileage of the country is increasing at the rate of
+about 6,000 miles a year. If any branch of business has suffered in
+consequence of the enactment of the law, it is the branch monopolized by
+Wall Street. Since 1885, the time when the Interstate Commerce Bill was
+first seriously agitated, the aggregate of railroad securities has
+increased nearly $2,500,000,000, or about one-third. This certainly does
+not look as if capital had been seriously frightened by the Interstate
+Commerce Act. There are other proofs of railroad prosperity. In 1885 the
+gross earnings of the railroads of the United States were $772,568,833,
+or 9.9 per cent. on their reported capital. In 1886 their gross earnings
+were $829,940,836, or 10.2 per cent. on the reported railroad capital.
+In 1890 the gross earnings had increased to $1,097,847,428, and equaled
+10.8 per cent. on the reported capital. This includes even the
+capitalization of new lines and others not reporting operations. Mr.
+Poor gives the reported cost of the lines actually operated as
+$8,519,670,421, against $10,122,635,900 reported cost of all the
+railroads built. Omitting from the computation the lines not reporting
+operations, the gross earnings of the roads actually operated equaled
+12.7 per cent. and their net earnings 4 per cent. on the actual cost of
+the lines which reported. The gross earnings for 1891 were
+$1,138,024,459, and for the year ending June 30, 1892, $1,222,711,698.
+
+The gross earnings per mile have increased from $6,265 in 1885, and
+$6,570 in 1886, to $6,946 in 1890, and $7,409 in 1892. In 1885 the
+capitalization per mile of road was $55,059 and the net earnings per
+mile were $2,185. In 1890 the capitalization per mile had decreased to
+$53,783, while the net earnings per mile increased to $2,195. The
+railroad mileage of the country has grown from 128,361 in 1885 to
+166,817 in 1890, to 170,601 in 1891, and to 175,000 in 1892.
+
+The railroad system of the United States has had a phenomenal growth,
+especially since 1870, since which time nearly 120,000 miles of road, or
+more than two-thirds of the total mileage, have been constructed. The
+table below shows the number of miles of railroad constructed and in
+operation, by quinquennial periods from 1830 to the close of 1890,
+inclusive:
+
+  YEAR.      MILES IN OPERATION.      INCREASE.
+
+  1830                23
+  1835             1,098                1,075
+  1840             2,818                1,720
+  1845             4,633                1,815
+  1850             9,021                4,388
+  1855            18,374                9,353
+  1860            30,626               12,252
+  1865            35,085                4,459
+  1870            52,922               17,837
+  1875            74,096               21,174
+  1880            93,296               19,200
+  1885           128,361               35,065
+  1890           166,817               38,456
+
+It will be noticed that in the sixty years covered by the above table
+there are but two quinquennial periods which show a falling-off in the
+rate of growth, viz.: 1860-65 and 1875-80. During the former period
+railroad construction was partially checked by the War of the Rebellion,
+during the latter by the general financial depression following the
+panic of 1873.
+
+The length of railroads in the world has grown from 206 miles in 1830 to
+about 400,000 miles in 1892. The following table shows the growth of
+railroad mileage by quinquennial periods:
+
+  YEAR.           MILES.
+
+  1830               206
+  1835             1,502
+  1840             5,335
+  1845            10,825
+  1850            23,625
+  1855            42,340
+  1860            66,413
+  1865            90,280
+  1870           131,638
+  1875           182,927
+  1880           231,190
+  1885           303,172
+  1890           385,000
+
+From this table it is seen that the railroad mileage of the world has
+doubled during the past fifteen years, and that its average annual
+increase is at present not far from 17,000 miles. There is no doubt that
+the extent of railroad construction has everywhere exceeded all
+anticipations. So fast has the railroad system expanded in the most
+highly civilized countries that it soon outgrew in nearly all of them
+the laws originally adopted for railroad control. In time an almost
+universal demand arose for reform, and the most progressive governments
+were not slow in heeding it. For the past fifteen years there has been a
+decided drift on the European continent toward state ownership of
+railroads, or to such strict control of the transportation business as
+virtually deprives the operating companies of the power to do injustice
+to the public.
+
+The railroad is assuming more and more the character of an international
+highway. A movement is on foot to connect the railroad systems of the
+United States with those of South America by an intercontinental or
+"Pan-American" railroad. Appropriations have been made by the United
+States and several of the South American republics for a preliminary
+survey of the proposed line. Three different surveying parties are in
+the field, one in Central America and the other two in the United States
+of Colombia and Ecuador. The progress so far reported by them is
+encouraging, and there is now some hope that before the close of the
+nineteenth century one may be able to travel by railroad from New York
+to Valparaiso without even a change of cars.
+
+It has also been proposed to span Behring Strait and connect North
+America with Asia and Europe by an international railway. This line, if
+constructed, would be simply an extension of the proposed Pan-American
+railroad and would follow the western coast of the United States as far
+as Behring Strait, then cross over into Asia, traverse Siberia and
+finally reach London via St. Petersburg, Berlin and Paris. It is very
+questionable whether such a line is at present feasible either from a
+technical or financial point of view, but the time will probably come
+when the railroad track will connect New York and London.
+
+
+
+
+CHAPTER IV.
+
+MONOPOLY IN TRANSPORTATION.
+
+
+From time immemorial efforts have been made by designing men to control
+either commerce or its avenues, the highways on the land and on the sea,
+by a power which law, custom, ingenuity, artifice or some other agency
+had placed into their hands.
+
+The ancient Phoenicians early aimed at and finally obtained the empire
+of the sea by making themselves masters of the most commodious harbors
+of the Mediterranean Sea and the Arabian Gulf. They established a
+regular intercourse with the countries bordering on the Mediterranean as
+well as with India and the eastern coast of Africa. From these latter
+countries they imported many valuable commodities which were not known
+to the people of other parts of the world, and during a long period they
+held this lucrative branch of commerce without a rival. The character
+and the situation of the Phoenicians aided them greatly in acquiring
+this mastery of commerce. Neither their manners and customs nor their
+institutions showed any marked national peculiarity; they had no
+unsocial prejudices and they mingled with the people of other countries
+without the least scruple or repugnance. As their native country was
+small and quite barren, they early learned to rely upon commerce as the
+best source of riches and power. Like the other Semitic tribes, the
+Phoenicians were noted for their energy and acumen, and while they
+were not a literary people in the strict sense of the word, ancient
+civilization received probably a more powerful impetus through their
+commercial supremacy than through any other agency.
+
+During the reign of King Solomon the Jews made an attempt to wrest from
+the Phoenicians at least a part of the world's trade. Solomon built
+ships and imported Phoenician sailors for his fleet. For a time it
+seemed as if the Israelites might become the rivals of their teachers in
+the art of navigation and in the mysteries of trade; but their peculiar
+religious customs in that early day proved a serious impediment to
+commercial ascendancy, as it rendered them incapable of that unreserved
+intercourse with strangers so essential in commerce.
+
+The monopoly of the sea, at least of the Mediterranean, passed to the
+Carthaginians, their descendants. The latter extended their navigation
+toward the west and north. They planted colonies and opened new harbors,
+and up to the time of the Punic wars kept almost the entire trade of the
+countries bordering on the Mediterranean in their hands.
+
+After the downfall of Carthage the control of the commerce of Southern
+Europe and Northern Africa descended to the Romans. When Rome became the
+capital of the world, it gathered the wealth and valuable productions of
+all its provinces. Under the consuls and the earlier emperors the
+vigilance of the Roman magistrates and the spirit of the Roman
+government gave every possible security to commerce and prevented for a
+time the rise of monopoly. Nowhere was national union so complete or
+commercial intercourse so perfect as in the Roman empire. The
+intelligence and the power of Rome stimulated and regulated the industry
+of her people and permitted them to enjoy the fruits of their efforts
+without public or private restrictions.
+
+We have seen that the intercourse of Rome and her provinces was
+facilitated by the construction of roads and the establishment of
+imperial posts. During the decline of the empire the maintenance of
+these posts led, however, to a grave abuse. We are informed by Gibbon in
+his "Decline and Fall of the Roman Empire":
+
+"But these beneficial establishments were accidentally connected with a
+pernicious and intolerable abuse. Two or three hundred agents or
+messengers were employed, under the jurisdiction of the master of the
+offices, to announce the names of the annual consuls and the edicts or
+victories of the emperors. They insensibly assumed the license of
+reporting whatever they could observe of the conduct either of the
+magistrates or private citizens, and were soon considered as the eyes of
+the monarch and the scourge of the people. Under the warm influence of a
+feeble reign they multiplied to the incredible number of ten thousand,
+disdained the mild though frequent admonitions of the laws, and
+exercised in the profitable management of the posts a rapacious and
+insolent oppression. These official spies, who regularly corresponded
+with the palace, were encouraged by favor and reward anxiously to watch
+the progress of every treasonable design, from the faint and latent
+symptoms of disaffection to the actual preparation of an open revolt.
+Their careless or criminal violation of truth was covered by the
+consecrated mask of zeal; and they might securely aim their poisoned
+arrows at the breast either of the guilty or the innocent, who had
+provoked their resentment."
+
+After the downfall of the Romans, commerce remained paralyzed during the
+period of Gothic ignorance and barbarism. The crusades for the recovery
+of the Holy Land from the Saracens, in the eleventh and following
+centuries, opened again communication between the east and the west by
+leading multitudes from every European country into Asia; and though the
+object of these expeditions was conquest, and not commerce, their
+commercial effects were both beneficial and permanent. The crusades were
+especially favorable to the commercial pursuits of the Italian states.
+The vast armies which marched from all parts of Europe toward Asia gave
+encouragement to the shipping of Venice, Genoa, and Pisa, which
+sometimes transported them, and always supplied them with provisions and
+military stores. Besides the immense sums which these states received on
+this account, they obtained commercial privileges of great consequence
+in the settlements which the crusaders made in the East. All the
+commodities which they imported or exported were exempted from every
+imposition, the property of entire suburbs in some of the maritime
+towns, and of large streets in others, was vested in them, and all
+questions arising among persons residing within their precincts, or who
+traded under their protection, were decided by their own laws and by
+judges of their own appointment. When the crusaders took Constantinople,
+the Venetians did not neglect to secure to themselves many advantages
+from that event. Nearly all the branches of commerce were in time
+transferred from Constantinople to their city. At the end of the crusade
+period Venice had monopolized nearly all the foreign trade of Europe.
+She supplied the people of Italy, France and Germany with those
+commodities with which the crusaders by their intercourse with more
+refined nations had become acquainted. The possession of many Eastern
+ports and the maintenance of a powerful navy made it possible for the
+Venetians to retain their monopoly for several centuries.
+
+The growth of commerce in Central Europe was but slow, owing to the
+dangers to which it was exposed in those days of feudalism. The mountain
+fastnesses of robber knights, which controlled every road and navigable
+river, were so many toll-gates at which the wayfaring merchant was
+stopped to pay tribute. In time this system of plunder grew to such an
+extent that hundreds of feudal lords relied upon it for their support.
+Such a tax upon commerce greatly enhanced the value of all commodities,
+and this deplorable state of things lasted until the cities made their
+power felt by forming alliances for mutual protection. One of these
+alliances, the Rhenish League, comprised in time seventy towns, and the
+ruins of the strong castles destroyed by its forces still exist along
+the Rhine, picturesque memorials of these lawless times.
+
+Perhaps the most powerful commercial union of the middle ages was the
+Hanseatic League. To protect their commerce, the cities of Hamburg and
+Lubeck formed about the middle of the thirteenth century an alliance for
+mutual defense. The advantages derived from this union attracted other
+towns to the confederacy. In a short time about eighty of the largest
+cities lying between the Baltic and the Rhine joined this famous league,
+which in time became so formidable that its alliance was courted and its
+enmity was dreaded by the greatest monarchs. The League divided its
+territory into several districts. Its members, like railway associations
+of the present day, made their own laws, and met for this purpose at
+regular intervals in the city of Lubeck. The original object of the
+League, mutual assistance against outside attacks, was soon lost sight
+of, and its constantly growing power was used to obtain still greater
+commercial privileges in the adjoining countries, and even to force
+their rulers to concede to its members a commercial monopoly. In 1361 a
+controversy arose between the League and the King of Denmark, which led
+to a long and bitter war between them. This war was participated in by
+no less than seventy-seven cities on the part of the League. It
+terminated in 1370, leaving the Hansa master of the situation. For many
+years after this the League exerted its power in Denmark, Sweden and
+Norway, and the rulers of these countries were compelled to respect the
+wishes and even submit to the orders of these proud merchants. The
+countries bordering on the Baltic Sea remained the domain of the League
+for several centuries. They gathered there immense quantities of raw
+material, which they sold in the various ports of Europe. The influence
+of the League even reached as far as Novgorod in the east and London in
+the west. In both cities the League had its quarters, and within them it
+virtually exercised the right of sovereignty. Its main market was at
+Bruges in Flanders, which was then a bee-hive of industry and thrift.
+There the Italian traders came with the products of the east, such as
+spices, perfumes, oil, sugar, cotton and silk, to exchange them for the
+raw materials of the north. While taxes and imposts everywhere else
+harassed merchants, commerce was free in the cities of Flanders, owing
+to the liberality, or rather shrewdness, of her rulers. In Bruges the
+members of the Hansa met the merchants of Venice on equal terms, and the
+exchange of the products of the north for those of the east and south
+could be effected there to the greatest advantage of both.
+
+While it must be admitted that the Hanseatic League developed the
+resources of Northern Europe, and that, even at the time of its greatest
+power, there was always competition among its own members, the fact
+remains that it abused its power by the suppression of all outside
+competition, and that it usurped rights which belong only to the state,
+thus often producing abuses as great as those which it was organized to
+remedy. Its final downfall was caused by the development of national
+power in the northern kingdoms and the growth of commerce and
+navigation in Great Britain. A stubborn assertion of antiquated
+privileges on the part of the Hansa involved it in a feud with the
+illustrious and lion-hearted Queen Elizabeth of England. In 1589 the
+Queen caused sixty of their vessels to be captured on the Tagus, and
+later even took possession of their hall and wharves in London. After
+this the League's decline was very rapid, though its organization was
+kept up till 1669, when its delegates held their last session.
+
+Contemporary with the decline of the Hanseatic commerce in the north was
+that of the Italian cities, especially Venice, in the south. They had
+prospered by their commerce with the Levant until Vasco de Gama
+discovered the sea route to East India in 1497. His countrymen, the
+Portuguese, soon utilized this discovery. They took possession of the
+coast of India and of the islands to the south of it. They also
+succeeded in excluding the Arabs from the commerce with that country, of
+which up to that time they had had exclusive control. For this purpose
+they built fortresses and factories on the west coast of Hindostan, took
+possession of the island of Socotra in the Arabian, and of Ormus in the
+Persian Gulf, and forced the Indian princes to grant them the exclusive
+privilege of trading with their subjects. They also captured the city of
+Malacca, where the trade between China, Japan, the Philippine Islands,
+the Moluccas and India had concentrated itself. In this way they got in
+a comparatively short time control of the commerce of India, Arabia, and
+even Egypt. By forcing the Venetians and their commercial allies out of
+those markets, they secured for themselves a monopoly of the commerce
+between Europe and the east. The political ascendancy of the Turks in
+the islands situated in, and in the countries bordering on, the Eastern
+Mediterranean, caused the loss of Cyprus, Crete (Candia) and Morea to
+the Venetians and greatly aided the Portuguese in establishing their
+commercial supremacy. Less profitable for the latter was the possession
+of their American colonies. They, as well as the Spaniards, adopted here
+a policy which ultimately brought commercial and industrial ruin upon
+both. Entirely neglecting agriculture and relying on the mineral
+resources of their transatlantic colonies, which were believed to be
+inexhaustible, they strove to amass riches by reserving for themselves
+the exclusive privilege of supplying them with the manufactures of
+Europe in exchange for American gold. Neglecting home industries, they
+bought their supplies as well as those of their colonies in France,
+Holland and England. A spirit of speculation and adventure enervated
+their people, and led in time to commercial bankruptcy and political
+disaster.
+
+Spain also drained her treasury by her wars with her Dutch dependencies,
+and the loss of her northern provinces was a serious blow to her
+commerce. Antwerp, which had become the successor of Bruges as the
+commercial emporium of the north, began to decline, and Amsterdam, the
+metropolis of the new Dutch republic, became heir to its glory and its
+riches. The young republic at once commenced to compete in the carrying
+trade with Spain and Portugal, and to make inroads into the eastern
+commerce of the latter.
+
+The Dutch East India Company, which was organized in 1602, sent a fleet
+of fourteen vessels into the Indian Archipelago to found colonies in
+Java, Sumatra and the Moluccas. In a short time they had monopolized the
+entire spice trade, which immediately became a source of great wealth.
+A cargo of five vessels, which returned to Amsterdam in 1603, consisted
+of over two million pounds of spices. This cargo was purchased for
+588,874 florins and was sold for 2,000,000 florins. It is under these
+circumstances not surprising that the dividends of the company's
+stockholders often amounted to 75 per cent., and never went below 12-1/2
+per cent. previous to 1720. Holland's colonial trade made Amsterdam the
+commercial metropolis of Europe. It became the grain market from which
+Spain, Italy and other countries drew their supplies. All the products
+of the world found purchasers here, and a well-developed banking system
+greatly facilitated the exchange. The rapid accumulation of fortunes by
+the Dutch merchants and bankers was without precedent in Europe. Besides
+this, the progress which Holland made in ship-building and navigation
+and the advantages which she derived from her colonial trade placed her
+in a position to outstrip all other nations in the carrying trade of
+Europe. During the first half of the seventeenth century the Dutch were
+justly called the freighters of Europe. But the injury which their
+policy did to the commercial and manufacturing interests of other
+European nations led both England and France to adopt measures well
+calculated to accomplish, in a short time, their commercial
+emancipation. Louis XIV., in order to build up French shipping,
+collected a tonnage from every foreign ship which entered a French
+harbor. England went still further. In 1651 Oliver Cromwell promulgated
+the Navigation Act, by which foreign ships were prohibited from
+importing into England any goods except such as were produced or
+manufactured in their own countries. This was a heavy blow at the Dutch,
+who were thus deprived of the privilege of effecting the exchange of
+commercial commodities between England and her colonies as well as the
+continent. The war which the Dutch Republic waged against England, to
+force her to revoke this act, resulted in favor of the latter and ended
+the commercial supremacy of the Dutch in Europe.
+
+England, which before this time had played but a secondary role as a
+commercial power, rose fast to prominence after her successful struggle
+with the Dutch. She commenced to strengthen her industries by the
+adoption of a high tariff policy, and her merchants were encouraged to
+enter into commercial relations with colonists and foreigners. The
+privileges which had been given to foreign tradesmen were revoked, while
+ship-building and navigation were greatly favored by the government. As
+England gained greater strength as a naval power, her foreign policy
+became more aggressive.
+
+In 1600 the "Company of Merchants of London Trading to the East Indies"
+obtained a charter, and, in spite of Dutch and Portuguese opposition,
+soon gained a foothold on the Moluccas and the coast of Malabar, whence
+it extended in time its dominion to Surat, Bombay, Madras and Calcutta.
+Here they built forts and established their commerce. From these places
+the company pushed into the interior, until finally, after repeated
+struggles with the natives and European rivals, the whole of Hindostan
+came under English dominion. As its power increased, the company
+commenced to abuse shamefully the monopoly which it had been granted, by
+inaugurating a system of plunder and oppression which is perhaps without
+its equal in the annals of history. These growing abuses led to frequent
+revolts and seriously imperiled England's dominion in these territories.
+
+To remedy these evils, Parliament at the close of the seventeenth
+century annulled the charter of the company and declared the commerce
+with the East Indies open to all of the King's subjects. A number of
+small companies were formed, but in 1702 they all combined and organized
+the East India Company. Monopoly was again established, but the patience
+of the natives was exhausted, and England's interests in Hindostan were
+in a critical condition. At this juncture the East India Company adopted
+a policy of moderation, and this, together with the aid which the
+government gave to the company, enabled it to strengthen again its
+weakened commercial relations and to further enlarge its territory. But
+the temptation to abuse its power was too great for this strong
+corporation to be long resisted. Abuses again crept into its management
+and continued to grow until its charter was finally repealed.
+
+The policy adopted by Great Britain for the government of her American
+colonies during the eighteenth century was less rapacious, but scarcely
+more just than that pursued in her eastern possessions. To retain those
+colonies as commercial no less than as political dependencies,
+Parliament enacted laws compelling their people to trade with the mother
+country exclusively and laying restraint on their manufactures. But the
+American pioneers felt that they had brought with them across the ocean
+the rights of Englishmen; they objected to taxation without
+representation, and the men who for opinion's sake had left comfortable
+homes to brave upon a distant shore the dangers of frontier life were
+prepared, if necessary, to emphasize their objection by armed
+resistance. England, intent upon maintaining her barbaric system of
+discriminative duties and commercial monopolies, blindly attempted
+coercion, but the war which resulted wrested from the English crown its
+brightest jewel, and the War of 1812 established upon American soil the
+principle of industrial and commercial liberty.
+
+It must not be supposed, however, that America and the United States in
+particular have been free from monopolies growing out of the
+transportation business. Nothing would be farther from the truth. There
+is no law so stringent but that it will be violated; there is no
+government so vigilant but that it will at times be imposed upon. It is
+true, our government sanctions no monopoly, but the very liberty of
+action which exists here among corporations as well as individuals
+offers to organized wealth and power a wide field for abuses.
+
+We have seen in the foregoing that almost from time immemorial efforts
+have been made to monopolize transportation and trade, and that these
+efforts were successful whenever either from ignorance or weakness the
+masses fell into political apathy. There is a natural tendency among men
+to utilize commercial advantages to the detriment of others. In modern
+times the opportunities for building up large monopolies have greatly
+increased and have been turned to the most profitable account by
+designing men. Great and even unbearable abuses have always followed
+where the greed and ambition of such men have not been checked by
+governmental agencies. In this respect the people of the United States
+have had about the same experience as the rest of mankind. Ever since
+the introduction of railroads into this country there has been a
+well-marked drift toward monopolizing the transportation business.
+
+As long as the dangers of monopoly remained unknown to the American
+people, legislation for the control of railroads and other public
+carriers was both scarce and crude, and shrewd railroad men were not
+slow in taking advantage of the situation. It is foreign to the design
+of this treatise to give a complete history of railroad monopoly in the
+United States. The author will therefore confine himself to showing that
+transportation companies will, like the great commercial organizations
+of the past, when left to follow their instincts, invariably use their
+power to oppress the public by exacting excessive charges for their
+services, or to discriminate against the many by extending special
+privileges to the few. Hundreds of cases might be given to illustrate
+the above rule, but a history of two of these corporations will suffice
+to show to what extent corporate abuses can be carried, and to serve as
+a warning against the adoption of any "_laissez faire_" policy in the
+railroad legislation of the future. The corporations selected for this
+purpose are the Camden and Amboy Railroad and the Standard Oil
+Companies, both typical representatives of the Rob Roy policy which
+organized wealth has pursued since the dawn of civilization, when not
+prevented by the wisdom and strength of a good government.
+
+
+THE CAMDEN AND AMBOY RAILROAD COMPANY.
+
+For almost forty years the Camden and Amboy Railroad was the only direct
+route between the cities of New York and Philadelphia. It is doubtful
+whether previous to the war a more important or a more remunerative road
+existed in the United States, for, besides connecting the two largest
+cities in the Union, it formed part of the direct land route from the
+East to the South.
+
+The efforts to open a direct through route between New York and
+Philadelphia date back to the year 1812, when the construction of a
+canal between the Hudson and the Delaware was proposed, but an
+ill-advised jealousy of the State of Pennsylvania delayed for many years
+the realization of the project. When this obstacle was finally overcome,
+a change of sentiment had taken place in New Jersey. Railroads had just
+made their appearance in the United States, and a large number of the
+people of New Jersey preferred a railroad to a canal.
+
+The matter was finally compromised in the legislature of New Jersey,
+which on the 4th of February, 1830, simultaneously granted charters to
+the Delaware and Raritan Canal Company and the Camden and Amboy
+Transportation Company, fixing the capital stock of each company at
+$1,000,000, with the right to increase it to $1,500,000. The charter
+further stipulated what taxes should be paid to the State, and also
+contained the provision that within five miles of the starting-point and
+within three miles of the terminus of each line no other railroad or
+canal should be built. It was believed the existence of both a water and
+a land route would be sufficient to maintain competition on this
+important thoroughfare of interstate traffic. The construction of the
+railroad, which had been surveyed in almost a straight line between its
+termini, was at once commenced. A number of well-to-do and practical men
+took hold of the enterprise, among them one John Stevens, who together
+with his three sons took one-half of the capital stock. The canal
+project did not do so well at first. At the middle of the year 1830 only
+about one-twelfth of its capital stock had been sold, and there was
+great danger that the company might forfeit its charter, as the time
+allowed for the subscription of its stock was nearing its end. At this
+juncture Robert Field Stockton, a young man of ability, enthusiasm and
+wealth, came to the rescue of the canal company. He not only bought for
+himself a goodly share of the canal stock, but also prevailed on his
+rich father-in-law, Mr. John Porter, to invest $400,000 in the
+enterprise. The financial difficulties of the company were thus removed.
+At the next session of the legislature Mr. Stockton secured an amendment
+to their charter which apparently only authorized the enlargement of the
+canal, but in reality empowered the canal company to construct a second
+railway.
+
+It was from the beginning Mr. Stockton's object to share with the
+railroad company the advantages which their line promised to give them.
+The enlargement of his company's franchise placed him in a position to
+dictate terms to the Camden and Amboy Transportation Company. The latter
+was given the choice, to prepare for competition with a rival railroad
+line, or to consolidate with the Delaware and Raritan Canal Company. It
+chose the latter alternative, and on the 15th day of February, 1831, the
+two companies became one. The consolidation still required the sanction
+of the legislature. This was obtained in consideration of the transfer
+of 2,000 shares of the capital stock of the company to the State. It was
+further stipulated that the new company should pay to the State a tax of
+10 cents for each passenger and of 15 cents for each ton of freight
+carried over its line through the State, as well as an annual tax of
+$30,000, and that the State in return should protect the company against
+any and all competition in the direct passenger and freight traffic
+between the cities of New York and Philadelphia. Serious doubts were at
+the time entertained by many, whether the State of New Jersey under the
+Federal Constitution possessed the right to thus create a monopoly in
+transportation facilities, and to regulate arbitrarily the commerce
+between sister States.
+
+Five days after it had granted this charter to the Camden and Amboy
+Company, the legislature granted another charter authorizing the
+construction of a railroad from Jersey City to New Brunswick on the
+Raritan River. On the 23d of February of the same year a charter had
+been granted by the legislature of the State of Pennsylvania to a
+company which had been formed for the purpose of constructing a railroad
+from Philadelphia to Trenton. This company had likewise been authorized
+by its charter to buy the right of way for a railroad from Trenton to
+New York, which it proceeded at once to do. It was evident that as soon
+as the two new roads would meet at New Brunswick, an understanding would
+be reached between them, by which another through line would be created
+between New York and Philadelphia, which would have the advantage over
+the Camden and Amboy road that it touched the capital of New Jersey and
+could thus make itself serviceable to members of the legislature,
+officers of State and influential politicians.
+
+The Camden and Amboy Freight Company soon arrived at the conclusion that
+it could not permit such rivalry. It appealed to the legislature for
+protection. Resolutions were passed in its favor, but the Philadelphia
+and Trenton Railroad Company paid no attention to those resolutions, but
+quietly continued to lay its track. Mr. Stockton and his friends did not
+dare to invoke the aid of the courts, because a judicial investigation
+might have resulted in the destruction of their own charter. The
+situation was critical, but Mr. Stockton was equal to the occasion. He
+bought quietly a sufficient number of shares to control the management
+of the Philadelphia and Trenton road, and, in April, 1836, secured the
+consolidation of the Philadelphia and Trenton and the Camden and Amboy
+railroad companies.
+
+The canal of the company was not completed until 1838. It had consumed a
+sum of money largely in excess of the original estimate. To connect the
+two lines of the consolidated company, a branch road was constructed
+from Trenton to Bordentown. Later the road from Trenton to Brunswick was
+completed and an agreement entered into with the Jersey City company for
+a division of the traffic of the two roads. The large cost of these
+improvements suggested to the company the advisability of increasing its
+revenues and of decreasing its expenditures. Its charter provided for a
+payment to the State of 10 cents for each through passenger. By an
+artifice the company avoided the payment of this tax. It compelled its
+through passengers to walk over the bridge at Trenton and then continue
+their journey by rail via Bordentown to Jersey City.
+
+The company's charter also stipulated, that the fare between New York
+and Philadelphia should not exceed $3 per passenger. Its officers
+interpreted this stipulation to apply only to the intermediate traffic
+and proceeded to collect $2.50 for the trip from New York to Trenton,
+and $1.50 from there to Philadelphia, thus increasing the fare for the
+entire journey to $4.00, one dollar above the maximum allowed by law.
+One Jacob Ridgway, who was the owner of a ferry-boat at Camden, saw here
+an opportunity for starting a lucrative business. He bought a steamer
+and carried passengers from Philadelphia to Trenton for one-third of the
+fare demanded by the railroad. After the Camden and Amboy Company had
+made several unsuccessful attempts to intimidate Mr. Ridgway and his
+force, one of which even brought Mr. Stockton in contact with the
+criminal courts, it purchased the boat with all terminal facilities at
+Philadelphia and Trenton. The attention of the legislature of New
+Jersey was repeatedly called to the company's failure to comply with the
+provisions of its charter, but these appeals were on the whole of no
+avail. In 1842, after a long discussion, a resolution was carried
+declaring the charge of $4 for the through journey illegal, but the
+company entirely ignored this legislative reminder and continued its old
+tariff.
+
+The company's charter also reserved for the State the right to acquire
+the Camden and Amboy road under certain conditions upon the payment of a
+reasonable compensation. In 1844, through Mr. Stockton's engineering,
+the constitution of New Jersey was so amended as to practically deprive
+the State of the power to acquire the company's property.
+
+During the first few years of the existence of the Camden and Amboy
+Transportation Company its business was managed in the interest of its
+owners, but soon a few of its leading stockholders managed to turn its
+enormous profits into their own pockets. The Stevens and Stockton
+families, together with two other directors of the Camden and Amboy
+Company, had come into possession of a line of steamers that plied on
+the Raritan, between New Brunswick and New York. The enterprise, in
+spite of its largely watered capital, had been made to pay dividends
+ranging from 30 to 40 per cent. Its owners saw an opportunity for a
+larger field of usefulness and larger dividends. In 1834 a majority of
+the board of directors of the Camden and Amboy Company proposed that the
+company rid itself of the responsibility connected with the
+transportation business and lease its railroad and canal. Mr. Stevens,
+as representative of the Camden and Amboy Company, then negotiated with
+Mr. Stevens, the representative of the Napoleon Steamer Company, and the
+negotiations soon resulted in an agreement between the two companies by
+which the latter leased the railroad and canal lines of the former and
+agreed to pay it a fixed toll of $7.64 per ton upon all freights carried
+by rail, and one-quarter of all its revenues derived from the canal.
+Soon afterward the Napoleon Company entered into a similar contract with
+the Camden Ferry Company and now had a complete monopoly of the
+transportation business between New York and Philadelphia. It at once
+commenced to develop a system of organized plunder. Instead of the
+maximum charter tariff of 8 cents per ton per mile, it charged 10, 12,
+and even 15 cents. The through rates charged were several times as high
+as those fixed by the charter. Canal rates were raised to such an extent
+as to make them prohibitory and to compel the public to ship by rail. It
+is difficult even to estimate the total annual profits of the
+directorial syndicate. Their accounts, if any were kept, were not
+accessible, and surmises can only be based upon such data as
+occasionally found their way to the public. In 1845 the share of the
+canal tolls paid to the company's stockholders was $359,000. The
+directors' share under the terms of their lease is thus found not to
+have been less than $1,077,000. Another item of $170,000, tolls
+collected for the transportation of 27,000 tons of freight, was so
+divided that the Camden Ferry Company, or its other self, the
+directorial syndicate, received $32,000 for one mile, while the Camden
+and Amboy Railroad Company received $63,000, or less than twice as much,
+for ninety-two miles. The directors under their lease were entitled to
+the remaining $75,000.
+
+The service of the company was as bad as it was expensive; its trains
+were slow and irregular, and its employes arrogant. The syndicate which
+controlled the company defied its stockholders, the public and the
+courts alike. When one of the stockholders, a Trenton merchant by the
+name of Hagar, applied to the courts for an order to compel the
+directors to produce their books and render an account, the syndicate
+bought Mr. Hagar's shares, for which he had paid $125 a share, at the
+price of $1,456 a share. The suit was then withdrawn and the matter
+hushed up.
+
+In 1848 a number of articles appeared in a paper published at
+Burlington, Pa., which were signed by "A Citizen of Burlington" and
+contained much surprising information concerning the Camden and Amboy
+Transportation Company. It was charged that the directors had defrauded
+both the State and the company's stockholders of large sums of money,
+that they had grossly violated their charter by charging illegal and
+extortionate rates, oppressive to both commerce and travel. It was shown
+that while the average rate per ton per mile of thirty-five neighboring
+roads was 2.85 cents, that of the Camden and Amboy Company was 4.54
+cents. It was also shown that neither the stockholders nor the State had
+received the share of the company's revenues to which they were
+entitled. These articles were extensively reprinted and caused a great
+commotion wherever they appeared. After the first storm had subsided the
+directors issued an address to the people of New Jersey, in which they
+bitterly complained of the people's loss of confidence in their
+integrity, and declared that the charges preferred against them were
+founded on falsehoods.
+
+The "Citizen of Burlington" replied by accusing the directors of
+defalcation and falsifying their books. He charged that from 1840 to
+1847 no account had been rendered of the receipt of no less than
+$5,266,431, on which $493,066 was due to the State. As soon as the
+legislature convened, a resolution was introduced that a commission be
+appointed to investigate the charges preferred against the Camden and
+Amboy Transportation Company. The resolution was adopted, but it was
+virtually left to the accused to select the members of the commission.
+That the directors had a guilty conscience appeared from the fact that
+the last annual report of the company, which had just been printed, was
+withdrawn and destroyed. To silence their unknown accuser, they
+threatened him with criminal prosecution. He now gave his name. It was
+Henry C. Carey, the noted writer and authority on political economy. Mr.
+Carey did not give up the contest. He proceeded to show how the policy
+of the managers of the Camden and Amboy Transportation Company depressed
+commerce, manufactures and agriculture alike. He showed how the company
+as a public carrier discriminated in favor of industries which they
+carried on as private individuals. He claimed that the company had
+forfeited its charter, and that it was the duty of the State to
+authorize the construction of another road. In the meantime, early in
+1849, the legislative investigation committee submitted its report. It
+was perhaps as shameless a document as was ever placed before a
+legislative assembly. It lauded the directors, to whose influence the
+members of the commission owed their selection, and whitewashed their
+past management of the company's affairs.
+
+But the people of New Jersey were far from being satisfied with this
+report and demanded the appointment of another committee. Another
+investigation was ordered, and this time the company, or rather its
+directors, found it impossible to control the selection of its members.
+Soon after their appointment the committee asked Mr. Carey to lend them
+his assistance in their labors, and he readily consented. During the
+summer of 1849 the members of the committee had occasion to go to
+Bordentown, to inspect the company's books. From that time on a
+wonderful change seemed to have come over the committee. They found they
+could dispense with Mr. Carey's further services. What had previously
+appeared to them a ring of rapacious monopolists seemed now an
+association of worthy philanthropical gentlemen. In their report to the
+legislature they completely exonerated the company's managers. They
+admitted that the State had not been paid all that was due to it, but
+they asserted that this difference in the company's accounts was due
+solely to clerical errors, for which the management were in no wise
+responsible. The report was accepted, although not even the annexed
+testimony supported it, and thus the matter was dropped.
+
+This was a great victory for Mr. Stockton and his friends. It
+demonstrated the success of their methods of dealing with public
+servants. Mr. Carey repeated his charges, but the directors failed to
+prosecute him for libel as they had threatened. He asked that he be
+permitted to inspect the company's books, but was met with a peremptory
+refusal. Public opinion was defied, and the old methods were continued.
+
+The extortionate and discriminating tariff of the only through route of
+New Jersey affected seriously the agricultural as well as the commercial
+interests of that State. The Camden and Amboy monopoly kept the State of
+New Jersey for many years far behind the New England States in railroad
+facilities. In 1860 New Jersey had only one mile of railroad for every
+17.6 square miles of territory, while the proportion of miles of
+railroad to square miles of territory for the same year was 1 to 7.9 in
+Connecticut, 1 to 7.6 in Rhode Island, and 1 to 6 in Massachusetts. At
+present New Jersey has one mile of railroad to every 3.79 square miles,
+and therefore leads all the States in the Union in density of railroad
+track.
+
+The question may be asked how the Camden and Amboy Transportation
+Company, or rather the syndicate which controlled it, contrived to
+maintain its power for so many years, to the great detriment of industry
+and commerce. The only answer that can be given is that the men for whom
+the maintenance of the monopoly was a source of great wealth were
+constantly using a part of this wealth for the corruption of those who
+were in a position to influence public opinion or to direct the policy
+of the State. Prominent politicians were favored with passes, attorneys
+were retained by the company as local solicitors, corrupt and servile
+legislators were bribed by money or the promise of lucrative positions,
+and newspapers were given large subsidies. In addition to this public
+men were constantly made to realize the political power of the company,
+whose many employes had always been trained to do the bidding of their
+masters. If the opposition, in spite of this, was ever successful at
+legislative elections, the company's managers found it less expensive to
+gain the good will of a few members of the legislature after election
+than it would have been to gain the good will of their constituents
+before election. Dissatisfied stockholders who threatened with judicial
+investigation were quietly bought out or impressed with the danger of
+inviting public discussion in regard to the validity of the company's
+charter, as it might lead to its annihilation. The good people of New
+Jersey made several attempts to rid the State of the despotism of the
+company by making the question a political issue, but they were each
+time defeated through the lavish and scandalous expenditure of the
+company's money.
+
+The original charter of the Camden and Amboy Railroad Company was
+granted for a period of twenty years, and should have expired in 1853,
+but its managers succeeded in having it extended to January 1, 1859. In
+1854 another extension was asked for, and after a long and bitter debate
+the company was again triumphant. An act was passed on the 16th of
+March, 1854, making it illegal to build previous to the first day of
+January, 1869, without the consent of the Camden and Amboy
+Transportation Company, a railroad in the State of New Jersey for the
+transportation of passengers and freight between New York and
+Philadelphia. At the end of this period even a third extension was
+granted, and the company, though after January 1, 1867, under a new
+name, maintained its monopoly until it consolidated, in 1871, with the
+Pennsylvania Railroad Company.
+
+That the spirit of the past is still at work was shown by the recent act
+of the legislature of New Jersey legalizing the consolidation of the
+coal roads. The coal barons found the legislature as servile as the
+managers of the Camden and Amboy Railroad Company had found them of
+yore, and their well-planned scheme would probably have been successful
+had it not been for Governor Abbot's courageous veto of the disgraceful
+act, and it is more than probable that they will yet succeed. They have,
+in fact, during the last year advanced the price of coal about one
+dollar per ton.
+
+
+THE STANDARD OIL MONOPOLY.
+
+The Standard Oil monopoly may be said to be the crowning monument of
+corporation conspiracy. It is, indeed, doubtful whether the combined
+brotherhoods of mediaeval knights ever were guilty of such acts of
+plunder and oppression as the Standard Oil Company and its railroad
+allies stand convicted of before the American people. The facts that
+have been unearthed by official investigations show a frightful
+prevalence of corporate lawlessness and official corruption, and there
+can be no doubt that, could certain high railroad dignitaries have been
+compelled to testify, and could the truth have been fathomed, it would
+have been found that not only the public, but railroad stockholders as
+well, were victimized by those transactions.
+
+The founder of the Standard Oil monopoly was some twenty years ago part
+owner of a petroleum refinery at Cleveland, Ohio. His fertile brain
+conceived the thought that with the cooperation of the railroad
+companies a few men of means could control the petroleum business of the
+United States. With this end in view he approached the managers of the
+New York Central, the Erie and the Pennsylvania Central railroad
+companies, and on January 18, 1872, entered with them into a secret
+compact by which they agreed to cooperate with the South Improvement
+Company (an organization formed by that gentleman to aid in the
+accomplishment of his designs) to grant to said companies certain
+rebates and to secure it against loss or injury by competition. The
+South Improvement Company, in consideration of these favors, guaranteed
+to the railroad companies a fair division of its freights. The existence
+of this contract soon became known and caused a violent protest among
+the oil-producers. An indignation meeting was held and a committee was
+appointed to wait on the railroad managers and demand fair treatment for
+all.
+
+The railroad companies yielded and promised to give equal rates to all
+shippers and to grant to no person either rebates or any other advantage
+whatever. New rates were fixed for the transportation of both crude and
+refined oil, and it was agreed on the part of the railroad companies
+that at least ninety days' notice should be given of any change that
+might be made in the rates. Steps were also taken to have the charter of
+the South Improvement Company canceled because it had been found that it
+was neither the owner of a refinery nor of an oil well, and could
+therefore not comply with the legal requirements concerning the
+organization of stock companies. While the South Improvement Company
+thus came to a sudden and rather inglorious end, its founders soon
+contrived other means to carry out their ingenious plans. They bought a
+refinery, reorganized by taking the prepossessing title of Standard Oil
+Company, and were now prepared to resume their operations under the
+guise of legal authority.
+
+The railroad companies seemed to have relished their novel business
+connections, for, without paying the least attention to the agreement
+into which they had entered with the other producers and refiners of
+oil, they extended the privileges of the defunct South Improvement
+Company to its successors. The new company received secret rebates
+ranging from 50 cents to $1.32 per barrel. The agreement also contained
+the stipulation that if lower rates should ever be granted to their
+competitors, an additional rebate should be given to the Standard Oil
+Company. Endowed with these privileges, the favored company proceeded to
+unite under its banner, by consolidation, purchase or lease, the
+leading refineries of Cleveland.
+
+The effect of the discriminations practiced against independent
+refineries soon became apparent. In less than two years there were
+closed in Pittsburgh twenty-one refineries, that represented an
+aggregate capital of $2,000,000 and had given employment to over 3,000
+people. A large number of the remaining refineries were forced to
+consolidate with the Standard Oil Company.
+
+The next step toward the entire suppression of competition was an attack
+planned against the independent pipe lines. The Standard had early
+secured control of the United Pipe Line. To exterminate competing lines,
+they again appealed to the railroad companies, and on the 9th day of
+September, 1874, J. H. Rutter, general freight agent of the New York
+Central, issued a new oil tariff which discriminated greatly in favor of
+the oil brought by the United Pipe Line to the refineries. Up to that
+time this company had done from 25 to 30 per cent. of the total business
+of the various pipe lines. Within one year after the adoption of the new
+tariff it did fully 80 per cent. of the entire business. This forced the
+independent lines either to sell out to the Standard or to suspend
+business, for the latter's rebate was larger than their toll. The oil
+tariff of the Pennsylvania Central compelled the independent Pittsburgh
+refiners to ship their refined oil over that company's line, if they
+would avail themselves of the rebate which it granted on the rates for
+the transportation of crude oil to Pittsburgh. The evident purpose and
+the effect of such a tariff was to prohibit oil shipments over the
+Baltimore and Ohio. Had this road made ever so reasonable a tariff, the
+combined charges for the transportation of the crude petroleum from the
+oil regions to Pittsburgh by the Pennsylvania Central, and for that of
+the refined oil to the sea coast by the Baltimore and Ohio, would still
+have been prohibitive in competition with the special transit rates
+granted to the Standard Oil Company. As a remedy it was proposed to
+organize a new pipe line, it being believed that the crude oil could be
+brought to Pittsburgh by that line, refined there, shipped to the
+seaboard by the Baltimore and Ohio, and sold there at as good or even a
+better profit than the product of the Standard, notwithstanding the
+favors received by the latter from the allied trunk lines. This movement
+resulted in the creation of the Columbia Conduit Company, which at once
+proceeded to lay its pipes from the oil wells to Pittsburgh. Under the
+laws of the State of Pennsylvania it became necessary for this company
+to obtain the permission of property-holders to lay the pipes through
+their lands. Consent was everywhere readily given, and the pipes were
+laid without hindrance until the track of the Pennsylvania Railroad was
+reached, within a few miles of the Pittsburgh refineries. This company
+peremptorily refused to let the pipes be laid under its track. The pipe
+line company after some delay contrived a way to obviate the difficulty.
+It laid its pipes on each side of the road as close to the track as it
+could without trespassing against the legal rights of the Pennsylvania
+Central, and then conveyed the oil from one side of the track to the
+other by means of large oil tanks on wheels, which could not be
+prevented from passing over the railroad track at the public crossing.
+After several months the railroad company allowed the pipes to be laid
+under its track, but it soon appeared that another combination had been
+effected to destroy the value of this concession. A railroad war had
+given the three trunk lines an opportunity to force the Baltimore and
+Ohio into the pool. A uniform rate of $1.15 was established for
+shipments of refined petroleum from any point to the seaboard. While
+this was in itself an unjust discrimination against Pittsburgh, which is
+250 miles nearer tidewater than Cleveland, the railroads in addition
+granted the Standard secret rebates which enabled it to sell its oil on
+the coast for less than the sum of its first cost at the refineries and
+the open rate of transportation to the points of export. The independent
+refiners of Pittsburgh found themselves again cut off from the market,
+but necessity soon made them discover another outlet. Shipping their oil
+down the Ohio River to Huntington, W. Va., they had it taken by the
+Chesapeake and Ohio Railroad to Richmond. In spite of the fact that this
+route was more than twice as long as the direct line from Pittsburgh to
+the seaboard, and in spite of the further fact that it necessitated an
+expensive transfer, a rate equal to about two-thirds of the trunk line
+rate for the direct shipment proved remunerative to the Chesapeake and
+Ohio. The independent refiners kept up their competition for some time,
+but the great disadvantage of river travel and the insufficient export
+facilities of Richmond finally forced them to give up the contest.
+
+Until the year 1877 the Standard Oil Company had worked hand in hand
+with the railroads. It had obtained all its privileges by asking for
+them and by holding out inducements to railroad managers to grant them.
+It now commenced to dictate terms to refractory railroad companies.
+
+The Pennsylvania road ventured to carry oil not the property of the
+Standard on terms which that company did not approve. The latter ordered
+the road to refuse to carry the product of their competitors. This the
+railroad company declined to do, and the Standard at once withdrew its
+custom. The Pennsylvania retaliated by carrying the oil of the
+independent refineries at merely nominal rates and even went so far as
+to make its rates dependent upon the profits realized by the shippers. A
+fierce freight war was thus precipitated, in which the Erie and New York
+Central supported the Standard Company. The Pennsylvania road was soon
+forced to surrender and sign an ignominious treaty.
+
+The Baltimore and Ohio, which had again commenced to carry the product
+of those Pittsburgh refineries which received their crude oil through
+the Columbia Conduit Company, was in a similar manner forced to reject
+their freights. The pipe line, whose value was thus almost entirely
+destroyed, was soon after sold to the Standard Oil Company. This company
+had now an almost complete monopoly of the oil business of the United
+States, and still it was not satisfied. It appears that some of the
+producers of crude oil had been in the habit of shipping a part of their
+product in spite of the advantages which the Standard had through its
+rebates. To prevent even these shipments, or rather to exact another
+tribute from railroad stockholders, the American Transfer Company, one
+of the auxiliaries of the Standard Oil Trust, in 1878, demanded and
+received from the Pennsylvania road a "commission" of 20 cents a barrel
+on all shipments of petroleum _made by any_ shipper. It had been shown
+to the satisfaction of the Pennsylvania Railroad Company that similar
+commissions, ranging from 20 to 35 cents a barrel, were being paid by
+the New York Central and Erie roads.
+
+When, in 1879, an effort was made to establish a pipe line from the oil
+regions to the seaboard, nothing was left undone by the trunk lines to
+thwart the enterprise. The new company finally succeeded in making
+connection with a railway which had no part in the pool, and there was
+some hope that under this arrangement competition might at least be
+maintained at some points. The Standard Company again appealed to the
+trunk lines to protect it against injury by competition and obtained
+from them a special rate of 20 cents per barrel, which rate was even
+reduced to 15 cents per barrel two months later. Against such a rate it
+was impossible to compete, and after a short struggle the new line found
+itself compelled to sell its works to the Standard.
+
+To crown its monopoly, the Standard Oil Company finally bought of the
+New York Central and Erie roads their terminal facilities for the
+transportation of oil, and thereby made it virtually impossible for them
+to transport oil for any of its few remaining competitors. Mr. Josiah
+Lombard, part owner of the New York refinery, stated in 1879 before the
+investigating committee of the legislature of New York that in 1878 he
+had requested the Erie Company to transport for him 100 cars of crude
+oil from Carrollton to New York; that he had called upon Mr. Vilas, the
+general freight agent of the company, in person, but had never been able
+to obtain the cars, though the oil had been held in Carrollton three or
+four months ready to be loaded. This gentleman also testified that he
+had found it impossible to obtain cars from the New York Central, and
+that the company's general freight agent had informed him that the road
+did not own and could not furnish any oil cars.
+
+After the Standard Oil Company had secured control of the various pipe
+lines of the oil regions, it frequently lowered the price of crude oil
+to such an extent as to make its production unprofitable. It even
+refused to buy oil, basing its refusal upon the ground that the railroad
+companies failed to furnish cars for its transportation. When the
+well-owners had their tanks filled, they had the choice to let the oil
+run away or to be at the expense of closing up their wells. In one
+instance, however, when their ruse threatened to cause a riot, several
+hundred cars were brought to the wells within a few hours.
+
+The Standard Oil Trust, not satisfied with the monopoly of the wholesale
+trade, even tried in places to control the retail trade by peddling oil
+at private houses. This method of destroying competition was chiefly
+resorted to where independent dealers obtained their supply by a water
+route.
+
+That many of the deeds of the Standard are dark is evident from the fact
+that its members, when summoned by the Hepburn committee, declined to
+testify, lest their testimony be used to convict them of crime.
+Officials of the trust have bribed or attempted to bribe employes of
+rival firms, for the purpose of ruining their business. By its peculiar
+methods the company has been successful in courts of justice and
+legislative halls, and has enjoyed an impunity for its conspiracy
+against the public that is without precedent in America. It has
+accumulated a capital of more than $100,000,000, and it is even claimed
+that for years its annual dividends have exceeded in amount the capital
+actually invested. This is not at all strange when it is considered that
+they have levied upon the producers, consumers and transporters alike.
+Mr. Cassat testified before the New York investigating committee that in
+eighteen months the railroads had paid the Standard in rebates no less
+than $10,000,000. And the very payment of these enormous rebates
+enabled the Standard to decrease the price of oil to the producer and to
+increase it to the consumer.
+
+It is claimed by the defenders of the Standard monopoly that under the
+trust the price of petroleum has been constantly decreased to the
+consumer. That the price of kerosene is lower now than it was fifteen
+years ago is undoubtedly true, but the reductions were brought about not
+by the trust, but in spite of the trust. The price now maintained is an
+unnatural one. The Standard Oil Company never lowered the price of its
+oil except when compelled to do so by competition. The largely increased
+output of crude oil, the improved methods of refining, the greatly
+lowered cost of transportation would have lowered the price of coal oil
+without the philanthropy of the Standard Oil Company. Iron, steel,
+calico, woolen goods and a thousand other commodities have within almost
+the same period suffered much larger reductions than coal oil. But even
+if the Standard monopoly had voluntarily lowered the price of its
+products, the American people could never approve of its methods. They
+can never be made to believe that the end sanctifies the means,
+especially when those means are railroad favors, secret combinations,
+bribery, intimidation and lawless arrogance.
+
+Many other interesting cases might be given. The Southern Pacific
+Railway Company, for instance, owns nearly all of the railways of
+California, and enjoys at the present time almost a complete monopoly of
+the transportation business of that State and much more of the Pacific
+Coast. Perhaps no set of managers would be more considerate of the
+people's rights in the absence of legal restraint than those in charge
+of this company, yet there is not a business man on the Pacific Coast
+who comes in contact with this company who does not realize and feel
+the power of its iron hand, unless it be those who for various reasons
+are recipients of its special favors. It has become notorious that the
+legislature, Board of Railroad Commissioners and some of the judges of
+the courts of that State are as servile to the demands of this railway
+company as are its own employes.
+
+The railway company is a closely organized body of shrewd, active men,
+while those who furnish business for it are not organized, and they will
+never be able to properly protect their own interests until they control
+the machinery of their State government.
+
+
+
+
+CHAPTER V.
+
+RAILROAD ABUSES.
+
+
+As has already been shown, railroad enterprise met with comparatively
+little opposition in the United States, for, as compared with the
+interests certain to be benefited by the introduction of the new mode of
+transportation, those likely to be injured by it were insignificant. It
+is true, the innate conservatism of man even here recorded its
+objections to the innovation. It viewed with distrust the new power
+which threatened to revolutionize well-established systems of
+transportation and time-honored customs and to force upon the people
+economic factors the exact nature and value of which could only be
+ascertained by practical tests. But the progressive portion of the
+community was so decidedly predominant that these protests were soon
+drowned in the general demand for improved facilities of transportation.
+The farmer who had to haul his produce a great distance to reach a
+market appreciated the advantages to be derived from the location of a
+railroad station nearer home. The manufacturer who heretofore had, had a
+very limited territory for the sale of his products well realized that
+he could with the aid of a railroad enlarge his territory and increase
+his output, and with it his profits. The pioneer merchant found that he
+could no longer compete with former rivals in adjoining towns, since the
+iron horse had reached them and lowered their freights, and he also
+became a convert to the new order of things and clamored loud for
+railroad facilities. Railroads seemed the panacea for industrial and
+commercial ills, and every inducement was held out and every sacrifice
+made by communities to become participants of their blessings. So great
+was the estimate of the conveniences afforded by them and so strongly
+was public opinion prejudiced in their favor that it is no exaggeration
+to say that railroad companies as a rule were permitted to prepare their
+own charters, and that these charters almost invariably received
+legislative sanction.
+
+To such an extent was the public mind prepossessed in favor of railroads
+that any legislator who would have been instrumental in delaying the
+granting of a railroad charter for the purpose of perfecting it, to
+protect the people against possible abuses, would have been denounced as
+a short-sighted stickler and obstructor of public improvements. Anxious
+for railroad facilities, the people were deaf to the warnings of
+history. Their liberality knew no bounds. National, State and county aid
+was freely extended to new railroad enterprises. Communities taxed
+themselves heavily for their benefit, and municipalities and individuals
+vied with each other in donating money, rights of way and station
+buildings. This was especially true of the West, whose undeveloped
+resources had most to gain by railroad extension. So large were the
+public and private donations in several of the Western States that their
+value was equal to one-fifth of the total cost of all the roads
+constructed. To still more encourage promoters of railroad enterprises,
+general incorporation laws were passed which permitted companies to be
+formed and roads to be built practically without State supervision. In
+their admiration for the bright side of the picture, the people entirely
+overlooked the shady side.
+
+Besides this, there was virtually an absence of all law regulating the
+operation of railroads. It was, under these circumstances, not strange
+that abuses early crept into railroad management which, long tolerated
+by the people and unchecked and even encouraged by public officers,
+finally assumed such proportions as to threaten the very foundation of
+free government. Great discoveries that add rapidly to the wealth of a
+country tend to overthrow a settled condition of things, and organized
+capital and power, if not restrained by wholesome laws and public
+watchfulness, will ever take advantage of the unorganized masses. The
+people of those regions which the railroad stimulus had caused to be
+settled thrived for years so well upon a virgin soil that they gladly
+divided their surplus with the railroad companies. They looked upon the
+railroads as the source of their prosperity and upon railroad managers
+as high-minded philanthropists and public benefactors, with whom to
+quarrel would be an act of sordid ingratitude, and they paid but little
+attention to the means employed by them to exact an undue share of their
+earnings. Railroad men did whatever they could to foster through their
+emissaries this misplaced adoration. They posed before the public as the
+rightful heirs of the laurels of Watt and Stephenson, insisting that
+their genius, capital and enterprise had built up vast cities and opened
+for settlement and civilization the boundless prairies of the West.
+These claims have been persistently repeated by railroad men, though
+they are so preposterous that they scarcely deserve refutation. The
+railroad, gradually developed by active minds of the past, and greatly
+improved by the inventions of hundreds of men in the humbler walks of
+life, is the common inheritance of all mankind, though no class of
+people have derived greater benefits from it than railroad constructors,
+managers and manipulators. Railroad managers are no more entitled to
+the special gratitude of the public for dispensing railroad
+transportation at much more than remunerative rates than is the Western
+Union monopoly for maintaining among us an expensive and inefficient
+telegraph service. No one believes that the disbanding of the Western
+Union would leave us long without telegraphic communication. In like
+manner railroads will be built whenever and wherever they promise to be
+profitable. If one company does not take advantage of the opportunities
+offered, another will. That large cities have been built up by the
+railroads is true, but it is equally true that these cities by their
+commerce and manufactures administer to the prosperity of the railroads
+as much as the railroads administer to theirs. Commercial centers in
+days gone by existed without railroads, but railroads could not long
+exist without the stimulating influence of these busy marts of trade.
+The same argument applies with still greater force to the agricultural
+sections of our country, especially the great Northwest. The dry-goods
+merchant might as well boast of having clad the public as the railroad
+manager of having built up farming communities by selling to them
+transportation.
+
+And yet the American people have never ceased to be mindful of the
+conveniences afforded to them by this modern mode of transportation. On
+the contrary, they have been but too prone to credit railroad men with
+being benefactors, when they were but beneficiaries, and this liberality
+of spirit made them overlook, or at least tolerate, the abuses which
+grew proportionately with the wealth and power of the companies.
+
+The first railroad acts of England had contemplated to make the roads
+highways, like turnpikes and canals. These roads were established by the
+power of eminent domain. Companies were empowered to build and maintain
+them and to reimburse themselves by the collection of fixed tolls. Had
+the owners of the roads from the beginning been deprived of the
+privilege of becoming carriers over their own lines, the system might
+have so adjusted itself as to become entirely practicable; but as they
+were allowed to compete with other carriers in the transportation of
+passengers and merchandise, they were soon able to demonstrate, at least
+to the satisfaction of Parliament, that the use of the track by
+different carriers was impracticable and unsafe. A number of
+circumstances combined to aid the railroad companies in their efforts to
+monopolize the trade on their lines. In the first place, when the early
+railroad charters were granted, but few persons had any conception of
+the enormous growth of commerce which was destined to follow everywhere
+the introduction of railways. The tolls as fixed in the charters soon
+yielded an income out of proportion to the cost of the construction and
+maintenance of the roads. Their large margins of profit enabled the
+owners of the roads to transport goods at lower rates than other
+carriers and to thus compel the latter to abandon their business.
+Another defect of the original charters worked greatly to the
+disadvantage of independent carriers. They contained no provision as to
+the use of terminal facilities. The railroad companies claimed that
+these facilities were not affected by the public franchise and were
+therefore their personal property. This placed independent carriers at a
+great disadvantage and made in itself competition on a large scale
+impossible. These carriers were thus at the mercy of the railroad
+companies for the transportation of their cars, and the companies never
+permitted their business to become lucrative enough to induce many to
+engage in it. It soon became apparent that under the charters granted
+to the railroad companies such competition as existed on turnpikes and
+canals was out of the question on their roads. In England the great
+abundance of water-ways exercised for many years a wholesome control
+over the rates of railway companies, until these companies, greatly
+annoyed by such restraint, absorbed many of the larger canals by
+purchase and made them tributary to their systems. These companies have
+also acquired complete control over many important harbors.
+
+In the United States the people depended from the beginning of the
+railroad era on free competition for the regulation of railroad charges.
+This desire to maintain free competition led to the adoption of general
+incorporation acts, it being quite generally believed that such
+competition as obtains between merchants, manufacturers and mechanics
+was possible among railroads and would, when allowed to be operative,
+regulate prices and prevent abuses. The remedy was applied freely
+throughout the country, but for once it did not prove successful.
+Stephenson's saying, that where combination was possible competition was
+impossible, was here fully verified. The great ingenuity of the class of
+men usually engaged in railroad enterprises succeeded in thwarting this
+policy of commercial freedom. The opportunities for those in control of
+railroads to operate them in their own interest, regardless of the
+interests of their patrons or stockholders, were so great that men of a
+speculative turn of mind were attracted to this business, which indeed
+soon proved a most productive field for them. One road after another
+fell into the control of men who had learned rapidly the methods
+employed to make large fortunes in a short time.
+
+As the roads multiplied, transportation abuses increased. A considerable
+number of people early favored State control of railroads as the best
+means of regulating transportation, but a majority looked upon the
+existing abuses as being merely incidental to the formative period, and
+hoped that with a greater expansion of the railroad system they would
+correct themselves. And this doctrine was industriously disseminated by
+railroad managers and their allies. They lost no opportunity to impress
+upon the people that State regulation was an undue interference with
+private business and that such a policy would soon react against those
+who hoped to profit by it, inasmuch as it would prevent the building of
+new roads and would thus hinder, rather than aid, in bringing about the
+right solution of the railway question, viz., regulation by competition.
+They contended, in short, that State regulation would be destructive to
+railroads as well as to every other class of property.
+
+Railroad sophistry for many years succeeded in preventing the masses
+from realizing that an increased supply of transportation does not
+necessarily lower its price, or, in other words, that railroad abuses do
+not necessarily correct themselves through the influence of competition.
+A large capital is required to build and maintain a railroad, which must
+necessarily be managed by a few persons. Besides this, the construction
+of a railroad practically banishes at once from its field all other
+means of land transportation. The railroad has thus a practical monopoly
+within its territory, and its managers, if left to follow their
+instinct, will despotically control all the business tributary to it,
+with unlimited power to build up and tear down, to punish its enemies
+and to reward its friends.
+
+It is not true that State control checks railroad building. While it may
+prevent the construction of useless lines and discourage speculation, it
+will encourage the building of roads for which there is a legitimate
+demand. Stockholders as a whole do not participate in the management of
+the roads and do not profit by railroad abuses, the origin of which may
+almost invariably be traced to selfish designs on the part of a few
+entrusted with the management of the property. Where through wise
+legislation these abuses are prevented, the roads are managed in the
+interest of all the stockholders, develop business and enjoy lasting
+prosperity.
+
+It may be laid down as a general rule that the policy which best
+subserves the interests of the patrons of a road is always the best
+policy for its owners. Injustice to a railroad will interfere with its
+usefulness; injustice to shippers depresses production and consumption;
+and in either case both the road and its patrons will suffer. State
+control is therefore as much needed in the interest of the owners of
+railroads as in the interest of their patrons. What should be the nature
+of such control will be discussed hereafter. A full understanding of the
+question at issue, however, makes necessary an inquiry into the various
+abuses which unrestrained railroad management of the past has developed.
+Perhaps no better presentation of the evils and abuses of railroads and
+their consequences can be found than that contained in the report of the
+Senate Committee on Interstate Commerce, submitted by Senator Cullom, in
+1886. This report charges:
+
+1. That local rates are unreasonably high, as compared with through
+rates.
+
+2. That local and through rates are unreasonably high at non-competing
+points, either from the absence of competition or in consequence of
+pooling agreements that restrict its operation.
+
+3. That rates are established without apparent regard to the actual cost
+of the service performed, and are based largely on "what the traffic
+will bear."
+
+4. That unjustifiable discriminations are constantly made between
+individuals in the rates charged for like service under similar
+circumstances.
+
+5. That improper discriminations are constantly made between articles of
+freight and branches of business of a like character, and between
+different quantities of the same class of freight.
+
+6. That unreasonable discriminations are made between localities
+similarly situated.
+
+7. That the effect of the prevailing policy of railroad management is,
+by an elaborate system of secret special rates, rebates, drawbacks and
+concessions, to foster monopoly, to enrich favored shippers, and to
+prevent free competition in many lines of trade in which the item of
+transportation is an important factor.
+
+8. That such favoritism and secrecy introduce an element of uncertainty
+into legitimate business that greatly retards the development of our
+industries and commerce.
+
+9. That the secret cutting of rates and the sudden fluctuations that
+constantly take place are demoralizing to all business except that of a
+purely speculative character, and frequently occasion great injustice
+and heavy losses.
+
+10. That, in the absence of national and uniform legislation, the
+railroads are able by various devices to avoid their responsibility as
+carriers, especially on shipments over more than one road, or from one
+State to another, and that shippers find great difficulty in recovering
+damages for the loss of property or for injury therefor.
+
+11. That railroads refuse to be bound by their own contracts, and
+arbitrarily collect large sums in the shape of overcharges in addition
+to the rates agreed upon at the time of shipment.
+
+12. That railroads often refuse to recognize or to be responsible for
+the acts of dishonest agents acting under their authority.
+
+13. That the common law fails to afford a remedy for such grievances,
+and that in cases of dispute the shipper is compelled to submit to the
+decision of the railroad manager or pool commissioner, or run the risk
+of incurring further losses by greater discriminations.
+
+14. That the differences, in the classifications in use in various parts
+of the country, and sometimes for shipments over the same roads in
+different directions, are a fruitful source of misunderstandings, and
+are often made a means of extortion.
+
+15. That a privileged class is created by the granting of passes, and
+that the cost of the passenger service is largely increased by the
+extent of this abuse.
+
+16. That the capitalization and bonded indebtedness of the roads largely
+exceed the actual cost of their construction or their present value, and
+that unreasonable rates are charged in the effort to pay dividends on
+watered stock and interest on bonds improperly issued.
+
+17. That railroad corporations have improperly engaged in lines of
+business entirely distinct from that of transportation, and that undue
+advantages have been afforded to business enterprises where railroad
+officials were interested.
+
+18. That the management of the railroad business is extravagant and
+wasteful, and that a needless tax is imposed upon the shipping and
+traveling public by the necessary expenditure of large sums in the
+maintenance of a costly force of agents engaged in a reckless strife for
+competitive business.
+
+Under the operation of the Interstate Commerce Law some of these evils
+have, so far at least as interstate commerce is concerned, disappeared,
+and others have been considerably mitigated. It cannot be expected,
+however, that a bad system of railroad management, to the development of
+which the ingenuity of railroad managers has contributed for two
+generations, could be entirely reformed in a few years. It is a
+comparatively easy task for shrewd and unscrupulous men, assisted by
+able counsel and unlimited wealth, to evade the spirit of the law and to
+obey its letter, or to violate even both its letter and spirit, and
+escape punishment by making it impossible for the State to obtain proof
+of their guilt.
+
+It is a humiliating spectacle to see the self-debased railroad officials
+confessing their own guilt by refusing to testify before the Interstate
+Commerce Commission on the ground that they would thereby criminate
+themselves. Congress should have sufficient respect for this commission
+and for itself to provide a way to punish such recusant witnesses who
+are willing to degrade themselves in so base a manner. Whether the law
+will eventually be respected by all depends upon the vigilance and
+courage of the people.
+
+That our railroad legislation is not yet perfect even its friends will
+admit; and as under a free government the demand of an enlightened
+public opinion is the first step toward the enactment of a law, it
+behooves the intelligent citizen to study the various railroad problems
+and to then exert his influence toward bringing about such a solution of
+them as justice and wisdom demand.
+
+In discussing the various evils of railroad management, the author will
+commence with and dwell more particularly upon those abuses which maybe
+said to be the cardinal ones, viz., discrimination, extortion,
+combinations and stock and bond inflation. When these are once
+effectually eradicated, other abuses of railroad management which have
+been the subject of public complaint will not long survive them.
+
+One of the strongest arguments that could be adduced by the founders of
+the American Constitution in favor of the establishment of a more
+perfect union was that the inequality of taxes placed upon commerce by
+the various States was a serious obstacle to its free development. Much
+as the individual States dislike to give up a part of their sovereignty
+to a central or national power, the demand for a common and uniform
+system of commercial taxation was so great that they were forced to
+yield and ratify the new Constitution. Our forefathers thus considered
+it a dangerous policy to permit a single State to lay any imposts upon
+the commercial commodities which passed over its borders. They were
+rightly of the opinion that industrial and commercial liberty was as
+essential to the welfare of the nation as political freedom and that
+therefore interstate commerce should not be hemmed in or controlled
+within State lines, but that the power to regulate it should be lodged
+in the supreme legislative authority of the nation, the Congress of the
+United States. For over half a century Congress alone exercised the
+power thus conferred upon it by the people. After the introduction of
+railroads, however, their managers gradually assumed the right to
+regulate the commerce of the country in their own interest through the
+adoption of arbitrary freight tariffs. Freight charges are practically a
+tax which follows the commodity from the producer to the consumer. An
+arbitrary and unjust charge is therefore an arbitrary and unjust tax
+imposed upon the public without its consent. It is a well-established
+rule of society that laws should be equitable and just to all citizens.
+Congress never assumed the role of Providence by attempting to equalize
+those differences among individuals which superior intellect, greater
+industry and a thousand other uncontrollable forces have ever created
+and will ever create. It has been reserved to railroad managers to
+demonstrate to the public that a power has been allowed to grow up which
+has assumed the right to counteract the dispensations of Providence, to
+enrich the slothful, to impoverish the industrious, to curtail the
+profits of remunerative industries and revive by bounties those
+languishing for want of vitality, to humble proud and self-reliant marts
+of trade and to build up cities in the desert. It will scarcely be
+claimed even by railroad managers that their policy of thus arbitrarily
+regulating commerce originated in philanthropic motives. They are forced
+to admit that it grew out of an attempt to increase the income of
+railroads by the extension of favors to naturally weak enterprises and
+to recoup by overtaxing stronger ones.
+
+The practical operation of this system soon showed to railroad managers
+their power and to the patrons of railroads their dependence upon those
+who dispensed railroad favors. The former soon discovered that their
+power might be used to further their private interests as well as those
+of the roads, and unscrupulous patrons were not slow to offer
+considerations for favors which they coveted. When such favors were once
+granted by the officials of one road, rival roads would grant similar
+ones in self-protection. Thus this vicious system grew until the payment
+of a regular tariff rate was rather the exception than the rule, and
+special rates became an indispensable condition of success in business.
+
+We may distinguish three classes of railroad discriminations, viz.:
+
+1. Those which affect certain individuals.
+
+2. Those which affect certain localities.
+
+3. Those which affect certain branches of business.
+
+Discrimination between individuals is the most objectionable, because it
+is the most demoralizing of all. Where such discrimination obtains,
+every shipper is in the power of the railroad corporation. It makes of
+independent citizens of a free country fawning parasites and obsequious
+sycophants who accept favors from railroad managers and in return do
+their bidding, however humiliating this may be. The shipper, realizing
+that the manager's displeasure or good will toward him finds practical
+expression in his daily freight bills, finally loses, like the serf, all
+self-esteem in his efforts to propitiate an overbearing master. He is
+intimidated to such an extent that he never speaks openly of existing
+abuses, lest he lose the special rates which have been given him, or, if
+he is not a participant of such privileges, lest additional favors be
+given to his rivals and they be thus enabled to crush him. Intimidation
+of shippers prevailed to such an extent previous to the enactment of the
+Interstate Commerce Law that when, in 1879, the special committee on
+railroads appointed by the legislature of New York invited all persons
+having grievances against railroads to come before them to testify, not
+one shipper testified voluntarily. On the contrary, they all insisted
+upon being subpoenaed, hoping that the railroad managers would not
+hold them responsible for any statement which they might be compelled to
+make under such circumstances. The report of that committee stated that
+the number of special contracts in force within the period of one year
+on the New York Central and Hudson River Railroad alone was estimated
+by the railroad people at 6,000. Mr. Depew, when he made the statement:
+"In territories comparatively new, and with little responsibility on the
+part of the managers to distant owners, they became in many cases very
+arbitrary and exercised favoritism and discriminations, which led to
+popular indignation and legislation," had probably not heard of this.
+The committee's report further stated that these special rates conformed
+to no system and varied without rule, that every application for a
+special rate was judged by itself and with reference to its own peculiar
+circumstances, and that it depended upon the judgment, or rather
+caprice, of the officer to whom the application was made, whether and to
+what extent a special rate should be granted. The reductions made to
+privileged merchants often amounted to more than what would be a fair
+profit to the dealer on the commodities shipped. The privileged dealer
+was thus enabled to undersell his rivals and eventually force them out
+of business or into bankruptcy. It was not at all uncommon for railroad
+companies to allow discounts amounting to 50, 60, 70 and even 80 per
+cent. of the regular rates. The New York Central gave a Utica dry-goods
+merchant a special rate of 9 cents while the regular rate was 33 cents
+on first-class freights. The lowest special rate granted at Syracuse was
+as low as 20 per cent. of the regular tariff rate on first-class goods.
+David Dows & Company and Jesse Hoyt & Company, by means of a grain rate
+from 2-1/2 to 5 cents lower than those given to other firms, were
+enabled to control in the winter of 1877 the grain trade of New York.
+The railroad even extended its fostering aid to A. T. Stewart & Co.,
+giving them a special rate "to build up and develop their business." The
+testimony given by Mr. Goodman, assistant general freight agent of the
+New York Central, in reference to the principle by which he was guided
+in granting special rates, is of sufficient interest to be given a place
+here:
+
+Question. You made the rate for A. T. Stewart & Company? Answer. Yes,
+sir.
+
+Q. Was that to build up and develop their business? A. Yes, sir.
+
+Q. That was the object? A. That was one of the objects.
+
+Q. January 11th, 1879? A. Yes, sir.
+
+Q. You thought that business was not yet sufficiently built up and
+developed? A. No, sir; not the manufacturing part of it.
+
+Q. How long had the factories of A. T. Stewart & Company been in
+existence? A. The one at Duchess Junction about three years, I think; it
+isn't completed yet.
+
+Q. And they were languishing and suffering? A. To a great extent; yes,
+sir.
+
+Q. And you acted as a fostering mother to A. T. Stewart & Company to
+build it up? A. Yes, sir; I added my mite to develop their traffic; we
+wanted to carry the freight; boats might have carried it in the summer.
+
+Q. Do you know anything of G. C. Buell & Company? A. Yes, sir.
+
+Q. You wanted to develop their business? A. Yes, sir; they are at
+Rochester--wholesale dealers.
+
+Q. Do you know H. S. Ballou, of Rochester? A. I do not.
+
+Q. He seems to be a grocer there? A. A small concern, perhaps.
+
+Q. Small concerns are not worth developing, according to your opinion?
+A. Our tariff rates are low enough for them at Rochester.
+
+Q. That is to say, a small concern ought to pay 40, 30, 25 and 20, as
+against a large concern, 13; that is your rule? A. Well, if he is a
+grocer, most of his business is fourth-class freight.
+
+Q. And he ought to pay 20, as against 13? A. Yes, sir.
+
+Q. That small man has no right to develop? A. He has the same chance
+that the other man has.
+
+Q. At 20 against 13? A. Oh, yes.
+
+Q. Do you call that the same chance? A. About the same chance, yes, sir.
+
+Q. You consider it the same chance? A. Yes, sir.
+
+Many reasons were assigned by railroad men in justification of their
+practices. It was claimed that special rates were given to regular
+shippers, but it has been proved that not all regular shippers had
+special rates, and that persons who made only single shipments were
+often fortunate enough to obtain special favors. It was further claimed
+that special rates were given to those who, starting out new in business
+or developing new enterprises, needed aid and encouragement. But it was
+shown on the other hand that the aid and encouragement thus given to
+some bankrupted others, and in the end deprived the companies of more
+business than their policy of discrimination brought them. Railroad
+managers also argued that they could afford to make lower rates on large
+shipments than on small ones for the same reasons that the wholesale
+merchant can sell his goods for less than the retailer. But while this
+may be a good reason why rates on car-load shipments should be lower
+than rates on shipments in less than car-load lots, it is certainly no
+good reason why five car-loads belonging to one shipper should be
+transported the same distance for less than five carloads belonging to
+five shippers. In the case of local shipments the car is scarcely ever
+loaded to its full capacity; one shipment after another is taken from it
+as the train moves along, and the car perhaps reaches its final
+destination nearly, if not entirely, empty. The terminal charges are
+here also largely increased, and it is but just that the shipper should
+pay the additional cost of carrying and handling the goods. The case is
+entirely different when the railroad company carries five full carloads
+from one station of its line to another. Whether they have been loaded
+by one or five persons, whether they are consigned to one or five
+persons, matters little to the railroad company. It merely transports
+the cars, and in either case its responsibility and its services are the
+same. The car-load must therefore be accepted and is now generally
+accepted by the best railroad men as the unit of wholesale shipments,
+and any discrimination made in favor of large wholesale shippers is
+arbitrary and unjust. In the shipment of some commodities, such as
+wheat, flour and coal, a small advantage in rates is sufficient to
+enable the favored shipper to "freeze out" all competitors. It is
+certainly not to the interest of any railroad company to pursue such a
+policy; for by driving small establishments out of the business it
+encourages monopoly, which almost invariably enhances prices and
+decreases consumption. The railroad thus suffers in common with the
+public the consequences of its short-sighted policy. That even railroad
+managers realize that these practices cannot be defended upon any
+principle of justice or equity is apparent from the fact that one of the
+never-varying conditions of special rates is that they be kept secret. A
+specimen of a special rate agreement which was placed before the New
+York investigating committee is here presented to the reader:
+
+      "This agreement, made and entered into this eighteenth day of
+      March, 1878, by and between the New York Central and Hudson
+      River Railroad Company, party of the first part, and
+      Schoellkopf & Mathews, of the city of Buffalo, N.Y., party of
+      the second part:
+
+      "Witnesseth, That said party of the first part hath promised
+      and agreed, and by these presents does promise and agree to
+      transport wheat from the elevator in Buffalo, reached directly
+      by said first party's tracks, except at such mills as time
+      said tracks may be obstructed by snow or ice, to the which
+      said second party may erect or operate at Niagara Falls, N. Y.,
+      at and for the rate of one and a quarter cents per bushel.
+
+      "And further, that said first party shall and will at all
+      times give, grant and allow to said second parties as low
+      rate of transportation on all property shipped by them from
+      their said mills at Niagara Falls, and as favorable facilities
+      and accommodation in all respects as are afforded by the party
+      of the first part to the millers of Buffalo and Black Rock.
+      And also that the said party of the first part will transport
+      for said second party all of their east-bound New York freight
+      at and for the price or rate of forty-seven per cent. of the
+      current all-rail through rates, via the route of party of the
+      first part, from Chicago to New York, at the times of shipment,
+      adding thereto three cents per barrel for flour and one and
+      one-half cents per hundred pounds for mill feed or grain, as
+      a terminal charge, to provide for the incidental expenses
+      attending local transportation.
+
+      "And will transport their freight to Boston and all points in
+      New England, taking Boston rates at the same rate as to New
+      York, with ten cents per barrel added for flour and five cents
+      per hundred pounds added for mill feed or grain.
+
+      "Provided, however, and this agreement is made upon the express
+      understanding and consideration, that said second party shall
+      regard and treat this agreement as confidential, and will use
+      all reasonable precaution to keep the same secret.
+
+      "And upon condition also that said second party shall ship
+      by the first party's road all the product from their mill at
+      Niagara Falls destined to all points in New York, Pennsylvania
+      and New England, reached by said first party, directly or by
+      connections with other routes.
+
+      "And this agreement shall be and remain in force for the term
+      of five years from and following the first day of September,
+      1878, after which period it may be terminated by sixty days'
+      written notice from either party.
+
+      "In witness whereof, the parties hereto have signed these
+      presents the day and year first above written.
+
+      "N. Y. C. & H. R. R. R. Co.,
+      By J. H. RUTLER,
+      General Traffic Manager.
+      SCHOELLKOPF & MATHEWS."
+
+It will be noticed that this agreement was based upon the expressed
+condition that Schoellkopf & Mathews treat it as "confidential," and use
+all reasonable precaution to keep it secret. It is difficult to account
+for this strong injunction of secrecy except upon the assumption that
+the managers of the road, conscious of the great wrong which they
+inflicted upon the body of the people by their discriminations, hoped to
+escape public criticism by adopting a policy of secret dealing. Much as
+special rates were sought after, but few shippers to whom they had been
+granted were contented with their lot, for none was confident that his
+rivals did not have better rates than himself.
+
+Discriminations between localities had their origin in the natural
+desire of competing roads to increase their business at the expense of
+their rivals. When two or more railroads touched the same point each
+would attempt to secure the largest possible share of the through
+business by holding out every possible inducement in rates to the
+shippers of that place. Indeed, the freight rates at competitive points
+were often so low that railroad managers found themselves placed in a
+rather unpleasant dilemma. They either had to admit that the rates
+charged by them at non-competitive places were exorbitant or that they
+were carrying the freights of competitive points at a loss and were thus
+squandering the money of their stockholders. They preferred as a rule
+to admit that they were doing competitive business at a loss, but
+asserted that, inasmuch as they were compelled to run their trains, they
+could better afford to do competitive business temporarily at a loss
+than not to do it at all. The same logic might with equal propriety be
+employed by the grocer. To draw to him distant customers, he might offer
+to sell to them at cost or even at a loss; and then, to recuperate, he
+might advance the prices of his goods for his regular customers. If
+there is any difference between the grocer and the railroad company, it
+lies in the fact that the former's old customers would soon find relief
+at a rival store, while the patrons of the railroad at non-competitive
+points are like the traveler in the hands of a highwayman, without
+immediate redress. The railway company which discriminates between
+competitive and non-competitive points forgets that its line is a common
+highway for all points tributary to it; that all have equal rights, and
+that the only differences in tariff which the principles of the common
+law permit are those which arise from a difference of service and cost.
+All other differences that railroad companies may make are unjust
+discriminations in violation of their charter and expose them to a
+forfeiture of the franchises conferred upon them.
+
+The nature and extent of the discrimination practiced between different
+places are often such that no interest of the company can possibly be
+subserved by them, and the conclusion is forced upon us that the
+advantages granted by railroad managers to certain places are designed
+to serve chiefly personal and selfish interests. The great fortunes
+amassed in a brief period of time by railroad managers can in almost
+every case be traced to stock, real estate, commercial and other
+speculations directly or indirectly connected with railroad
+construction or management. And where other than personal interest
+cannot be shown, this is the only basis upon which the many apparent
+absurdities of railroad discrimination can be harmonized.
+
+It is claimed by railroad men that transportation by water is a
+regulator of railway rates which they must respect. It is contended, for
+instance, that, although the cities situated on our large lakes enjoy
+superior commercial advantages which are mainly due to their having at
+their disposal water communication with the Atlantic Ocean, inland towns
+have no cause to complain against the railroads for not equalizing those
+differences which nature has largely created. It might be more difficult
+to meet this argument if, owing to peculiar combinations, these water
+rates were not made to extend their influence to almost every inland
+city north, east and south in the Union, and if those cities were not
+given much lower rates than hundreds of places much nearer the lakes.
+The teamster who, half a century ago, found it impossible to compete
+with the canal, river or lake boats, simply surrendered the field to
+them and confined his operations to such a territory as could give him
+assurance of a profitable business. Let the railroads do likewise. No
+company has a right to destroy a rival route, water or rail, by adopting
+special tariffs for competing points. There are at points accessible to
+water transportation certain freights requiring speedy carriage which
+will go to the railroads at profitable rates, but the heavier freights,
+as coal, lumber and even certain kinds of grain, should go to the
+carrier by water if he can afford to transport them at lower cost.
+
+There have been but few legislative investigations of railroad abuses in
+this country, but the disclosures which they have made to the public
+are astounding. The most noteworthy of these were made by the Hepburn
+committee, of New York, to which reference has already been made. It is
+difficult to understand how a free and enlightened community could so
+long and so patiently bear railroad despotism. Individual discrimination
+might, under the veil of secrecy, long escape notice, but that a system
+of open and widespread discrimination affecting every non-competitive
+and even many a competitive point in the State, doing visible and
+irreparable injury to thousands of shippers, and infringing upon the
+rights of millions, should long be borne by a free and enlightened
+people, is a strange phenomenon of democratic endurance.
+
+It would lead us too far from our subject to review in detail the many
+and glaring instances of local discrimination which the report
+enumerates. A few will suffice to show their scope and nature.
+
+William W. Mack, of Rochester, a manufacturer of edged tools, testified
+that, in order to save fourteen cents per hundredweight on his freights
+to Cincinnati, he shipped his goods to New York and had them shipped
+from there to their destination, via Rochester; and that he availed
+himself of the same roundabout route for his St. Louis shipments, and
+saved thereby eighteen cents per hundredweight. In both of these cases
+the railroad company carried the goods 700 miles farther than the direct
+distance for a less charge.
+
+Port Jervis millers had their grain shipped from the West to Newburgh, a
+point fifty miles to the east of them, and then had it returned to Port
+Jervis on the same line, at a less rate than that charged for a direct
+shipment.
+
+The grain rates from Chicago to Pittsburgh were 25 cents per hundred in
+March, 1878, and only 15 cents from Chicago to New York.
+
+Flour was carried from Milwaukee to New York for 20 cents, while the
+rate from Rochester to New York was 30 cents at the same time. It was
+also carried from East St. Louis to Troy at the same rate as from
+Rochester to Troy. The rate on butter from St. Lawrence County, N.Y., to
+Boston, over the Ogdensburg and Lake Champlain and Vermont Central, was
+60 cents per hundred; from the nearer county of Franklin, 70 cents; it
+then continued to increase as the distance decreased, until it reached
+90 cents at St. Albans, Vermont.
+
+Soap shipped by Babbit & Co., of New York, to Crouse & Co., of Syracuse,
+paid 8 cents per box when the freight was paid in Syracuse, but 12 cents
+per box when paid by the shipper in New York.
+
+It cannot even be said that New York fared worse than any of her sister
+States. There is hardly a business man in any community in the United
+States who cannot cite many cases of similar discrimination. Hundreds of
+well authenticated cases have been reported from every part of the
+country. A few striking ones may be given space here:
+
+The Illinois Central Company hauled cotton from Memphis to New Orleans,
+a distance of 450 miles, at $1.00 a bale, while the rate from Winona,
+Miss., to New Orleans, about two-thirds of the distance, was $3.25 a
+bale. The same company charged for fourth-class freight from Chicago to
+Kankakee, a distance of 56 miles, 16 cents per hundred, and only 10
+cents to Mattoon, 116 miles farther. The rate from New York to Ogden was
+$4.65 per hundred, and only $2.25 per hundred from New York to San
+Francisco. The car-load rate on the Northern Pacific was $200 from New
+York to Portland and just twice as much to a number of points from 100
+to 125 miles east of Portland. The Chicago, Burlington and Quincy hauled
+stock from points beyond the Missouri River to Chicago for $30 per
+car-load, while it exacted $70 per car in Southwestern Iowa for a much
+shorter haul.
+
+To what extent local discrimination has been carried by railroad
+companies is well illustrated by the following incident: A nurseryman
+residing at Atlantic, Iowa, a station on the Chicago, Rock Island and
+Pacific Railroad, 60 miles east of Council Bluffs, bought a car-load of
+grapevines at Fredonia, New York. Finding that the through rate from
+Fredonia to Council Bluffs, plus the local rate from the latter place to
+Atlantic, was less than the rate for the direct shipment from Fredonia
+to Atlantic, he caused the car to be consigned to Council Bluffs,
+intending to have it thence hauled back to Atlantic. Being short of
+stock at the time the train containing his car passed through his town
+on its way to Council Bluffs, the consignee prevailed upon the station
+agent to set out his car. In due time he received a request from the
+general office of the railroad to pay an amount equal to the rate per
+car-load from Council Bluffs to Atlantic. The request was promptly
+complied with by the appreciative nurseryman, who after all had been
+saved an annoying delay by the courtesy of the company's agent.
+
+An infinite number of similar discriminations might be cited. They all
+show the same violation of the fundamental principles of justice and
+equity, the same despotical assertion of the power of the railroads to
+regulate the commerce of the country as the caprice or selfish interests
+of their managers might direct.
+
+Discriminations between commodities, or, as they might also be called,
+discriminations in classification, are probably the most common of
+unjust railroad practices. For the purpose of establishing as near as
+may be uniform rules in all matters pertaining to rates, the various
+roads operating in a certain territory usually form traffic
+associations. The general freight agents of the roads that are members
+of the association in turn form a select body known as the rate
+committee. These committees of freight agents have for more than twenty
+years constituted the supreme authority in all matters pertaining to
+freight classification. The trunk line classification recognizes six
+regular and two special classes, and every article known to commerce is
+placed in one of these classes. One whom Providence has not favored with
+the mysterious wisdom of a general freight agent might suppose that
+considerations of bulk, weight, insurance and similar factors formed a
+basis of railroad classification. Nothing, however, is farther from the
+truth. Freight charges, when permitted to be fixed by railroad
+companies, are invariably such as the traffic will bear, and freight
+classifications are arranged on this principle, provided competition by
+water, rail or other land transportation does not demand a modification.
+It is, as a rule, not to the advantage of a railroad to entirely starve
+out any commercial or industrial concern along its line. Hence tariffs
+are scarcely ever made entirely prohibitory. Railroads proceed here upon
+the principle of the robber knight of mediaeval times, who simply
+plundered the wayfaring trader to such an extent as to reduce his
+profits to a minimum. He never stripped him, for by doing so he would
+have prevented his return and would have destroyed his own source of
+revenue. In like manner a railroad will never annihilate any weak branch
+of business along its line, nor will it, if it is in its power, permit
+any business to prosper without paying to it heavy tributes out of its
+profits. Every commodity is therefore made to pay a transportation tax
+based chiefly on its value and the profit which it yields, and all
+classifications are prepared with this object in view.
+
+The protection which, through exceptionally low rates, is extended by
+the railroad companies to certain industries, may not be objectionable
+_per se_, but the question arises whether the railroad companies or the
+people should exercise the right to determine when and where such
+protection is necessary. Moreover, to tax one branch of commerce for the
+benefits bestowed upon another is a practice of extremely doubtful
+propriety, and the power to do so should certainly never be conferred
+upon a private corporation. When customs laws are proposed in Congress
+ample opportunity is given to the representatives of the various
+industries of the country to be heard upon the subject. No hasty step is
+taken. Members of Congress have every opportunity to ascertain the
+sentiment of their constituents, through the public press, petitions and
+private correspondence. The subject is discussed in all its phases, both
+in the committee-rooms and upon the floors of both houses of Congress.
+Every detail is fully considered, and many compromises are often
+necessary to secure for a bill the support of the majority. When it
+finally passes it represents the will of the people, or at least the
+will of their legal representatives, who may be expected to know their
+wants and are accountable to them for their acts. Freight
+classifications, however, while they are fully as far-reaching as
+customs laws, are made by a few freight agents meeting in secret
+session, listening to no advice and acknowledging no higher authority.
+
+It is claimed by the railroad men that it is to the interest of railroad
+companies to do justice to all, and that the best classification for
+the largest number of people is also the best for the roads. If this be
+true, it is difficult to see why railroads should fail to consult their
+patrons in the arrangement of their freight classifications. Intelligent
+shippers may certainly be supposed to know as well as the railroad
+companies what classification is to their common interest. Railroad
+managers are naturally despotical. They do not wish and do not tolerate
+any outside interference with what they obstinately term their private
+business. Even if the general policy of the companies designed the
+greatest good to the greatest number, the opportunities and temptations
+of their agents to pursue selfish ends or take advantage of individuals
+in the preparation or application of their tariffs are such that in the
+practical execution the evil will always outweigh the good.
+
+It is not within the scope of the present inquiry to review in detail
+the various classifications in force, or to point out the unjust
+features. The author will confine himself to showing by a few
+characteristic examples that the power now in the hands of the railroad
+companies to classify the various commodities of commerce for the
+purpose of rating is greatly abused and is a potent means of railroad
+extortion. And that it may not be charged that abuses have been cited
+which are a thing of the past, the examples will chiefly be taken from
+cases which have come before the Interstate Commission for adjudication.
+
+A complaint was filed with the commission in 1887 by T. J. Reynolds
+against the Western New York and Pennsylvania Railroad Company, from
+which it appeared that that company charged a greater price for the
+transportation of railroad ties from points in the State of Pennsylvania
+to points in the State of New York than was charged at the same time
+for the transportation of lumber between the same points. The commission
+held that this was a case of unjustifiable discrimination and ordered
+the company to place railroad ties in the same class with other rough
+lumber. Many Western roads for years have been guilty of the same
+discrimination. The reasons for such a policy are obvious. A high tariff
+on railroad ties prevents their being shipped, depreciates their market
+price at home, to the sole benefit of the discriminating company, which
+is thus enabled to buy ties at a low price. Prohibitory rates on ties
+and rails are also often maintained by railroad companies to either
+delay or render more costly the construction of new lines which threaten
+to become their competitors. The Union Pacific Railroad Company several
+years ago even went so far as to make prohibitory rates on steel rails
+intended for the construction of a road which promised to become a
+competitor of one of its connecting lines.
+
+From another case decided by the Interstate Commerce Commission it
+appeared that the Lake Shore and Michigan Southern Railway Company
+charged for blocks intended for wagon-hubs, and upon which only so much
+labor had been expended as was necessary to put them in condition, a
+higher rate than for lumber, claiming that such blocks were unfinished
+wagon material and were therefore, as articles of manufacture, subject
+to higher charges than raw material. The commission justly held that
+these blocks were as much to be regarded as raw material as the boards
+from which wagon-boxes are made.
+
+In the classification of the Southern Railway and Steamship Association
+pearline was placed in the fourth class, with a rate of 73 cents per
+hundred pounds, and common soap in the sixth class, with a rate of 49
+cents per hundred pounds. This latter article, when shipped by large
+manufacturers, enjoyed besides a special rate of 33 cents per
+hundredweight. Pearline and soap are competitive; there is no
+appreciable difference between them as regards the cost of
+transportation; but one commands a higher price in the market than the
+other, and upon this fact solely did the railroad company base its
+alleged right to levy upon pearline a transportation tax 120 per cent.
+in excess of that levied upon soap, though the service rendered by the
+company was the same in either case. The commission held that the
+discrimination made by the "special rate" of the Southern Railway and
+Steamship Association between pearline and common soap was unjust, and
+ordered that it be discontinued and that, with common soap in the sixth
+class, pearline be placed in the fifth.
+
+For years the rate from Indianapolis to New York was the same for corn
+as for its direct products, such as ground corn, cracked corn, corn
+meal, hominy and corn feed. Such a tariff made it possible for Western
+mills to compete with similar mills that had been established in the
+East, since a discrimination of 5 per cent. was sufficient to absorb
+three or four times the profits of any Western mill. It was shown by the
+evidence produced that the actual cost of transportation was
+substantially the same for direct corn products as for the raw corn. The
+only defense which the railroad company could make for this
+discrimination was that in the carriage of raw corn they had to meet
+lake competition. The weakness of this argument will be perceived when
+it is remembered that Indianapolis is 154 miles from the nearest
+lake-shipping point. There is but little doubt that this discrimination
+was made by the railroad company because it was to its interest to haul
+the raw corn from the West to the East and to return it in altered
+form. Railroads care, as a rule, little for a waste of force, if such
+waste is to their own advantage.
+
+In another case brought before the commission in 1889 it was shown that
+the "Official Classification" placed common soap in carload lots in
+Class V, while such articles as coffee, pickles, salted and smoked fish
+in boxes or packages, rice, starch in barrels or boxes, sugar, cereal
+line and cracked wheat are placed in Class VI. The chief reply of the
+railroad companies to this complaint was that soap was justly placed in
+Class V because the components from which it is in part made stood in
+Class V.
+
+In another case it was shown that one kind of soap was burdened with a
+higher transportation tax than another, irrespective even of cost,
+because one had been advertised as toilet and the other as laundry soap.
+
+The principle of charging what the traffic will bear is well illustrated
+by the relative rates on patent medicines and ale and beer, as
+maintained by the Official Classification.
+
+In a complaint made by a prominent manufacturer of proprietary medicines
+against the New York Central and other roads, it was shown that the
+complainant's products were shipped at owner's risk, and that they were
+in bulk and intrinsic value similar to ale and beer, but that in spite
+of these analogies the former were rated as first-class and the latter
+as third-class goods, simply because they retailed at a higher price.
+
+Another unwarrantable discrimination is that in favor of live stock and
+against dressed beef. While Mr. Fink, the commissioner of the Trunk Line
+Pool, himself admitted that the cost of carrying dressed beef from
+Chicago to New York was only 6-1/4 cents per 100 pounds in excess of
+the cost of hauling live stock, the trunk lines maintained on dressed
+beef a rate 75 per cent. higher than that on live cattle. The railroad
+companies asserted that this was due to those people in the East whose
+living depended on the live-stock interest. The railroads have in this
+assumed a paternalism which would not be tolerated even in the
+Government. To protect the East, railroads will not permit the West to
+engage in new industries.
+
+The position which the Interstate Commerce Commission has assumed in
+interpreting the rights of shippers under the law which railroad
+companies are bound to respect in the preparation of their tariff sheets
+and classifications cannot but be most gratifying to the people. In a
+decision relating to the classification and rates for car-loads and less
+than car-loads, filed March 14, 1890, the commission laid down the
+following rules for the guidance of railroad companies:
+
+      "1. Classification of freight for transportation purposes is
+      in terms recognized by the act to regulate commerce, and is
+      therefore lawful. It is also a valuable convenience both to
+      shippers and carriers.
+
+      "2. A classification of freight designating different
+      classes for car-load quantities and for less than car-load
+      quantities for transportation at a lower rate in car-loads
+      than in less than car-loads is not in contravention of the
+      act to regulate commerce. The circumstances and conditions
+      of the transportation in respect to the work done by the
+      carrier and the revenue earned are dissimilar, and may
+      justify a reasonable difference in rate. The public
+      interests are subserved by car-load classification of
+      property that, on account of the volume transported to reach
+      markets or supply the demands of trade throughout the
+      country, legitimately or usually moves in such quantities.
+
+      "3. Carriers are not at liberty to classify property as a
+      basis of transportation rates and impose charges for its
+      carriage with exclusive regard to their own interests, but
+      they must respect the interests of those who may have
+      occasion to employ their services, and conform their charges
+      to the rules of relative equality and justice which the act
+      prescribes.
+
+      "4. Cost of service is an important element in fixing
+      transportation charges and entitled to fair consideration,
+      but is not alone controlling nor so applied in practice by
+      carriers, and the value of the service to the property
+      carried is an essential factor to be recognized in
+      connection with other considerations. The public interests
+      are not to be subordinated to those of carriers, and require
+      proper regard for the value of the service in the
+      apportionment of all charges upon traffic.
+
+      "5. A difference in rates upon car-loads and less than
+      car-loads of the same merchandise, between the same points
+      of carriage, so wide as to be destructive to competition
+      between large and small dealers, especially upon articles of
+      general and necessary use, and which, under existing
+      conditions of trade furnish a large volume of business to
+      carriers, is unjust and violates the provisions and
+      principles of the act.
+
+      "6. A difference in rate for a solid car-load of one kind of
+      freight from one consignor to one consignee, and a carload
+      quantity from the same point of shipment to the same
+      destination, consisting of like freight or freight of like
+      character, from more than one consignor to one consignee or
+      from one consignor to more than one consignee, is not
+      justified by the difference in cost of handling.
+
+      "7. Under the official classification the articles known in
+      trade as grocery articles are so classified as to
+      discriminate unjustly in rates between car-loads and less
+      than car-loads upon many articles, and a revision of the
+      classification and rates to correct unjust differences and
+      give these respective modes of shipment more relatively
+      reasonable rates is necessary and is so ordered."
+
+The efforts which the commission has made to bring about a uniform
+classification throughout the country are in the right direction, while
+the results of its labor are not yet satisfactory.
+
+In their fifth annual report, the Commissioners, after giving an account
+of their efforts and the shuffling and double-dealing of the railroad
+companies with them upon this matter of uniform classification, said:
+
+      "Its conviction remains unchanged that the necessities of
+      commerce require that the existing classifications be
+      consolidated, and that this result should be accomplished as
+      speedily as may be found practicable; and it does not feel
+      justified in asking for the further efforts of the carriers
+      the same measure of indulgence which from time to time it
+      has heretofore suggested should be extended to them, and
+      which was thought to be required in the public interest.
+
+      "The commission can not but think that if legislation to
+      that end be enacted by Congress the carriers will speedily
+      consummate the reform already begun in this direction. It is
+      therefore recommended that an act be passed requiring the
+      adoption within one year from the date of its passage of a
+      uniform classification of freight by all the carriers,
+      subject to the act to regulate commerce, and providing that
+      if the same be not adopted within the time limited, either
+      this commission or some other public authority be required
+      to adopt and enforce a uniform classification."
+
+The present confusion which exists in the classification and rates of
+the seventeen hundred railroad organizations of the country makes it
+difficult for the commission to do justice to all interests and
+localities. With the adoption of a uniform classification it is to be
+hoped that in time many of the present inequalities will be adjusted,
+especially if an intelligent public sentiment upon the subject of
+railroad regulation is maintained. A prominent railroad manager in the
+East, whose devotion to corporate interest is only equaled by his
+political ambition, has recently made repeated efforts to convince the
+people that railroad abuses are things of the past and that, if any such
+abuses still linger in isolated districts, they are simply unavoidable
+exceptions to the rule which will soon have to yield to the general
+spirit of fairness and amity for which, in his opinion, the railroads
+have of late been distinguished. He reasons that the law has fulfilled
+its mission, that the railroads have reformed, and that it now behooves
+the people to relent and to extend to the much persecuted corporations
+the hand of friendship and good will. The postprandial eloquence of this
+gentleman has often suavely intimated that the repeal of the Interstate
+Commerce Act would be the most opportune recognition of restored
+confidence.
+
+Still bolder champions of the railroad cause do not hesitate to demand
+the repeal of the law. It is not likely that the sophistry of railroad
+hirelings will triumph over the practical logic of an intelligent
+public. No law, be it ever so wise, can in the space of a few years
+correct all the abuses which half a century of unbridled railroad
+domination has developed. Yet, since both the friends and the enemies of
+the law agree that it has been partially successful in its operation, it
+should be continued and improved to keep it in harmony with new
+conditions and a progressive public sentiment. It is claimed by railroad
+managers that the adoption of a uniform classification will remove the
+only vestige of discrimination still left. This is not true, for by far
+the largest number of complaints that have recently been brought before
+the Interstate Commerce Commission charged personal and local
+discrimination independent of any question of classification.
+
+It is shown by the reports of the commission that discriminations are
+still practiced by various companies, that annual passes are still
+illegally issued to bribe or appease men of influence, that discounts
+are still given to favor shippers under various pretexts, that some
+large railroad centers still enjoy more favorable rates than smaller
+towns, and that the long and short haul clause of the Interstate
+Commerce Act is still violated by railroad companies. There are besides
+these scores of other devices in vogue among railroad managers to
+subvert the principles of the common law. No doubt discriminations are
+now much less frequent, and are possibly the exception where but a few
+years ago they were the rule, but the fact that such abuses still exist
+is a strong argument for the retention of the law as well as for the
+necessity of continued vigilance on the part of the people and those
+especially charged with the execution of the laws. The railroad acts of
+Congress and the various States ask nothing of common carriers but just
+and equitable treatment for all their patrons. If this is freely
+accorded, these laws are no burden to the railroads. If, on the other
+hand, there is a tendency on the part of the railroads to resort to
+subterfuges and evasions, the wholesome restraint of the statute is
+absolutely necessary for the protection of the shipper.
+
+The repeal of the Interstate Commerce Law, or the adoption of such
+amendments as are demanded by railroad men, would be interpreted by them
+as an abandonment of all its principles and would inaugurate an era of
+unprecedented railroad oppression. History ever repeats itself.
+Unchecked license will always lead to arrogance and despotism, and any
+power which is long permitted to defy the state will in time control it.
+It is not likely that the people of the United States can be induced to
+demonstrate to the world that democratic government is incapable of
+profiting in the dear school of experience.
+
+Our railroad legislation contains no principle that is not found in the
+common law. Its maxims are our birthright and will be the birthright of
+our children and children's children, and while railroad companies may
+be able in the future, as they have been in the past, to violate the law
+temporarily with impunity, they will never be able to prevail upon the
+American people to abandon the policy of railroad reform which the
+passage of the Interstate Commerce Law inaugurated.
+
+The Interstate Commerce Commissioners say in their sixth annual report:
+
+      "Whoever will read the report of the special committee of
+      the United States Senate, commonly called the 'Cullom
+      Committee,' will be astounded at the magnitude and extent of
+      railroad abuses brought to light by their investigation.
+      Those unfamiliar with the facts made public at that time can
+      hardly believe the outrages which were proven to exist and
+      the manifold devices by which the most flagrant injustice
+      was perpetrated. A single illustration will furnish a better
+      reminder than extended comment.
+
+      "It appears from that report that the Standard Oil Company,
+      in one instance at least, boldly demanded from a certain
+      railroad that its shipments should be carried for 10 cents a
+      barrel; that all other shippers should be charged 35 cents a
+      barrel on the same article, and that 25 cents of the 35 paid
+      by such other shippers should be handed over by the railroad
+      to the Standard Oil Company, and the penalty threatened for
+      non-compliance with this impudent extortion was a withdrawal
+      of its entire business.
+
+      "The foregoing statements but imperfectly describe the
+      situation which existed when the Interstate Commerce Law was
+      enacted. In any reasonable view of the case it was too much
+      to expect that the common and long continued abuses of
+      railroad management could be corrected in less than half a
+      dozen years, or that the first scheme of legislative
+      regulation would prove adequate to that end. It would be
+      contrary to all experience if so great and radical a reform
+      could be thus speedily accomplished, or if the initial
+      statute should be found sufficient to bring it about. The
+      law was the outgrowth of an aroused and determined public
+      sentiment, which, while united in demanding Government
+      interference, was divided and uncertain as to the best
+      methods of affording relief. Like all attempts in a new
+      field of legislation, the statute was a compromise between
+      divergent theories and conflicting interests. It was
+      scarcely possible that it should be so complete and
+      comprehensive at the outset as to require no alteration or
+      amendment. Those who are familiar with the practices which
+      obtained prior to the passage of this law and contrast them
+      with the methods and conditions now existing will accord to
+      the present statute great influence in the direction of
+      necessary reforms and a high degree of usefulness in
+      promoting the public interest.
+
+      "Whoever will candidly examine the reports of the commission
+      from year to year, and thus become acquainted with the work
+      which has been done and is now going on, will have no doubt
+      of the potential value of this enactment in correcting
+      public sentiment, restraining injustice and enforcing the
+      principle of reasonable charges and equal treatment.
+      Imperfections and weaknesses which could not be anticipated
+      at the time of its passage have since been disclosed by the
+      effort to give it effective administration. The test of
+      experience, so far from condemning the policy of public
+      regulation, has established its importance and intensified
+      its necessity. The very respects in which the existing law
+      has failed to meet public expectation point out the
+      advantages and demonstrate the utility of Government
+      supervision.
+
+      "Moreover, it may be fairly claimed that much greater
+      benefits would have been realized had the statute as enacted
+      expressed the evident purpose of those who framed it, and
+      received a construction according to its apparent import. It
+      is not too much to say that judicial interpretation has
+      limited its scope and ascribed to it an intent not
+      contemplated when it was passed. If its supposed meaning, as
+      understood at the time of its passage, had been upheld by
+      the courts, it is believed that its operation would have
+      been much more effective and its usefulness greatly
+      increased. So far as failure has attended the efforts to
+      give it proper administration, that failure can be mainly
+      attributed to differences between its apparent meaning and
+      the judicial interpretation which some of its provisions
+      have received; and the commission is of the opinion that if
+      the present law could be so altered as to express clearly
+      and beyond doubt what it was evidently intended to express
+      at the time of its enactment, it would prove, even without
+      other amendment, an instrumentality of the highest value in
+      removing the evils against which it is aimed.
+
+      "The specific instances in which the statute has received
+      judicial construction, and the limitations upon its scope
+      and meaning which the courts have imposed, will be alluded
+      to at greater length in another part of this report.
+
+      "It seems proper, however, to observe in this connection
+      that the effect of these decisions in weakening the law and
+      preventing its enforcement has been greatly exaggerated. The
+      impression has been created in many directions that judicial
+      construction has invalidated the essential feature of the
+      statute and condemned the general principle which lies at
+      its foundation. That impression cannot be too speedily
+      corrected, for nothing has been decided which permits such
+      an inference. On the contrary, neither the power of the
+      national legislature to regulate the transportation of
+      interstate commerce nor the general policy of the existing
+      law has been questioned by any tribunal."
+
+Probably no law in the United States has ever before been so fiercely
+attacked at all of its vital points as has this law. It is not strange
+that among the great number of National and State courts the railroad
+companies have found occasionally a judge ready and willing to assist
+them in breaking it down, but upon the whole the judiciary has been
+disposed to co-operate with other departments of the Government in their
+efforts to secure effective regulation of the transportation business.
+
+
+
+
+CHAPTER VI.
+
+STOCK AND BOND INFLATION.
+
+
+The complaint is frequently heard from railroad men that our freight
+rates are too low, and in support of it the statement is usually made
+that the greater part of the railroad stocks of the United States pays
+dividends considerably smaller than the average interest realized by
+capitalists on money loaned or invested in other enterprises.
+
+This statement may be true, and yet it is valueless as an argument for
+higher rates. It may be admitted that the dividends declared upon the
+face values of railroad stocks are quite moderate, but it is a fact too
+well authenticated to be contradicted that railroad securities represent
+to a considerable extent only fictitious capital. The public concedes
+that liberal returns should be allowed to railroad companies on money
+actually invested, but it naturally objects to being taxed for the
+purpose of making dividends on watered stock. The evil referred to is a
+serious one, and has contributed much to the general demand for railroad
+reform. Most of the early roads of this country were built for the
+accommodation of local traffic. They were constructed and managed by
+business men upon business principles. The stock issued by the companies
+was in most cases paid for in full and was not unfrequently sufficient
+for the completion of the entire road, and no incumbrance was permitted
+by the owners to be placed upon the property. These enterprises as a
+rule proved very profitable. One of the first roads running west of
+Chicago will serve as an illustration. The Galena and Chicago Union
+Railroad Company paid a 10 per cent. dividend within a year after being
+opened to traffic, and gradually increased its dividends to 15, 20 and
+22 per cent. During the first two years of the road's operation its
+expenses were only 38-1/2 per cent. of its earnings. During the second
+year the company, after paying a 15 per cent. dividend, diminished its
+debt nearly $60,000 and increased its surplus $11,700. In 1856 the road
+had a length of 232 miles, on which the gross earnings amounted to
+$2,315,787. This revenue exceeded the estimate made by the company's
+officers the year previous by $300,000. In his annual report for 1856
+the president of the company said: "This result shows an _increased
+surplus_ of $65,000, after paying 22 per cent. in dividends and all
+expenses and interests chargeable to income account." The report also
+shows that expensive improvements, such as large permanent bridges and
+stone culverts, displacing as a rule wooden ones, were charged to
+current expenses.
+
+The financial success of railroads soon attracted the cupidity of
+financial adventurers--men of great energy, but small means--whose aim
+was to secure the greatest possible returns with the least possible
+outlay of money. With the introduction of these elements into railroad
+circles the era of speculation commenced. Take the line just referred
+to. In 1852 the average number of miles operated was 62, and the year
+following, 90. But while the number of miles operated increased less
+than 50 per cent., the capital stock of the company grew from $444,193
+to $1,362,559, and its debt from $60,145 to $542,287. The capitalization
+of the road was thereby increased from $8,000 to $21,000 per mile, and
+this was done for the purpose of making the capital appear adequate to
+its earnings. Nearly all railroads became in time the foot-balls of
+shrewd manipulators. They were bonded before they were constructed, and
+often for more than the value of the completed road. Stocks at the best
+only represented nominal values and were given as premiums to the
+bondholders or promoters of the road.
+
+But the science of stock-watering did not reach its fullest development
+until during the period of railroad consolidation. Fictitious values
+were now created as often as a new consolidation took place. Watered
+stocks and bonds were watered again and again, until they represented
+little more than a purely imaginary capital upon the basis of which
+dividends might be declared. Take the case of the New York Central and
+Hudson River Railroad companies, which consolidated in 1869 with a
+capital of $103,110,137.31. The former of these roads was organized in
+1853 by the consolidation of ten smaller roads connecting the cities of
+Albany and Buffalo. The capital stock of these companies amounted to
+$20,799,800, of which $16,852,870 was claimed to have been paid in.
+Their funded debt was $2,497,526. It is impossible at this day to
+ascertain the original cost of all these roads, but it is certain that
+the above sums represent about three times the amount actually expended
+for their construction.
+
+One of the roads entering into the consolidation was the Utica and
+Schenectady. It was 78 miles long and formed about one-fourth of the
+consolidated line. It had the heaviest grading and rock-cutting, was the
+best-equipped and undoubtedly the most expensive, in proportion to its
+extent, of the ten roads out of which the New York Central was created.
+The original cost of this line was $2,000,000. Bonds were never issued
+by the company. The line was profitable from the very beginning, paid
+regularly ten per cent. dividends,--the limit to which railroad
+companies were then restricted,--and had a large surplus, which it
+expended mainly for improvements. No assessment was ever made on the
+stock beyond the $1,500,000 which was originally paid in by the
+shareholders and upon which they had drawn regular and liberal
+dividends. Taking the original cost of this line as a basis, it is but
+fair to presume that the entire line from Albany to Buffalo, covering a
+distance of 297 miles, did not cost to exceed $6,000,000. These roads,
+however, entered into the consolidation with a capital stock of
+$15,274,800 and a bonded indebtedness of $1,696,326.
+
+Estimating the cost of the branches upon the same basis upon which we
+have estimated that of the main line, we shall find that the total
+original cost of the consolidated lines cannot have exceeded $8,000,000.
+The Mohawk Valley road was put in at $2,000,000 and the Syracuse and
+Utica direct at $600,000, though the roads only existed on paper and did
+not represent any value whatever. The Schenectady and Troy road, which
+went into the consolidation with $650,000 stock and $90,000 bonds, had
+been bought for less than $100,000 two months previous to the
+consolidation.
+
+It will thus be seen that already nearly one-third of the stocks and
+bonds of the consolidated companies was water. The consolidation
+agreement fixed the capital stock of the New York Central at $23,085,600
+and its funded debt at $11,564,033.62, increasing the stock over
+$2,000,000, and the bonded debt over $9,000,000. The latter was more
+than quadrupled, and $8,000,000 worth of bonds were, under the name of
+consolidation certificates, given as a present to the stockholders of
+the new road. The capital stock of the New York Central grew steadily up
+to the time of its consolidation with the Hudson River road, when it was
+$28,795,000. All improvements made during this time were paid for out of
+its surplus earnings, with the single exception of the Athens branch,
+for which the company issued $2,000,000 of its stock.
+
+The gross earnings of the New York Central in 1854 were $5,000,000, and
+its net earnings $2,830,000. In 1863 its gross earnings were in round
+numbers $10,000,000, and in 1869 they reached $15,000,000. The dividends
+paid during that year amounted to $4,300,000, and the interest to
+$894,000. In view of the fact that the bonded indebtedness of the road
+was from two to three million dollars more than the original cost, this
+dividend of 15 per cent. upon a wholly fictitious capital must be
+regarded as an unwarranted tribute levied upon the commerce of the
+country. But we shall soon see that in railroad hydraulics, as well as
+in other branches of human industry, success stimulates to still greater
+energy.
+
+The Hudson River Railroad Company was organized in 1847. It extended
+from New York City to East Albany and was 144 miles long. There are no
+data extant upon which could be based a reliable estimate of its
+original cost. Estimating it upon the basis of that of the Utica and
+Schenectady, we should have to place it somewhat below $3,000,000. While
+such an estimate may be too low, the amount of its funded indebtedness
+in 1851, which was $5,640,000, probably more than covers the amount
+actually expended in the construction of the road. In 1851 the capital
+stock of the Hudson River road was $4,000,000. In 1853 the funded debt
+had increased to $7,000,000, and in 1862 to $9,000,000. In 1869 the
+bonded indebtedness had decreased to $4,309,000, but the capital stock
+had grown to over $16,000,000. Between 1853 and 1869 the company
+increased its stock and bonded indebtedness nearly $11,000,000, while
+the assessments paid by its stock and bondholders during this time did
+not exceed $1,000,000. Improvements were made, but these were chiefly
+paid for out of the surplus earnings of the road. It has been shown by
+experts that $6,640,000 is a high estimate of the actual original cost
+of the Hudson River road to its stock-and bondholders, and that
+securities to the amount of more than $13,000,000 represented surplus
+earnings and water. At the time of the consolidation of the Hudson River
+and New York Central railroads the capital stock of the two roads had
+grown to $44,800,000. Under the consolidation agreement the stock was
+fixed at $45,000,000. The new company also assumed all the bonded and
+other indebtedness of both roads. If the consolidation manipulators had
+paused here, the capital of the new company would have been somewhat
+less than $60,000,000, or more than three times the cost of the
+property. But the road was, under existing rates, capable of earning
+dividends on a much larger capital, and this emergency was met by the
+issuance of consolidation certificates to the amount of $45,000,000. The
+total capital of the road was thus increased to and made to pay
+dividends on over $103,000,000, while the total cost of the road and its
+equipment, as claimed by the company in 1870, was less than $60,000,000,
+their estimate being based upon assumed consolidation values and the
+expenditures made from surplus earnings. During the same year the gross
+earnings of the company were $22,363,320, and their net earnings
+$8,295,240. In 1880 the gross earnings had increased to $33,175,913,
+and the net earnings to $15,326,019. The company was able to declare in
+that year 11.82 per cent. dividend on its $89,500,000 of fictitious
+stock. In 1890 its gross earnings were $37,008,403, or $26,050 per mile,
+while its total net earnings were $12,516,273. The gross earnings have
+largely increased during the years 1891 and 1892. It is safe to say that
+$2,000,000 per annum would pay very liberal interest and dividends on
+the amount of money expended upon the construction of the New York
+Central and Hudson River Railroad from the proceeds of its bonds and
+stocks. By the creation of fictitious values the managers of the company
+have attempted to impose an exorbitant tax upon the commerce and travel
+of the country for all time to come. The Government guarantees an
+inventor a monopoly only for a limited space of time, upon the
+expiration of which his invention becomes the common property of the
+people; but railroad managers endeavor to collect, under the protection
+of our laws, an exorbitant royalty from our people forever.
+
+The case of the New York Central and Hudson River Railroad Company is
+only one of the innumerable instances of stock watering in the history
+of American railroads. Indeed, it can be shown that stock-watering
+reached a still higher degree of development in the case of the Erie
+road. It has been demonstrated that the actual original cost to the
+stock-and bondholders of the New York Central Railroad Company, which
+was, with its branch lines, 593 miles long, did not, including the
+Athens branch, exceed $10,000,000. Its cost to its owners, in 1869,
+including the bonuses, premiums, commissions and fictitious equalization
+values of several transfers, was reported by them to be only
+$37,600,000, or about $63,400 per mile. At about the same time the main
+stem of the Erie Railway, extending from New York to Dunkirk, a distance
+of 459 miles, was represented by a capital of $108,807,687, or $237,000
+per mile. Considering the inferiority of this road to the New York
+Central, we are forced to the conclusion that nearly 85 per cent. of the
+capital of the road represented water, or, in other words, that the
+commerce of the United States was taxed to pay dividends on about
+$90,000,000 of watered securities. In 1863 the Erie Railroad had
+outstanding $11,437,500 of common stock. In 1864 this had been increased
+to $15,693,000, in 1868 to $37,765,000, and in 1869 to $70,000,000. Not
+one-tenth of this enormous increase of capital was ever expended on the
+property of the road. The stock was sold at from 20 to 40 cents on the
+dollar, and the proceeds disappeared in the hands of its managers. To
+what extent this freebootery was carried will probably never be known.
+An idea of the rottenness of the Erie management may be had from the
+fact that the courts at one time ordered its president to restore to the
+company $9,000,000 of diverted securities, which order was complied
+with. Vast private fortunes were amassed by nearly all the men who
+directed the affairs of the road, and the mismanagement became in time
+so notorious that the legislature of the State of New York was appealed
+to, to remove the directors of the road for the protection of its
+stockholders, and to reduce the capital stock of the company to the
+amount actually paid for it. This movement failed, however, because it
+was opposed by the very stockholders whose interests were supposed to
+have suffered by directorial mismanagement. They preferred to continue
+to draw dividends on the face value of stocks which they had purchased
+at 20 cents on the dollar. The capitalization of the company has since
+been increased to $163,679,825, and it is by no means a secret among
+those familiar with railroad values that the bonded indebtedness of the
+Erie road represents alone many millions more than the total amount that
+was ever invested in the property.
+
+The principal competitor for through traffic of the two companies whose
+financial operations we have just reviewed is the Pennsylvania Central
+Company. It has often been asserted by the managers and friends of this
+company that its capital is free from water; but this is not true. In
+1864 a dividend of $4,130,760 was made out of the surplus earnings of
+the road. This dividend was payable in capital stock and was equal to 30
+per cent. of the then outstanding capital. Similar surplus dividends,
+each equal to 5 per cent. of the company's outstanding stock, were
+declared in 1867 and 1868. The people were thus taxed to pay dividends
+on a capitalized surplus which had been derived from excessive charges
+previously imposed on them. I shall not attempt here to determine
+whether the capital represented by the Pennsylvania Railroad Company has
+been honestly invested. A committee of Congress has expressed the
+opinion that the capitalization of its main line exceeds the amount of
+the actual cost of the property by more than eleven million dollars.
+There is, however, a system of inflation practiced by the Pennsylvania
+Railroad Company which is simply a new form of bond and stock watering.
+More than one-half of the capital of this company has been invested in
+the stocks and bonds of other corporations. In 1891 the amount so
+invested was $154,319,240, and the income derived from it $4,852,181.
+This does not only cause the stocks and bonds of certain companies to be
+counted twice, but exacts a double tax from the commerce of the
+country, interests and dividends upon the same capital being paid both
+to the bond- and stockholders of the Pennsylvania Central and to the
+bond-and stockholders of the roads in whose securities it has made
+investments. The income of the company is thus swelled far beyond the
+amount which the traffic reports indicate. It will be seen that, to
+perpetuate extortionate rates, this process of manifolding securities
+might be continued indefinitely.
+
+The cost to its stock-and bondholders of the Baltimore and Chicago line
+of the Baltimore and Ohio Railroad, which has a length of 795 miles, was
+estimated by the company's officers at about $57,000,000. The actual
+cost of this road, owing to its expensive mountain grades, was probably
+greater than that of any of the other through lines between the
+sea-coast and Chicago, but there can be no doubt that the capitalization
+of this road represents from one-half to one-third pure water. At the
+time of the completion of this road to Chicago the surplus earnings of
+the company, after the payment of interest and dividends, amounted to
+over $29,000,000. This had been charged to "profit and loss" and used in
+the construction of branch lines. Thus an amount equal to more than half
+of the reported cost of this line had at the time of its completion been
+returned to its owners in other railroad values.
+
+The Select Senate Committee on Transportation Routes to the Seaboard in
+1874 estimated the excess of the capital over actual cost of the Erie
+road, from New York to Dunkirk, at $68,807,000; that of the New York,
+Lake Shore and Michigan Southern line to Chicago at $115,188,137, and
+that of the Pennsylvania and Fort Wayne line to Chicago at $11,290,374.
+If this estimate was correct the entire over-capitalization of these
+lines, on which the commerce between the West and the East was forced to
+pay a dividend of 8 and 10 per cent. per annum, was no less than
+$195,000,000. The committee assumed the actual cost of these roads to be
+$182,000,000, or about $78,000 per mile. They based their estimate upon
+the cost of the main branch of the Baltimore and Ohio, as reported by
+their officers, supposing it to represent the actual outlay made by its
+stock-and bondholders. Various revelations which have since been made to
+the public, as to the real cost of railway construction, justify the
+belief that the estimated cost of $78,000 per mile for those roads is
+far too high. Mr. Henry Poor, several years ago, estimated the average
+cost of the roads of the United States at $30,000 a mile. Making
+allowance on one hand for Mr. Poor's tendency to favor the railroad side
+of the question, and on the other hand for the more expensive grades,
+double tracks and better terminal facilities of these trunk lines,
+$50,000 per mile may be considered a fair estimate of their average
+cost. Upon this basis the total cost of the three lines in question
+would amount to $116,450,000, and the excess of their capital over
+actual cost would be the enormous sum of $261,000,000, or 325 per cent.
+of their actual cost, and probably not less than 400 per cent. of the
+original cost to their stock-and bondholders. The capital of these
+companies has since been considerably increased, to enable their
+managers to increase their dividends, and with it the tax levied upon
+the commerce of the country.
+
+These are only a few of the many instances of stock watering that might
+be mentioned. In fact, there are to-day very few railroads in the United
+States that are entirely free from it. It is a notorious fact that the
+stock of a large number of railroad companies represents little or no
+value, having either been sold at a mere nominal price or been donated
+as a premium or bonus to those who purchased a large amount of the
+company's bonds. In recommending, in his December, 1891, annual message,
+Government aid for the Nicaragua Canal, President Harrison said: "But if
+its bonds are to be marketed at heavy discounts and every bond sold is
+to be accompanied by a gift of stock, as has come to be expected by
+investors in such enterprises, the traffic will be seriously burdened to
+pay interest and dividends." It is not difficult to surmise to what
+enterprises the President referred. It has for many years been a
+well-settled principle among railroad incorporators that no larger
+assessments should be made upon the stockholders than is necessary to
+float the company's bonds. A company, for instance, is organized with a
+capital stock of, say, $1,000,000. Five per cent. of this sum, or
+$50,000, is paid into defray preliminary expenses. The road is then
+bonded for perhaps $2,000,000, but as the bonds are sold for only 80 per
+cent. of their face value and as the incorporators allow themselves 5
+per cent. for the negotiation of the bonds, only $1,500,000 is realized
+for the construction of the road. The incorporators now vote to
+themselves a contract to construct the road for $1,500,000 and at once
+sublet it to a contractor who is ready and anxious to build the road for
+$1,200,000. The incorporators thus realize $1,000,000 worth of stock, a
+portion of which is unloaded upon unsophisticated investors, and
+$300,000 in cash, at an outlay of $50,000; and the road, which cost
+$1,200,000, is made to pay interest and dividends on a total capital of
+$3,000,000, and this is subsequently watered indefinitely if the road
+proves profitable or a consolidation with some other road justifies the
+belief that its earning capacity might be increased. Nor is this an
+overdrawn picture. On the contrary, instances might be cited where only
+one-half of one per cent. of the company's stock was paid in by the
+shareholders.
+
+In the days of inflation such transactions did not seem to seriously
+affect railroad securities. Even when they were no longer a secret to
+the public, stocks and bonds sold readily, because, owing to the large
+earnings of the roads, this class of investments was unusually
+productive.
+
+In 1868 the earnings of the railroads of Massachusetts averaged $15,400
+a mile, and were equal to 38 per cent. of the total reported cost of all
+the lines of the State. The Chicago, Burlington and Quincy earned
+$15,386 per mile in 1867, and paid a 15 per cent. dividend. Its stocks
+were quoted 100 per cent. above par. In 1867 the Lake Shore Railroad
+earned more than 50 per cent., and the Terre Haute and Indianapolis even
+as much as 57.2 per cent. of the amount of its cost. Previous to the war
+the inflation of railroad securities was, as a rule, confined to the
+stock. Where roads were bonded for more than the cost of construction it
+was, with but very few exceptions, done to make their capital to
+correspond with their earning capacity, or rather to divert public
+attention from the fact that the rates in force had outlived their
+reasonableness. It was reserved to the Union Pacific and the Central
+Pacific companies to bond their roads from the beginning to an amount
+equal to twice their actual cost, or, in other words, to virtually
+receive them as a present from the Federal Government, bond them for all
+they were worth, and, in addition, issue stock to an amount largely in
+excess of the cost of construction, and then try to earn interest and
+dividends on the whole amount of securities issued. The history of
+these companies forms so interesting and instructive a chapter in the
+railroad annals of America that a short synopsis of it may not seem out
+of place here.
+
+The charter of the Union Pacific Railroad Company was granted by
+Congress on the first day of July, 1862. Shortly after the beginning of
+the War of the Rebellion it was made to appear to the country that a
+transcontinental road was a national necessity; that without it we could
+not hope to retain long the Pacific Coast. It was also very plausibly
+argued that the political benefits to be derived by the country from the
+construction of such a road, as well as its great length and
+extraordinary cost, made it the duty of the nation to aid liberally its
+enterprising and patriotic promoters in the prosecution of their
+gigantic task. In those stirring times few people were inclined to
+question the motives of those who advocated what appeared to be
+patriotic measures, or to be penurious in the expenditure of public
+funds when the public weal seemed to demand such expenditure.
+
+The Union Pacific Railroad charter, which in substance was passed by
+Congress as it had been drafted by the promoters of the enterprise, gave
+to the new company the right of way through the public lands, and
+authorized it to take, from the lands adjacent to the line of its road,
+earth, stone, timber and other materials for its construction. It
+further granted to the company every alternate section of land to the
+amount of five alternate sections per mile on each side of its line,
+excepting only those lands to which preemption or homestead claims
+attached at the time when the line of the road should be definitely
+fixed. In addition to these donations the United States issued to the
+company subsidy bonds in an amount equal to $16,000 per mile for the
+distance from the Missouri River to the eastern line of the Rocky
+Mountains, $48,000 per mile for a distance of 150 miles through the
+Rocky Mountains, and $32,000 per mile from the western base of the Rocky
+Mountains to the terminus of the road. Similar franchises were at the
+same time given to the Central Pacific Railroad Company, a corporation
+which had previously been chartered by the State of California. Besides
+its grant of right of way, land, timber, etc., this company received
+subsidy bonds at the rate of $16,000 a mile for a distance of 7.18 miles
+east of Sacramento, of $48,000 a mile for 150 miles through the Sierra
+Nevada, and of $32,000 a mile for the distance from the eastern base of
+that mountain range to its junction with the Union Pacific. The charters
+of the two companies provided that, to secure the repayment to the
+United States of the amount of those bonds, they should _ipso facto_
+constitute a first mortgage on the entire lines of the road, together
+with their rolling stock, fixtures and other property. The franchises
+and donations thus granted by Congress were most valuable; in fact, the
+latter were alone sufficient to build and equip the roads. In spite,
+however, of the liberal grants and in spite of the urgent necessity of
+the roads in those years of national trial, both of these enterprises
+made very slow progress. Their promoters were men of small means, and
+the capitalists to whom they appealed for help failed to realize the
+value of the franchises. No doubt when these men first engaged in their
+cause they expected to encounter serious obstacles in Congress,
+supposing that that august body would consider the proposed measure with
+much deliberation and to act upon it with still more circumspection.
+Their success greatly surprised them. They made the discovery that
+members of Congress could be imposed upon as easily as private
+citizens, and when they fully realized how readily their demands had
+been granted, they were greatly provoked at themselves because they had
+not asked for more.
+
+According to a story told by my old friend Mr. J. O. Crosby, an
+experienced member of the brotherhood of tramps late one afternoon
+chanced to stroll into the city of Alton. Having no visible means of
+support, he was picked up by the police and brought before the Mayor to
+give an account of himself and to be dealt with as that dignitary might
+see fit. The tramp, a printer by profession, and by no means a tyro in
+meeting such emergencies, so managed to impress the Mayor with his
+superior accomplishments that the latter concluded it would be a good
+investment, both for himself and the city over which he presided, to
+offer the genial stranger a contribution to his traveling fund, upon the
+condition that he would no longer than absolutely necessary molest the
+city with his presence. He accordingly told the intercepted tourist that
+while it had been for years the policy of the city and its officials to
+entertain all tramps found within the limits of Alton for thirty days at
+the city jail in exchange for a fair amount of labor, he would, in
+consideration of the apparent fact that he was of better metal than the
+average tramp, make an exception in his case, and would, even at the
+risk of being censured for it by his constituents, hand over to him five
+dollars from the municipal funds if he would agree to leave the city
+early next morning. The tramp gladly accepted the proposition,
+replenished his empty purse with the proffered bounty and withdrew from
+the City Hall, to take a stroll through Main Street. The city seemed to
+him as prosperous as the Mayor had shown himself liberal. It occurred to
+the itinerant typographer that its treasury would not have been the
+worse off for a ten-dollar levy, and he hastily returned to the Mayor's
+office to plead for a larger donation. The Mayor, not disposed to argue
+the question, handed him another five-dollar bill and improved the
+opportunity to remind him of his previous promise and to give expression
+to the hope that as a gentleman of honor he would now discharge his
+obligation. The tramp fairly overwhelmed His Honor with assurances of
+good faith and bade him an affectionate good-by. The next rising sun
+found him on his onward journey. His route led through Alton on the
+Hill, a portion of the city which he had not seen before. He viewed with
+surprise the many fine residences and other evidences of opulence which
+this part of the city contained. He passed on in a pensive mood until he
+reached the summit of the hill, which commanded a fine view of the
+entire city. Here he turned to cast a farewell glance over the town
+ruled over by the most generous mayor that it had ever been his
+privilege to meet. As he beheld before him the fine homes and beautiful
+yards, and below in the valley the lofty church-steeples, the many
+school-houses, the massive business blocks, the long and well-paved
+streets and the spacious and shady parks, an expression of mingled
+surprise and disappointment stole over his face. He thrice slapped his
+wrinkled brow and then hurriedly retraced his steps down the hill. When
+the chief magistrate of Alton came to his office that morning, he met
+the irrepressible tramp anxiously waiting for him at the door. "Mr.
+Mayor," said the wily extortioner, "I acted very hastily yesterday when
+I accepted your second proposition. You have here a much larger town
+than I ever supposed. I have been constrained to take our last agreement
+into reconsideration, and I shall not leave this point until you add
+another five dollars to your consideration. You can certainly better
+afford to do that than to throw away thirty days' board and the ten
+dollars which you have already paid me besides."
+
+The diplomacy of the Union Pacific and Central Pacific railway companies
+was the same as that of the Alton tramp. They had found Congress as
+generous as the tramp had found the Mayor of Alton, and now reproached
+themselves for their modesty and resolved to bring the pliability of
+Congress to a severer test. They again appeared before that body in 1864
+and asked that their charter be so amended as to grant to them ten
+alternate sections instead of five on each side of the road, and also
+all the iron and coal found within ten miles of their track, which had
+previously been reserved by Congress. And in addition to this they asked
+that they be authorized to issue their own mortgage bonds on their
+respective roads to an amount equal to the bonds of the United States,
+and that the lien of the United States bonds be made subordinate to the
+lien created by the companies' bonds. By the act of Congress, July 2,
+1864, all these demands were granted, and the two companies were thus
+virtually presented with their roads and were at the same time given
+permission to mortgage this gift of the people and divide the proceeds
+among their shareholders, many of whom had received their stock chiefly
+in consideration of their influence in and out of Congress. The
+contribution of the United States to these companies on account of their
+main lines has not been far from $80,000,000, of which over $52,000,000
+was paid in bonds, and the remainder in lands, which aggregated about
+23,000,000 acres. The whole line from Council Bluffs to Sacramento is
+1,780 miles long. It will thus be seen that the national contribution
+was about $45,000 per mile, besides the right of way and all timber,
+iron and coal found within ten miles of the road. There is no doubt that
+this contribution was equal to, if it did not exceed, the actual cost of
+the road. There has been an erroneous impression abroad which has
+likened the Pacific road to those wonderful and very expensive lines
+which cross the Andes and the Alps. Those who have not crossed the
+continent can hardly believe that the construction of this line was
+neither more difficult nor more expensive than that of any of the
+numerous railroads crossing the mountain ranges of the East, but such is
+the fact.
+
+Starting from Omaha, the Union Pacific follows for nearly 500 miles, or
+almost half of its entire length, the valley of the Platte River. A
+better route for a railroad cannot be found upon the western continent.
+There are between Omaha and Cheyenne but three bridges worthy of the
+name. The Platte Valley is almost straight, rising toward the west at a
+nearly uniform rate of about 10 feet to the mile. Grading was
+practically unnecessary, and the work of construction consisted of
+little more than the laying of the ties and track. From the base of the
+mountains at Cheyenne to their summit is a distance of about thirty-two
+miles, the difference in altitude between the two points being less than
+2,200 feet. The average grade is therefore about 68 feet to the mile,
+and nowhere are the grades heavier than 80 feet to the mile. There are
+heavier grades than these in the prairie State of Iowa, and the mountain
+grades of a number of Eastern roads exceed those of the Union Pacific by
+from 30 to 40 feet to the mile. The rise is, if not uniform, at least
+gradual, and the construction of even this portion of the road required,
+therefore, neither great engineering skill nor any unusual expenditure
+of money. The road now crosses a plateau which extends almost to the
+terminus of the Union Pacific at Ogden, and a very large portion of this
+is as favorable for a roadbed as the average railroad territory of the
+country.
+
+The route of the Central Pacific presented to the engineer no great
+obstacles between Ogden and the State line of California, the only
+elevation of any note to be surmounted being the Humboldt Mountains in
+Nevada. Their highest point, Humboldt Wells, is 221 miles west of Ogden,
+and has an elevation of 5,650 feet above the level of the sea, while
+that of Ogden is 4,320 feet. Upon an average the grades of this portion
+of the road do not differ from those found in the Mississippi Valley.
+The portion of the Central Pacific Railroad which traverses the Sierra
+Nevada is the most expensive of the whole line, but the cost of
+construction did not, even on this division, exceed the amount
+contributed for it by the Federal Government; for the statement is made
+upon good authority that a few of the leading promoters of the road
+built the first western section of twenty miles with their own capital,
+of less than $200,000, and a loan from the city of Sacramento and Placer
+County, amounting to $550,000, and then drew $848,000 Government
+subsidy, or more than enough to build the second section and draw
+another installment of the subsidy; and that they repeated the operation
+until the whole line was completed. These men were in such haste to
+realize the profits which their undertaking promised them that they did
+not even take sufficient time to make a proper survey of their line. Had
+they done so, a great saving, both in the construction and in the
+subsequent operation of the road, might have been effected. It is now
+well known that a route could have been found through the Sierra Nevada
+Mountains, not far distant from the route chosen, which would have saved
+800 feet in elevation and at least 25 per cent. in the expense of
+grading.
+
+It is certainly safe to say that if less than forty thousand dollars a
+mile was sufficient to construct the road through the Sierra Nevadas the
+Federal contribution of $50,000,000 for the entire line, from Omaha to
+San Francisco, left, after the completion, a respectable surplus, either
+to the companies or those of their members who had the construction
+contract, and that the $75,000,000 of capital stock and the $55,000,000
+of first mortgage bonds which the two companies issued were a gigantic
+dividend to the stockholders, for which, practically, no consideration
+was given.
+
+The companies might well have been satisfied with the Government's
+generosity, but their success in imposing upon Congress stimulated their
+greed. The act of 1864 provided that the charge for Government
+transportation over these roads should be applied to the liquidation of
+its bonds, and that after the completion of the lines five per cent. of
+their net earnings should likewise be so applied. When the Secretary of
+the Treasury, under the law, refused to pay them the amount earned by
+Government transportation, and in addition to this demanded the five per
+cent. of their net earnings in liquidation of their debt, the companies
+applied to Congress to again amend their charters so as to relieve them
+for the time being from any direct payment of either principal or
+interest of the Government bonds, and to make it the duty of the
+Secretary of the Treasury to pay to the companies in money one-half of
+the compensation allowed to them by law for services performed for the
+Government. And again Congress responded to their demands, granting
+them, by a rider to the army appropriation bill, passed March 3, 1871,
+all the relief asked for. Owing to the policy of the managers of the
+Pacific line to pay as little of the interest on the Government subsidy
+debt as is absolutely necessary to prevent foreclosure proceedings, the
+unpaid interest has accumulated until it now almost equals the amount of
+the original indebtedness. The last report of the Commissioner of
+Railroads shows that the total indebtedness, principal and interest, to
+the United States of the Pacific railroad companies, was $114,490,000 on
+July 1, 1892. The Commissioner seems to be of the opinion that the Union
+Pacific Company will not be able to pay the subsidy bonds at maturity,
+and he urges that some step be taken in the matter by Congress, whether
+it be to extend the loan, which will mature within the next six years,
+or to sell the road. The managers of the Pacific roads and their friends
+ask an extension of the Government subsidy bonds for fifty years, and a
+reduction of interest from 6 to 2 per cent. If Congress continues to be
+servile to these interests, the Pacific railroad lobby will secure just
+such legislation as they demand.
+
+At the time the Pacific roads were built the people of the United States
+had no adequate knowledge of the topography of the Territories, and the
+promoters of the road for a while found it a difficult task to convince
+capitalists that the investment would be a safe one. That they knew the
+value of the projected road was shown by the contest between the Central
+Pacific and the Union Pacific for mileage. For a distance of over 200
+miles the two companies graded roads side by side in contest for the
+Government subsidy.
+
+The promoters were even disappointed in the cost of the roads, as Mr.
+Sidney Dillon states in an article published in the August number of
+_Scribner's Magazine_, 1892, in which he says:
+
+      "At the end of 1867 the road was completed to the top of the
+      mountains and nearly half way to Salt Lake City. The cost of
+      building over the mountains was so much less than we had
+      expected that the construction company found itself with a
+      surplus from the proceeds of the subsidy bonds. This was
+      imprudently distributed in dividends."
+
+The United States Government could parallel to-day the line of either
+road for less than the amount of its first mortgage bonds, and its
+subsidy bonds are therefore nearly worthless.
+
+Mr. Clews, in his "Twenty-Eight Years in Wall Street," says:
+
+      "After the Thurman bill had been sustained by the Supreme
+      Court Mr. Gould had a plan to build a road from Omaha to
+      Ogden, just outside the right of way of the Union Pacific,
+      and give that road back to the Government. It would give
+      others 'a chance to walk.' The Government tried to squeeze
+      more out of the turnip than was in it. For $15,000,000 a
+      road could be built where it had cost the Union Pacific
+      $75,000,000."
+
+It may be admitted that the Pacific roads, even at an extravagant cost,
+have proved a good investment for the country, yet their history
+reflects severely on the statesmanship of those members of Congress
+whose duty it was to properly protect the interests of the nation at
+that time. They were unequal to their task.
+
+The Great Northern Railway Company has just completed its road to the
+Pacific Coast. Its line is very direct, and it has unusually light
+curvature and low grades, which will enable it to be operated more
+cheaply than any Pacific line yet constructed. Much of its route is
+through a rich and productive country, insuring to it a heavy local
+business.
+
+The following statistics concerning it are given in the _Railway Age_:
+
+  Total mileage, December 18, 1890          2,850
+  Average bonded debt per mile            $18,636 75
+  Average stock per mile                    7,015 67
+  Total                                    25,652 42
+  Interest charges per mile                 1,005 76
+  Dividend charges per mile                   420 94
+
+A comparison of these figures with those corresponding of other
+transcontinental lines is instructive, and is commended to Congressmen
+who have to deal with the Union Pacific and Central Pacific questions.
+
+Stock and bond inflation, it may confidently be asserted, has created
+from five to six thousand millions of dollars of fictitious railroad
+capital. In 1890 the average liabilities of the railroads in the United
+States, including the capital stock and the funded and unfunded debt,
+were $63,600 per mile. According to Mr. Poor's estimate of the average
+cost of American railroads per mile, more than 50 per cent. of this vast
+sum is pure water. But, as has been stated before, Mr. Poor is partial
+to the railroad interest, and his estimate of $30,000 a mile is too high
+for the time at which it was made. Furthermore, railroad building has
+since then been materially cheapened. Tens of thousands of miles of road
+have been built in recent years that did not cost to exceed $10,000 a
+mile. Very recently the Union Pacific Railroad Company proved, before
+the Board of Equalization at Salt Lake City, by the testimony of
+engineers, that the average cost per mile of the Utah Central line was
+only $7,298.20, itemized as follows:
+
+  Engineering                         $  300 00
+  Grading 5-ft. fill, 18,480 yds.      2,310 00
+  Ties, 2,640, at 30 cts.                792 00
+  Rails, 82 tons                       1,845 00
+  Splices                                 12 00
+  Bolts                                   24 00
+  Spikes                                 142 20
+  Track-laying                           600 00
+  Bridges                                200 00
+  Station-building                       100 00
+  Fences                                 150 00
+  Right of way                           720 00
+                                      ---------
+                                      $7,298 20
+
+In a recent article Mr. C. Wood Davis states that "many auxiliary lines
+have been built at costs ranging from $8,000 to $15,000 per mile, and
+capitalized at two, three, four, and even five times their cost, as in
+the case of the 107 miles of the Kansas Midland, costing, including a
+small equipment, but $10,200 per mile, of which 30 per cent. was
+furnished by the municipalities along its line. Yet, with construction
+profits and other devices, this road shows a capitalization of $53,000
+per mile."
+
+And that "the Missouri Pacific line from Eldora to McPherson, Kansas, a
+comparatively expensive prairie road, being located across the line of
+drainage, cost much less than $10,000 per mile, as have thousands of
+miles of other prairie roads."
+
+It is safe to say that $25,000 is a liberal estimate of the average cost
+per mile of American roads to the stock-and bondholders, and that their
+capitalization represents $38,000 of water per mile. The total net
+earnings of the railroads of the country were $341,666,639 in 1890, and
+$356,227,883 in 1891, upon an actual investment of only about
+$4,250,000,000. This is a return of about 8-1/2 per cent. and shows the
+force of Mr. Poor's statement that, if the water were squeezed out of
+railroad securities, no better-paying investment could be found in the
+country.
+
+We often see references to the fact that no dividends are paid upon a
+large portion of railroad stocks, but there is no reason why dividends
+should be paid upon many of them, as they represent no capital whatever
+that has gone into the road. It is probable that not to exceed ten cents
+on the dollar upon an average was originally paid for these stocks, and
+the $80,000,000 distributed annually as dividends upon them does not
+vary much from fifteen to twenty-five per cent. upon the amount actually
+invested in them.
+
+
+
+
+CHAPTER VII.
+
+COMBINATIONS.
+
+
+It is the favorite argument of railroad men, and the writer must confess
+that he himself formerly believed, that if all legal restraints were
+removed from railroad business, the laws of trade would regulate it more
+successfully and more satisfactorily, both to the railroad companies and
+their patrons, than the wisest statutes could ever regulate it. To give
+force to their argument, they cite the old Democratic maxim that that
+State is governed best which is ruled the least. They also assert that
+it is the province of the State to guarantee to each of its citizens
+industrial freedom; to permit him to transact any legitimate business
+according to his best judgment; to buy and to sell where and at what
+price he pleases; in short, to earn without restriction the reward of
+his intelligence and his industry. They further contend that under a
+free government the law of supply and demand should be allowed free
+sway, and that he who buys or sells transportation should not be
+hampered in his transactions any more than the grocer and his customer.
+
+The reply to this is that, while the grocer is a natural person, the
+railroad company is an artificial person, and that, while the business
+of the former is purely private, that of the latter is quasi-public. The
+grocer must rely solely upon his personal rights and private resources,
+but the railroad company accepts from the State the franchises which
+enable it to do business. And yet, if the public had any assurance that
+the laws of trade would regulate both kinds of business alike, it is
+not likely that the State would distinguish between the two. They claim
+that their business is like other private business, and therefore they
+should be let alone; that competition can be relied upon to correct
+abuses; and where competition does actually exist they forget, and then
+claim that their business is not like other private business, and they
+should be allowed to make pools and combinations, because in their
+business competition is ruinous. Experience has certainly demonstrated
+that competition is only possible where combination is impossible. Where
+the same commodity is supplied by a large number of individuals, there
+is but little danger for the public from those who supply it, for an
+agreement among many cannot easily be effected; and even if an
+understanding could be reached, it would not long be satisfactory to all
+parties. Disagreements would arise which would end in the dissolution of
+the combination. Where, however, the number of competitors is small,
+agreements can be easily effected and successfully maintained.
+
+It is doubtful whether there is at present any interest in the
+commercial world which has a greater tendency to monopoly and
+combination than the railroad interest. There are in the United States
+some 40,000 railroad stations. Not more than 4,000 of these are
+junctions of two or more roads. At 90 per cent. of these stations
+shippers are therefore confined to one line of railroad, and are, in
+absence of State regulation, compelled to pay for transportation
+whatever price the companies may be disposed to charge, subject only to
+such restrictions as the proximity of competing points may impose. If
+competition obtained at all points where two or more roads meet, many
+railroad companies could not afford to charge excessive rates at
+non-competitive points along their lines of road, for such a policy
+would slowly but surely drive a large volume of their legitimate
+business to rival roads, to whose interest it would be to encourage by
+every means in their power such diversion of traffic. Railroads early
+recognized this fact and took steps to enable each line to control its
+local business. The first combinations among railroad companies to
+control prices at competitive points were rather crude; in fact, much
+cruder than the first Granger legislation. They were simple agreements
+among the various roads touching a common point to maintain certain
+fixed rates. But while each road was anxious to have the rates agreed
+upon maintained by all of its rivals, it cared but little about
+maintaining its own good faith, and it improved every opportunity to get
+business at reduced rates so long as it could reasonably hope to escape
+detection. As soon as any of the competing roads, through the
+falling-off of its business, became convinced that it was the victim of
+overreaching rivals, it retaliated by offering still lower rates to
+close-tongued shippers. This tricky rivalry would be continued until the
+animosity engendered by it would lead to an open rupture, and what
+railroad men are pleased to term a rate war would follow. As the
+schedule rates had before been unreasonably high, so they became now
+unreasonably low. Hostilities would be continued until all belligerents
+became exhausted and manifested a disposition to negotiate a treaty of
+peace. The former high rates would then be restored; the compact was
+carried out for a short time, to be again violated and finally annulled.
+These rate agreements were in vogue in New England before the War of the
+Rebellion and gradually found their way to the Middle States and the
+West. Wherever they were tried they were violated, until even among the
+most unsophisticated of freight agents a rate agreement was looked upon
+as a farce.
+
+The statement is often made by railroad managers that excesses in
+railroad competition are the result of the peculiar conditions of their
+business, which has heavy fixed charges on one hand and a fickle
+patronage on the other; that the uncertainty of through business compels
+them to rely upon the local business for such revenue as is necessary to
+meet these fixed charges; and that, inasmuch as their trains _must_ run,
+and any through freight hauled by them is so much business taken from
+the enemy, they can better afford to take it at any price than to have
+one of their competitors take it.
+
+It is difficult to see why this reasoning should not be applied to other
+branches of business; for instance, to milling. The mill-owner, like the
+railroad company, has heavy fixed charges. He has to earn the interest
+on his capital, he has to keep his mill in repair, he now and then has
+to meet the demands of the times and purchase improved appliances, and
+he has to keep a certain number of employes, whether business is brisk
+or slack. He might, therefore, if he saw fit to employ the logic of
+railroad managers, earn revenue enough to meet his fixed charges from
+the business which his regular customers give him, and then do any
+business coming from beyond this circle at any price rather than
+surrender it to a rival.
+
+It will readily be conceded that any enterprise conducted on such
+principles could, at the best, flourish only temporarily, for it would
+soon encounter difficulties from two sources. Its local customers, thus
+discriminated against, would withdraw their patronage, while its
+competitors, finding their territory encroached upon, would, in
+self-defense, offer still better terms to the public to regain their
+lost customers. Such ruinous competition, if long persisted in, must
+necessarily cripple, if it does not bankrupt, a majority of those who
+engage in it. It is fortunately as rare in industrial and commercial
+circles as it is common among public carriers.
+
+This difference can easily be accounted for. Where there are a large
+number of competitors the prices of the commodities supplied by them are
+leveled down until they reach a point where they will afford only a
+reasonable margin of profit, and beyond which they will cease to be
+profitable, and will therefore cease to be supplied until the
+equilibrium is again established. Where, however, the number of
+competitors is small, the price of the commodities supplied by them
+will, by agreement, for a time at least, be maintained at a point where
+it affords considerable more than a reasonable profit. Here the large
+gain presents to the various competitors such a temptation to outstrip
+their rivals and increase their business at the expense of good faith,
+that but few, if any, of them will, in the long run, resist it. The
+tendency to underbid rivals will always be strong where profits are
+large, and it may safely be asserted that efforts to maintain, through
+combinations, excessive rates are the most fruitful source of ruinous
+competition.
+
+In time railroad managers became convinced that, unless it was possible
+to radically reform railroad ethics, rate agreements could never be
+relied upon for the maintenance of excessive rates at competing points.
+The combined roads found it an easy matter to agree upon excessive
+rates, but were powerless to enforce them. Experience convinced their
+managers that to make their tariffs effective it was necessary to
+deprive individual roads of the power or the inducement to cut below the
+agreed rates. Their ingenuity in time developed a system which promised
+to remove from individual roads every temptation to take business at
+less than schedule prices. This device consists in a division of
+railroad business and is commonly called a pool. There are various ways
+in which such a division is made. Either the traffic is divided among
+the various companies meeting at a common point, or each road is allowed
+to carry all freights that it may receive, and then the earnings of the
+different roads are divided, each road being paid the actual cost of
+such service as it has performed. There is still a third pooling
+arrangement, consisting in a division of territory, but this has been
+found less satisfactory and is now but rarely resorted to.
+
+It is said that the first regular pool organized in the United States
+was the Chicago-Omaha pool, formed in 1870 by the Chicago, Burlington
+and Quincy, the Chicago, Rock Island and Pacific, and the Chicago and
+Northwestern railroad companies, then the only three lines connecting
+the cities of Chicago and Omaha. This pool, which was subsequently
+joined by other lines, made an equal division of the traffic, and was so
+well organized that it lasted fourteen years "without a break." The
+abuses practiced by the companies belonging to this pool were one of the
+chief causes of the Granger movement in Iowa. It is indeed doubtful
+whether any other railroad combination ever maintained itself longer or
+pursued its ends with greater pertinacity than this pool. Another pool
+of national notoriety was the Southern Railway and Steamship
+Association, which was organized, though at first under a different
+name, in the State of Georgia, in 1875. It was probably the first money
+pool formed in the United States. Each member was awarded a certain
+percentage of the total business between the various competitive points
+along its line. If a company carried more than its share, it was
+compelled to turn over the receipts from such additional traffic to its
+rivals, which paid it a nominal price for carriage. This allowance was
+always made so low that there was no inducement for any company to seek
+to carry more than its allotment. The pool had its own executive,
+legislative and judicial departments, and it enforced its decrees with
+an iron hand. It maintained a strong centralized government, and
+rebellious members had but little mercy to expect from it. It provided
+that if any officer or representative of any company should authorize or
+promise, directly or indirectly, any variation from established tariffs,
+he should be discharged from the service, with the reason stated. The
+strong sentiment which we to-day find in the South in favor of State
+control of railways is the direct result of the many evils which this
+powerful pool introduced into the railway business of that section of
+the country.
+
+Other pools followed, as the Southwestern Association, organized in
+1876, to control the traffic between Chicago and St. Louis, and the
+Minnesota and the Colorado pools. Within a few years railroad pools
+covered the whole country. All pursued the same object, viz., the
+control of rates at competitive points, which enabled the companies to
+maintain excessive schedule rates at local points.
+
+Between 1875 and 1880 the pooling system rapidly spread all over the
+Union. Wherever competition promised to regulate rates by the
+application of the law of supply and demand, the pool was resorted to as
+the never-failing remedy to preserve dividends on watered stock. As long
+as lake and canal navigation controlled the carriage of heavy freights
+between Chicago and New York by means of rates so low that railroads
+found it, or at least thought it, impossible to compete with them in the
+transportation of agricultural products during the greater part of the
+year, railroad pools between Chicago and New York could not be
+successfully maintained. In 1873 the railroads transported only about 30
+per cent. of this kind of freight from the West to Eastern ports.
+
+Owing, however, to the rapid decrease of the cost of transportation,
+railroad companies from this time on were enabled to encroach rapidly
+upon the business of water routes, so that in 1876 they carried over 52
+per cent. of the entire volume of agricultural products that were moved
+from the West to the East. As long as these products were carried almost
+entirely by water from lake ports to the East, New York, as the terminus
+of this route, enjoyed decided advantages over the other Atlantic ports.
+When, however, the railroads commenced to successfully compete with the
+water routes in the transportation of these commodities, a considerable
+share of this business was diverted to Boston, Philadelphia and
+Baltimore, and it soon became apparent that these ports, in some
+respects, enjoyed advantages for the export trade not possessed by New
+York. It was, therefore, not surprising that the business men of these
+cities, together with the railroads terminating in them, made every
+effort to come in for their share of the traffic which was drifting away
+from New York.
+
+Competition between the New York Central and the Pennsylvania Railroad
+for the Western through traffic dated back as far as 1869, the year in
+which both systems secured, through consolidation with connecting roads,
+through lines to Chicago. Rates fell in one year from $1.80 to 25 cents
+per hundred pounds. After a time the managers of the two companies met,
+and schedule rates were restored. Rates were, at least outwardly,
+maintained until the Baltimore and Ohio and the Erie system entered
+Chicago, and the Grand Trunk made connections with Milwaukee and other
+lake points, and thus disturbed through rates. All efforts to maintain
+the level of the old tariffs, through agreements, proved now fruitless,
+for both the Baltimore and Ohio and the Grand Trunk found it to their
+interest to pursue independent policies, and refused to have their hands
+tied by an agreement with roads that were interested in continuing, if
+possible, the commercial supremacy of New York.
+
+Rate skirmishing finally developed into open war in 1876, when
+fourth-class rates between Chicago and the Atlantic fell as low as 16
+cents per hundred. This rate, however, was eclipsed in July, 1878, when
+wheat was carried from Chicago to New York for 10 cents per hundred. The
+existing conditions left no doubt in the minds of those familiar with
+railroad tactics that this war was simply the precursor of a gigantic
+combination between the trunk lines. An unsuccessful attempt to effect
+such a combination had been made before. In 1874 the managers of the
+Erie, Pennsylvania and New York Central met at Saratoga for the purpose
+of devising means for the suppression of competition in the trunk line
+traffic. This meeting, however, known in railroad history as the
+Saratoga Conference, was the first step toward the organization of a
+trunk line pool, although the conference did not lead to any immediate
+results, the Grand Trunk and the Baltimore and Ohio refusing to be bound
+by its decision. It was certainly no easy task to devise means to bring
+about an effective and permanent combination among five large through
+lines with greatly conflicting interests.
+
+So far pools had never failed to suppress competition wherever they were
+organized. But in the past pools had, almost without exception, only
+attempted to control rates between common points. They accomplished
+their object by a division of the entire traffic or earnings from the
+traffic between common points. The schedule rates remained the same for
+all. But the traffic of the trunk lines brought a new factor into the
+problem. Here the rival routes did not terminate at the same points. It
+was contended by the Baltimore and Ohio that, whatever might be the
+facilities of Baltimore for exporting agricultural products, that port
+was at a disadvantage as compared with the more northern ports on
+account of the longer voyage and higher ocean rates to Liverpool, and
+that it could therefore not enter into a combination with the roads
+leading directly to New York and Philadelphia upon equal terms, since
+this would divert its legitimate share of the through business to those
+ports. The Grand Trunk, on the other hand, refused to enter the
+combination because, not having any direct Chicago connection, it feared
+that the enforcement of pool rates would materially diminish the volume
+of its business. As yet the railroad wiseacres did not seem to be equal
+to the emergency, and matters drifted along in the old channel. The rate
+war of 1876 gradually brought about an understanding among the
+belligerents. The competing roads accepted the terms offered, and with
+this a new principle entered into the science of pooling. Rates between
+Chicago and Baltimore were fixed somewhat lower than those between
+Chicago and Philadelphia, and in turn Philadelphia was allowed a small
+advantage over New York. This concession was made to equalize the
+difference in the ocean rates of the competing ports. These equalizing
+or--to use railroad nomenclature--differential rates were subsequently
+granted by pools to such roads as, on account of some disadvantage,
+could not compete with other members of the pool on equal terms. Thus
+the longest route was usually permitted to charge the lowest, and the
+shortest route the highest rate. This practice is in conformity with the
+principle of charging whatever the traffic will bear, but it is
+certainly devoid of every consideration of justice and equity. If the
+longer line can afford to carry freight at rates lower than schedule
+prices, no further proof is needed under ordinary circumstances that the
+regular schedule rates of the shorter line are exorbitant.
+
+The concession of differential rates settled, at least temporarily, the
+difficulties that had arisen out of the east-bound traffic of the trunk
+lines. This arrangement did not, however, in any way affect the traffic
+moving in the opposite direction. The volume of west-bound freight is
+very much larger at New York than at any other of the Atlantic ports. In
+order to get its share of the business, each trunk line maintained an
+office in New York. These offices eagerly solicited business for their
+respective roads, and the freights which they received for
+transportation to the West would be forwarded either directly or by a
+circuitous route; but, the longer the route, the lower as a rule was the
+compensation asked for the service. Under these circumstances
+competition was brisk, and the profits realized were far from satisfying
+the cupidity of the competing lines. It was apparent to their managers
+that the competition in the west-bound traffic was similar to that
+formerly existing between Chicago and Mississippi and Missouri River
+points, which had promptly yielded to pools. The temporary adjustment of
+the more perplexing questions which had arisen out of the east-bound
+traffic now paved the way for a pooling arrangement for the west-bound
+freight. The Southern Pool, under the management of Albert Fink, had
+long attracted the attention of the trunk line managers. Its system of
+dividing the traffic, of reporting to a central office and of hearing
+and deciding complaints had enabled it to exert an almost absolute
+control over its members, to compel them to make honest returns and to
+prevent rupture and rebellion. It was believed that a pool of the trunk
+lines could not be effective or permanent unless organized upon the
+Southern basis and presided over by a trunk expert. Accordingly, when in
+1877 an agreement for the pooling of the west-bound traffic was reached
+by the trunk lines, Mr. Fink was tendered the position of pool
+commissioner. Under the agreement reached the total tonnage of the
+west-bound business was divided in such a way that the Erie and New York
+Central roads each received 33 per cent., the Pennsylvania 25 per cent.,
+and the Baltimore and Ohio 9 per cent. of it. If any road received more
+freight than was allotted to it by the pool, it delivered such surplus
+to the pool, or rather to such a road as the pool commissioner
+designated as not having received its allotment. The success of this
+pool from a railroad point of view made the trunk lines anxious to
+organize a similar pool for the whole east-bound traffic. It was
+proposed to control by such a combination the rates on all the
+east-bound traffic of the Northwest, by making Chicago the pooling
+center, fixing for it a schedule of rates and making the rates of all
+the railroad centers in the West and Northwest dependent upon it. The
+combination was to comprise more than forty companies, controlling over
+25,000 miles of road. The scheme was tried for three months in 1878,
+but proved a failure, owing to the fact that nearly all of the many
+diverging interests sought their own advantage. The Eastern and Western
+trunk line pools were, through the efforts of their commissioner,
+successfully maintained, though even their harmony was occasionally
+marred by a short war precipitated by such members as would think
+themselves entitled to larger shares of the spoils. But a readjustment
+would invariably follow, and the expenditures of the war would be taxed
+up to the public.
+
+After the failure of the gigantic Western pool which had been organized
+under the protectorate of the trunk lines, the companies which had
+composed it formed such local combinations as their individual interests
+dictated. It is doubtful whether during the five years immediately
+preceding the passage of the Interstate Commerce Law there was any
+junction of two or more roads in the United States which, except during
+the period of an occasional railroad war, had any competition in the
+transportation business. As has been shown before, discriminations
+without number were practiced between places and persons; goods were not
+unfrequently carried at a loss; but the general public was, as a rule,
+compelled to pay what the traffic would bear, or rather what the pooling
+roads thought it could bear.
+
+It is claimed by railroad managers that pools are the only effective
+contrivances for checking ruinous competition among railroad carriers,
+and that they are therefore justifiable as a means of self-protection.
+This might perhaps be a valid argument if any attack were made upon the
+railroads which encroached upon their rights or endangered their
+existence, but if railroad companies are disposed to cut each other's
+throats, the public should not be made to pay the penalty of their
+depravity. As long as schedule rates are unreasonably high, railroads
+will be tempted to offer to certain shippers low secret rates; but as
+soon as all rates have been leveled down to a point where they will
+yield only a fair profit with good management, the inducement to cut
+below them is largely taken away. Pools, far from being a remedy for the
+evils of excessive competition, will in the end only aggravate the
+disease which they attempt to cure. The high rates which they maintain
+attract the attention of speculative men and lead to the construction of
+rival roads. While the traffic remains the same, the proceeds must then
+be divided among a larger number of carriers. Thus the construction of
+unnecessary roads, which has often been the subject of bitter complaint
+on the part of the older roads, is chargeable directly to their wrong
+policies.
+
+One of the principal objections to industrial and commercial
+combinations is that they paralyze trade. Competition stimulates every
+competitor to offer the best at the lowest possible price. This
+increases the demand for the commodity, and both the producer and the
+consumer are in the end benefited by the operation of this law. On the
+other hand, combinations, or, what is the same, monopolies, increase the
+price, remove the stimulus to excellence, and reduce the demand, and
+thereby affect injuriously the producer and consumer alike. Competition
+in the railway service would mean an improved service and lower rates
+and would speedily be followed by a large increase of business.
+
+Another serious objection to pooling is that it invariably leads to
+periodic wars, which unsettle all business, and but too often introduce
+into legitimate trade the element of chance. These wars give, moreover,
+to designing railroad managers an opportunity to enrich themselves by
+stock speculations at the expense of the stockholders, whose interests
+they use as a football for the accomplishment of their selfish ends.
+When rates are reduced to a right level, and are properly adjusted, and
+are equal to all, even railroad men will find no necessity for pools.
+The desire for such a combination is a desire to impose upon somebody,
+or some locality, or the public at large. The proposition to give legal
+sanction to pools, made by railroad managers, is preposterous; and even
+a pool to be approved by the Interstate Commerce Commission is out of
+the question, as it would cause the railroads to increase their efforts
+to control the appointment of the commission. However honest it may look
+on its face, however plausible may be the arguments produced in its
+favor, it should not be permitted.
+
+There is no doubt but under the proposed pooling arrangement railroad
+interests, watered stocks and all, would be cared for, but there is
+every reason to believe that public interests would not be properly
+protected.
+
+So long as servility by a member of the Interstate Commerce Commission
+to railroad influences serves as a stepping-stone to a high position in
+the employ of railroad combinations, with a salary of three or four
+times that of an Interstate Commerce Commissioner, so long will it be
+unsafe to permit such powers to be vested in that commission.
+
+Pooling by railroads should not be permitted, if permitted at all, so
+long as representatives of speculative interests have a voice in their
+management, and not until all fictitious valuations are altogether
+banished from the equation, and until the roads are brought under
+complete Government control. There is no more necessity for pools among
+railroads than there is among merchants and manufacturers. The capital
+actually invested in railroads is now receiving larger returns than
+investments in other lines of business, and their incomes are increasing
+from year to year.
+
+Every pooling combination of railroad companies for the maintenance of
+rates is a violation of common law. From time immemorial the law has
+stamped as a conspiracy any agreement between individuals to support
+each other in an undertaking to injure public trade. The Interstate
+Commerce Act reasserts this principle, and provides penalties for the
+maintenance of such combinations among railroad companies. If, in spite
+of this act, the evil still exists, it is no argument against the merits
+of the law, but it does prove that the machinery provided for its
+enforcement is insufficient. That railroad companies can be made to
+respect the law there can be no doubt; but much cannot be accomplished
+unless the people fully realize the magnitude of the undertaking and
+vest the Government with sufficient power to cope with an organized
+force whose total annual revenue is nearly three times as large as that
+of the United States. The discussion of the question how this may be
+done will be reserved for a subsequent chapter.
+
+
+
+
+CHAPTER VIII.
+
+RAILROADS IN POLITICS.
+
+
+The question might be asked how the railroad companies for many years in
+succession have been able to prevent State control and pursue a policy
+so detrimental to the best interests of the public. One might think that
+in a republic where the people are the source of all power, and where
+all officers are directly or indirectly selected by the people to carry
+out their wishes and to administer the government in their interest, a
+coterie of men bent on pecuniary gain would not be permitted to subvert
+those principles of the common law and public economy which from time
+immemorial have been the recognized anchors of the liberty of the
+Anglo-Saxon race.
+
+The statement that under a free government it is possible for a few to
+suppress the many might almost sound absurd to a monarchist, and yet is
+it true that for the past twenty-five years the public affairs of this
+country have been unduly controlled by a few hundred railroad managers.
+
+To perpetuate without molestation their unjust practices and prevent any
+approach to an assertion of the principle of State control of railroad
+transportation, railroad managers have secured, wherever possible, the
+co-operation of public officials, and, in fact, of every semi-public and
+private agency capable of affecting public opinion. Their great wealth
+and power has made it possible for them to influence to a greater or
+less extent every department of the National and State governments.
+Their influence extends from the township assessor's office to the
+national capital, from the publisher of the small cross-roads paper to
+the editorial staff of the metropolitan daily. It is felt in every
+caucus, in every nominating convention and at every election. Typical
+railroad men draw no party lines, advocate no principles, and take
+little interest in any but their own cause; they are, as Mr. Gould
+expressed it, Democrats in Democratic and Republicans in Republican
+districts. The large means at the command of railroad companies, their
+favors, their vast armies of employes and attorneys and their almost
+equally large force of special retainers are freely employed to carry
+into execution their political designs, and the standard of ethics
+recognized by railroad managers in these exploits is an exceedingly low
+one.
+
+It is a settled principle of these men that, if they can prevent it, no
+person not known to be friendly to their cause must be placed into any
+public office where he might have an opportunity to aid or injure their
+interests. The records of the various candidates of the principal
+parties for city, county, State and national offices are therefore
+carefully canvassed previous to the primaries, the most acceptable among
+the candidates of each party are selected as the railroad candidates,
+and the local representatives of the railroad interest in each party are
+instructed to use all means in their power to secure their nomination.
+
+If none but candidates who are servile to the railroad interest are
+nominated by the principal parties, the election is permitted to take
+its own course, for, whichever side is successful, the railroad interest
+is safe. If, however, there is reason to believe that a nominee is not
+as devoted to their interests as the nominee of an opposing party, the
+latter is sure to receive at the polls whatever support railroad
+influence can give him. That a public official elected by the grace of a
+railroad manager is but too apt to become a tool in his hands needs no
+proof. Both gratitude and fear tie the average politician to the
+powerful forces which can control his political destiny.
+
+The railroad manager, on the other hand, always kindly remembers his
+officeholding friends as long as they are loyal and in a position to
+serve him. Before the enactment of the Interstate Commerce Act there was
+every year a wholesale distribution of railroad passes among public
+officeholders and other prominent politicians. The pass was the token of
+the continued good will of the railroad dignitaries as the withholding
+of the "courtesy" was a certain indication of their displeasure. If the
+officeholder had personal or political friends whom he desired to have
+recognized, an intimation of this desire was generally sufficient to
+have the pass privilege even extended to them. And yet these favors were
+not bestowed indiscriminately. Thus the pass credit of a county official
+was more limited than that of an officer of the State, and the latter
+class were again rated according to their influence and rank.
+Furthermore, while annual passes were thus freely distributed among one
+class of officials, others could obtain them only by making special
+application for them. Members of the legislature would not unfrequently
+receive their supply of railroad passes before their certificates of
+election were issued, but legislative committee clerks and employes in
+the various departments of the State government were required to satisfy
+the railroad authorities that they were in a position to aid or to
+injure the railroad cause before their names were placed on the list of
+persons "entitled to the courtesy".
+
+Of course the judiciary, as a coordinate branch of the government, could
+not well be slighted. Indeed, previous to the enactment of the
+Interstate Commerce Law, a judge would have regarded it an affront if he
+had not been furnished with passes by the various companies operating
+railroads in his district. It appears that the law has not entirely
+corrected this abuse, for only about two years ago the Chicago _News_
+made the discovery that nearly every judge in the city of Chicago
+traveled on passes. It is strange to what extent the pass often debased
+the judiciary. It was not unfrequent for judges to solicit passes for
+family and friends, and instances might be named where they demanded
+them in a wholesale way.
+
+The impudent demands were usually honored by the railroad authorities,
+who reasoned that they could better afford to bear the shameless
+effrontery of the ermined extortioner than the damage which might result
+to them from adverse decisions.
+
+A railroad pass, when presented by a public official or even by any
+public man, is now, in nine cases out of ten, a certificate of dishonor
+and a token of servility, and is so recognized by railroad officials.
+What equivalent railroad companies expect for the pass "courtesy" is
+well illustrated by the experience of an Iowa judge. This gentleman, who
+had been on the bench for years and always had been favored with passes
+by the various companies operating lines in his district, at the
+beginning of a new year failed to receive the customary pass from a
+leading road. Meeting its chief attorney, he took occasion to call his
+attention to what he supposed to have been an oversight on the part of
+the officer charged with the distribution of the passes. The attorney
+seemed to take in the situation at once. "Judge," said he, "did you not
+recently decide an important case against our company?" "And was my
+decision," replied the Judge, "not in accordance with law as well as
+with justice?" The attorney did not answer this question, but in the
+course of a few days the Judge received the desired pass. A few months
+later it again became the Judge's unpleasant duty to render a decision
+adverse to the same company. This second act of judicial independence
+was not forgiven, and the next time he presented his pass it was
+unceremoniously taken up by the conductor in the presence of a large
+number of passengers, and he was required to pay his fare.
+
+Employes, while engaged in the legitimate business of their companies,
+should, of course, be transported free, but a great many persons receive
+passes and are classed as employes who never render any legitimate
+service for the company giving the pass, and by far the greater portion
+of passes are not granted from pure motives, but are given for the
+purpose of corrupting their holders. It arouses antagonism, because as a
+rule passes are given to people who are fully able to pay their fare and
+are denied to those who are least able to pay it. The passenger who pays
+his fare and then finds that a large number of his fellow-passengers
+travel on passes realizes that he is compelled to pay a higher fare that
+others may be carried free. He feels that he is unjustly discriminated
+against, and wonders why such discrimination is tolerated in a country
+whose institutions are founded upon the very principle of equal rights
+to all. A good anecdote is related which well illustrates this feeling.
+A farmer and a lawyer occupied the same seat in a railroad car. When the
+conductor came the farmer presented his ticket, and the lawyer a pass.
+The farmer's features did not conceal his disgust when he discovered
+that his seat-mate was a deadhead. The lawyer, trying to assuage the
+indignation of the observing granger, said to him: "My friend, you
+travel very cheaply on this road." "I think so myself," replied the
+farmer, "considering the fact that I have to pay fare for both of us."
+
+But what must be a passenger's surprise when he finds that the judge who
+to-morrow is to preside at the trial of a case in which the railroad
+company is a party to-day accepts free transportation at its hands. A
+judge may scorn the charge that he is influenced by a railroad pass, but
+his fellow-passenger who has paid his fare cannot understand why the
+railroad company should give passes to one class of people and refuse
+them to others, if it does not consider one more than others to be in a
+position to reciprocate its favors.
+
+In their endeavor to win over the courts, however, the railroads do by
+no means confine their attention to the judges. They are well aware that
+a biased jury is often more useful to them than a biased judge, and
+efforts are made by them to contaminate juries, or at least prejudice
+them in their favor. A prominent Iowa attorney, the legal and political
+factotum of a large railroad corporation, for years made it a practice
+to supply jurors with passes. In one instance, when it was shown in
+court by the opposing counsel that all jurors in the case on trial had
+accepted passes from the railroad company which was the defendant in the
+case, the judge found himself compelled to discharge the whole jury. The
+argument made by this counsel, in support of his motion that the jury be
+discharged, was certainly to the point. He showed that in order to have
+an equal chance for justice it would be necessary for his client to give
+each juror at least fifty dollars to offset the bribes given to them by
+the railroad company.
+
+That it has always been the policy of railroad managers to propitiate
+the judiciary is a fact too generally known among public men to admit of
+contradiction. If a judge owes his nomination or election to railroad
+influences, railroad managers feel that they have in this a guarantee of
+loyalty. If, however, he acquires the ermine in spite of railroad
+opposition, every effort is made to conciliate the new dispenser of the
+laws. The bestowal of unusual favors, flattery, simulated friendship and
+a thousand other strategies are brought into requisition to capture the
+wayward jurist. If he proves docile, if his decisions improve with time
+and show a gradual appreciation of the particular sacredness of
+corporate rights, the railroad manager will even forgive him his former
+heresy and rally to his support in the future. But if he asserts his
+convictions, if he attempts to discharge the duties of his responsible
+office without fear or favor, if he can neither be corrupted nor
+intimidated, all available railroad forces will be marshaled against him
+in the future.
+
+It cannot be surprising that, under such circumstances, there always has
+been a tendency among judges to be conservative and to give the
+railroads the benefit of the doubt in their decisions. Judges well know
+that railroad companies appeal almost invariably when the decision of a
+lower court is adverse to them, but private citizens only in exceptional
+cases. They also know that railroads never forgive adverse decisions,
+whether right or wrong, while private citizens, as a rule, accept the
+decision of the court as justice, and do not hold the judge responsible
+for its being adverse to them. Our judiciary is, and probably always has
+been, as incorruptible as the judiciary of any country in the world; but
+our judges are made of no better material than our legislative or
+executive officers. Weak men, in all stations, are influenced by wealth
+and power, and weak judges can always be found who will be led or forced
+from the path of duty so long as corrupt men are permitted to manage
+railroads and to remain in possession of a power only inferior to that
+of an autocratic ruler.
+
+The influence which railroads exert extends from the lowest to the
+highest court of the land. Federal courts have more than once been
+successfully appealed to to give legal sanction to the perpetuation of
+gigantic frauds, or to frustrate attempts made by the individual States
+to place restrictions upon roads operated within their respective
+borders. Twenty years ago a Federal judge aided Mr. Gould in his
+notorious Erie transactions, and in more recent years a Federal circuit
+judge in the West threw the property of the Wabash Railroad Company,
+upon the application of its own directors, into the hands of receivers
+selected by its former managers without the knowledge or notice of its
+creditors, and issued orders for the management of the property which
+greatly discriminated in favor of certain bondholders and were so
+manifestly unjust that Judge Gresham, before whom the case was
+subsequently brought, did not hesitate to say to them that "the boldness
+of this scheme to aid the purchasing committee, by denying equal right
+to all bondholders secured by the same mortgages, is equaled only by its
+injustice." At the same time one of the counsel for the dissenting
+bondholders characterized these strange orders as "the highwayman's
+clutch on our throat, the robber's demand, 'Your money or your life.'"
+
+The decision which the Supreme Court of the United States rendered in
+the Granger cases in 1876, affirming the right of a State to control
+railroad charges for the transportation of passengers and freight wholly
+within the State, was a serious disappointment to railroad men, for it
+was the first step toward wresting from them the power to arbitrarily
+control the commerce of the country. Ever since that time it has been
+their determined purpose to bring about, if possible, a reconstruction
+of the Federal Supreme Court, in order to secure a reversal or
+modification of the Granger decision. In the case of Peik vs. Chicago,
+94th U. S., 176, the Supreme Court laid down the following broad
+principle of law: "Where property has been clothed with the public
+interest, the legislature may fix a limit to that which shall in law be
+reasonable for its use. This limit binds the courts as well as the
+people. If it has been improperly fixed, the legislature, not the
+courts, must be appealed to for a change." In one of the Granger cases
+the same court used the following language: "We know that this is a
+power which may be abused, but that is no argument against its
+existence. For protection against abuses by legislatures, the people
+must resort to the polls."
+
+Fourteen years later, in the case of C. M. & St. P. R. Co. vs. Minn.,
+decided in October, 1890, the same court rendered a decision so
+indefinite that the lawyers differed much in their opinions as to its
+meaning, and it appears that the members of the court who made the
+decision also differed in their opinions as to the meaning of the
+decision; for Justice Bradley said in his dissenting opinion, in which
+Justice Gray and Justice Lamar concurred, that the decision practically
+overruled Munn vs. Illinois; but the same court, in a case entitled Budd
+vs. New York, submitted in October, 1891, and decision rendered February
+29, 1892, and opinion delivered by Justice Blatchford, in referring to
+the Minnesota case, after quoting the above statement from Justice
+Bradley, said: "But the opinion of the court did not say so, nor did it
+refer to Munn vs. Illinois, and we are of opinion that the decision in
+that case is, as will be hereafter shown, quite distinguishable from the
+present case."
+
+It is thus apparent that this court has adhered to the decision in Munn
+vs. Illinois, and to the doctrines announced in the opinion of the court
+in that case, and those doctrines have since been repeatedly enforced in
+the decisions of the courts of the States.
+
+Judge Brewer, whose zeal for the defense of corporate interests seems to
+amount almost to a craze, dissented. He said: "I dissent from the
+opinion and judgment in these cases. The main proposition upon which
+they rest is, in my judgment, radically unsound. It is the doctrine of
+Munn vs. Illinois reaffirmed. The paternal theory of government is to me
+odious. Justice Field and Justice Brown concur with me in this dissent."
+
+It should be remembered that Justices Brewer and Brown were both
+appointed to the Supreme bench by President Harrison.
+
+We have every reason to believe that, unless the people of the United
+States are on the alert, as railroad managers always are, there is, with
+further changes in the personnel of the court, danger of its deviating
+from the sound principles of law laid down in its decision in the
+Granger cases. Railroad attorneys have repeatedly been raised to seats
+in the highest tribunal in the land. So great is the power of the
+railroad interests, and so persistent are they in their demands, that,
+unless a strong public sentiment records its protest, their candidates
+for appointive offices are but too apt to be successful. Representatives
+of the railroads sit in the Congress of the United States, others are
+members of the national campaign committees of both of the great
+political parties, others control the politics of the States, and their
+influence reaches to the White House, whether its occupant is aware of
+it or not. Other interests in the past have succeeded in securing the
+appointment of biased men as judges of the Supreme Court who afterwards
+could always be relied upon to render decisions in their favor. Will the
+people profit by their experience, or will they be indifferent to the
+danger which surrounds them, until nothing short of a political upheaval
+can restore to them these rights of sovereignty, of which they have so
+insidiously been deprived?
+
+Human gratitude is such that even high-minded men who, through the
+influence of the railroad interest, have been placed upon the Federal
+bench, find it impossible to divest themselves of all bias when called
+upon to decide a case in which their benefactors are interested. Such is
+the human mind that, when clouded by prejudice, it will forever be blind
+to its own fault. Even the members of so high a tribunal as the
+Electoral Commission which decided the presidential contest between
+Hayes and Tilden could not divest themselves of their prejudices; each
+one, Republican or Democrat, voted for the candidate of the party with
+which he had cast his political fortune.
+
+Last January, in an address delivered before the New York State Bar
+Association at Albany, Mr. Justice Brewer reminded his hearers that the
+rights of the railroads "stand as secure in the eye and in the custody
+of the law as the purposes of justice in the thought of God." And
+further on they were told that "there are to-day $11,000,000,000
+invested in railroad property, whose owners in this country number less
+than two million persons. Can it be that whether that immense sum shall
+earn a dollar or bring the slightest recompense to those who have
+invested perhaps their all in that business, and are thus aiding in the
+development of the country, depends wholly upon the whim and greed of
+that great majority of sixty millions who do not own a dollar? It may be
+said that that majority will not be so foolish, selfish and cruel as to
+strip that property of its earning capacity. I say that so long as
+constitutional guarantees lift on American soil their buttresses and
+bulwarks against wrong, and so long as the American judiciary breathes
+the free air of courage, it cannot."
+
+Unfortunately judicial buttresses and bulwarks have not always been
+lifted against wrong. Judge Taney, like Brewer, supposed that it was
+left at his time for his court to preserve the peace and provide for the
+safety of the nation; but history has shown that we cannot depend upon
+that high tribunal for safety when it is controlled by weak or
+inefficient men.
+
+When we consider what "that great majority" has done for this country in
+the past, and is doing for it at the present time, and especially when
+we contrast its sense of justice and right with the weakness and
+inability of some of its public servants, does it not seem to be a
+little presumptuous for them to assume that "the danger is from the
+multitudes--the majority, with whom is the power," and that, were it not
+for their superior wisdom and patriotic action, this great government of
+the people, by the people and for the people would be a failure?
+
+Mr. Lincoln never feared "the whim and greed" of "that great majority,"
+but he had at all times implicit confidence in the great mass of the
+people, and they in return had full confidence that no temptation of
+wealth or power was sufficient to seduce his integrity.
+
+We cannot dismiss this subject without referring to a stratagem which
+railroads have in the past repeatedly resorted to for the purpose of
+removing from the bench judges of independent minds whom they found it
+impossible to control. This stratagem consists of a well-disguised
+bribe, by which a Federal judge is changed into a railroad attorney with
+a princely salary. The railroad thus gets rid of an undesirable judge
+and gains a desirable solicitor at a price at which they could well have
+afforded to pension the judge.
+
+The following is a copy of a broker's circular letter sent to prominent
+bankers of Iowa, and shows that even the Clerk of the United States
+Court is not overlooked:
+
+      "----, June 30th, 1892.
+
+      "Mr. ----,
+
+      "We offer, subject to sale at par and interest, note $2,500.
+      Date, July 5th, 1892. Time, six months; rate, 6 per cent.
+      Payable where desired. Maker, ---- Endorser, Judge ---- Mr.
+      ----, the maker, is clerk of the United States Circuit Court
+      at ---- Judge ---- the well known attorney of the ---- and
+      ---- Railway Co., of ----, stated to us to be worth $150,000
+      to $200,000. Can you use it?"
+
+While railroad managers rely upon servile courts as a last resort to
+defeat the will of the sovereign people, they are far from losing sight
+of the importance of controlling the legislative branch of the
+government. By preventing what they are pleased to call unfriendly
+legislation they are more likely to prevent friction with public
+opinion, and they avoid at the same time the risk of permanently
+prejudicing their cause by an adverse opinion upon a constitutional
+question which they may find it necessary to raise in order to nullify a
+legislative act. There are three distinct means employed by them to
+control legislative action. First, the election to legislative offices
+of men who are, for some personal reason, adherents to the railroad
+cause. Second, the delusion, or even corruption, of weak or unscrupulous
+members of legislative bodies. Third, the employment of professional and
+incidental lobbyists and the subsidizing of newspapers, or their
+representatives, for the purpose of influencing members of legislative
+bodies and their constituencies.
+
+There are probably in every legislative body a number of members who are
+in some way or other connected with railroad corporations. No doubt, a
+majority of these are personally irreproachable and even so high-minded
+as to always postpone private for public interest; yet there are also
+those whose political advancement was brought about by railroad managers
+for the very purpose of having in the legislative body servile members
+who could always be relied upon to serve their corporate masters.
+Nevertheless, were railroad interests restricted to the votes of these
+men for their support, the public would probably have no cause for alarm
+on account of the presence of railroad representatives in legislative
+bodies, but, as many other interests seek favorable legislation,
+railroad men are often enabled to gain support for their cause by a
+corrupt bargain for votes, and it is thus possible for them to double,
+triple, and even quadruple, their original strength, by a policy of
+reciprocity.
+
+As in Congress and State legislatures, so these representatives of the
+railroads may be found in our city councils. The leaders of the
+railroads in Congress and in the legislatures of the various States
+usually rely upon discretion for obtaining their end, but railroad
+aldermen with but few exceptions seek to demonstrate their loyalty to
+the cause to which they are committed by a zealous advocacy of extreme
+measures, and will not unfrequently even gain their end through the most
+unscrupulous combinations. If their votes, together with such support as
+they obtain by making trades, are not sufficient to carry out or defeat
+a measure which the railroad interests may favor or oppose, even more
+questionable means are employed to gain a sufficient number of votes to
+command a majority.
+
+Outright bribery is probably the means least often employed by
+corporations to carry their measures. While it may be true that the vote
+of every weak and unscrupulous legislator is a subject of barter, money
+is not often the compensation for which it is obtained. It is the policy
+of the political corruption committees of corporations to ascertain the
+weakness and wants of every man whose services they are likely to need,
+and to attack him, if his surrender should be essential to their
+victory, at his weakest point. Men with political ambition are
+encouraged to aspire to preferment and are assured of corporate support
+to bring it about. Briefless lawyers are promised corporate business or
+salaried attorneyships. Those in financial straits are accommodated with
+loans. Vain men are flattered and given newspaper notoriety. Others are
+given passes for their families and their friends. Shippers are given
+advantages in rates over their competitors; in fact, every legislator
+disposed to barter his vote away receives for it compensation which
+combines the maximum of desirability with the minimum of violence to his
+self-respect.
+
+Those who attempt to influence or control legislative bodies in behalf
+of interested parties are collectively called the lobby. As a rule, the
+lobby consists of prominent politicians likely to have influence with
+members of their own party; of men of good address and easy conscience,
+familiar alike with the subject under consideration and legislative
+procedure, and last, but not least, of confidential agents authorized
+and prepared to enter into secret negotiations with venal members. The
+lobby which represents the railroad companies at legislative sessions is
+usually the largest, the most sagacious and the most unscrupulous of
+all. Its work is systematic and thorough, its methods are unscrupulous
+and its resources great. Yet all the members of a legislative body
+cannot be bribed, either by money, or position, or favors. Some of them
+will not vote for any proposed measure unless they can be convinced that
+it is for the public welfare. These legislators, if their votes are
+needed, are turned over to the persuasive eloquence of those members of
+the lobby who, apparently, have come to the capital moved by a patriotic
+impulse to set erring legislators right on public questions. Their
+familiarity with public matters, their success in public life, their
+high standing in political circles, their apparent disinterestedness and
+their plausible arguments all combine to give them great influence over
+new and inexperienced members. In extreme cases influential constituents
+of doubtful members are sent for at the last moment to labor with their
+representatives, and to assure them that the sentiment of their
+districts is in favor of the measure advocated by the railroads.
+Telegrams pour in upon the unsuspecting members. Petitions in favor of
+the proposed measure are also hastily circulated among the more
+unsophisticated constituents of members sensitive to public opinion, and
+are then presented to them as an unmistakable indication of the popular
+will, although the total number of signers forms a very small percentage
+of the total number of voters of the districts in which these petitions
+were circulated. A common method employed by the railroad lobby in Iowa
+has been to arouse, by ingenious arguments, the prejudices of the people
+of one part of the State against those of another, or of one class
+against those of another class; for instance, the East against the West,
+or that portion of the State the least supplied with railroad facilities
+against that which is best supplied; or the river cities against the
+interior cities; or the country people against the city people; or the
+farmer against the merchant, and always artfully keeping in view the
+opportunity to utilize one side or the other in their own interest.
+
+Another powerful reinforcement of the railroad lobby is not unfrequently
+a subsidized press and its correspondents. The party organs at the
+capital are especially selected to defend as sound measures, either from
+a partisan or non-partisan standpoint, legislation of questionable
+propriety desired by the railroads. When such measures are advocated by
+party organs, partisan members, either from fear or prejudice, are apt
+to "fall into line," and then to rely upon these organs to defend their
+action. Editors, reporters and correspondents are even retained as
+active lobbyists and give the railroad managers' cause the benefit of
+their prestige. To such an extent has the abuse of the press been
+carried that a considerable number of its unworthy representatives look
+upon railroad subsidies as legitimate perquisites which they will exact
+through blackmailing and other means of compulsion if they are not
+offered. A case may be cited here to illustrate their mode of operation,
+as well as the ethics of railroad lobbies. During one of the sessions of
+the Iowa legislature a newspaper correspondent came in possession of
+some information which reflected severely on the railroad lobby. He made
+his information the subject of a spicy article and showed it to a
+friend who stood close to the gentleman chiefly implicated, with the
+remark that nothing but a hundred dollar bill would prevent the
+transmission of the article by the evening mail to the paper which he
+represented. Before sundown the stipulated price for the correspondent's
+silence was paid, and an enemy was turned into a friend.
+
+Professor Bryce says of the American lobby system: "All legislative
+bodies which control important pecuniary interests are as sure to have a
+lobby as an army to have its camp followers. Where the body is, there
+will the vultures be gathered together." To such an extent is the lobby
+abuse carried that some large corporations select their regular
+solicitors more for their qualifications as lobbyists than for their
+legal lore. It is a common remark among lawyers that a great company in
+Chicago pays a third-class lawyer, who has the reputation of being a
+first-class lobbyist, an extravagant salary and calls him general
+solicitor, while it relies upon other lawyers to attend to its important
+legal business. The readiness of members of the bar to serve wealthy
+corporations is fast bringing the legal profession of America into
+disrepute abroad. The author just quoted, in speaking of its moral
+standard, says: "But I am bound to add that some judicious American
+observers hold that the last thirty years have witnessed a certain
+decadence in the bar of the great cities. They say that the growth of
+enormously rich and powerful corporations, willing to pay vast sums for
+questionable services, has seduced the virtue of some counsel whose
+eminence makes their example important, and that in a few States the
+degradation of the bench has led to secret understandings between judges
+and counsel for the perversion of justice."
+
+There are, of course, able and honorable attorneys employed by railroad
+companies, but often railroad lawyers are selected more for their
+political influence, tact and ingenuity than for legal ability, and, as
+a rule, the political lawyer receives much better compensation for his
+services than does the lawyer who attends strictly to legitimate legal
+work.
+
+The danger from railroad corporations lies in their great wealth,
+controlled by so few persons, and the want of publicity in their
+business. Were they required to render accounts of their expenditures to
+the public, legislative corruption funds would soon be numbered with the
+defunct abuses of railroad corporations, and, with bribes wanting in the
+balance of legislative equivalents, the representatives of the people
+could be trusted to enact laws just alike to the corporations and the
+public, while asserting the right of the people to control the public
+highway and to make it subservient to the welfare of the many instead of
+the enrichment of the few. A wise law regulating lobbies exists in
+Massachusetts. Every lobbyist is required to register, as soon as he
+appears at the Capitol, to state in whose interest and in what capacity
+he attends the legislative session, to keep a faithful account of his
+expenses and to file a copy of the same with the Secretary of State.
+Were a similar law enacted and enforced by every State legislature, as
+well as by Congress, the power of railroad lobbies would be curtailed.
+
+Railroad managers never do things by halves. Well realizing that it is
+in the power of a fearless executive, by his veto, to render futile the
+achievements of a costly lobby and to injure or benefit their interests
+by pursuing an aggressive or conservative policy in the enforcement of
+the laws, they never fail to make their influence felt in the selection
+of a chief magistrate, either of the Nation or of an individual State.
+No delegate, with their permission, ever attends a national convention,
+Republican or Democratic, if he is not known to favor the selection of a
+man as the presidential candidate of his party whose conservatism in all
+matters pertaining to railroad interests is well established. At these
+conventions the railroad companies are always represented, and their
+representatives do not hesitate to inform the delegates that this or
+that candidate is not acceptable to their corporations and cannot
+receive their support at the polls. During the Chicago convention of
+1888 the statement was openly made that two of the Western candidates
+lost Eastern support because they were not acceptable to a prominent New
+York delegate who had come to Chicago in a threefold capacity--that of a
+delegate, a presidential possibility, and special representative of one
+of the most powerful railroad interests in the country. This same man
+appeared again last year at the Minneapolis convention as chief
+organizer of the forces of a leading candidate. His counterpart was in
+attendance at the Chicago convention looking after the same interests
+there.
+
+It is the boast of prominent railroad men that their influence elected
+President Garfield, and the statement has been made upon good authority
+that "not until a few days before the election did the Garfield managers
+feel secure," and that "when the secret history of that campaign comes
+to be written it will be seen that Jay Gould had more influence upon the
+election than Grant and Conkling." It cannot be said that railroad
+managers, as a class, have often openly supported a presidential
+candidate. This may be due to the fact that with the uncertainty which
+has for years attended national politics they deem it the part of
+discretion to pretend friendship for either party and then shout with
+the victor. In conformity with this policy, a well-known New York
+railroad millionaire has for years made large and secret contributions
+to the campaign funds of both political parties. He thereby places both
+parties under political obligations, and believes his interests safe,
+whichever turn the political wheel may take. After the contest he is
+usually the first to congratulate the successful candidate. In the
+national campaign of 1884 this railroad king completely outwitted a
+prominent Western politician and member of the Republican national
+campaign committee who has always prided himself on his political
+sagacity. This gentleman had taken it upon himself to enlist the rich
+and powerful New Yorker in the Republican cause, and to obtain from him,
+as a token of his sincerity, a large contribution to the Blaine campaign
+fund. He succeeded, at least so far as the contribution was concerned;
+but when the struggle was over and the opposition, in the exuberance of
+joy over their victory, told tales out of school, he was not a little
+chagrined to find that the managers of the Cleveland campaign had
+received from the astute railroad millionaire a campaign contribution
+twice as large as that which he had obtained from him. The diatribes
+which for weeks after the election filled the columns of his paper
+reflected in every line the injured pride of the outwitted general.
+
+Judging from the laxity with which the railroad laws have been enforced
+in a considerable number of States, their executive departments are as
+much under the influence of railroad managers as are the legislative
+departments of others. This cannot be surprising to those who know how
+often governors of States are nominated and elected through railroad
+influences, and what efforts are made by corporations to humor servile
+and to propitiate independent executives. The time is not far remote
+when nearly every delegate to a State convention had free transportation
+for the round trip. This transportation was furnished to delegates by
+railroad managers through their local attorneys, or through favored
+candidates and their confidants. It was only offered to those who were
+supposed to be friendly to candidates approved by the railroad managers;
+and as free passage was looked upon as the legitimate perquisite of a
+delegate, but few persons could be induced to attend a State convention
+and pay their fare. As a consequence, the railroad managers found it too
+often an easy matter to dictate the nomination of candidates.
+
+Since the adoption of the Interstate Commerce Law convention passes, as
+such, have largely disappeared; but many a prominent politician in going
+to and returning from political conventions travels as a railroad
+employe, though the only service which he renders to the railroad
+companies consists in manipulating conventions in their favor. If all
+the railroad candidates--and the companies usually take the precaution
+to support more than one candidate--are defeated in the convention of
+one party, and a railroad candidate is nominated by the other party, the
+latter is certain to receive at the polls every vote which railroad and
+allied corporate influence can command.
+
+One might suppose that an attempt would at least be made to hide from
+the general public the interference of such a power with the politics of
+a State; but railroad managers seem to rely for success as much upon
+intimidating political parties as upon gaining the good will of
+individual citizens. To influence party action, the boast has in recent
+years repeatedly and boldly been made in Iowa that 30,000 railroad
+employes would vote as a unit against any party or individual daring to
+legislate or otherwise take official action against their demands, and
+forgetting that, with the same means used in opposition to them, a few
+hundred thousand farmers and business men could be easily organized to
+oppose them. Unscrupulous employers often endeavor to control the votes
+of their employes. This is particularly true of railroad companies, and
+they use many ingenious plans to accomplish it. In the Northwest, and
+especially in Iowa, they have for several years organized their employes
+as a political force for the purpose of defeating such candidates for
+State offices as were known to favor State control of the transportation
+business. They have even paid the expenses of the organization, although
+they have made every effort to make it appear as if the movement was a
+voluntary one on the part of their employes. They are employing this
+method in Texas and other States at the present time, in opposition to
+the effort that is being made by the people to secure just and
+reasonable treatment from the railroads.
+
+That the chief executive of a State should be influenced in the
+discharge of his official duties by such favors as passes, the freedom
+of the dining- and sleeping-car, by the free use of a special car, or
+even a special train, one is loath to believe; yet it is a fact, and
+especially during political campaigns, that such favors are frequently
+offered to, and accepted by, the highest executive officers, and it is
+equally true that many of these officers often connive at the continued
+and defiant violations of law by railroad officials. While the men who
+manage large railroad interests do not always possess that wisdom which
+popular reverence attributes to them, they certainly possess great
+cunning, and expend much of their artfulness in efforts to win over
+scrupulous, and to render still more servile unscrupulous executives.
+The general railroad diplomate never omits to pay homage to the man in
+power, to flatter him, to impress him with the political influence of
+his company, to intimate plainly that, as it has been in the past, so it
+will be in the future its determined policy to reward its friends and to
+punish its enemies. If the executive proves intractable, if he can
+neither be flattered, nor coaxed, nor bribed into submission, he does
+not hesitate to resort to intimidation to accomplish his purpose. This
+is by no means a rare occurrence. There are few public men who, if
+determined to do their duty, have not been subjected to railroad insult
+and intimidation. The author may be permitted to give an instance from
+his personal experience. Soon after his inauguration as Governor of Iowa
+a general officer of one of the oldest and strongest Western railroads
+called at his office and importuned him with unreasonable requests. When
+he found that he had utterly failed to impress the author with his
+arguments, he left abruptly, with the curt remark that these matters
+could be settled on election day, and he emphasized his statement by
+slamming the door behind him.
+
+A servile railroad press has always been ready to misrepresent and
+malign executive officers who have refused to acknowledge any higher
+authority than the law, the expressed public will and their own
+conception of duty. This abuse has even been carried so far that the
+editorial columns of leading dailies have been prostituted by the
+insertion of malicious tirades written by railroad managers and railroad
+attorneys; and the fact that public opinion has not been more seriously
+influenced by these venal sheets must be solely attributed to the good
+judgment and safe instinct of the masses of the people.
+
+However persistently railway organs deny it, it is a matter of general
+notoriety that railway officials take an active part in political
+campaigns. Hundreds of communications might be produced to show their
+work in Iowa, but the following two letters, written by a prominent
+railroad manager to an associate, will suffice for the purpose. It will
+be noticed that one was written before and the other after election.
+Comments upon their contents are unnecessary:
+
+      "----, Iowa, Nov. 2nd, 1888.
+
+      "DEAR SIR: I have just discovered this P. M. that the
+      Central Committee have sent electrotypes to all the
+      printing offices in the State of the State ticket, with
+      the names of the Railway Commissioners and Supreme Judge
+      in so small a space as to make it very difficult, if not
+      impossible, to write in the names. I am having slips made
+      with Commissioners' names and Judge written on them, and
+      they will be sent to all agents, not later than to-morrow,
+      to paste over the printed names on the ticket, and thus
+      beat this scheme. Have you seen any tickets yet? And what
+      do you think of this plan?
+
+      "Yours truly, "----"
+
+      "----, Iowa, Nov. 11, 1888.
+
+      "DEAR SIR: Repeating the old and time-honored saying:
+      'We have met the enemy and we are theirs.' The Democratic
+      Granger and the largely increased Republican vote was too
+      much for us. Many friends voted with the railway men, but
+      to no purpose. The comparison between Granger and Smyth
+      will tell more than anything else the strength of the
+      railway vote. But we are badly used up, and may as well
+      take our dose.
+
+      "Yours truly, "----"
+
+While the result of this election was indeed a bad dose for speculating
+railway managers, it is the opinion of the masses and of railway
+stockholders, who are more interested in the general welfare of the
+roads than in speculation in their stocks, that the dose was well
+administered, and should be repeated whenever the necessity for it may
+again arise.
+
+It is probably true that railroad managers have lost much of their
+former influence in politics. As their means of corruption have become
+generally known they have become less effective. The public is more on
+the alert, and corrupt politicians often find themselves unable to carry
+out their discreditable compacts.
+
+But it is unreasonable to expect the evil to cease until the cause is
+removed. The trouble is inherent in the system, and the fault is there
+more than in the men who manage the business, and not till the great
+power exercised by them is restrained within proper limits will the evil
+disappear. All this can be accomplished when there shall be established
+a most thorough and efficient system of State and National control over
+the railroad business of the whole country.
+
+
+
+
+CHAPTER X.
+
+RAILROAD LITERATURE.
+
+
+The cause of the railroad manager has never been without time-servers.
+Not to speak of those newspaper editors who, for some consideration or
+another, defend every policy and every practice inaugurated or approved
+by railroad authorities, there has always been a school of literati who
+felt it their duty to enlighten, from a railroad standpoint, their
+fellow-men by book or pamphlet upon the transportation question, to
+correct what they supposed to be false impressions, and to round up with
+an apology or defense for the railroad manager, who is invariably
+represented by them as the most abused and at the same time most
+patriotic and most progressive man of the age.
+
+The benefits derived from the railroad are great. It has been an
+important factor in the development of our country's resources and the
+advancement of our civilization. Its value is fully appreciated, but
+there is no reason why the men who have utilized the inventions of
+Stephenson and others, and have grown rich by doing so, should be
+eulogized any more than those who are ministering to the wants of the
+public by the use of the Hoe printing press, McCormick's reaper,
+Whitney's cotton gin, or any of the thousands of other modern
+inventions.
+
+These authors doubtless are prompted by various motives. Some have been
+educated in the railroad school and are therefore blind to railroad
+evils. Others naturally worship plutocrats, because they hold the
+opinion that capital is entitled to a larger reward than brains and
+muscle, for the reason that the latter is more plentiful than the
+former.
+
+But there is a third class of railroad authors, who, there is reason to
+believe, enter the literary arena in defense of railroad evils not
+solely for the love they bear the cause, but as the paid advocates of a
+class of men who feel that their cause is in need of a strong defense at
+the bar of public sentiment. It would be difficult to account in any
+other way for the extravagant statements and one-sided arguments made by
+this class of writers. Yet railroad literature has not confined itself
+to the retrospective field. Its scope has grown with the significance of
+its contributors. In more than one instance have men at the head of
+large railroad corporations, influenced by temporary interest, become
+the authors of documents containing assertions and prophecies highly
+pathetic at the time, but subsequently shown to be so replete with
+falsehoods and absurdities that few railroad managers would to-day be
+willing to father them. Thus Alexander Mitchell, the late president of
+the Chicago, Milwaukee and St. Paul Railroad Company, addressed on the
+28th of April, 1874, shortly after the passage of the Wisconsin Granger
+Law, a letter to Governor Taylor, containing the following passages:
+
+      "That it [the Wisconsin law] has effectually destroyed all
+      future railroad enterprises, no one who is acquainted with
+      its effect in money centers will for a moment doubt.... The
+      whole amount received on the investment [Chicago, Milwaukee
+      and St. Paul Railroad] for interest and cash and stock
+      dividends, amounts to only six per cent. per annum of the
+      actual cost of the property. I submit to your Excellency,
+      and through you to the people of the State, whether this is
+      more than a fair and reasonable return for the capital
+      invested in these improvements. Is it not far below such
+      reasonable amount? The best and most careful economists
+      admit that no less than ten per cent. per annum should be
+      allowed on such investments.... The directors of this
+      company have at all times had a due regard to the interests
+      of the public, and a desire to furnish transportation at the
+      lowest possible figures, and, although not receiving a fair
+      and reasonable return on their investments, they have for
+      the last four years prior to 1873 steadily reduced their
+      rates of freight and passengers from year to year, as will
+      be seen from the following tables, showing the charge for
+      freight per mile, and the average per mile for passengers
+      for each year, from 1868 to 1873 inclusive:
+
+           Charges per ton    Average passenger rate
+           per mile--cents.      per mile--cents.
+
+  1864                            .04
+  1868     .03      40-100        .03      86-100
+  1869     .03      10-100        .03      92-100
+  1870     .02      82-109        .03      85-100
+  1871     .02      54-100        .03      75-100
+  1872     .02      43-100        .03      54-100
+  1873     .02      50-100        .03      42-100
+
+      "The law in question proposes to reduce our passenger rates
+      twenty-five per cent. and our freight rates about the same,
+      thus deducting from our present tariff about twenty-five per
+      cent. of our gross earnings.... This act, as we have seen,
+      proposes to take from us twenty-five per cent. of our
+      passenger and freight earnings, and the additional tax of
+      one per cent. of our gross earnings, all of which is
+      equivalent to taking from us twenty-six per cent. of our
+      gross earnings. Therefore, deducting this amount, equal to
+      twenty-six per cent. of our entire gross earnings, from
+      thirty-three per cent., our average net earnings on
+      business, would leave us only seven per cent. of our gross
+      earnings as the entire net earnings of the road, out of
+      which must be paid the interest on the bonds and the
+      dividends to our stockholders. It is therefore manifest that
+      this law will take from us over three-fourths of the net
+      income received under our present tariff.... The board of
+      directors have caused this act to be carefully examined and
+      considered by their own counsel, and by some of the most
+      eminent jurists in the land, and after such examination they
+      are unanimous in their opinion that it is unconstitutional
+      and void.... The board of directors are trustees of this
+      property, and are bound faithfully to discharge their trust,
+      and to the best of their ability to protect it from
+      spoliation and ruin. They have sought the advice of able
+      counsel, and, after mature consideration, believe it their
+      duty to disregard so much of said law as attempts
+      arbitrarily to fix rates of compensation for freight and
+      passengers.... Being fully conscious that the enforcement of
+      this law will ruin the property of the company, and feeling
+      assured of the correctness of the opinions of the eminent
+      counsel who have examined the question, the directors feel
+      compelled to disregard the provisions of the law so far as
+      it fixes a tariff of rates for the company, until the courts
+      have finally passed upon the question of its validity."
+
+The letter was at the time regarded by railroad men as a very strong
+document, and the railroad journals were filled with lengthy editorials
+in praise of the soundness of the doctrines and arguments which it
+contained. The disinterested of the enlightened portion of the community
+even then realized that the "eminent jurists" whom the company had
+consulted were hired attorneys and greatly biased in their views as to
+the constitutional rights of corporations, and that President Mitchell
+on his part had painted by far too dark a picture of the situation. It
+is now quite generally admitted that many of Mr. Mitchell's statements
+were as false as his counsel's interpretation of the Constitution and
+the law was erroneous. From the assertions made in this letter one is
+led to infer that the then stock-and bondholders of the Milwaukee road
+had paid in full every dollar of the capitalized value of the road, and
+that they derived from their investment an income of only about six per
+cent. on the money actually invested by them. The cost of the entire
+Chicago and Milwaukee system in Wisconsin was stated in the letter as
+being $38,000 per mile. It is not likely that this line of road ever
+cost to exceed $25,000 a mile, or that those who then owned the road
+paid much more than two-thirds of its actual cost for it. The road, as
+the letter itself admits, was bought at sheriff's sale, and no mercy
+whatever was shown to the farmers who had mortgaged their farms to aid
+the railroad company in raising funds for the construction of its line.
+
+The letter contains other misstatements equally grave. Mr. A. B.
+Stickney, the president of the Chicago, St. Paul and Kansas City
+Railroad, in his recent excellent work, "The Railway Problem," reviews
+Mr. Mitchell's letter as follows:
+
+      "Mr. Mitchell states the average rate per mile in 1873 for
+      passengers at 3.42 cents. It was well understood that this
+      was an average rate received from those passengers who paid
+      anything, and that, had the average rate been obtained by
+      using as a divisor the total number of paying passengers
+      plus the number of those who rode free the average would
+      have been much below three cents, the price fixed by the
+      law, and consequently, if the company would collect the
+      legal rate from all alike and abolish the free list, its
+      revenues from the passenger business would be increased
+      rather than decreased. If the same test is applied to the
+      freight rates it becomes equally evident that this statute
+      did not reduce the rates in Wisconsin below the average rate
+      of 2.50 cents per ton per mile, which, according to Mr.
+      Mitchell's statement, was the average for the year 1873. For
+      proof, it may be stated that the law classified freight into
+      four general classes, to be designated as first, second,
+      third and fourth classes, and into seven special classes, to
+      be designated as D, E, F, G, H, I and J. The rates on the
+      four general classes were made the same as were 'charged
+      for carrying freights in said four general classes on said
+      railroads on the first day of June, 1873,' and the rate per
+      ton per mile was fixed at certain rates for the first
+      twenty-five miles, a less for the second twenty-five miles,
+      and a fixed rate per mile after, as follows:
+
+             1st 25 Miles    2nd 25 Miles.   All Over 50 Miles.
+
+         D   4-4/5 cents      3-1/5 cents       1 3/5 cents.
+         E   Same as class above.
+         F   4     cents      2     cents       1     cent.
+         G   3-1/5 cents      2     cents       1     cent.
+         H   4     cents      2-4/5 cents       1-3/5 cents.
+         I   4-2/5 cents      2-2/5 cents       1-1/5 cents.
+         J   3-1/5 cents      2-2/5 cents       1     cent.
+
+      "When it is considered, in connection with these figures,
+      that the four general classes were left by the legislature
+      under the same tariffs as had been enforced by the
+      companies, and, as a rule, first class is three times the
+      rate of class D, and third and fourth class materially
+      higher, the evidence seems conclusive that the rates fixed
+      by law would produce an average materially higher than the
+      average of the whole year, stated by Mr. Mitchell at 2-1/2
+      cents. It seems also probable that, had the rates fixed by
+      this law been applied to the whole business of the line, the
+      interstate as well as the State traffic, it would still have
+      produced a larger average. The latter of course is the
+      proper test. There are little inaccuracies in the material
+      facts as stated by Mr. Mitchell which were pointed out at
+      once. For example: In his tabulated statement of passenger
+      earnings per mile, averaging the gross earnings from
+      transportation of passengers who paid any fare, and omitting
+      the large number who went free, the rate is stated at 3
+      42-100 cents per mile; then he says: 'The law in question
+      proposes to reduce our passenger rate twenty-five per
+      cent.,' which would have reduced the rate to 2.57 cents per
+      mile, while, the rate fixed by the law complained of was
+      three cents per mile. Then Mr. Mitchell proceeds: 'And our
+      freight rates about the same; thus deducting from our
+      present tariff about twenty-five per cent. of our gross
+      earnings.' It was immediately pointed out that the law only
+      applied to strictly State business; that is, to traffic
+      that originated and ended in the State of Wisconsin. All
+      other traffic was interstate commerce, and could not be
+      controlled by State legislation. The volume of business
+      which would be affected by the law would therefore be
+      comparatively small--estimated at not over ten per cent., of
+      the total traffic of the line. Hence, if the rates fixed by
+      the law were twenty-five per cent. less than the rates the
+      company had been in the habit of collecting (which was
+      denied), it could not possibly have 'deducted from its
+      present tariff' more than two and one-half per cent.,
+      instead of twenty-five per cent. as stated by Mr. Mitchell.
+
+      "It was claimed that the facts were, that the Chicago,
+      Milwaukee and St. Paul Company, in its efforts to bankrupt
+      the Lake Superior and Mississippi Company, had many of its
+      interstate rates so low that it had resulted in loss, and
+      that its other rates had been made unreasonably high in
+      order to recoup this loss, and that the State of Wisconsin
+      was compelled to pay a part of the expense of the
+      transportation of favored sections of the State of
+      Minnesota."
+
+All through the Granger contests the railways have weakened the force of
+their arguments by their misrepresentation of facts and by their
+extravagant predictions of ruin. The companies were continually
+proclaiming: 'If this or that is done, it will ruin us; it will ruin the
+State,' when, in fact, a road cannot be mentioned that has suffered from
+State legislation. Nineteen years ago no railroad manager could have
+written what Mr. Stickney writes to-day, and few railroad managers would
+write to-day what Mr. Mitchell wrote then. And yet, such is the change
+which public sentiment is undergoing upon these questions, that the
+utterances of many of our present railroad authors will appear as absurd
+a few years hence as Mr. Mitchell's letter of nineteen years ago appears
+to us now.
+
+Many railroad attorneys have since been guilty of resorting to the
+sophistry employed by President Mitchell in that strange letter which he
+addressed to the Governor of Wisconsin. Even so distinguished a
+gentleman as Hon. James W. McDill, now a member of the Interstate
+Commerce Commission, made in 1888, as a member of a railroad lobby, the
+following remarkable statements before the Railroad Committee of the
+General Assembly of Iowa, in a speech opposing a proposed reduction of
+the passenger rate of first-class roads from three to two cents per
+mile:
+
+      "The proposition, if confined to the first-class roads of
+      Iowa, proposes a one-third reduction of their revenues from
+      passenger business.... We have earned in Iowa by first-class
+      roads annually about $13,000,000, and a reduction of one
+      cent, or from a rate of three cents to two, will reduce
+      their revenues about $5,000,000 a year.... Thus it is seen
+      that it is proposed to take from the revenues of a part of
+      the railroads of Iowa, annually, almost as much as all the
+      railroads of Iowa have paid for taxes in nine years
+      ($6,549,505.84)."
+
+Mr. McDill was a member of the Iowa Railroad Commission for several
+years. He may, therefore, be presumed to have known that the State of
+Iowa could not, and did not propose to, regulate interstate traffic, and
+that the thirteen million dollars railroad revenue to which he referred
+was derived both from interstate and State traffic; that the latter was
+only about one-fourth of the former, and that therefore the proposed
+reduction on the basis of schedule rates would have cut down the net
+revenue of the roads only about one million instead of five million
+dollars. But Mr. McDill himself states that the average rate earned by
+all the railroads of the United States was, for the year 1886, only
+2.181 cents per passenger per mile. It certainly was not over 2-1/2
+cents per mile for the first-class roads of Iowa. Thus the proposed
+reduction, instead of being one cent per mile, as stated by Mr. McDill,
+was only one-half cent per mile; and it only applied to the local
+business of the first-class roads. In other words, the bill under
+consideration, had it been enacted into law, would have caused a
+reduction of 20 per cent. on about 25 per cent. of the total revenue
+from passenger business of the first-class roads, or of five per cent.
+on their total income from passenger traffic in the State of Iowa. It
+will be noticed that Mr. McDill in his calculation made no allowance
+whatever for the increase of business which would have followed such a
+reduction. The gain from this source would probably have greatly
+exceeded the loss due to this small reduction in the fare. In the same
+address Mr. McDill made many other equally fallacious statements.
+
+One of the most devoted advocates of the interests of railroad managers
+is Marshall M. Kirkman. He is the author of a number of books and
+pamphlets upon railway subjects, among them a pamphlet entitled "The
+Relation of the Railroads of the United States to the People and the
+Commercial and Financial Interests of the Country."
+
+Mr. Kirkman introduces his subject with the following rather remarkable
+statement:
+
+      "I shall show that while the railways of the United States
+      are designated as monopolies, they are not so in fact.
+      Accused of disregarding the interests of the community, I
+      will show that they are abnormally sensitive to their
+      obligations in this direction. While legislatures claim the
+      right to fix rates, I shall show that the abnormal
+      conditions under which the railway system has grown up and
+      its chaotic nature render the exercise of such a privilege
+      impossible. I will show that while it is assumed that rates
+      may be fixed arbitrarily, they must, on the contrary, be
+      based on natural causes, the competition of carriers, their
+      necessities and the rivalries of conflicting markets and
+      trade centers; conditions manifestly impossible to determine
+      or regulate in advance, and therefore beyond the control of
+      legislation.... While a division of business (by pooling) is
+      thought to be contrary to the interests of the people, I
+      shall show that it is the legitimate fruit of indiscriminate
+      railway building and offers the only escape from the
+      conditions such practice engenders. I shall show that, while
+      it is assumed that rates may be based progressively or
+      otherwise on distance, the enforcement of such a principle
+      would restrict the source of supply, and, in so far as this
+      was the case, render great markets or centers of industry
+      impossible."
+
+Speaking of the importance of the railroad, Mr. Kirkman says:
+"Superseding every other form of inland conveyance, it determines the
+location of business centers, and vitalizes by its presence, or blasts
+by its absence." He contends that rigid and scrutinizing supervision
+should be exercised by the Government over the location of railroads,
+and that only such lines should be permitted to be built as afford
+reasonable grounds for profitable enterprise. "It should be," he says,
+"an axiom in our day that a government that permits or encourages the
+construction of two railways where one would suffice is, to the extent
+that it does this, a public nuisance." Mr. Kirkman here makes it the
+duty of the Government to arbitrarily meddle with railroad affairs. He
+would give the Government the power to determine when and where an
+additional railroad is needed, and to prohibit the construction of any
+new road that has not the Government sanction. The interests of a
+thousand towns might suffer for want of adequate transportation
+facilities, individuals and communities might be anxious to build their
+own lines for the development of local resources, but all railroad
+enterprise is doomed to a standstill until a conservative governmental
+commission has been entirely satisfied that a prospected road will pay
+and not deprive existing roads of any part of their revenue. There can
+be no doubt that if such a policy were ever adopted in America, few
+roads would be built without having first passed the ordeal of a legal
+injunction, and many a prospected road, though greatly needed, would
+remain unbuilt because its promoters would be discouraged by the delay
+and cost of litigation.
+
+But while this author is perfectly willing to trust the Government with
+the great responsibility of prohibiting the construction of proposed
+roads, he is not willing to have it exercise the power to determine what
+are reasonable rates. He tries to sustain his objection by the following
+argument: "The fixing of rates upon a railroad is as delicate a process
+as that of determining the pulse of a sick man. They cannot be
+determined abstractly, or in advance of the wants of business, but must
+be adjusted from hour to hour to conform to its fluctuations. Five
+thousand men find active employment in the United States in connection
+with the important duty of making rates. Each case requires particular
+investigation and involves, in many instances, prolonged study and
+research. The duty requires men of marked experience and capacity. They
+and men like them are the silent, unseen power that moves great
+enterprises of every nation. In the case of railroads we may enumerate
+those having official positions, but the experts from whom the official
+heads derive information and assistance cannot be classified. They
+comprise a vast army of experienced and able men familiar with railway
+traffic and quick to respond to its requirements. Such a body of men
+could not be organized by a government, or, if organized, would rapidly
+deteriorate under conditions so unfavorable for their support and
+development. Whatever authority exercises the duty of fixing rates must
+take up the subject in the same methodical way and, acting through
+skilled agents, pursue its inquiries and determine its results with the
+same experience, minute care and _conscientious regard_ for the
+technical requirements of business that the railway companies observe.
+No government can possess the facilities for perfecting so vast and
+intricate an organization and at the same time render it responsive to
+the public good. The labor is too great and the responsibility too
+remote. It could not move with sufficient quickness to respond to the
+actual requirements of trade, and too many restrictions would
+necessarily govern its actions. For these and other equally important
+reasons governments must always be satisfied to restrict their offices
+in this direction."
+
+Speaking of the men who are commonly termed railroad magnates, Mr.
+Kirkman says: "They alone possess the needed administrative ability that
+the situation demands. They not only provide largely the capital, but
+they discover the fields wherein it may be used most advantageously.
+They are the advance guard of all great enterprises, the natural leaders
+of men. They are an integral part of the country, a necessary and
+valuable element, without which its natural resources would avail
+little." This is a very strong statement in the face of the fact that
+but very few of the class of men to whom Mr. Kirkman refers ever built a
+line of road. They have usually found it more profitable to "gobble"
+roads already built than to construct new lines.
+
+According to this author the public have no reason to complain of
+railroads; on the contrary, the latter have always been the victims of
+public persecution, and "every species of folly, every conceivable
+device of malice, the impossible requirements of ignorance, the selfish
+cunning of personal interests, the ravings of demagogues, the
+disappointments, envies, prejudices and jealousies of mankind have each
+in turn and in unison sought to injure the railway interest."
+
+But probably the most extravagant passage in the whole treatise is the
+one referring to special rates, which he calls "the foundation and
+buttress of business," without which it could not be carried on. He
+expresses the opinion that without the continued and intelligent use of
+such rates "our cities would soon be as destitute of manufactories as
+one of the bridle paths of Afghanistan," and then continues: "The
+special rate of carriers is like the delicate fluid that anoints and
+lubricates the joints of the human body. It is an essential oil. Without
+it the wheels of commerce would cease and we should quickly revert to
+the period when the stage-coach and the overland teamster fixed the
+limits of commerce and the stature of cities."
+
+The most recent and probably the most radical of Mr. Kirkman's books is
+"Railway Rates and Government Control." It would lead us too far from
+our subject to enter into a discussion of Mr. Kirkman's errors; in fact,
+it might prove an endless task. Suffice it to say that in discussing his
+subject he revels in such phrases as: "Subject too vast to be
+comprehended." "Acts of agrarian legislation and foolish manifestations
+of disappointment and hate." "The rabble will avail itself of every
+excuse to pass laws that would, under other circumstances, be called
+robberies." "Ignorance and demagogism." "Government interference, the
+panacea of cranks and schemers." "Only understood by the few." "These
+people are as sincere as they are ignorant." "Governments have no
+commercial sense." "Those who condemn them are not so dishonest as
+ignorant, and not so malicious as foolish." "Silly people." "Justice and
+common honesty are systematically denied [the railroads]." "Legal means
+of plundering them." "The intelligence and facilities of Government are
+but one step above the barbarian." "Those who use railroads should pay
+for them," etc., etc.
+
+Mr. Kirkman's argument is in substance: Rate-making is a difficult
+subject. The people are too ignorant to understand it. Those who carry
+on the Government are for the most part fools and demagogues, and are
+utterly unfit to do justice to such a task. Railroad men are wise and
+just, and neither the people nor the Government should meddle with the
+railroad business. In order to place a true estimate upon Mr. Kirkman's
+utterances, one should remember that he is a railroad employe as well as
+the patentee and vendor of a number of railroad account forms which are
+extensively used by railroad companies.
+
+The Chicago _Tribune_, in reviewing this last literary production of Mr.
+Kirkman, says:
+
+      "The great fault of Mr. Kirkman's statements is that they
+      are often so general in character as to be both true and
+      false at the same time.... He does not seem to comprehend
+      the nature of the railroad, or to perceive the danger of
+      allowing a railroad to exercise its powers uncontrolled. He
+      denies the State's right to interfere with any
+      discriminations which a railway corporation chooses to
+      adopt. He would allow railways to fix whatever charges they
+      please for long hauls and short hauls.... Mr. Kirkman does
+      not adduce a single fact in support of these remarkable
+      views. He simply says: 'Railroads cannot, if they would,
+      maintain any inequitable local tariff.' This is not
+      argument, it is simply assertion. Every one who has learned
+      the alphabet of this question knows that railways have been
+      exceedingly unjust wherever competition or the law did not
+      restrict their powers. If this were the proper place for it
+      we would give the author instances of this injustice by the
+      hundred, and almost any book on the subject refers to such
+      cases by the thousand.... When confronted with the facts
+      substantiating such charges the author answers the argument
+      by exclaiming: 'But how absurd! But how untrue! Our
+      commercial morals are equal to the highest in the world....'
+      Scarcely an assertion can be taken without qualification.
+      The author fairly revels in half-truths.... The book may
+      have its merits, but they are too modest to reveal
+      themselves."
+
+It is a failing of mankind to take for truth without further
+investigation any assertion that has often been reiterated. Most people
+are prone to believe that an assertion made by a thousand hearsay
+witnesses is true, overlooking the possibility of their drawing from a
+common false source. But it is surprising that an author like Prof.
+Arthur T. Hadley should fall into such an error. In his otherwise
+excellent work, "Railroad Transportation, Its History and Its Laws," Mr.
+Hadley bases a number of his deductions upon false premises advanced by
+railroad managers, and arrives at conclusions which appear strange when
+their source is considered. In the chapter on railroad legislation
+Professor Hadley says: "But a more powerful force than the authority of
+the courts was working against the Granger system of regulation. The
+laws of trade could not be violated with impunity. The effects were most
+sharply felt in Wisconsin. The law reducing railroad rates to the basis
+which competitive points enjoyed left nothing to pay fixed charges. In
+the second year of its operation, no Wisconsin road paid a dividend;
+only four paid interest on their bonds. Railroad construction had come
+to a standstill. Even the facilities of existing roads could not be kept
+up. Foreign capital refused to invest in Wisconsin; the development of
+the State was sharply checked; the very men who had most favored the law
+found themselves heavy losers.... By the time the Supreme Court
+published the Granger decisions, the fight had been settled, not by
+constitutional limitations, but by industrial ones."
+
+These statements are either utterly untrue or greatly misleading. Mr.
+Hadley ought to know that the railroad companies in the Granger States
+never complied with the letter, much less with the spirit of the law.
+Whenever they made an apparent effort to live up to it they only did so
+to make it odious. Rates were never reduced by the legislature to the
+basis previously enjoyed by competitive points, but merely to the
+average charge which had obtained before the passage of the law. As a
+rule the railroad revenues increased. If any companies failed to earn
+enough to pay fixed charges it was simply because they were determined
+not to do so. A non-payment of dividends did not injure the managers,
+but simply other stockholders of the road. A permanent establishment of
+the principle of non-discrimination, on the other hand, would have
+benefited stockholders, while prejudicing the speculative interest which
+managers had in the roads. Railroad construction came, after the
+financial panic of 1873, to a practical standstill throughout the United
+States; and if the Granger States did not get their share of the very
+small total increase during the five years following the panic, it was
+due solely to a conspiracy on the part of the railroad managers to
+misrepresent and pervert the legislation of these States. The laws, as
+has already been stated, were finally repealed, not because the people
+had tired of them or regarded them unwise or unjust, but because it was
+hoped that the commissioner system would prove more efficient. It was
+offered as a compromise measure and was accepted as such by the railroad
+managers, who, in their eagerness to rid themselves of the restrictions
+imposed by the Granger laws, gave every assurance of complete submission
+to the requirements of the proposed legislation.
+
+Mr. Hadley even goes so far as to defend railroad pools. "Unluckily," he
+says, "we place these combinations outside of the protection of the law,
+and by giving them this precarious and almost illegal character we tempt
+them to seek present gain, even at the sacrifice of their own future
+interests. We regard them, and we let them regard themselves, as a means
+of momentary profit and speculation, instead of recognizing them as
+responsible public agencies of lasting influence and importance." We can
+partially account for this author's defense of pooling when we are
+informed that he accepts it as an axiom that "combination does not
+produce arbitrary results any more than competition produces beneficent
+ones." Referring to railroad profits, Mr. Hadley says: "The statement
+that corporations make too much money is scarcely borne out by the
+facts. The average return of the railroads of this country is only four
+per cent., the bondholders receiving an average of four and a half per
+cent., the stockholders of two and a half per cent. True, much of the
+stock is water, not representing any capital actually expended; but,
+even making allowance for this, it is hardly probable that the roads are
+earning more than five per cent. on the total investment. This assumes
+an average cost of $45,000 per mile, implying that about half of the
+stock and one-sixth of the bonds are water." Mr. Hadley would probably
+have come much nearer the truth if he had assumed three-fourths of the
+stock and one-fourth of the bonds to be water. Even Mr. Poor, who
+certainly cannot be accused by railroad men of being inimical to their
+interests, places the average cost of the railroads of this country no
+higher than at $30,000 per mile; and this estimate, it should be
+remembered, includes the value of the large donations made to railroad
+companies by the public. With a full understanding of all the
+circumstances, Mr. Poor said of railroad investments several years ago
+that if the water were taken out of them no class of investments in this
+country would pay as well. In the face of this statement Mr. Hadley
+would do well to revise his figures.
+
+We find, however, in Prof. Hadley's book also eminently sound views,
+like the following: "If the object of a railroad manager is simply to
+pay as large a dividend as possible for the current year, he can best do
+it by squeezing his local tariff, of which he is sure, and securing
+through traffic at the expense of other roads by specially low rates;
+that is, by a policy of heavy discrimination. But the permanent effect
+of such a policy is to destroy the local trade, which gives a road its
+best and surest custom, and to build up a trade which can go by another
+route whenever it pleases. The permanent effect of such a policy is
+ruinous to the railroad as well as the local shipper." And he continues:
+"By securing publicity of management you do much to prevent the
+permanent interests of the railroads from being sacrificed to temporary
+ones. By protecting the permanent interests of the public you enlist the
+stockholders and the best class of railroad managers on the side of
+sound policy."
+
+Edward Atkinson, in an essay entitled "The Railway, the Farmer and the
+Public," endeavors to prove that the farmers have no cause for
+complaining against the railroad, because rates of transportation have
+been greatly reduced during the past twenty years. Speaking of the
+reductions made in freight rates in the State of New York, he says: "Had
+the rate of 1870 been charged on the tariff of 1883 the sum would have
+been at 1.7016 cents on 9,286,216,628 tons, carried one mile,
+$158,014,262; the actual charge was $83,464,919, making a difference of
+$74,549,343 saved on one year's traffic on the lines reported in New
+York." It either did not occur to Mr. Atkinson, or, if it did occur to
+him, he failed to mention it, that these freight reductions were forced
+upon the railroads chiefly by water competition, and that if the
+railroad companies had not saved these seventy-four million dollars for
+the people, the canal lines, always subject to competition, would have
+saved a large part of it. With equal propriety might it be said that the
+railroads, by meeting canal competition, saved for themselves in the
+year mentioned a goodly share of their gross earnings. Such reasoning is
+absurd, and it is high time that the bubble of an argument so often used
+by railroad advocates be pricked. As Mr. Atkinson has introduced the
+farmer, let us apply his rule to him. There was a time when the farmer
+sold his corn for a dollar a bushel. To-day he sells it for thirty
+cents. He therefore saves to the people of this country, on
+2,000,000,000 bushels, the enormous sum of $1,400,000,000. There is
+scarcely an industry in existence to which this argument does not apply
+with equal force. Mr. Atkinson virtually admits that railroads charge
+all the traffic will bear when he says: "The charge which can be put
+upon the wheat of Dakota or Iowa for moving it to market is fixed by the
+price at which East Indian wheat can be sold in Market Lane." He is
+opposed to the Interstate Commerce Law, which he regards as "obnoxious
+measures of national interference and futile attempts to control this
+great work." He would rely chiefly upon the publicity of accounts made
+by railway officers, as secured by the private publication of Poor's
+Railway Manual, for all needed regulation, but concedes the
+establishment of a figurehead commission, concluding his remarks upon
+the subject as follows: "A commission which may bring public opinion to
+bear upon railway corporations may well be established, and there the
+work of the legislator may well cease." When we consider the powerful
+agencies employed by railroads to create public sentiment in their favor
+we can well understand the inefficiency of such a milk-and-water method
+of control.
+
+One of the most radical books ever published at the instigation of
+railroad managers appeared in 1888, under the title "The People and the
+Railways." Its author is Appleton Morgan, who attempts to "allay the
+animosity towards the railway interests" as shown in Mr. James F.
+Hudson's book, "The Railways and the Republic." The means which Mr.
+Morgan chooses are not well calculated to accomplish his purpose, for
+the masses of the people prefer in such a controversy arguments to
+ridicule and sarcasm, weapons of literary warfare to which this author
+resorts altogether too freely. Mr. Morgan's opinion as to the benefits
+of centralized wealth and trade combinations differs greatly from that
+held by the great majority of the American people. He says: "The fact,
+the truth is, that (however it may be in other countries) the
+accumulation of wealth and centralization of commerce in great
+combinations has never, in the United States, been a source of
+oppression or of poverty to the non-capitalist or wage-worker." There is
+scarcely an evil in railroad management which Mr. Morgan does not
+defend. Pools, construction companies, rebates, discriminations and
+over-capitalization all find favor in Mr. Morgan's eye. "Rebates and
+discriminations," he says, "are neither peculiar to railways nor
+dangerous to the 'Republic.' They are as necessary and as harmless to
+the farmer as is the chromo which the seamstress or the shop girl gets
+with her quarter-pound of tea from the small tea merchant, and no more
+dangerous to the latter than are the aforesaid chromos to the small
+recipients." Pools and combinations receive an unusually large share of
+Mr. Morgan's attention. A few selections from his effusions in their
+favor may be given here, viz.:
+
+"These pools are the legitimate and necessary results of the
+rechartering over and over again of railway companies to transact
+business between the same points by paralleling each other. So long as
+the people in their legislatures will thus charter parallel lines
+serving identical points--thus dividing territory they once granted
+entire--it is not exactly clear how they can complain if the lines built
+(by money invested, if not on the good faith of the people, at least in
+reliance upon an undivided business) combine to save themselves from
+bankruptcy." And again: "Against the inequality of their own rates and
+the hardship of the long and short haul (in other words, against the
+discrimination of nature and of physical laws) no less than against the
+peril of bankruptcy and the consequent speculative tendency of their
+stocks (after which may come the wrecking, the watering, and the vast
+individual fortunes), the railways of this republic have endeavored, by
+establishment of pool commissions, to defend both the public and
+themselves.... The honest administration of railways for all interests,
+the payment of their fixed charges, the solvency of their securities,
+the faithful and valuable performance of their duties as carriers, can
+be conserved in but one way--by living tariffs, such as the pools once
+guaranteed."
+
+In the following passage this author denies to the State the right to
+regulate rates: "Granting that they [the railroads] must carry freights
+for the public in such a way as not to injure either the public or the
+freight in the carrying, most emphatically (it seems to me) it does not
+follow that they must add to the value of the freights they carry by
+charging only such rates as the public or the owners of the freight
+insist on."
+
+But Mr. Morgan's indignation rises to the highest pitch in his
+discussion of the Interstate Commerce Act. He fears that it will cause
+the downfall of our liberties and sees in the background the Venetian
+Bridge of Sighs and the French Bastille. He asks: "Why should for any
+public reasons--for any reason of public safety--the Interstate Commerce
+Law have come to stay?" He then berates the act as follows: "To begin
+with, the present act abounds in punishments for and prohibitions
+against an industry chartered by the people, but nowhere extends to that
+industry a morsel of approval or protection. It bristles with penalties,
+legal, equitable, penal, and as for contempt, against railway companies,
+but nowhere alludes to any possible case in which a railway company
+might, by accident, be in the right, and the patron, customer, passenger
+or shipper in the wrong.... The constitutions of civilized nations, for
+the last few centuries at least, have provided that not even guilt
+should be punished except by due process of law, and have uniformly
+refused to set even that due process in motion except upon a complaint
+of grievance. But the Interstate Commerce Law denies the one and does
+away with the necessity for the other. That statute provides that the
+commission it creates shall proceed 'in such manner and by such means as
+it shall deem proper,' or 'on its own motion,' and that 'no complaint
+shall at any time be dismissed because of the absence of direct damage
+to the complainant.' Even the Venetian council often provided for a
+certain and described hole in the wall through which the anonymous
+bringers of charges should thrust their accusations. Even the court of
+star chamber was known to dismiss inquisitions when it found that no
+wrong had been done. But the statute of interstate commerce appears to
+issue _lettres de cachet_ against anything in the shape of a railway
+company--to scatter them broadcast, and to invite any one who happens to
+have leisure to fill them out, by inserting the name of a railway
+company. It says to the bystander: 'Drop us a postal card, or mention to
+any of our commissioners, or to a mutual friend, the name of any railway
+company of which you may have heard, and so give us jurisdiction to
+inquire if that company may have by chance omitted to dot an i or cross
+a t in its ledgers, or whether any one of its hundreds of thousands of
+agents--in the rush of a day's business, or in a shipper's hurry to
+catch a train--may have named a rate not on the schedule then being
+prepared at headquarters, or charged a sixpence less than some other
+agent 250 miles down the line may have accepted a week ago for what
+might turn out to be a fraction more mileage service in the same general
+direction. No particular form is necessary. Drop in to luncheon with our
+commission any day between twelve and one, and mention the name of a
+railway company. The railway company may have done you no damage, nor
+grieved you in any way; just mention the railroad, and we will take
+jurisdiction of its private (or quasi-public) affairs. Or, if you don't
+happen to have time to mention it, we will take jurisdiction anyhow, 'of
+our own motion,' of any railway company whose name we find in the
+Official Gazette. It really does not matter which; any one will do."
+This is a fair example of the literature on the Interstate Commerce Law
+paid for by railroad men.
+
+Mr. Stickney, although a railroad president, takes an entirely different
+view of the situation. He considers the law inadequate to bring about
+the reforms needed. He says: "This enormous business is now in the
+control of several hundred petty chieftains, who are practically
+independent sovereigns, exercising functions and prerogatives in
+defiance of the laws, and practically denying their amenability to the
+laws of the country. If the Government would seek to bring them to terms
+and compel them to recognize and obey the laws, it must use the means
+necessary to accomplish the end. It must have executive officers
+sufficient in number as well as armed with an adequate power and dignity
+to command their respect.... The power conferred upon them [the
+Interstate Commerce Commission] to enforce their judicial orders is the
+power 'to scold.' The penalties of the law which the courts are in power
+to impose are certainly severe, but the law has been operated for about
+four years without any convictions, and yet no well-informed person is
+ignorant of the fact that the law has not been obeyed. The president of
+a large system is said to have remarked that 'if all who had offended
+against the law were convicted there would not be jails enough in the
+United States to hold them.' It is evident that the Government has not
+provided adequate machinery for enforcing the law."
+
+Mr. Stickney is correct in his statement that adequate machinery for
+enforcement of the law has not been provided, but he does not give
+sufficient credit to the law or the commission. While much work remains
+to be done, much progress has been made.
+
+He is of the opinion that the public welfare would be furthered if the
+National Government assumed the sole control of railroads. He gives his
+reasons for the change which he proposes, as follows:
+
+      "There are many reasons besides these in the interest of
+      uniformity which make it desirable to transfer the entire
+      control of this important matter to the regulation of the
+      Nation. First, because of its constitution and more extended
+      sessions, Congress is able to consider the subject with
+      greater deliberation, and therefore with more intelligence,
+      than can a legislature composed of members who, as a rule,
+      hold their office for but one short session of about sixty
+      days' duration. There would also be removed from local
+      legislation a fruitful source of corruption, which is
+      gradually sapping the foundations of public morality.... In
+      the second place, the problem of regulating railway tolls
+      and managing railways is essentially and practically
+      indivisible, by State lines or otherwise, and therefore it
+      is not clear but that whenever the question may come before
+      the courts it may be held that the authority of Congress to
+      deal with interstate traffic carries with it, as a necessary
+      and inseparable part of the subject, to regulate the traffic
+      which is now assumed to be controlled by the several States.
+      The courts have held that the States have authority to
+      regulate strictly State traffic in the absence of
+      Congressional action, but their decisions do not preclude
+      the doctrine that Congress may have exclusive jurisdiction
+      whenever it may choose to exercise the authority. There is a
+      line of reasoning which would lead to that conclusion. It
+      may be that many will not care to follow the lead of the
+      writer as to the measure of aggregate net revenue which
+      railway companies are entitled to collect in tolls, but it
+      is evident that before the tolls can be intelligently
+      determined some measure of such aggregate revenue must be
+      ascertained. The question would then arise, what proportion
+      must be levied upon State and interstate traffic
+      respectively? If the State should refuse to levy its share
+      (and how could such share be ascertained?), then more than
+      its share would have to be levied on interstate traffic, and
+      thus the State by indirection would be able to do what the
+      Constitution prohibits. Of course, when the Constitution was
+      adopted railways and railway traffic were unknown. But it
+      was a similar question which brought the thirteen original
+      States together into one nation, under the present
+      Constitution. At least the first movement toward amending
+      the original Articles of Confederation was to give Congress
+      enlarged power over the subject of commerce."
+
+In reply to this it may be said that it will be an unfortunate day for
+the States when they surrender the power to control their home affairs.
+Differences between State and interstate rates could easily be adjusted
+by the National and State commissions and by the courts. It certainly
+ought not to be difficult for such tribunals to see that a rate which is
+made higher or lower, as it may be for State or interstate traffic, is
+wrong.
+
+Mr. Stickney has fallen into the error common to railroad men in
+believing that lower rates of transportation will not prevail in the
+future. There are many reasons why it is probable that they will be
+lower. Present rates are highly profitable on well located lines.
+Labor-saving inventions will increase, and roads will be built and
+operated more cheaply. Lines will be located with lower grades, lighter
+curvature and more directness. Business will increase largely, and the
+ratio of expenses will decrease. Steel will be improved in quality and
+will be substituted for iron. A heavier rail and more permanent roadway
+will be used. Rates of interest will rule lower, and there will be much
+more economy in superintending. Extravagant salaries to favorites will
+be reduced, and sinecures and parasites will be cut off from the
+payrolls. Lower wages are inevitable as our population becomes more
+dense.
+
+A very interesting and instructive author upon railroad subjects is
+Charles Francis Adams, Jr., ex-president of the Union Pacific Railroad
+and formerly a member of the Board of Railroad Commissioners of the
+State of Massachusetts. After twenty years' constant association with
+railroad men, Mr. Adams should certainly know the character of his
+quondam colleagues. In his book, "Railroads, Their Origin and Problems,"
+he says of them: "Lawlessness and violence among themselves [_i. e._,
+the various railroad systems], the continual effort of each member to
+protect itself and to secure the advantage over others, have, as they
+usually do, bred a general spirit of distrust, bad faith and cunning,
+until railroad officials have become hardly better than a race of
+horse-jockeys on a large scale. There are notable exceptions to this
+statement, but, taken as a whole, the tone among them is indisputably
+low. There is none of that steady confidence in each other, that easy
+good faith, that _esprit du corps_, upon which alone system and order
+can rest. On the contrary, the leading idea in the mind of the active
+railroad agent is that some one is always cheating him, or that he is
+never getting his share in something. If he enters into an agreement,
+his life is passed in watching the other parties to it, lest by some
+cunning device they keep it in form and break it in spirit. Peace is
+with him always a condition of semi-warfare, while honor for its own
+sake and good faith apart from self-interest are, in a business point of
+view, symptoms of youth and a defective education." And again, in an
+address delivered before the Commercial Club of Boston in December,
+1888, Mr. Adams expressed his opinion concerning the average railroad
+manager of to-day as follows: "That the general railroad situation of
+the country is at present unsatisfactory is apparent. Stockholders are
+complaining; directors are bewildered; bankers are frightened. Yet that
+the Interstate Commerce Act is in the main responsible for all these
+results, remains to be proved. In my opinion, the difficulty is far more
+deep-seated and radical. In plain words, it does not lie in any act of
+legislation, State or National; and it does lie in the covetousness,
+want of good faith and low moral tone of those in whose hands the
+management of the railroad system now is; in a word, in the absence
+among men of any high standard of commercial honor. These are strong
+words, and yet, as the result of a personal experience stretching over
+nearly twenty years, I make bold to say they are not so strong as the
+occasion would justify. The railroad system of this country, especially
+of the regions west of Chicago, is to-day managed on principles
+which--unless a change of heart occurs, and that soon--must inevitably
+lead to financial disaster of the most serious kind. There is among the
+lines composing that system an utter disregard of those fundamental
+ideas of truth, fair play and fair dealing which lies at the foundation,
+not only of the Christian faith, but of civilization itself. With them
+there is but one rule--that, many years ago, put by Wordsworth into the
+mouth of Rob Roy:
+
+    "'The simple rule, the good old plan,
+    That he shall take who has the power,
+    And he shall keep who can.'"
+
+As regards the causes of the Granger movement, Mr. Adams says, in the
+work above mentioned: "That it [the Granger episode] did not originate
+without cause has already been pointed out. It is quite safe to go
+further, and to say that the movement was a necessary one, and through
+its results has made a solution of the railroad problem possible in this
+country. At the time that movement took shape the railroad corporations
+were in fact rapidly assuming a position which could not be tolerated.
+Corporations, owning and operating the highways of commerce, claimed for
+themselves a species of immunity from the control of the law-making
+power. When laws were passed with a view to their regulation they
+received them in a way which was at once arrogant and singularly
+injudicious. The officers entrusted with the execution of those laws
+they contemptuously ignored. Sheltering themselves behind the Dartmouth
+College decision, they practically undertook to set even public opinion
+at defiance. Indeed, there can be no doubt that those representing these
+corporations had at this juncture not only become fully educated up to
+the idea that the gross inequalities and ruinous discriminations to
+which in their business they were accustomed were necessary incidents to
+it which afforded no just ground of complaint to any one, but they also
+thought that any attempt to rectify them was a gross outrage on the
+elementary principles both of common sense and of constitutional law. In
+other words, they had thoroughly got it into their heads that they, as
+common carriers, were in no way bound to afford equal facilities to all,
+and, indeed, that it was in the last degree absurd and unreasonable to
+expect them to do so. The Granger method was probably as good a method
+of approaching men in this frame of mind as could have been devised."
+
+Speaking of the educational value of railroad competition, Mr. Adams
+says: "Undoubtedly the fierce struggles between rival corporations
+which marked the history of railroad development, both here and in
+England, were very prominent factors in the work of forcing the systems
+of the two countries up to their present degree of efficiency. Railroad
+competition has been a great educator for railroad men. It has not only
+taught them how much they could do, but also how very cheaply they could
+do it. Under the strong stimulus of rivalry they have done not only what
+they declared were impossibilities, but what they really believed to be
+such."
+
+Mr. Adams has, from his long association with railroad managers, imbibed
+one heresy which is in strange discord with the general soundness of his
+opinions. He holds that the railroad system was left to develop upon a
+false basis, inasmuch as the American people relied for protecting the
+community from abuses upon general laws authorizing the freest possible
+railroad construction everywhere and by any one. It can therefore not be
+surprising that Mr. Adams is an advocate of the legalized pool. He is of
+the opinion that secret combinations among railroads, inasmuch as they
+always have existed, always will exist as long as the railroad system
+continues as it now is. Hence he proposes to legalize a practice which
+the law cannot prevent, and by so doing to enable the railroads to
+confederate themselves in a manner which shall be at once both public
+and responsible. The reply might be made that there are many other
+conspiracies which the law cannot always prevent, but that this is no
+reason why conspiracies should be legalized. If pools and other railroad
+abuses had, since the beginning of the railroad era, been treated as
+crimes and misdemeanors, and punished as such by the imposition of heavy
+fines, few people would to-day be ready to offer apologies for them. If
+the time shall ever come when pools must be legalized it will be time
+for railroad control equivalent to Government ownership.
+
+Among the more recent writers upon railroad subjects is W. D. Dabney,
+late chairman of the Committee on Railways and Internal Navigation in
+the Legislature of Virginia. Mr. Dabney favors State control, and is, on
+the whole, friendly to the Interstate Commerce Act. He sees danger in
+the pool, but inclines to the belief that the public benefit derived
+from the pooling system outweighs the danger of public detriment from
+its existence. The following is his chief argument for a legalized pool:
+"Perhaps, so long as railroad companies continue to enjoy an absolute
+monopoly of transportation over their own lines, so that free
+competition is restricted in its operation to a comparatively few
+favored points, it may be worthy of serious consideration whether it
+would not be better to legalize than to prohibit pooling, taking care to
+put the whole matter under strict public supervision and control. The
+companies would then be left comparatively free to bring their local
+rates into something like harmony with the long-distance rates, and
+should they fail to do so where the needs of the local community and
+their revenues make it proper to be done, then it is the function of
+public regulation to compel it to be done."
+
+Of the Interstate Commerce Act Mr. Dabney says: "The legislation
+recently enacted by Congress for the regulation of commerce by railway
+is the result of more careful and intelligent deliberation perhaps than
+any other measure of similar character, and it is not unlikely that the
+legislation of many of the States will sooner or later be conformed to
+it."
+
+He speaks at some length of the drift toward railroad centralization. A
+few extracts from this passage may be here given: "That the tendency
+towards the unification and consolidation of different and competitive
+lines has been decidedly increased by the anti-pooling and the long and
+short haul sections of the Interstate Commerce Law can hardly be
+doubted.... The modern device of the 'trust' as a means of unifying
+industrial interests and eliminating competition had not yet been
+applied in the field of railroad transportation.... The scheme of trust
+here briefly outlined would probably require for its successful
+operation the concurrence of the entire stockholding interest of each
+company embraced in it; and herein, it seems likely, will be found the
+chief difficulty in perfecting such a scheme. Should it ever be
+perfected, a far more stringent public supervision and control of the
+railroad transportation of the country will be demanded."
+
+Another author, Charles Whitney Baker, associate editor of the
+_Engineering News_, suggests in his book, "Monopolies and the People," a
+plan for the reorganization of our railroad system, to remedy the evils
+of monopoly which are at present connected with railroad management. The
+following quotation from his work outlines the system proposed: "Let the
+Government acquire the title of the franchise, permanent way and real
+estate of all the railway lines in the country. Let a few corporations
+be organized under Government auspices, and let each, by the terms of
+its charter, receive a perpetual lease of all the railway lines built,
+or to be built, within a given territory. Let the territory of each of
+these corporations be so large, and so planned with regard to its
+neighbors, that there shall be, so far as possible, no competition
+between them. For instance, one corporation would operate all the lines
+south of the Ohio and east of the Mississippi River; another all lines
+east of the Hudson and of Lake Champlain, etc. Let the terms of rental
+of these lines be about 3-1/4 per cent. on the road's actual 'present
+cost' (the sum of money it would cost to rebuild it entirely at present
+prices of material and labor), less a due allowance for depreciation.
+The corporations would be obliged to keep the property in as good
+condition as when received, and would own absolutely all their
+rolling-stock, machinery, etc." The proposed reform measures, it must be
+admitted, are very good in theory, but their practical application is
+unfortunately entirely out of the question under our system of
+government.
+
+Mr. John M. Bonham is the author of a recent work entitled "Railway
+Secrecy and Trusts." This writer, upon the whole, takes advanced ground
+in dealing with the question of railroad reform. He deems the present
+interstate legislation inadequate to correct all the graver railroad
+evils, expressing his views upon this subject as follows:
+
+      "Railway construction continues to increase in the United
+      States with immense rapidity. Concurrent with this increase,
+      and notwithstanding all the efforts that have been made at
+      restraint, the aggressions upon political and industrial
+      rights increase also. Nor is it likely that without more
+      rigorous control than is now exercised these aggressions
+      will be any less active than they are to-day. It is coming
+      to be pretty generally realized that the Interstate Commerce
+      legislation has not fulfilled the expectation of its
+      friends. But this is a frequent trait of tentative
+      legislation. It is not reasonable to expect that the first
+      efforts to solve a problem the factors of which are so
+      hidden and complex will be followed by complete success."
+
+Concerning the changes needed to make Government regulation in the
+United States more effective, he says:
+
+      "A reform which would deal with an elaborate system of evil
+      cannot, therefore, be confined to treating consequences,
+      the separate instances of the system. There must be a power
+      which can go behind these and grapple with causes. There
+      must, therefore, be something more than a court. There must
+      be a commission, a department of government which will
+      provide organized supervision and inspection against which
+      the quasi-public corporation can claim no privacy as
+      inviolable. Such a department must be clothed with the power
+      to ascertain precisely where and how the evils of the
+      present methods originate, and when these are ascertained it
+      must be able to apply the remedy at the source of evil. The
+      remedial force must be of a preventive kind."
+
+A few grave misstatements of historical facts greatly mar Mr. Bonham's
+book. He makes, for instance, the following statement:
+
+      "Following this came restrictive legislation, which, in some
+      instances, was so unreasonable as to make any railway
+      management impossible. Some of the Granger legislation, and
+      especially that of Iowa, was of this character, as were also
+      some of the earlier efforts to secure Congressional
+      legislation."
+
+It was left to Mr. Bonham to discover that legislation ever made
+railroad management impossible in Iowa. The General Assembly of Iowa
+passed at two different times railroad laws that were greatly obnoxious
+to railroad managers. In 1874 it passed a maximum tariff act which, at
+the urgent solicitation of the railroad forces, was repealed four years
+later; and in 1888 it passed an act containing the principles of the
+Interstate Commerce Act and in addition authorizing the Board of
+Railroad Commissioners to fix _prima facie_ rates. Strange as it may
+seem to Mr. Bonham and other people inclined to believe without
+investigation the statements of railroad men, the earnings of the Iowa
+roads greatly increased immediately after the enactment of the so-called
+Granger laws in 1874, as the following table will show:
+
+  Year.  Miles of Railroad.  Gross Receipts.
+
+  1871          2,850          $12,395,826
+  1872          3,642           14,534,408
+  1873          3,728           15,430,619
+  1874          3,765           15,568,907
+  1875          3,823           18,422,587
+  1876          3,938           17,221,032
+  1877          4,075           20,714,496
+  1878          4,157           21,294,275
+
+When the Granger law was repealed in 1878, the railroads were earning
+$1,000 per mile more than they were earning when the law was enacted.
+The present railroad law, which was passed in 1888, and has also been
+the subject of extreme criticism on the part of railroad organs, has had
+the same beneficial effect. The law, owing to the obstacles thrown in
+its way by the railroad managers, did not become operative until 1889.
+From July 1st, 1889, to June 30th, 1892, the gross railroad earnings of
+the Iowa roads, which for three years had been at a standstill,
+increased and were over $7,000,000 more in 1892 than they had been any
+year previous to 1889, as will be seen from the table below:
+
+  Gross Railroad Earnings in Iowa.
+
+   1886-87          $37,539,730
+   1887-88           37,295,586
+   1888-89           37,469,276
+   1889-90           41,318,133
+   1890-91           43,102,399
+   1891-92           44,540,000
+
+The net earnings per mile of the Iowa roads were $1,421.91 in the year
+1888-89, and $1,821.37 the year following. The total net earnings of all
+Iowa roads during the year ending June 30th, 1891, were $14,463,106,
+against $11,861,310 during the year ending June 30th, 1889, and were
+still greater for the year ending June 30, 1892. No further vindication
+of the Iowa law is necessary. These figures show plainly that the
+lowering and equalizing of the rates not only increased the roads'
+business and income, but also their net earnings. And it must be
+remembered that the reports showing these facts were made by the
+railroad companies and were certainly not made with any intention of
+prejudicing the cause of the railroad manager.
+
+James F. Hudson, the author of "The Railways and the Republic," is a
+very exhaustive and instructive writer upon the subject of railroad
+abuses. His material is well selected, and the subject ably presented.
+To the assertion of railroad managers, that railroad regulation
+injuriously affects the value of railroad property, he makes the
+following reply:
+
+      "Suppose that it were true, as these jurists and writers
+      claim, that by the assertion of the public right to regulate
+      the railways the value of their property is decreased, are
+      there no other property rights involved? Do railway
+      investments form the only property in the land which
+      requires the protection of the law? Are we to understand
+      these judgments and their indorsers to mean that because
+      railroad property will depreciate if certain principles of
+      justice prevail, therefore justice is to be set aside for
+      the benefit of railway property? If the magnitude of
+      interests involved is to be of weight in deciding such
+      questions, let us put against 'the hundreds of millions' of
+      railway property on the one side the thousands of millions
+      of private property on the other. Railway regulation,
+      according to a writer in the _Princeton Review_, is
+      'confiscation of railroad property;' but this puts wholly
+      out of the question the idea of private property which is
+      rendered possible by leaving unchecked the power of the
+      railways over commerce and manufactures through the
+      manipulation of freight rates. Of the two parties in
+      interest the shippers represent far greater property
+      interests than the carriers, although the latter, by their
+      organization, are more powerful. I have yet to hear of a
+      single case where restrictive railway legislation has
+      seriously damaged the honest valuation of any railway. I
+      have yet to learn of any seriously proposed scheme of
+      regulation that has proposed to cut down railway profits
+      below a fair dividend on capital actually invested. But the
+      entire Nation knows of one notorious case in which the
+      discriminating policy of the leading railways of the country
+      has resulted in the wholesale confiscation of private
+      property for the benefit of a favored corporation."
+
+Concerning the inconsistency presented by the plea of railroad managers
+for a legalized pool, Mr. Hudson says:
+
+      "It has been argued for years that the subject is so
+      delicate and vast that it must not be touched by legislation
+      in the public interest. To protect the rights of the
+      ordinary shipper against the favorite of the railway would
+      so hamper the operations of trade, it has been repeated
+      times without number, as to take away the independence of
+      the railways and destroy the freedom of competition. Yet,
+      after years of argument that Government has no
+      constitutional power to interfere with the railways, and of
+      demonstration that all such interference must be ill-advised
+      and injurious, the railway logic comes to the surprising
+      climax of appealing to legislation for the aid of the law in
+      upholding their efforts to prevent competition."
+
+Mr. Hudson maintains that if the pool were legalized it would only be a
+means of swelling railroad earnings. He says:
+
+      "If the pool would maintain equitable rates its success
+      might be desired, but what guarantee is there that the
+      complete establishment of its power would make such rates?
+      Its very character, the functions of the men who control its
+      policy, and its avowed object of swelling the earnings of
+      railways by artificial methods, forbid such an expectation.
+      Make the success of the pool absolute, so that it can work
+      without fear of competition, and its rates will be uniform,
+      but of such a character that their uniformity will be a
+      public grievance and burden.... A grave effect of this
+      policy, though not easily calculable, is the ability it
+      gives to railway officials to control the prices of stocks,
+      and the temptation to enhance their fortunes by so doing....
+      It is a heavy indictment against the pooling system that it
+      gives power to avaricious and unscrupulous men in railway
+      management to enrich themselves at the cost of shareholders
+      and investors, both by forming combinations and by exciting
+      disputes or ruptures in them."
+
+The question whether the common law does not protect the public
+sufficiently is well answered by Mr. Hudson as follows:
+
+      "The common law is sufficient in theory, but it has failed
+      in practice.... In practice, legal remedies against railway
+      injustice can be applied to the courts only by fighting the
+      railways at such disadvantages that the ordinary business
+      man will never undertake it except in desperate cases. Every
+      advantage of strength and position is with the railways....
+      This [the railroad] power has kept courts in its pay; it
+      defies the principles of common law and nullifies the
+      constitutional provisions of a dozen States; it has many
+      representatives in Congress and unnumbered seats in the
+      State legislatures. No ordinary body of men can permanently
+      resist it."
+
+But the remedy which Mr. Hudson proposes for the correction of railroad
+evils is one of doubtful efficacy. It is this:
+
+      "Legislation should restore the character of public highways
+      to the railways by securing to all persons the right to run
+      trains over their track under proper regulations, and by
+      defining the distinction between the proprietorship and
+      maintenance of the railway and the business of common
+      carriers."
+
+While it is admitted that the opening of the railroads to the free use
+of competing carriers is not necessarily impractical from a technical
+point of view, it cannot be admitted that the proposed remedy would cure
+the evil. There would certainly be nothing to hinder carrying companies
+forming a trust which might prove more dangerous to the interests of
+shippers than are to-day the combinations of the railroad companies.
+
+Mr. Hudson devotes a chapter to the railroad power in politics, and
+shows how corporations, through their wealth, have secured the greatest
+and most responsible offices in the executive, legislative and judiciary
+departments of the Government. Speaking of their influence in the
+Supreme Court of the United States, he says:
+
+      "The assertion that Jay Gould paid $100,000 to the
+      Republican campaign fund in 1880, in return for which Judge
+      Stanley Mathews was nominated to the Supreme Bench, is
+      denied as a political slander; but the fact remains that
+      this brilliant advocate of the railway theories of law has
+      been placed in the high tribunal, and that his presence
+      there together with Justice Field, long a judicial advocate
+      of the corporations, is expected to protect the railways in
+      future against such constructions of law as the Granger
+      decisions."
+
+An English writer, Mr. J.S. Jeans, presents, in his "Railway Problems,"
+a great deal that is of interest to American readers. The statistical
+data of his work are especially interesting. We learn that the United
+Kingdom has nearly twenty railroad employes per mile of road operated,
+to less than five in the United States, and that the average number of
+employes per L1,000 ($4,850) of gross earnings is on the railroads of
+the United Kingdom 5.4 to only about half as many in the United States.
+We further learn that the average earnings per train mile in America are
+over 25 per cent. higher than they are in the United Kingdom, and exceed
+those of most European countries.
+
+Of the remarkable increase in number and the profitableness of the
+third-class passenger traffic in England Mr. Jeans says:
+
+      "There has hitherto been a great lack of knowledge in this
+      country as to the extent to which the different classes of
+      passenger traffic yield adequate profit to the railroad
+      companies. English passenger traffic differs from that of
+      most other countries in this respect, that the chief
+      companies attach third-class carriages to almost every
+      train. The accommodation provided for third-class passengers
+      in England is also much superior to what is found in other
+      countries where there is the same distinction of classes.
+      The effect of those two distinguishing features of the
+      English railway system is that third-class carriages are
+      much more and first-class carriages much less utilized than
+      in other countries. The tendency appears to be towards an
+      increasing use of third-class, and a decreasing use of
+      first-class vehicles. But, all the same, the leading English
+      lines continue to provide a large proportion of first-class
+      accommodation in every train, and it is no unusual thing to
+      find the third-class carriages of express trains absolutely
+      full, while first-class carriages are almost empty. The
+      natural result is that third-class travel is a source of
+      profit, while first-class travel is not.... So far as
+      passenger traffic is a source of net profit, that profit is
+      contributed by the third-class. The total receipts from
+      passenger traffic in England and Wales amounted in 1885 to
+      L21,968,000. But if the average receipts per carriage over
+      the whole had been the same as in the case of the Midland
+      first-class vehicles, namely, L330, the total receipts from
+      passenger traffic would only have been about nine millions.
+      It is not necessary to be an expert in order to see that
+      traffic so conducted must be attended with a very serious
+      loss."
+
+Of the stock-watering of American railroad companies Mr. Jeans says:
+
+      "It seldom happens that in the United States the cost of a
+      railway and its equivalent corresponds, as it ought to, to
+      the total capital expenditure. There is no country in the
+      world where the business of watering stocks is better
+      understood or carried out more systematically and on so
+      large a scale. For this reason there is liable to be a great
+      deal of error entertained in reference to the natural cost
+      of American lines."
+
+There are many financial journals that are so closely identified with
+the speculative interests of the country, and many railway papers that
+depend so largely upon railway men for support, that railway managers
+are never without a medium through which they can present their views to
+the public. A systematic and concerted effort is also constantly made by
+the railroads to pervert the press of the country at large. The great
+city papers generally yield to their influences and enlist in their
+service, and yet there are notable exceptions to this.
+
+In speaking of the extravagant sums which the railroads paid to the
+great dailies, ostensibly for advertising, but in fact for their good
+will and other services, a railroad superintendent recently said that it
+was an infamous outrage, and yet it was the best investment of money
+that his company could make. The country papers have shown more
+integrity in maintaining their independence, but the railroads are not
+without their organs among them. It is not unfrequent to find some of
+them defending railroad abuses with all the apparent zeal of a Wall
+Street organ, and a glance at their columns often reminds one of Mr.
+Lincoln's story of the Irishman and the pig. Mr. Lincoln defended an
+Irishman against the charge of stealing a pig. After the testimony was
+taken in court, Mr. Lincoln called his client aside and told him that
+the testimony was so strong against him, and that the case was so clear,
+that it was impossible for him to escape conviction, and he advised him
+to plead guilty and throw himself on the mercy of the court. "No, Mr.
+Lincoln," said Patrick, "you go back and make one of your great speeches
+and swing your long arms and talk loud to the jury, and you will win
+the case." Mr. Lincoln, in accordance with that disposition to
+accommodate so strongly characteristic of him, did as he was directed by
+his client, and to his great surprise the jury promptly brought in a
+verdict of not guilty. After it was all over, Mr. Lincoln said: "Now,
+Patrick, tell me why that jury acquitted you. I know that you stole the
+pig, and my speech had nothing to do in securing your acquittal."
+Patrick replied: "And sure, Mr. Lincoln, every one of those jurymen ate
+a piece of the pig."
+
+
+
+
+CHAPTER X.
+
+RAILROAD LITERATURE--CONTINUED.
+
+
+Railroad questions have become of such general interest that their
+discussion has become a prominent factor of magazine literature. It is a
+significant fact that these contributors are usually railroad men, and
+under these circumstances an unbiased discussion of the questions at
+issue is indeed a rare occurrence. It is but too frequently the sole
+object of the contributor, and not unfrequently even of the publisher,
+to create a public sentiment in favor of the unjust demands of railroad
+managers.
+
+During the last few years systematic efforts have been made by the
+railroad interests to influence public opinion against the Interstate
+Commerce Law and restrictive State legislation through the leading
+magazines of the country. Mr. Sidney Dillon, president of the Union
+Pacific Railroad, in an article which appeared in the April (1891)
+number of the _North American Review_, under the title "The West and the
+Railroads," endeavors to show that the West is indebted to the railroad
+managers for nearly all of the blessings which its people enjoy, and
+that therefore railroad legislation in the West is a symptom of rank
+ingratitude. He prefaces his argument with the remark that the elder
+portions of our commonwealth have already forgotten, and the younger
+portions do not comprehend or appreciate, that but for the railroads
+what we now style the Great West would be, except in the valley of the
+Mississippi, an unknown and unproductive wilderness. He then argues
+that, inasmuch as the railroads carry the wheat of Dakota and Minnesota
+to the sea-coast, and bring those sections of our community into direct
+relation with hungry and opulent Liverpool, the world should "thank the
+railway for the opportunity to buy wheat, but none the less should the
+West thank the railway for the opportunity to sell wheat." It does not
+seem to occur to Mr. Dillon that the railway might, with equal
+propriety, thank the world in general, and the Great West in particular,
+for its opportunity to carry wheat.
+
+We are also told that the railway has reclaimed from nature immense
+tracts of land that were worthless except as to their possibilities,
+which once seemed too vague and remote to be considered and are to-day
+valuable; that it has changed the character of the soil as well as the
+climate of the West, and we are almost given to understand that in many
+respects it has assumed the functions of Providence. Mr. Dillon
+generously admits, however, that railways have not been built from
+philanthropic motives and that we find among railroad promoters and
+contractors men of large fortunes. He then proceeds to reprimand the
+States west of the Mississippi for their "ungrateful" legislation,
+which, he says, interferes with the business of the railway, even to the
+minutest detail, and always to its detriment. Such legislation
+exasperates Mr. Dillon the more because it originated in States "which
+happened to be the communities that owe their birth, existence and
+prosperity to these very railways." Mr. Dillon then gives vent to his
+wrath by the use of such terms as impertinence, ignorance and
+demagogism. He holds that legislative enactments as to the rights and
+liabilities of railway corporations are useless, "because the common law
+has long since established these as pertaining to common carriers, and
+the courts are open to redress all real grievances of the citizen." Upon
+this theory we might as well dispense with the legislative department of
+the Government, for there is no relation in the community to which the
+principles of the common law can not be applied. Besides this, Mr.
+Dillon entirely ignores the fact that the railway company is not only a
+common carrier, but the keeper of the highway, and as such is subject to
+Government control as much as the turnpike tollgate keeper or the
+collector of customs. "Then as to prices." Mr. Dillon continues: "These
+will always be taken care of by the great law of competition, which
+obtains wherever any human service is to be performed for a pecuniary
+consideration. That any railway, anywhere in a republic, should be a
+monopoly, is not a supposable case."
+
+Like the rest of railway men, Mr. Dillon excels in painting dark
+pictures of railroad catastrophes. A sample production of his art is
+here presented:
+
+      "One of the greatest dangers to the community in a republic
+      is this: that it is in the power of reckless, misguided or
+      designing men to procure the passage of statutes that are
+      ostensibly for the public interest and that may lead to
+      enormous injuries. Let us imagine for a moment that all
+      railways in the United States were at once annihilated. Such
+      a catastrophe is not, in itself, inconceivable; the
+      imagination can grasp it, but no imagination can picture the
+      infinite sufferings that would at once result to every man,
+      woman and child in the entire country. Now, every step taken
+      to impede or cripple the business and progress of our
+      railways is a step towards just such a catastrophe, and
+      therefore a destructive tendency."
+
+Mr. Dillon, losing sight of all other interests, did not think that his
+nonsensical mode of reasoning would apply equally well to them. Let us,
+for instance, imagine for a moment that all of the farms of the United
+States were at once annihilated. Can the imagination picture the
+infinite sufferings that would at once result to every man, woman and
+child in the whole country? Now, is not any step taken to impede or
+cripple the business of farming a step towards just such a catastrophe,
+and therefore of a destructive tendency? Mr. Dillon then avails himself
+of an opportunity to give the people of the United States some
+gratuitous advice when he says:
+
+      "We do not arrogate superior wisdom or intelligence to
+      ourselves when we suggest to the people of the United
+      States, and especially that portion of the country where
+      railroads have been the subject of what we consider to be
+      excessive legislation, that the rational mode of treating
+      any form of human industry that has for its object the
+      performance of desired and lawful service is to let it
+      alone, and that the railway is no exception to this
+      principle."
+
+This is the very plea that Jefferson Davis made when he kindled the
+flame of treason.
+
+       *       *       *       *       *
+
+In the March, 1891, number of the _Forum_, Mr. W. M. Acworth discusses,
+under the title "Railways under Government Control," the working of the
+railway systems of the different nations. He holds that the management
+of railroads which are the property of the State is, as a rule, greatly
+inferior to the management of those roads which are the property of
+private trading corporations; he assigns to the railway experts of
+England and America the first places among the railway experts of the
+world, and appears to attribute all the good in the railroad management
+of these countries to the absence of State interference, and all the
+evil in the management of the railroads of other countries to the fact
+that such interference exists. He says of the railroads of England and
+the United States:
+
+      "In speed and accommodation, in the energy which pushes
+      railways into remote districts, and in the skill which
+      creates a traffic where no traffic existed before, they
+      stand to-day in the front rank, as they have stood for the
+      last half century. To say that they are very far from
+      perfect is nothing; it is only to say that they are worked
+      by human agency. Their worst enemies will scarcely deny that
+      they are at least alive; so long as there is life there may
+      be growth, and we may hope to see them outgrow the faults of
+      their youth. The charge made against State railway systems
+      is that they are incapable of vigorous life. The old adage
+      which proclaimed that 'necessity is the mother of invention'
+      has been re-stated of late years as the law of the survival
+      of the fittest in the struggle for existence. If the
+      doctrine is true, the State railway system, relieved from
+      the necessity of struggle, must cease to be fit and will
+      fail to survive."
+
+While it is not intended to enter here into a defense of a State railway
+system, it may justly be questioned whether "the State railway system,
+relieved from the necessity of struggle, must cease to be fit and will
+fail to survive." The growth of the State system in Europe is in itself
+a sufficient refutation of Mr. Acworth's theory. The mail service has
+for several hundred years been a monopoly of the government; but, while
+it is far from being perfect, it remains to be demonstrated that private
+enterprise could give to the public a better service in the long run.
+
+Mr. Acworth is an Englishman who in former years wrote many bitter
+things concerning the abuses which he then thought he saw in the
+management of the railroads of his native country, which, according to
+his own statement, are, besides those of the United States, the only
+roads in the world for whose regulation competition has been relied upon
+in the past. Mr. Acworth has become a convert to the _laissez faire_
+theory of dealing with railroads and now evinces an unusual, but perhaps
+pardonable, zeal in the defense of his new position. In the preface to
+his book, "The Railways of England," he says upon the subject:
+
+      "I have published before now not a few criticisms (which
+      were meant to be scathing) on English railways anonymously.
+      I find myself using, under my own name, the language of
+      almost unvarying panegyric. This is partly to be explained
+      by the plan of the book, which professes to set before the
+      reader those points on each line which best merit
+      description--its excellencies, therefore, rather than its
+      defects. Much more, however, is it due to a change of
+      opinion in the writer.... I have found in so many cases that
+      a satisfactory reply existed to my former criticisms, that I
+      have perhaps assumed that such an answer would be
+      forthcoming in all; and if I have taken up too much the
+      position of an apologist, where I should have been content
+      to be merely an observer, let me plead as my excuse that I
+      am only displaying the traditional zeal of the new-made
+      convert."
+
+Prof. Hadley, of whose work, "Railroad Transportation, its History and
+its Law," mention has been made above, contributed an article to the
+April, 1891, number of the _Forum_, under the title "Railway Passenger
+Rates." He endeavors to show that the high passenger rates of American
+railroads are due solely to superior service. He says:
+
+      "Continental Europe pays two-thirds as much as America or
+      England and gets an inferior article. India pays still less
+      and gets still less. The difference is seen both in quality
+      and quantity of service. In India express trains rarely run
+      at a greater speed than 25 miles an hour. In Germany and
+      France their speed ranges from 25 to 35 miles an hour, and
+      only in exceptional instances is more than 40 miles an hour.
+      In the United States and in England the maximum speed rises
+      as high as 50, or, in exceptional instances, 60 miles an
+      hour. With regard to the comfort of the cars in different
+      countries, there is more room for difference of opinion;
+      but there can be no doubt that the average traveler in the
+      United States, or even in the English third-class car, fares
+      better than he would in the corresponding class on
+      continental railroads, and infinitely better than the bulk
+      of travelers in British India."
+
+It may be admitted that upon the whole the speed of American and English
+railroads is greater than that of continental roads, yet the difference
+is much less than Mr. Hadley would make us believe. The fast trains of
+the Berlin and Hamburg Railroad, according to Roell's "Railroad
+Encyclopedia," make the distance of 179 miles in three hours and
+forty-four minutes. The average speed is therefore 48 miles an hour.
+There are but few lines in the United States whose regular express
+trains run at a greater speed. The express trains of the Berlin and
+Brunswick line make 45-1/2 miles an hour. Trains are run on the Vienna
+and Buda-Pesth Railway at the rate of 42 miles an hour and on the Paris
+and Calais Railway at a rate of over 40 miles an hour. Official reports
+give the average speed of express trains in Northern Germany as 32.2
+miles per hour, which is considerably more than the average speed of our
+Western trains, upon which the rates charged are twice as high as those
+charged by German roads. The average speed of the express trains in
+England was 35.7 miles per hour in 1890, in the Netherlands 30.7 miles,
+in France 30 miles, in Denmark and Southern Germany 28.8 miles and in
+Austria 27.8 miles per hour. Accurate statistics showing the average
+speed in America are not in existence, but it may well be questioned
+whether the difference between the speed of American and European trains
+is sufficient to justify upon that score any essential difference in the
+rates. Mr. Hadley's statement that the average traveler in the United
+States, or even in the English third class, fares better than he would
+in the corresponding class on continental railroads, is far too sweeping
+to be true. It is certain that the Belgian, German, Austrian or French
+second-class coupes are much to be preferred to the smoking and emigrant
+cars which in America are made to take their places.
+
+To prove that much more work is demanded of American railroads than of
+European railroads, Mr. Hadley presents the following table:
+
+                                                        Annual Train
+                                           Miles run     Service per
+                                           by Trains       head of
+    Countries.             Population.     annually.     Population.
+
+  United States (1889)      61,000,000    724,000.000      12
+  Great Britain (1889)      38,000,000    303,000,000       8
+  Germany (1889)            48,000,000    181,000,000       3-3/4
+  France (1888)             38,000,000    145,000,000       3-3/4
+  Austria-Hungary (1887)    40,000,000     66,000,000       1-2/3
+  India (1889)             200,000,000     51,000,000       0-1/4
+
+And he adds: "These figures are for passenger trains and freight trains
+together, as some countries do not give statistics of the two
+separately; but the general results would be nearly the same if
+passenger trains alone could be considered. The figures show that, for
+every man, woman and child, a train is run twelve miles annually in the
+United States, in Great Britain eight miles, in Germany or France a
+little less than four miles, in Austria not much more than a mile and a
+half, and in British India less than a quarter of a mile."
+
+This statement, even if correct, is certainly misleading. No allowance
+is made for the greater distances and the greater average haul in
+America, and none for our bulky raw products, which require more car
+room than the manufactured goods predominating as freight in Europe.
+
+If Mr. Hadley's statement of miles run by trains annually is used in
+connection with Mr. Poor's statement showing the length, for 1889, of
+the railroads of the countries given in the above table, it can be shown
+that the average number of trains run annually per mile is considerably
+less here than in Europe:
+
+                    Length of                   Average Number
+                    Railroad      Miles run        of Trains
+                    in miles      by Trains      per mile per
+    Countries.       (1889).     annually.          annum.
+
+  United States      161,396     724,000,000         4,485
+  Great Britain       19,930     303,000,000        15,203
+  Germany             25,360     181,000,000         7,137
+  France              21,910     145,000,000         6,618
+  Austria-Hungary     15,990      66,000,000         4,127
+
+It is seen that while the average number of trains run per mile per
+annum is only 4,485 in the United States, it is 6,618 in France, 7,137
+in Germany, and 15,203 in Great Britain. In Austria-Hungary it is
+somewhat less than here. It is not claimed that this is in every respect
+a fair argument; but it is at least as fair as Mr. Hadley's. As has been
+stated before, the average earnings per train mile are larger in the
+United States than in most nations, and, excepting Sweden, railway
+capital has the highest gross earnings of any nation in the world; and
+when Mr. Hadley bases his argument in favor of higher rates for American
+railroads than for those of Europe upon the claim that the latter secure
+larger train loads, he simply reasons from false premises.
+
+Mr. Hadley then continues:
+
+      "But why cannot our railroad men, with our present train
+      service, secure larger loads by making lower rates, and give
+      us cheap service as well as plenty of it? Why cannot we
+      secure two good things instead of one? For two reasons:
+      First, because it is not certain that low rates will be
+      followed by greatly increased travel; second, because such
+      increased travel would not be so economical to handle in
+      America as it is in Europe. It is wrong to assume that,
+      because reductions of charges in Europe have increased travel
+      enormously, they would have a proportionate effect in America
+      and a corresponding advantage in American railroad economy.
+      It is a somewhat significant fact that second-class trains at
+      reduced rates have been extremely successful in Europe and
+      not at all so in America. Other things being equal, the
+      American public would be glad to have its travel at lower
+      fares; but it cares more for comfort and speed, and for being
+      able to travel at its own times, than for a slight difference
+      in charge. The assumption so frequently made, that a
+      reduction in fares would cause an enormous increase in travel
+      in this country, is for the most part a pure assumption, not
+      borne out by the facts."
+
+The great increase in business which has everywhere followed reductions
+in postage rates, telegraph rates and street-car fares, as well as
+railroad rates, sufficiently refutes the assertion that it is not
+certain that low rates would be followed by greatly increased travel. If
+the second class has not been as successful here as in Europe this is
+solely due to the fact that the American railroad companies have
+systematically discouraged second-class travel by forcing passengers
+into filthy and over-crowded cars. The statement that increased travel
+would not be so economical to handle in America as in Europe scarcely
+needs a reply. If, as Prof. Hadley says, the American public demand more
+frequent trains than the people of Europe, and if these frequent trains
+are not at present profitable to our railroad companies, it would seem
+to be plainly to their interest to hold out every inducement to the
+public to increase travel and thus fill their trains.
+
+Mr. Hadley does not aid his argument when, referring to the Hungarian
+zone system, he says: "The importance of the zone system in Austria and
+in Hungary lies in the fact that its adoption was accompanied by a great
+reduction in rates. The unit rate for slow, third-class trains, which
+had previously been nearly a cent and a half a mile, was reduced to less
+than one cent.... The use of railroads under the new system, though
+vastly greater than it was before, is vastly less than that of a
+well-managed American road at American rates." Mr. Hadley inadvertently
+presents here one of the very best reasons why our passenger rates
+should be reduced.
+
+The fact is, railroad men are opposed, and always have been opposed, to
+reduction of rates, and to all progressive movements that require
+increased expenditures or threaten to temporarily reduce their revenues.
+When the introduction of the zone system was first advocated in Hungary
+it was opposed by just such men and just such arguments.
+
+No one can contradict the following facts, viz.: That the average cost
+of European roads is much greater than that of American roads; that the
+number of railroad employes per mile is much greater there than here;
+that much larger sums are expended for repairing and improving the
+roads, and that therefore the lives of passengers are much safer in
+Europe than in America; and that the average speed and corresponding
+accommodations of European trains, and especially those of England,
+Germany, France and Austria-Hungary, compare quite favorably with the
+average speed and corresponding accommodations of our roads. It is,
+under these circumstances, absurd to claim that the higher prices
+charged by American roads are due to the greater cost of service.
+
+Mr. Hadley's labors as a railroad author have, it seems, greatly
+increased his corporation bias. In an address which he delivered before
+the American Bankers' Association at New Orleans in November, 1891, upon
+the subject of "Recent Railroad Legislation and its Effects upon the
+Finances of the Country," he made a number of assertions which ill
+comport with the fairness of a public statistician or the wisdom of a
+Yale professor. After a few introductory remarks, Prof. Hadley made the
+following statement:
+
+"Every one knows that railroad property has fallen in value since the
+passage of the Interstate Commerce Act four years and a half ago; few
+have made any accurate estimate of the amount of that fall. Let us take
+the stock of the leading railroad systems centering in Chicago as a
+type. Here we find an aggregate shrinkage of over $60,000,000, or more
+than one-quarter of the par value of the stocks.
+
+                           Par Value.       Price.         Shrinkage.
+                                        Apr. 4,  Nov. 4,
+                                         1887.    1891.
+  C., M. & St. P.          $30,904,261      93       75    $5,560,000
+      "    "    Preferred   21,555,900     122      119       647,000
+  C. & N. W.                31,365,900     121      116     1,568,000
+      "    "    Preferred   22,325,454     148      139     2,009,000
+  C., R. I. & P.            41,960,000     126       82    18,462,000
+  C., B. & Q.               77,540,500     140       98    32,567,000
+                           -----------                     ----------
+              Total.      $225,651,000                    $60,815,000"
+
+The table shows that fifty-one million of these sixty million dollars
+are the shrinkage of the Chicago, Rock Island and Pacific and the
+Chicago, Burlington and Quincy stocks. It is surprising that Prof.
+Hadley should be ignorant of the real causes of this depreciation, which
+are known to nearly every Granger in the West. In 1887 the Chicago, Rock
+Island and Pacific Railroad Company owned 1,121 miles of road, only 172
+of which were outside of the States of Illinois and Iowa. In 1891 the
+same company owned 2,725 miles of road, with 1,776 miles outside of
+Illinois and Iowa and scattered through Missouri, Kansas, Nebraska,
+Colorado, Indian Territory and Oklahoma. In Kansas alone the Rock Island
+system grew from two miles in 1887 to 1,059 miles in 1891. In other
+words, to a little over a thousand miles of _good_ road the company's
+managers added nearly 2,000 miles of poor road and a proportionate
+amount of new stock, and the depreciation in the company's stock which
+followed was no greater than one should have expected under such
+circumstances. The managers of the Rock Island and the promoters of
+these new lines found the transactions to their advantage, while the
+original stockholders of the company had to bear the imposition, as
+hundreds of thousands of railroad stockholders had done before them. But
+neither the law of Congress nor that of any State was to blame for this
+depreciation of the Rock Island stock.
+
+Since 1891, railroad stocks have advanced on an average at least twenty
+per cent., and during the last sixty days have declined about
+twenty-five per cent., although there has been no essential change in
+interstate or State legislation. It is certainly as fair to call the
+advance the ultimate result of restrictive railroad legislation as to
+attribute to that legislation the shrinkage above referred to. Extensive
+speculations similar to those just mentioned were, during the same
+period, indulged in by the managers of the C., B. & Q. Railroad Company
+and its protege, the C., B. & N., who, in addition to this, greatly
+injured their road in 1888 by the unjust provocation of the engineers'
+strike. So destructive were this strike and its consequences to the
+company's business that it is difficult to account for the motives of
+those who provoked and stubbornly prolonged it except upon the theory
+that it played an important role in their stock manipulations.
+
+But the recent legislation of a considerable number of States has, in
+Prof. Hadley's opinion, been still more detrimental to railroad
+interests than that of Congress. He says;
+
+      "In the second place, the legislatures of several States,
+      stimulated by the example of Congress, hastened to pass in
+      imitation, of the Interstate Commerce Act, laws which, in
+      many instances, went far beyond their model in point of
+      stringency. Examples are furnished by the statutes of Iowa,
+      Maryland, Minnesota and South Carolina in 1887-88; of
+      Florida in 1888-89, and of no less than thirteen States in
+      1889-90, viz.: Georgia, Iowa, Kentucky, Massachusetts,
+      Mississippi, New Hampshire, New Jersey, North Dakota, Ohio,
+      Rhode Island, South Dakota, Virginia, Wyoming; as well as by
+      the recently adopted Constitution of Kentucky. The
+      legislation of 1890-91 shows a slight reaction against the
+      movement of the three years previous.
+
+      "In two respects the State legislatures went quite beyond
+      the scope of the Interstate Commerce Act. They tried to
+      prescribe safety appliances to the operating department, and
+      rates to the traffic department. Of the first of these
+      groups little need be said, except that as a rule they have
+      failed to accomplish any great progress toward the result in
+      view, and have in some instances actually hindered such
+      progress. The attempt at prescribing rates was more serious.
+      It involved a return to the methods of the Granger
+      legislation, fifteen years earlier, which had operated so
+      disastrously upon the railroads and the public alike. The
+      system of commissioners with powers to make schedules which
+      should be at least _prima facie_ evidence of reasonable
+      rates had, during the intervening period, never been wholly
+      abandoned; but the powers thus conferred had been sparingly
+      exercised. It was either left unused, as was generally the
+      case in the North from 1877 to 1887, or the schedule rates
+      were put so high as not to interfere with good railroad
+      economy, of which examples are seen in Georgia and other
+      parts of the South. But from the year 1887 onward there was
+      a pressure upon the Commissioners to make schedules, and to
+      make them low; and lest these boards should not be able to
+      reflect the popular feeling directly enough, they were, in
+      some instances, no longer to be appointed by the Governor,
+      but elected by popular vote. The law which was most severely
+      applied and attracted most public attention was that of
+      Iowa.... The agitation against the railroads has many points
+      in common with the land agitation in Ireland. Absentee
+      ownership is at the bottom of the trouble in either case.
+      Property is owned in one place and used in another, and the
+      users, not satisfied with the conditions of use, insist on
+      taking the business direction into their own hands. They
+      claim the right to fix rates in Iowa for the same general
+      reasons by which they claim the right to fix rents in
+      Ireland."
+
+It must be presumed that Mr. Hadley is ignorant of the fact that under
+the Iowa Commissioners' tariff the gross earnings of the Iowa railroads
+increased $7,000,000, or more than 17 per cent., in about three years,
+and their net revenue increased in proportion. Never have the railroads
+or the people of Iowa enjoyed a healthier prosperity than they do at
+present. It is true that the State of Iowa denies to the railroad
+companies the right to charge what they please; but this claim does not
+prevent them from doing justice to the absentee owner of railroad
+property. That absentee owners of property are disposed to take undue
+advantage of those who use it is illustrated in the very case which Mr.
+Hadley cites. So flagrant was the injustice done by the English landlord
+to the Irish tenant that the English Parliament was constrained to
+interfere and correct it.
+
+Mr. Hadley says further:
+
+      "It is seen in Iowa to-day, where, as a result of radical
+      legislation with regard to rates, railroad construction has
+      almost entirely ceased, the average for the years 1888-90
+      being less than fifty miles."
+
+Now Professor Hadley hails from the State of Connecticut, where
+railroads are permitted to make their own tariffs and where legislators
+are supposed not to be hostile to them. According to Poor's Manual, that
+State had 1,004.02 miles of railroad in 1888, and just 2.52 miles more
+in 1891, while Iowa had 8,364 miles in 1888, 8,436 in 1891, and 8,505
+miles on January 1, 1893. Will Mr. Hadley please explain why railroad
+construction has ceased in Connecticut? Iowa has one mile of railroad
+for every 227 inhabitants, and Connecticut has one for every 741
+inhabitants, although the per capita valuation is $473 in the latter,
+and only $273 in the former State. Nor have other Eastern States done
+much better than Connecticut. During the three years 1888-1891 there
+were built 74 miles of railroad in New Hampshire, 50 in Vermont, 23 in
+Massachusetts and 9 in Rhode Island. Iowa has an area of 56,000 square
+miles and a population of 1,911,896, an assessed valuation of
+$520,000,000; New England has an area of 66,400 square miles, a
+population of 4,700,745, and an assessed valuation of $3,500,000,000.
+Yet Iowa has 1,576 miles of railroad more than all the New England
+States together. She has a railroad net as close as that of the Empire
+State, having one mile of road to about 6-1/2 miles of territory,
+although the population of that State is three times as dense as hers.
+Nevertheless, railroad construction is at present active in Iowa,
+several lines of road are in the process of construction at the present
+writing, and there is every indication of still greater activity in the
+near future. The _Railway Age_ of March 17, 1893, in a detailed list of
+new lines projected or under construction in the United States, gives
+for Connecticut only 32 miles, while it gives for Iowa 930 miles.
+
+Mr. Hadley continues:
+
+      "It is seen to some extent in the Northwest as a whole. At
+      the close of the year 1887 the States included by Henry V.
+      Poor in the Central, Northern and Northwestern groups had
+      25,040 miles of road, while those of the South Atlantic,
+      Gulf and Mississippi Valley had but 24,567. To-day this
+      relation is reversed: the Northwest has but 27,294 miles,
+      while the South has 30,696."
+
+Had Mr. Hadley taken the pains to look up the population of these groups
+he would have found that the "South" is fully three times as populous as
+the "Northwest," and that therefore his figures prove nothing beyond the
+fact that at the present rate of gain the railroad facilities of the
+South will in a quarter of a century be equal to those of the Northwest
+to-day.
+
+But the argument is weak in another respect. The State in the Southern
+group that made by far the greatest gain in railroad mileage during the
+period mentioned by Mr. Hadley is Georgia, which gained about 1,000
+miles in three years, yet that State prescribed rates for railroad
+companies six years before Iowa did, and has for many years exerted a
+more thorough control over her railroads than perhaps any other State in
+the Union. The smallest increase is in West Virginia, which during the
+period given gained an average of only 69 miles per annum; and yet in
+West Virginia railroads charge their own rates and usually have their
+own way.
+
+Finally Prof. Hadley says:
+
+      "Where are we to find the limit to such unwise action? The
+      United States Supreme Court can do something and has shown a
+      disposition to do something. In the Minnesota cases it
+      repudiated the doctrine of uncontrolled rights on the part
+      of the legislature to make rates, as emphatically as it
+      repudiated the doctrine of uncontrolled rights on the part
+      of agents of the corporation in the Granger cases, twelve
+      years before."
+
+It is evident that Mr. Hadley is as much mistaken in his interpretation
+of the decision of the court as he has been in his other assertions, as
+will be seen from the following extract from Judge Blatchford's opinion
+in Budd vs. New York, in which he says, "The main question involved is
+whether this court will adhere to its decision in Munn vs. Illinois."
+
+The court first quoted from the opinion of Judge Andrew of the Court of
+Appeals of New York, as follows: "The opinion further said that the
+criticism to which the case of Munn vs. Illinois had been subjected
+proceeded mainly upon a limited and strict construction and definition
+of the police power; that there was little reason, under our system of
+government, for placing a close and narrow interpretation on the police
+power, or restricting its scope so as to hamper the legislative power in
+dealing with the varying necessities of society and the new
+circumstances as they arise calling for legislative intervention in the
+public interest; and that no serious invasion of constitutional
+guarantees by the legislature could withstand for a long time the
+searching influence of public opinion, which was sure to come sooner or
+later to the side of law, order and justice, however it might have been
+swayed for a time by passion or prejudice or whatever aberrations might
+have marked its course."
+
+Judge Blatchford then said: "We regard these views, which we have
+referred to as announced by the Court of Appeals of New York, so far as
+they support the validity of the statute in question, as sound and
+just.... We must regard the principle maintained in Munn vs. Illinois as
+firmly established."
+
+General Horace Porter has made a contribution to the railway rate
+literature by an article which appeared in the December, 1891, number
+of the _North American Review_. Unfortunately many of the General's
+statements are either false or misleading. Thus, in a table which he
+presents for the purpose of comparing the passenger rates of Europe with
+those of the United States, he gives the regular first-class schedule
+rates for the United Kingdom, France and Germany and the average
+earnings per passenger per mile for this country. That this is an unfair
+comparison needs no further argument, especially when it is remembered
+that in Europe from 85 to 90 per cent, of all passengers are carried in
+the third class at a regular rate averaging about 1-1/2 cents per mile,
+and that considerable reductions are made for excursion, commutation and
+return tickets.
+
+But General Porter says concerning American rates:
+
+      "When we take into consideration the excursion and the
+      commutation rates, we find first-class passengers carried as
+      low as half a cent a mile."
+
+Now the question arises whether American railway companies carry
+passengers at such rates with or without loss to themselves. If they are
+carried at a loss, an injustice is done to the regular passengers, whose
+fare must not only make up the loss, but yield a larger profit than
+would otherwise be necessary. If, on the other hand, a rate of half a
+cent a mile can be made remunerative, there is certainly no justice in
+maintaining rates five and six times as large on well-patronized lines.
+General Porter places stress upon our superior accommodations in the way
+of lighting, ventilation, ice-water, lavatories, and free carriage of
+baggage, etc., and then adds:
+
+      "In this connection we must also recollect that the cost of
+      fuel, wages and all construction materials is considerably
+      higher here than in Europe, while the population from which
+      the railways derive their support is much more sparse; the
+      United States having 166,000 miles of railway with a
+      population of 63,000,000, while Europe has only 135,000
+      miles with a population of 335,000,000."
+
+We grant the point which the General makes on ventilation, ice-water,
+etc.; but, to make the comparison a fair one, he should also have
+referred to the much greater cost of European roads, to their much
+greater number of employes per mile, to the much shorter haul, to the
+higher price of their fuel, to the superiority of their roadbed and the
+greater security of their passengers. Moreover, whether the railroads of
+a country are profitable or not cannot be ascertained by merely
+comparing miles of road with square miles of territory and number of
+inhabitants. British India has a population of 275,000,000 and only
+about 16,000 miles of railroad, and yet her roads are scarcely as
+profitable as our own. China has 3,000,000 and Asia has about 4,000,000
+people to every mile of railroad, but so far their railroads have proved
+no bonanza. The question is not how many people there are to each mile
+of railroad, but rather to what extent the railroad is used by the
+people. The amount of freight carried annually by the railways of the
+United States is about 680,000,000 tons, or 85,000,000,000 ton miles,
+and the number of passengers carried is about 535,000,000, representing
+an aggregate of travel of nearly 13,000,000,000 miles. This shows an
+average of 1,300 tons of freight carried one mile, and 200 miles
+traveled annually for each inhabitant of the nation, and a greater use
+of railway facilities than that of any other country in the world. The
+income of the railroads per capita is $17 in the United States, $11 in
+the United Kingdom, $5 in Germany, $4 in France, and still less in
+Italy, Austria and Russia. The average freight haul is 63 miles in
+Europe and 120 miles in the United States; the average passenger haul 15
+miles in Europe and 24 miles in the United States. It has already been
+shown that the average earnings per train mile are also larger here than
+there. Roell's Encyclopedia of Railroads for 1892 shows that in France
+the average rate for all traffic for the year 1888 was for passengers
+1.45 cents per mile, and for freight 1.14 cents per ton per kilometer,
+and that the nation had also received by way of free or reduced rates on
+Government business during that year benefits to the amount of
+$59,000,000. Large reductions have been made during the past year in
+passenger rates.
+
+The General indulges in making the stereotyped railroad charge that "the
+legislatures of several of the States have enacted laws to effect a
+reduction of rates, the literal obedience to some of which would amount
+to the practical confiscation of railway property."
+
+The General or any of his friends cannot name a road that was ever
+confiscated by legislation, or even seriously injured. It is a fact that
+the very legislation of which railroad managers so bitterly complain has
+had a beneficial influence on railroad earnings. Thus, in Iowa, where,
+according to the testimony of railroad men, Grangerism has reigned
+supreme during the past few years, railroad earnings increased between
+1889 and 1892 from $37,000,000 to $44,000,000, or more than 18 per cent.
+Still better results could have been secured if the railroad managers
+had been in sympathy with the law. There is no doubt that they would
+gladly suffer, or rather have their companies suffer, a loss of revenue,
+if this would lead to a repeal of the laws and restore to them the power
+to manipulate rates for their own purposes.
+
+But the General comes to the main point of his article when he
+complains against "the unreasonable requirements and restrictions of the
+Interstate Commerce Law." He says:
+
+      "Principal among these are what is known as the 'long and
+      short haul clause,' which prohibits railway companies from
+      receiving any greater compensation in the aggregate for a
+      shorter than for a longer haul over the same line in the
+      same direction, the shorter being included within the longer
+      distance; and the anti-pooling clause, which prevents
+      railway companies from entering into any agreement with each
+      other for an apportionment of joint earnings."
+
+If we carefully examine the railroad literature of the last four years,
+we find that it has concentrated its efforts toward the creation of
+public sentiment in favor of the repeal of these two clauses of the
+Interstate Commerce Law. Railroad men are well aware of the fact that,
+with these two clauses stricken out, the Interstate Commerce Law would
+be practically valueless, and in clamoring for their repeal they evince
+a persistency worthy of a better cause. The practices which these
+clauses aim to prohibit cannot be defended upon any consideration of
+justice and equity, and it is folly to expect the American people to
+sacrifice their convictions of right to the selfish interest of a
+comparatively small number of persons interested in the manipulation of
+railroad stocks.
+
+The July, 1891, number of the _Forum_ contains an article on the
+operation of the Interstate Commerce Law from the pen of Aldace F.
+Walker, formerly a member of the Interstate Commerce Commission, and now
+commissioner of the Western Traffic Association. Mr. Walker evidently
+belongs to the old school of railroad men, who have not yet accepted the
+Granger decision. Referring to it, he says:
+
+      "This decision was not unanimous, and the reasoning
+      presented was not so convincing as to command universal
+      acceptance. It was at once challenged by the corporations,
+      and has been from time to time attacked in the same
+      tribunal; it has not yet been withdrawn, but it has been
+      materially modified, notably in a case from Minnesota,
+      decided in 1890, when it was established that there is a
+      limit beyond which the State cannot go in reducing railway
+      rates, which limit would be passed in case a State should
+      attempt to deprive a corporation of its property, without
+      due process of law, by fixing rates too low to permit of a
+      fair remuneration for its use. A large debatable ground yet
+      remains open, with a possibility that the position of the
+      railway in Federal jurisprudence may eventually be radically
+      modified."
+
+The passage quoted clearly indicates that railroad men expect better
+things of the court in the future, but Mr. Walker is much mistaken in
+supposing the court materially modified the Granger decision, as will be
+seen by referring to the case of Budd vs. the State of New York, decided
+in February, 1892, by the same court.
+
+Mr. Walker, unlike Mr. Depew, candidly admits the former universality of
+the evil of discrimination. He says:
+
+      "In order to secure traffic, a railway official felt called
+      upon to underbid his rival. He gave the shipper a private
+      rate, a rebate, a free pass--anything in the shape of a
+      concession or a favor. The land was honeycombed with special
+      arrangements of innumerable forms, all secret, because
+      otherwise they would have been useless, and all forced upon
+      the carriers by the exigencies of unbridled competition.
+      Many shippers became wealthy from such gains. Others were
+      envious of like success. At last the public sense of justice
+      demanded a reform."
+
+And Mr. Walker's candor rises to a still higher pitch when he admits
+that the ingenuity of railroad managers has found ways to evade the
+Interstate Commerce Law. The following passage from the Commissioner's
+article will, no doubt, be a great surprise to such law-abiding and
+confiding managers as Mr. Depew:
+
+      "There was nothing in the law specifically forbidding the
+      payment of 'commissions,' and it was found that the routing
+      of business might be secured by a slight expenditure of that
+      nature to a shipper's friend. Other kindred devices were
+      suggested, some new, some old; the payment of rent, clerk
+      hire, dock charges, elevator fees, drayage, the allowance of
+      exaggerated claims, free transportation within some single
+      State--a hundred ingenious forms of evading the plain
+      requirements of the law were said to be in use. The
+      demoralization was not by any means confined to the minor
+      roads. Shippers were ready to give information to other
+      lines concerning concessions which were offered them, and to
+      state the sum required to control their patronage. A freight
+      agent, thus appealed to, at first perhaps might let the
+      business go, but when the matter became more serious and he
+      saw one large shipper after another seeking a less desirable
+      route, he was very apt to throw up his hands and fall in
+      with the procession."
+
+Mr. Walker is very severe on the Interstate Commerce Act, which, he
+says, might in its present form "well be entitled, 'An act to promote
+railway bankruptcies and consolidations by driving weak roads out of
+competitive business.'" To remedy the evil which, in his opinion, the
+act causes, he favors the granting of differentials by the stronger to
+the weaker roads. Such a device is simply a species of pool under a less
+offensive name. Its manifest object is to maintain rates through a
+conspiracy of rival railroads. Mr. Walker admits this when he says:
+
+      "It operates in practice to affect a distribution of the
+      traffic somewhat roughly, giving rise to frequent
+      dissensions and bickerings over the 'differentials' which
+      are allowed; but after all it has enabled the trunk lines
+      usually to secure a better maintenance of tariff rates and a
+      better observance of the provisions of the law against
+      private rebates and discriminations than has been
+      attainable in other sections of the country where different
+      conditions make such an arrangement impracticable. It
+      vividly illustrates, however, the necessity of some plan by
+      which common business may be divided."
+
+This problem, which apparently causes so much perplexity to railroad
+managers, would soon be solved if railroad abuses were done away with.
+So long as these abuses exist and rates are maintained by artificial
+means there will be bickering and strife for business which legitimately
+belongs to others. Mr. Walker then bewails the proscription of the pool,
+saying:
+
+      "It may be stated without fear of contradiction that if the
+      carriers had been left free to make arrangements among
+      themselves upon which each line might rely for eventually
+      receiving in some form a fair share of competitive traffic,
+      the temptation for secret rate-cutting would have been in
+      great measure removed and the country would have been spared
+      most of the traffic disturbances and illegitimate
+      contrivances for buying business which have since been
+      periodically rife."
+
+This argument amounts to this, that, rather than place a law upon our
+statute books which reckless railroad managers might be strongly tempted
+to violate, they should be permitted to combine and control the highways
+and levy _ad libitum_ upon the commerce of the country. It is a most
+preposterous proposition.
+
+The article especially condemns the long and short haul clause of the
+law. That this clause is injurious to the commerce of the country is,
+however, not obvious from his reasoning. Mr. Walker makes the statement
+that this clause of the law "has removed from many jobbing centers
+important advantages which they previously had, and has enabled interior
+communities, formerly of little apparent consequence, to deal directly
+with distant markets." If he means by this that this feature of the law
+has equalized shipping throughout the country, he is doubtless right. If
+he wishes us to infer, however, that it prevents the railroad companies
+from doing substantial justice to all, he presumes altogether too much
+upon the credulity of his readers.
+
+Another article from the same author appeared under the title
+"Unregulated Competition Self-destructive," in the December, 1891,
+number of the same periodical. He commences his article with an inquiry
+into the pedigree and merit of the time-honored proverb, "Competition is
+the life of trade," and arrives at the conclusion that the phrase is
+fatherless and insignificant. He says:
+
+      "'Competition is the life of trade;' 'Competition is the
+      death of trade;' one phrase is as true as the other. For all
+      that appears, it was a toss-up which of the two should
+      become current as the expression of the general thought."
+
+It is its general recognition that gives a truth a proverb's currency.
+Mr. Walker sneers at a disagreeable proverb because, like the majority
+of his colleagues, he holds the masses in contempt. He gives his
+estimate of popular intelligence in the following words:
+
+      "Unfortunately most men do not think worthily, or do not
+      think at all; they are ruled by phrases, and they catch the
+      crude ideas of others as they fly."
+
+Mr. Walker's whole argument is one in favor of the legalization of the
+pool, though he carefully avoids the word which grates so harshly on the
+American ear. He makes the broad statement, without offering the least
+proof in support of it, that measures have been everywhere adopted "to
+subdue and ameliorate the evil results of inordinate and excessive
+competitive strife," and then he asks:
+
+      "Has not the time come for a reversal of the legislative
+      attitude? Would it not be well for Congress, State
+      legislatures and the judiciary to cease their futile
+      attempts to maintain unqualified freedom of competition, and
+      substitute therefore a recognition of the right of every
+      industry to combine under proper supervision, and to make
+      agreements for the maintenance of just and reasonable
+      prices, the prevention of the enormous wastage consequent
+      upon warlike conditions, and the preservation of existing
+      institutions through the years to come?"
+
+Mr. Walker then proceeds to make the bold prediction that revolution and
+anarchy will follow if the demands of the railroad corporations are not
+complied with, saying:
+
+      "Unless this course is adopted a social convulsion may
+      fairly be apprehended, forced by the universal and necessary
+      repudiation of existing laws and rules of decision, and by
+      the general formation of combinations without their pale."
+
+This is a strange threat indeed, and unworthy of a man who has held as
+great a public trust as Mr. Walker has. The article also contains the
+statement that combinations do not extinguish competition. "They
+regulate it," says Mr. Walker, "with more or less efficiency, and they
+often go so far as to suspend its operation in respect to one or more
+important features of the strife; for example, the price paid or the
+time consumed. But as long as the employer or the purchaser has a
+choice, so long there is competition." Here is a sample of Mr. Walker's
+irony, for the choice which the shipper has under the pool is simply
+Hobson's choice.
+
+Mr. Walker has also an article in the August, 1892, number of the
+_Forum_, the substance of which is to show that organizations among
+railroad companies, like the Western Traffic Association, are necessary
+for the purpose of restraining competition among them. He holds that
+such competition as exists in almost all other lines of business "is
+radically vicious to all interests, however pleasant and desirable it
+may seem to self-styled anti-monopolists," and that "it is a calamity
+not only to the owners of the roads, but to the public also."
+
+According to his statement, the Traffic Association is simply a little
+innocent and inoffensive organization whose duty it is only to maintain
+rates, and he sees nothing wrong in allowing a few representatives of
+corporations to meet in secret and discuss, scheme and levy such a tax
+upon the commerce of this country as may suit their convenience; and he
+regrets that their attempts are "hampered by legislation which forbids
+the formation of pools." In other words, he proposes to have the case in
+court decided by a jury made up entirely of the parties at interest in
+the case. This piece of effrontery is about on a par with the average
+argument of this class of pleaders.
+
+Suppose we apply the same rule to other classes. Take the farmers, for
+instance. Let them have an organization for the purpose of maintaining
+rates, with their representatives meeting in secret and fixing the price
+of their produce and asking the Government to enforce their orders,
+pools and edicts, so as to afford them relief from selling corn at ten
+cents per bushel, beef and pork at a dollar and a half per hundred, and
+hay at two dollars per ton, and their other produce at proportionate
+rates. Who would condemn such an organization more severely than the
+advocates of the Traffic Association? They never find terms sufficiently
+expressive with which to condemn the Farmers' Alliance and other kindred
+associations, which are organized solely for the purpose of lawfully
+correcting existing abuses and of forming a wholesome public sentiment.
+
+It is evident that some progress is being made upon this question, as
+Mr. Walker admits that "the fortunes which have been made are seen to
+have been the result of dealings in stocks and in titles, the
+consequences of which, if involving wrong, are rightly charged against
+the lax legislation which has made such operations possible." "Every
+person seeking for the services of a common carrier is entitled to know
+that he is charged no more than his neighbor who obtains the same
+service under the same conditions." "The theory that any unjust
+discrimination or unjust preference or advantage in respect to
+individuals, communities or descriptions of traffic must be suppressed
+by the State, has become firmly lodged in legislation." This improvement
+in the sentiment of railroad men is gratifying.
+
+This gentleman, as has already been stated, was for several years a
+member of the Interstate Commerce Commission, a board created by
+Congress for the special purpose of enforcing the law which he so
+unreservedly condemns. No doubt Mr. Walker performed the duties of his
+office as he understood them; but if he held then the views which he
+holds now, his work must have been a hindrance rather than a help to the
+commission.
+
+Among financial journals, so many of which are devoted to the support of
+vicious and demoralizing methods, and are ever ready to defend whatever
+is bad in corporation management, it is refreshing to find occasionally
+one that exposes abuses and favors the earning of legitimate dividends,
+and it is a pleasure to quote the following from the June number, 1892,
+of the _Banker's Magazine_:
+
+      "There are two widely differing theories concerning the
+      management of railroads in this country; one theory is that
+      profits should be acquired from fluctuations in the stock,
+      and the other is that the profits should be acquired in the
+      old-fashioned way, by performing a useful service and
+      receiving a reward therefor, to be divided among the
+      stockholders in the way of a dividend. These two theories
+      are so different in their practical operation that they give
+      rise to the most diverse consequences. Of course, many
+      railroads are not dividend-earning, and with these the
+      profits to the managers and those who are allied with them
+      must come from stock fluctuations and from whatever sucking
+      arrangements can be devised whereby their vitality or
+      sustenance can be acquired by the favored few who are in
+      control. Unfortunately, there are many railroads in this
+      condition, the history of which is too well known to require
+      description. Once in control, the way is easy to retain it
+      and to make money by a thousand devices which ingenious and
+      unscrupulous managers are constantly planning and putting
+      into operation.
+
+      "The consequences of the other theory are as different, both
+      to the corporate property and to the public, as can be
+      imagined. When a railroad is properly managed and earning
+      dividends, a policy of development is adopted, having for
+      its end the natural expansion of the property in harmony
+      with the growth of the country, the needs of business and
+      the desires of the people. The fruits of such a policy may
+      not be apparent at once, but they inevitably come, and, when
+      they are reaped, are enjoyed and appreciated by all. Only by
+      such a policy can our roads ever become great, commanding
+      the confidence of the people, and fulfilling their highest
+      uses; in short, only by such a policy can a railroad be
+      brought to a high degree of perfection.
+
+      "The difference is clearly seen by contrasting a road of
+      this character with one that is run by the Wall Street
+      method for stock-jobbing purposes. By this method dividends
+      are not regarded as of so much consequence to investors as
+      an instrument or argument for affecting the value of the
+      stock. In other words, if a dividend is earned and paid at
+      all, it is chiefly as an instrument or agency for
+      stock-jobbing purposes, and not because the road is managed
+      primarily for this purpose. Furthermore, dividends, too
+      often, are disregarded altogether, as well as any policy of
+      permanent improvement or of general development. The
+      cardinal idea always is, how can the road be maintained and
+      manipulated so as to cause the largest variations in the
+      stock and the most money for the managers?
+
+      "Too many managers, as is well known, have made great sums
+      for themselves and built additions long in advance of their
+      means, and have seriously crippled their corporations by so
+      doing. But they have made fortunes for themselves. What the
+      great majority of mankind consider is the immediate present,
+      and not the future.
+
+      "It is undoubtedly a hard thing for those who are conducting
+      their corporations in an honest and able manner, for the
+      benefit of their owners, to keep still while their enemies
+      are pounding them and glorifying those who are managing
+      their corporations for personal and corrupt ends; but all
+      cheap and false practices must finally lead to disaster. We
+      hear a great deal of this kind of thing nowadays. One of the
+      evil effects of speculation and newspaper reading is, that
+      people have got in the way of not thinking much for
+      themselves; of regarding as truth whatever is printed, and
+      of not opening their eyes wide enough to discover the
+      shallowness of the reasonings and falsehoods that are put
+      forth at the behests of speculators, or of those who are
+      managing corporations for speculative purposes. The American
+      people have had an amazing experience in losses from
+      following advice thus plentifully and freely given;
+      nevertheless, there seem to be persons left who are willing
+      to listen and fall into the old ways and be trapped, as so
+      many others have been in the past. There is a considerable
+      class, having means and nothing to do, who perhaps might
+      just as well lose their money in poker, railroad or grain
+      speculation as in any other way, for this furnishes about
+      the only source of amusement to them; but, after all, there
+      is no reason why railroads should be managed so exclusively
+      for the amusement of this class. The time is coming, and
+      probably is not far off, when they will get enough of it;
+      and railroad investors will conclude that dividends for
+      themselves are better than profits for speculators; and when
+      they do, all stock-jobbing managers will be consigned to the
+      limbo which is their proper destination."
+
+This magazine is edited by Mr. Albert S. Bolles, author of several
+excellent financial works. We are much indebted to him for the sound
+banking system which we now have, and which has contributed so largely
+to the unexampled prosperity which this country has enjoyed for the last
+thirty years.
+
+Our national banking system illustrates well how service able the
+corporation may be to a people when its use is restricted by wholesome
+laws to the performance of its proper functions.
+
+The old United States Bank was organized for practically the same
+purposes as our present national banks, but for lack of proper
+restrictions its use was soon perverted to ignoble purposes. The bank
+managers showed so much partiality in the distribution of their favors
+and accommodations, and meddled in politics to such an extent, that the
+people became disgusted with it, and a renewal of its charter was
+refused.
+
+Mr. Clay clearly saw how dangerous a great money power might become to
+our country, and, in opposing the extension of the bank's charter, said:
+
+      "The power to charter companies is one of the most exalted
+      attributes of sovereignty. In the exercise of this gigantic
+      power we have seen an East India Company created, which is
+      in itself a sovereignty, which has subverted empires and set
+      up new dynasties, and has not only made war, but war against
+      its legitimate sovereign! Under the influence of this power
+      we have seen rise a South Sea Company, and a Mississippi
+      Company, that distracted and convulsed all Europe, and
+      menaced a total overthrow of all credit and confidence, and
+      universal bankruptcy."
+
+Can we afford to ignore the lessons of history?
+
+Mr. Henry Clews makes some spicy and pertinent observations on railroad
+men's methods in an article which recently appeared in the _Railway
+Age_. Mr. Clews seems to have but little confidence in the average
+railroad director. He advises stockholders to exercise constant
+vigilance and defensive conservatism, "lest they become the instruments
+by which unscrupulous and crafty directors work out schemes that are in
+reality nothing but frauds or robbery." And then he adds:
+
+      "In estimating corporate acts we must never forget that,
+      while the best of men will bear watching as to their
+      individual dealings with others, they need to be doubly
+      watched when they sit around a corporation board and vote as
+      to transactions in respect of which none of them can be
+      called to personal account. Temptations attack with enormous
+      force when the gains are prospectively great and the risk of
+      penalty inappreciable or non-existent."
+
+Mr. Clews also tells us how roads are wrecked by their boards of
+directors. "In one case," he says, "the stock of a leading railway,
+which in 1880 sold at 174, in 1884 sold at 22-1/2, and in 1885 at 22.
+This vast shrinkage of value was not owing to panic or to stringency of
+money, nor did it arise from a diminution of traffic on the original
+line; but it was because consolidation had been pushed to an extreme by
+the directors of the corporation, so much so that the entire system
+yielded no dividends; a fleet and useful animal had been loaded down
+with dead wood and rubbish till he could scarcely crawl; barren acres
+had been added to an originally fruitful farm until the whole estate
+could hardly pay taxes; a mass of rotten apples had been thrown into the
+measure with sound fruit, and buyers refused the whole as a mere heap
+of corruption. And it was generally believed that the men who
+perpetrated this mischief under the names of 'construction,' 'requisite
+consolidation,' 'absorption of necessary branches,' etc., had made a
+great deal of money by it and had not made it honestly. But it was all
+done pursuant to legal forms and by boards of directors, so that the
+defrauded stockholders were without remedy."
+
+Mr. Clews then gives us a more detailed account of the way in which
+branch roads are built and absorbed, viz.:
+
+      "Given a useful, well constructed, dividend-paying road, a
+      body of people with some capital and political influence,
+      aided by some of the directors of this prosperous line;
+      construct a branch road to some outside point; the more
+      important such point the better, but that is of small
+      consequence. The road gets itself built; it is bonded for
+      more than it cost, and it cost twice as much as it ought,
+      since the constructors were all together in the ring and
+      have favored each other. Then the capital stock is fixed at
+      so much, and this is mostly distributed among the
+      constructors. The road then, swelled to a fictitious price
+      of three or four to one, and not worth anything to start
+      with, is ripe for absorption and consolidation. Its
+      directors and those of the main line meet, confer and vote
+      the measure through. They all profit by it, more or less,
+      but their profits are enormously in excess of the trifling
+      losses due to the shrinkage of values of the shares of the
+      main line. A director of the main line may perhaps lose
+      $20,000 on a thousand shares, but what is this when compared
+      to a gain of hundreds of thousands in his holdings of the
+      branch road, whose liabilities are assumed by his victimized
+      corporation? And such a director would not be equal to the
+      demands of his covetousness if he had not sold thousands of
+      shares short, in anticipation of the fall which the
+      transactions of himself and his associates were inevitably
+      bound to produce."
+
+Mr. Clews concludes his article with the following passage:
+
+      "The profits realized on the speculative constructions are
+      enormous and have constituted the chief source of the
+      phenomenal fortunes piled up by our railroad millionaires
+      within the last twenty years. It is no exaggeration to
+      characterize these transactions as direct frauds upon the
+      public. They may not be such in a sense recognized by the
+      law, for legislation has strangely neglected to provide
+      against their perpetration; but morally they are nothing
+      less, for they are essentially deceptive and unjust, and
+      involve an oppressive taxation of the public at large for
+      the benefit of a few individuals who have given no
+      equivalent for what they get. The result of this system is
+      that, on the average, the railroads of the country are
+      capitalized at probably fully 50 per cent. in excess of
+      their actual cost. The managers of the roads claim the right
+      to earn dividends upon this fictitious capital, and it is
+      their constant effort to accomplish that object. So far as
+      they succeed they exercise an utterly unjust taxation upon
+      the public by exacting a compensation in excess of a fair
+      return upon the capital actually invested. This unjust
+      exaction amounts to a direct charge and burden on the trade
+      of the country which limits the ability of the American
+      producer and merchant to compete with those of foreign
+      nations and checks the development of our vast natural
+      resources. In a country of 'magnificent distances' like ours
+      the cost of transportation is one of the foremost factors
+      affecting the capacity for progress; and the artificial
+      enhancement of freight and passenger rates due to this false
+      capitalization has been a far more serious bar to our
+      material development than public opinion has yet realized.
+      The hundreds of millions of wealth so suddenly accumulated
+      by our railroad monarchs is the measure of this iniquitous
+      taxation, this perverted distribution of wealth. This
+      creation of a powerful aristocracy of wealth, which
+      originated in a diseased system of finance, must ultimately
+      become a source of very serious social and political
+      disorder. The descendants of the mushroom millionaires of
+      the present generation will consolidate into a broad and
+      almost omnipotent money power, whose sympathies and
+      influence will conflict with our political institutions at
+      every point of contact. They will exercise a vast control
+      over the larger organizations and movements of capital;
+      monopolies will seek protection under their wing, and by the
+      ascendancy which wealth always confers they will steadily
+      broaden their grasp upon the legislation, the banking and
+      commerce of the nation."
+
+These are strong words, but they come from a man whose thirty years'
+experience in Wall Street enables him to speak intelligently upon this
+subject and who certainly cannot be accused of being prejudiced against
+railroad men or corporate investments. In a recent number of his _Weekly
+Financial Review_ Mr. Clews said of the railroad stock market:
+
+      "Judgment passes for little in estimating the future of many
+      securities, for the market is almost wholly under the
+      control of comparatively few persons, whose operations must
+      inevitably influence the value of thousands of millions of
+      stocks and bonds. Never in the history of Wall Street was
+      the value of such an enormous aggregation of securities so
+      absolutely under the control of so small a circle as at this
+      time. Such a state of affairs cannot be considered
+      satisfactory; hence not only is speculation likely to be
+      unhealthily stimulated, but the future of these combinations
+      gives birth to a variety of uncertainties which, while they
+      may elevate prices, will certainly not add to their
+      stability."
+
+If the silly claim of railroad men, that Western people do not invest in
+railroad securities on account of their unprofitableness, needed any
+answer, the above words would furnish it.
+
+The May, 1893, number of the _North American Review_ contains an article
+entitled "A Railway Party in Politics," by Mr. H. P. Robinson, editor of
+the _Railway Age_. Mr. Robinson belongs to that class of reformers who
+can see but one side of a question, and only a short-sighted view of
+that. He is as zealous as a new convert, and is expert, in the ward
+politician's way, in defense of the worst abuses practiced by railway
+men. He says:
+
+      "That the right to 'regulate' the railways, which is vested
+      in the State, has now been carried in the West to a point
+      not only beyond the bounds of justice, but beyond its
+      constitutional limits, and that it would soon be impossible
+      for any railway company in the West to keep out of
+      bankruptcy unless some vigorous and concerted action were
+      taken to arouse public opinion, and to compel a modification
+      of the present policy.
+
+      "It is easy to see how much strength such a party, if
+      formed, would possess. According to the reports of the
+      Interstate Commerce Commission there were in the immediate
+      employ of the railways of the United States a year and a
+      half ago 749,301 men, all or nearly all voters, which number
+      has now, it may be assumed, been increased to about 800,000.
+      There are, in addition, about one million and a quarter
+      shareholders in the railway properties of the country; and
+      in other trades and industries immediately dependent upon
+      the railways for their support there are estimated to be
+      engaged, as principals or employes, over one million voters
+      more. These three classes united would give at once a massed
+      voting strength of some three millions of voters. There are
+      also, in the smaller towns especially, and at points where
+      railway shops are located, all over the country, a number of
+      persons, small tradesmen, boarding-house keepers, etc., who
+      are dependent for their livelihood on the patronage of
+      railway employes, and whose vote could unquestionably be
+      cast in harmony with any concerted employes' movement.
+      Moreover, unlike most new parties, this party would be at no
+      loss for the sinews of war or for the means of organization.
+      The men whom it would include form even now almost a
+      disciplined army. With them co-operation is already a habit.
+      While the financial backing and the commercial and physical
+      strength of which the party would find itself possessed from
+      its birth would be practically unlimited....
+
+      "For the present it seems to them better to believe that the
+      people--those people who are not railway men--are acting now
+      only in ignorance, and that as soon as they see the truth
+      they will, by their own instinctive sense of justice,
+      re-mould their opinions and their policy without political
+      coercion.
+
+      "At the same time there has already come into existence in
+      some of the Western States a movement which has its
+      significance and its practical influence. This is what is
+      called the Railway Employes' Club movement. It started in
+      Minnesota, at a small meeting of railway employes held in
+      Minneapolis in 1888. From that meeting the movement grew,
+      and made a certain feeble effort, not entirely unsuccessful,
+      to influence the State election in the fall of that year. By
+      the State election of 1890 the movement had grown and was
+      better organized, and the Employes' Club did exercise
+      considerable influence in the election of certain of the
+      State officers and certain members of the State legislature
+      in that year.
+
+      "From Minnesota the movement spread to Iowa, and there is no
+      contradiction of the fact that the railway employes' vote
+      was one of the strongest forces in the State election of the
+      fall of 1891. It also overflowed into Kansas, Nebraska,
+      Missouri and Texas. Had the election of last November been
+      normal it is probable that the effect of the Railway
+      Employes' Club vote would have been as visible in two or
+      three of those States then as it had been in Iowa in the
+      preceding year. But in the deluge which occurred all trace
+      of the smaller streams and currents was obliterated. Had the
+      members of the clubs not taken the precaution to do
+      considerable work in the local nominating conventions of
+      both parties they would be compelled to confess that their
+      campaign of 1892 was a failure....
+
+      "So far the clubs have admitted and will admit of no
+      negotiations with the State committees of other parties.
+      They hold their own meetings and decide for themselves that
+      such and such a candidate is inimical to their interests as
+      railway employes, and such and such a man is their friend.
+      Then they go to the polls and vote--voting in the main
+      their normal party ticket, scratching only a man here and a
+      man there, their attention being chiefly centered upon
+      members of the boards of railroad commissioners and of the
+      State legislatures.
+
+      "In Minnesota in 1890 their weight was thrown chiefly in
+      favor of Republicans. In Iowa in 1891 it was given to
+      Democrats. In all States the men whom they oppose are those
+      who have made themselves conspicuous as 'Granger' and
+      anti-railway politicians. The keynote of the movement and
+      the one plank in the platform of the clubs is that the
+      extreme anti-railroad legislation of late years has reduced
+      the earnings of the companies to a point at which they are
+      unable any longer to keep full forces on their payrolls or
+      to pay such wages as they should, and that by this
+      legislation the railway employes are necessarily the
+      immediate sufferers....
+
+      "A railway party is therefore already in existence.... And
+      moreover, though accidentally only, it is working forcibly
+      in behalf of railway interests as a whole....
+
+      "Meanwhile Mr. A. F. Walker, the chairman of the Joint
+      Committee of the Trunk Line and Central Traffic
+      Associations, prophesies that if things go on as they are
+      going now, before long 'the managers of the railways will be
+      chiefly receivers.' In the year 1891 receivers were
+      appointed for twenty-six companies in the United States,
+      representing $84,479,000 of capital, and twenty-one
+      companies, with 3,223 miles of road, with a capitalization
+      of $186,000,000, were sold under foreclosure.
+
+      "It is doubtful whether the result which Mr. Walker
+      foretells would be regarded as a calamity by the 'uninformed
+      public opinion of the West.' That Minnesota railroad
+      commissioner was quite sure of the public applause before he
+      made his classic declaration that he proposed to 'shake the
+      railroads over hell' before he had done with them, and the
+      Governor of Iowa, who announced that he did not care if
+      'every d--d railroad in the State went into bankruptcy'
+      before the expiration of his term of office, knew that the
+      sentiment would have the sympathies of his constituents.
+      This attitude of the Western mind is, of course, largely
+      explained by the fact that the people of the West do not as
+      a rule own railway securities. In two States (the only two
+      in the West in which, so far as I am aware, the figures have
+      been compiled) out of 27,645 stockholders in the lines
+      within the State borders only 359 are residents of the
+      States. If the other 27,286 were also residents of these
+      States (that is to say, if 27,286 of the present residents
+      were also stockholders in the railways), it is probable that
+      the ferocity of the public opinion in these States against
+      railways would be materially modified."
+
+It is evident that Mr. Robinson has not been as successful in organizing
+small tradesmen, boarding-house keepers, employes and shareholders into
+a new party as he contemplated, notwithstanding "it was at no loss for
+the sinews of war."
+
+He attempts to show that this movement originated with the employes, but
+it is too well known that the employes who organized the movement were
+under pay of the railroad companies and received their instructions from
+the railroad managers. The statement which Mr. Robinson attributes to
+the Governor of Iowa undoubtedly originated in the mind of one who is
+laboring to modify the ferocity of "the uninformed public opinion of the
+West." No Governor of Iowa ever made any such statement, nor ever
+entertained any such sentiment. It is a sheer fabrication.
+
+There are a number of standard text-books of law which are indispensable
+to the student of railroad questions desiring to go back to first
+principles. Only a few of them can be mentioned here.
+
+I. F. Redfield, in his "Law of Railways," says concerning the necessity
+for railroad supervision:
+
+      "Railways being a species of highway, and in practice
+      monopolizing the entire traffic, both of travel and
+      transportation, in the country, it is just and necessary and
+      indispensable to the public security that a strict
+      legislative control over the subject should be constantly
+      exercised."
+
+Regarding the original character of the railway as a common highway,
+Redfield says:
+
+      "The Railways Clauses Consolidation Act provides, in detail,
+      for the use of railways by all persons who may choose to put
+      carriages thereon, upon the payment of the tolls demandable,
+      subject to the provisions of the statute and the regulations
+      of the company. The view originally taken of railways in
+      England evidently was to treat them as a common highway,
+      open to all who might choose to put carriages thereon. But
+      in practice it is found necessary for the safety of the
+      traffic that it should be exclusively under the control of
+      the company, and hence no use is, in fact, made of the
+      railway by others."
+
+As to the questionable financial expedients so frequently resorted to in
+building American railways, this author says:
+
+      "This is not the place, nor are we disposed, to read a
+      homily upon the wisdom of legislative grants, or the
+      moralities of moneyed speculations in stocks on the exchange
+      or elsewhere. But it would seem that legislation upon this
+      subject should be conducted with sufficient deliberation and
+      firmness so as not to invest such incorporations with such
+      unlimited powers as to operate as a net to catch the unwary,
+      or as a gulf in which to bury out of sight the most
+      disastrous results to private fortunes, which has justly
+      rendered American investments, taken as a whole, a reproach
+      wherever the name has traveled."
+
+The opinion is expressed in this work that under certain circumstances
+railroad securities should be aided by State credit, and is supported by
+the following argument:
+
+      "Here we have no national funded stock in convenient sums
+      for small investment, and which, being sure, is really a
+      great blessing to the mass of those who wish to invest
+      moderate sums as a protection against age or calamity. In
+      those countries where such opportunities exist, it removes
+      all temptation to invest small sums in these enterprises,
+      which, however necessary for the public, such small owners
+      can but poorly afford to aid in carrying forward, and which
+      consequently should in justice either be guaranteed or owned
+      by the State, or at all events aided by State credit, when
+      they become indispensable for the public convenience."
+
+Upon the subject of eminent domain Redfield says:
+
+      "That railways are but improved highways, and are of such
+      public use as to justify the exercise of the right of
+      eminent domain, by the sovereign, in their construction, is
+      now almost universally conceded."
+
+Kent says in his "Commentaries on American Law":
+
+      "The right of eminent domain, or inherent sovereign power,
+      gives to the legislature the control of private property for
+      public uses, _and for public uses only_.... So, lands
+      adjoining New York canals were made liable to be assumed for
+      the public use, so far as was necessary for the great object
+      of the canals.... In these and other instances which might
+      be enumerated, the interest of the public is deemed
+      paramount to that of any private individual; and yet, even
+      here, the constitutions of the United States and of most of
+      the States of the Union have imposed a great and valuable
+      check upon the exercise of legislative power, by declaring
+      that private property should not be taken for public use
+      without just compensation.... It undoubtedly must rest, as a
+      general rule, in the wisdom of the legislature to determine
+      when public uses require the assumption of private property;
+      but if they should take it for a purpose not of a public
+      nature, as if the legislature should take the property of A
+      and give it to B, or if they should vacate a grant of
+      property, or of a franchise, under the pretext of some
+      public use or service, such cases would be gross abuses of
+      their discretion, and fraudulent attacks on private right,
+      and the law would clearly be unconstitutional and void."
+
+Concerning the construction of corporate powers Kent lays down the
+following rule:
+
+      "The modern doctrine is to consider corporations as having
+      such powers as are specifically granted by the act of
+      incorporation, or as are necessary for the purpose of
+      carrying into effect the powers expressly granted, and as
+      having no other. The Supreme Court of the United States
+      declared this obvious doctrine, and it has been repeated in
+      the decisions of the State courts. No rule of law comes with
+      a more reasonable application, considering how lavishly
+      charter privileges have been granted. As corporations are
+      the mere creatures of law, established for special purposes,
+      and derive all their powers from the acts creating them, it
+      is perfectly just and proper that they should be obliged
+      strictly to show their authority for the business they
+      assume, and be confined in their operations to the mode and
+      manner and subject matter prescribed."
+
+As to the duties of common carriers he says:
+
+      "As they hold themselves to the world as common carriers for
+      a reasonable compensation, they assume to do and are bound
+      to do what is required of them in the course of their
+      employment, if they have the requisite convenience to carry
+      and are offered a reasonable and customary price; and if
+      they refuse without just ground, they are liable to an
+      action."
+
+Judge Cooley, in his very able work, "Constitutional Limitations,"
+refers to the so-called vested rights of corporations and the abuse
+growing out of them as follows:
+
+      "It is under the protection of the decision in the Dartmouth
+      College case that the most enormous and threatening powers
+      in our country have been created, some of the great and
+      wealthy corporations actually having greater influence in
+      the country at large, and upon the legislation of the
+      country, than the States to which they owe their corporate
+      existence. Every privilege granted or right conferred--no
+      matter by what means or on what pretense--being made
+      inviolable by the Constitution, the Government is
+      frequently found stripped of its authority in very important
+      particulars, by unwise, careless or corrupt legislation; and
+      a clause of the Federal Constitution whose purpose was to
+      preclude the repudiation of debts and just contracts
+      protects and perpetuates the evil."
+
+The late President Garfield, in one of his legislative speeches, called
+attention to the fact that Chief Justice Marshall pronounced the
+decision in the Dartmouth College case ten years before the steam
+railway was born, and then said:
+
+      "I have ventured to criticise the judicial application of
+      the Dartmouth College case, and I venture the further
+      opinion that some features of that decision, as applied to
+      the railway and similar corporations, must give way under
+      the new elements which time has added to the problem."
+
+Charles Fisk Beach, Jr., in his recent work entitled "Commentaries on
+the Law of Private Corporations," well defines what constitutes
+dedication to a public use. He says:
+
+      "Whenever any person pursues a public calling and sustains
+      such relations to the public that the people must of
+      necessity deal with him, and are under a moral duress to
+      submit to his terms if he is unrestrained by law, then, in
+      order to prevent extortion and an abuse of his position, the
+      price he may charge for his services may be regulated by
+      law. When private property is affected with a public
+      interest it ceases to be _juris privati_ only. This was said
+      by Lord Chief Justice Hale more than three hundred years ago
+      in his treatise _De Portibus Maris_, and has been accepted
+      without objection as an essential element in the law of
+      property ever since."
+
+Treating of the fiduciary position of directors and officers of
+corporations, the same author says:
+
+      "The directors, officers and agents of a corporation are
+      held to the general rule of law resting 'upon our great
+      moral obligation to refrain from placing ourselves in
+      relations which ordinarily excite a conflict between
+      self-interest and integrity.' The directors and officers
+      are the agents of the company, and while acting in that
+      capacity for it cannot deal with themselves to the detriment
+      of the corporation. All contracts of that character are
+      voidable at the option of the corporation."
+
+And further he says:
+
+      "A director whose personal interests are adverse to those of
+      the corporation has no right to act as a director. As soon
+      as he finds he has personal interests which are in conflict
+      with those of the company he ought to resign."
+
+T. Carl Spelling, in his treatise on "The Law of Private Corporations,"
+says of pooling arrangements:
+
+      "Courts long ago exercised jurisdiction to regulate rates of
+      _quasi_ public corporations, and on the same principle will
+      refuse to enforce pooling contracts between railroad and gas
+      companies. Such contracts are void as against public
+      policy.... There is substantial harmony between the English
+      and American definitions of monopoly, the two countries
+      agreeing that contracts entered into by and between two or
+      more corporations, the necessary result of whose performance
+      will crush and destroy competition, are illegal."
+
+Upon the subject of eminent domain Mr. Spelling remarks:
+
+      "That the legislature may thus select any agency it sees fit
+      for the exercise of eminent domain, and also that it may
+      determine what purposes shall be deemed public, are
+      propositions too deeply rooted in the jurisprudence of this
+      country to admit now of doubt or discussion. Making an
+      application of this doctrine to railway operations,
+      conceding it to be settled that these facilities for travel
+      and commerce are a public necessity, if the legislature,
+      reflecting the public sentiment, decide that the general
+      benefit is better promoted by their construction through
+      individuals or corporations than by the State itself, it
+      would clearly be pressing a constitutional maxim to an
+      absurd extreme if it were to be held that the public
+      necessity should be only provided for in the way which is
+      least consistent with the public interest.... The power of
+      eminent domain being an inherent element of sovereignty, it
+      cannot be divested out of the State or abridged by contract
+      or treaty so as to bind future legislatures. Nor can the
+      right be divested by private contract."
+
+Concerning State control of corporations the same author says:
+
+      "The subordination of all private interests to the purposes
+      of government, subject only to the condition that the object
+      to be accomplished shall be one in which the public has an
+      interest, is no longer an open question. In its general
+      bearing this principle is too well settled and uniformly
+      recognized--underlying the adjudications by courts of all
+      cases involving constitutional provisions--to require more
+      than a mere statement."
+
+And again he says:
+
+      "Nor is it longer necessary to seek a justification of the
+      common practice of regulating the rates of charges and
+      general management of railroads on the ground that they have
+      received valuable franchises of a public nature and had
+      important powers of sovereign character conferred upon them.
+      That may be an important political consideration, and as
+      such may strengthen the argument in favor of the right; but
+      the right itself rests upon firmer ground, and upon other
+      considerations than that of pecuniary consideration derived
+      from the State. The State may regulate their business, not
+      because they are corporations, nor yet because they are
+      corporations of a particular kind, but because they, like
+      the individuals of which they are composed, are subject to
+      the laws which say that when one devotes his property to a
+      use in which the public has an interest, he in effect grants
+      to the public an interest in that use, and must submit to be
+      controlled by the public for the common good to the extent
+      of the interest he has thus created."
+
+
+
+
+CHAPTER XI.
+
+RAILROADS AND RAILROAD LEGISLATION IN IOWA.
+
+
+The first survey for a railroad in the State of Iowa was made in the
+fall of 1852. The proposed road had its initial point at Davenport and
+followed a westerly course. It was practically an extension of the
+Chicago and Rock Island Railroad, which was then being built between
+Chicago and the Mississippi River. On the 22d day of December, 1852, the
+Mississippi and Missouri Railroad Company was formed, its object being
+to build, maintain and operate a railroad from Davenport to Council
+Bluffs. The articles of association were acknowledged before John F.
+Dillon, notary public, and filed for record in the office of the
+Recorder of Scott County, on the 26th of January, 1853, and in the
+office of the Secretary of State on the first day of February following.
+In 1853 the Mississippi and Missouri Railroad Company entered into an
+agreement with the Railroad Bridge Company of Illinois for the
+construction and maintenance of a bridge over the Mississippi at Rock
+Island. The work was commenced in the fall of that year, and the bridge
+was completed on April 21, 1856, it being then the only bridge spanning
+the Mississippi River. The first division of the Mississippi and
+Missouri Railroad, extending from Davenport to Iowa City, was completed
+on the first of January, 1856, and was formally opened two days later. A
+branch line to Muscatine was completed shortly thereafter. On the first
+day of July the State of Iowa had in all sixty-seven miles of railroad,
+bonded at $14,925 a mile, which at that time probably represented the
+total cost of construction. The earnings of these sixty-seven miles of
+road during the six months following July 1, 1856, amounted to $184,193,
+or $2,749 per mile, which was equal to an annual income of about $5,500
+per mile.
+
+On the 15th of May, 1856, Congress granted to the State of Iowa certain
+lands for the purpose of "aiding in the construction of railroads from
+Burlington, on the Mississippi River, to a point on the Missouri River
+near the mouth of the Platte River; from the city of Davenport, Iowa, by
+way of Iowa City and Fort Des Moines, to Council Bluffs; from Lyons City
+northwesterly to a point of intersection with the main line of the Iowa
+Central Air Line Railroad near Maquoketa, thence on said line running as
+near as practical to the forty-second parallel across the State; and
+from the city of Dubuque to the Missouri River near Sioux City." The
+grant comprised the alternate sections designated by odd numbers and
+lying within six miles from each of the proposed roads. Provision was
+also made for indemnity for all lands covered by the grant which were
+already sold or otherwise disposed of.
+
+The wisdom of the land-grant policy has been questioned. When these
+grants were made it was believed by many that railroads would not and
+could not be built in the West without such aid. While others did not
+share this opinion, they at least supposed that land grants would
+greatly stimulate railroad enterprise and lead to the early construction
+of the lines thus favored.
+
+The land grant of the Mississippi and Missouri Railroad was a mere
+donation for that part of the line which was already completed at the
+time the grant was made; and the extension of this line, as well as the
+construction of the other lines to which the grant applied, was not
+made as fast as had been anticipated. The price of all Government lands
+lying outside of the land-grant belts was $1.25 per acre. To reimburse
+the public treasury for the loss resulting from these grants, the price
+of lands situated within the land-grant belts was advanced to $2.50 per
+acre, practically compelling the purchasers of the even-numbered
+sections of land, instead of the Government, to make the donation to the
+railroads, it being supposed that the benefits resulting to those
+regions from the immediate construction of railroads would
+correspondingly enhance the value of the alternate sections of land
+reserved by the Government. Designing men soon saw the advantages which
+the situation offered. They combined with their friends to organize
+companies for the construction of the land-grant roads, built a small
+portion of the proposed line, to hold the grant, and then awaited
+further developments, or rather the settlement of the country beyond.
+There are those who believe that the doubling of the price of Government
+land within the belt of the proposed land-grant roads greatly retarded
+immigration and with it the construction of roads. They hold that, had
+no grant whatever been made to any railroad company and had equal
+competition in railroad construction been permitted, the Iowa through
+lines, instead of following, would have led, the tide of immigration.
+
+It has been seen that in 1856 the Mississippi and Missouri Railroad was
+completed as far as Iowa City. On the second day of June of that year
+its Board of Directors asked the Governor of the State to convene the
+General Assembly in extra session, to consider the disposition which
+should be made of the recent Congressional grant. This urgency might
+lead one to suppose that the company was anxious to extend its line at
+the earliest opportunity. The General Assembly was convened, and the
+land given to the State by Congress for the purpose of aiding in the
+construction of a railroad from Davenport to Council Bluffs was given to
+the Mississippi and Missouri Railroad Company. The act was approved by
+the Governor on July 14, 1856, and three days later the company
+"assented to and accepted the grant." It then executed mortgage after
+mortgage, and built a branch line through quite a populous territory,
+from Muscatine to Washington, but the main line made very slow progress.
+In 1865 the bonded debt of the company amounted to $6,851,754, although
+the line was completed only to Kellogg, in Jasper County, about forty
+miles east of Des Moines. In spite of the fact that the cost of
+operating the road had from the beginning varied but little from 60 per
+cent. of its gross receipts, its president, in a circular letter to the
+stock-and bondholders, dated October 20th, 1865, made the statement that
+the company was "driven to the necessity of selling the road or
+reorganizing." In 1866 suit was brought in the Circuit Court of the
+United States for the District of Iowa for the foreclosure of the
+company's mortgages, and a decree of foreclosure was entered on the 11th
+day of May of that year. The property was sold on the 9th day of July
+following at Davenport, and was purchased by the Chicago, Rock Island
+and Pacific Railroad Company, which was incorporated in this State a few
+weeks previous to the sale, for the purpose of acquiring the railroads
+built by the Mississippi and Missouri Railroad Company with all its
+appurtenant property, "and all the rights, privileges and franchises
+granted by the act of Congress of May 15th, 1856, to the State of Iowa,
+and by the State of Iowa granted to the said Mississippi and Missouri
+Railroad Company, and when so acquired to maintain and operate the said
+railroad." It is a significant fact that all the corporators of the new
+company, except one, were directors of the bankrupt company. On the 20th
+of August, 1866, the Chicago, Rock Island and Pacific Company of the
+State of Iowa consolidated with the Chicago, Rock Island and Pacific
+Railroad Company of Illinois, and conveyed all its property, powers and
+franchises to the consolidated company. The validity of the
+consolidation was questioned by a large number of stock-and bondholders,
+and the courts were appealed to to issue injunctions restraining the
+consolidated company from extending its line or expending any money
+obtained through the sale of its securities. In this predicament the
+company turned to the Iowa legislature for protection. Anxious to secure
+the early completion of the road, the Twelfth General Assembly, by an
+act approved February 11th, 1868, recognized the consolidated company,
+and resumed and granted to it "all right or interest" which the State
+had in the lands previously granted to the Mississippi and Missouri
+Railroad Company. The act expressly provided, however, that the Chicago,
+Rock Island and Pacific Railway Company should "at all times be subject
+to such rules, regulations and rates of tariff for transportation of
+freight and passengers as may from time to time be enacted and provided
+for by the General Assembly of the State of Iowa," and that if the
+company should neglect to comply with any of the requirements of the
+act, it should forfeit to the State all its franchises and corporate
+rights acquired by or under the laws of the State, and all lands granted
+to aid in the construction of its road. The line was completed to
+Council Bluffs in June, 1869.
+
+The lands in aid of the construction of a railroad running across the
+State, as nearly as practicable along the forty-second parallel, were
+granted by the General Assembly to the Iowa Central Air Line on the 14th
+of July, 1856, but as this company failed to fulfill the conditions of
+its grant, it was, on the 17th of March, 1860, transferred to the Cedar
+Rapids and Missouri River Railroad Company. This company completed the
+road to Marshalltown in 1862, to Nevada in 1864, to Boone in 1865, and
+to Council Bluffs in the fall of 1867.
+
+The Burlington and Missouri River road reached the Missouri River but a
+few months later. Ten years after this company had received its grant,
+its line had only been completed as far as Albia, in Monroe County. In
+1867 the road was built little more than half across the State. But it
+managed not to be far behind its two rivals on the north in reaching the
+Missouri River.
+
+At first sight it might seem as if these companies had all at once
+become awake to their obligations. When it is remembered, however, that
+in 1869 the junction of the Union Pacific and Central Pacific railroads
+was effected, and thus a continuous line across the continent formed,
+the conclusion lies near that the haste with which the three Iowa
+land-grant roads were completed was simply the result of a strife for
+the large amount of through business which the completion of the Pacific
+route promised to bring to them.
+
+No such inducement existed for the Dubuque and Sioux City Company, and
+twelve years after receiving its grant it had not yet built half of its
+line. In his message to the Twelfth General Assembly, delivered January
+14, 1868, Governor Stone said: "Under the provisions of the act adopted
+by the General Assembly, at its extra session (in July, 1856), this (the
+Dubuque and Sioux City) company became the beneficiary of the grant
+designed to secure the construction of a railroad leading from Dubuque
+to Sioux City, and this valuable donation was accepted from the State,
+with all the terms and conditions imposed. A large portion of this grant
+has already been absorbed by the company, in various ways, by pretended
+sales and incumbrances. This road has been constructed to Iowa Falls, a
+distance of 143 miles from Dubuque, but I am unable to discover any
+reliable evidence of earnest intention on the part of this company to
+construct the line to its terminal point on the Missouri River."
+
+The Governor further recommended that the General Assembly pass an act
+resuming the control over these lands. At about the same time an
+agreement was effected between the Iowa Falls and Sioux City Railroad
+Company (which was organized in the fall of 1867) and the Dubuque and
+Sioux City Railroad Company, by which the latter transferred to the
+former its land grant for the unfinished portion of the Dubuque and
+Sioux City road. This agreement was confirmed by the General Assembly,
+through an act approved April 7, 1868. The road was completed to Fort
+Dodge in August, 1869, and to Sioux City a year or two later. The entire
+line was then leased to the Illinois Central.
+
+The land grant to this line of road embraced over 1,000,000 acres of the
+finest lands of the State. We can appreciate the magnitude of this
+donation when we consider that, had these lands been sold at only $8 per
+acre, the proceeds would have paid the whole expense of building and
+equipping the road from Dubuque to Sioux City. The lands granted to the
+C., R. I. & P. R. R. were sold at an average price of over $8 per acre,
+and those of the B. & M. at over $12 per acre.
+
+Among the other important land grants is that made to the McGregor
+Western Railroad Company. This company was the successor of the
+McGregor, St. Peters and Missouri River Railroad Company, which was
+organized in 1857 for the purpose of constructing a railroad from
+McGregor to the Missouri River. The construction of the road was
+commenced in 1857 at McGregor. Large local subscriptions were taken
+along the proposed line, the writer being one of the subscribers. Work
+was continued the next year until much of the heavy grading had been
+done, when the road was allowed to go through the process of
+foreclosure, like many other roads built in the West at that time. The
+old stock was completely wiped out, and new owners came into possession
+of the property, reorganizing under the name of the McGregor Western
+Railway Company. Nearly all the early investments of Iowa people were
+thus confiscated by the same class of men who now cry out loudly against
+confiscatory measures. By an act of Congress approved May 12, 1864, the
+State of Iowa was granted, for the use and benefit of the McGregor
+Western Railroad Company, every alternate section of land designated by
+odd numbers for ten sections in width on each side of the proposed road.
+The act contained the condition that in the event of the failure of said
+McGregor Western Railroad Company to build twenty miles of said road
+during each and every year from the date of its acceptance of the grant
+the State might resume the grant and so dispose of it as to secure the
+completion of the road in question. The McGregor Western Railroad
+Company failing to comply with the conditions of the grant, the General
+Assembly on the 27th day of February, 1868, resumed the lands and on the
+31st day of March of the same year regranted them to the McGregor and
+Sioux City Railway Company. The act specially provided that the company
+accepting the grant "shall at all times be subject to such rules,
+regulations and rates of tariff for the transportation of freight and
+passengers as may from time to time be enacted and provided for by the
+General Assembly of the State of Iowa, and further subject to the
+conditions, limitations, restrictions and provisions contained in this
+act and in the acts of Congress granting said lands to the State of
+Iowa." It also contained the condition that at least twenty miles of
+road should be built by the company every year and that the whole road
+should be completed to the intersection of the then proposed railway
+from Sioux City to the Minnesota State line by the first day of
+December, 1875.
+
+The McGregor and Sioux City Railway Company also failing to comply with
+the terms of the grant, the lands were again resumed by the General
+Assembly on March 15th, 1876, and regranted to the McGregor and Missouri
+River Railroad Company upon the condition that it complete the road to
+the intersection of the Sioux City and St. Paul Railroad on or before
+the first day of December, 1877.
+
+But the State found itself again disappointed, and two years later the
+General Assembly for the third and last time resumed its grant and then
+conferred it upon the Chicago, Milwaukee and St. Paul Railway Company
+upon the express conditions that it complete the road to Spencer on or
+before the first day of January, 1879, and to Sheldon within a year
+thereafter, and that the road should at all times be subject to State
+control. The road was completed to Sheldon without delay, and on the
+30th of November, 1878, the Governor of the State certified to the
+Secretary of the Interior that the Chicago, Milwaukee and St. Paul
+Railway Company had completed its road from Algona to Sheldon in
+compliance with the conditions of the original grant and the laws of the
+State.
+
+It thus took over twenty years to complete this road. Ten years after
+its construction had commenced it had only reached Calmar in Winneshiek
+County. In 1869 the road was completed to Clear Lake and in 1870 to
+Algona. This point remained its terminus until it passed into the hands
+of the Chicago, Milwaukee and St. Paul Railway Company.
+
+The State of Iowa has not derived that benefit from the large land
+grants made to its railroads which her people had a right to expect. In
+spite of these grants roads were built only when there was reason to
+believe that they would be immediately profitable to their owners. The
+land grants enriched the promoters of these enterprises much more than
+they did the State in whose interest the grants were presumed to be
+made. As a rule they enabled scheming men to hold the selected territory
+until a railroad through it promised to be a safe and profitable
+investment, and to avoid the payment of taxes on their millions of acres
+of land, which in the meantime became very valuable. Other roads were
+built at an early day without Government aid. They were pushed forward
+by the current of immigration until the threatened competition of roads
+favored by these grants checked their progress. The Chicago, Iowa and
+Nebraska road may be cited as a fair illustration. It was projected on
+the 26th of January, 1856, in the town of Clinton, to be built from
+Clinton to the Missouri River via Cedar Rapids. It was opened to De Witt
+in 1858 and completed to Cedar Rapids the following year. The road was
+82-1/2 miles long and was built entirely with private means, receiving
+neither legislative aid nor local subsidy. It is more than probable
+that this road would at an early day have been completed to the Missouri
+River, had it not feared the rivalry of the subsidized Cedar Rapids and
+Missouri road.
+
+The total number of acres of land granted by Congress to aid the
+construction of Iowa roads is 4,069,942. A fair idea of the value of
+these lands may be obtained from the fact that the Chicago, Rock Island
+and Pacific Railroad Company sold over half a million acres of its lands
+at an average of $8.68 per acre, and the Chicago Burlington and Quincy
+sold nearly 350,000 acres at an average of $12.17 per acre.
+
+But land grants form only a small part of the public and private
+donations which have been made to Iowa roads. Including the railroad
+taxes voted by counties, townships and municipalities, the grants of
+rights of way and depot sites and public and private gifts in money,
+these roads have received subsidies amounting to more than $50,000,000,
+or enough to build 40 per cent. of all the roads of the State. There is
+no doubt that the contributions of the public toward the construction of
+the railroads of Iowa is several times as large as the actual
+contributions of their stockholders for that purpose.
+
+The people of Iowa were from the first very favorably disposed towards
+railroads. Every inducement was held out to railroad builders to come
+here and help to multiply the tracks for the iron horse. They came and
+brought with them many abuses which since the first introduction of
+railroads had gradually been developed in other States.
+
+The contrast between the old and the new mode of transportation was so
+great, and the public appreciated so highly the superior conveniences
+afforded by the latter, that for years the abuses practiced by the early
+railroads were scarcely noticed, or, if they did attract the attention
+of the public, they appeared more like necessary features of the new
+system of transportation than like abuses. The evil gradually increased,
+but for years no attempt was made to check its growth. The railroad
+managers construed this failure of the people to interfere with, or even
+protest against, their unjust practices as a quasi-sanction of their
+course, and soon claimed to do by right what they had formerly done by
+sufferance. The evils increased until the patience of the people finally
+became exhausted.
+
+While the State thus for years dealt very leniently with the railroad
+companies, the laws of Iowa had from the beginning of railroad building
+emphasized the principle of State control. This principle was asserted
+in the very first railroad act ever passed in the State. Section 14 of
+chapter I. of the acts of the extra session of the Fifth General
+Assembly, regranting to the various railroad companies the lands granted
+to the State by Congress for railroad purposes, provides that "railroad
+companies accepting the provisions of this act shall at all times be
+subject to such rules and regulations as may from time to time be
+enacted and provided for by the General Assembly of Iowa...." In 1866 an
+attempt was made in the General Assembly to regulate rates, but the
+Attorney-General, to whom the question of constitutionality was
+submitted, held in his opinion that it was not in the power of the
+legislature to prescribe rates for railroad companies. This opinion
+provoked much indignation among the people of the State, and led to the
+expression of a sound public opinion by legislative acts which could not
+be misunderstood.
+
+When the Twelfth General Assembly (in 1868) regranted to the Chicago,
+Rock Island and Pacific Railroad Company the lands originally granted
+to the Mississippi and Missouri Company, it only did so upon the
+condition that "said railroad company, accepting the provisions of this
+act, shall at all times be subject to such rules, regulations and rates
+of tariff for transportation of freight and passengers as may from time
+to time be enacted and provided for by the General Assembly of the State
+of Iowa...." The same restricting clause, known as the Doud Amendment,
+was added to all other land grant acts passed by the Twelfth and
+subsequent General Assemblies, and the various companies willingly and
+gladly accepted it.
+
+The abuses of which the people of Iowa complained were far from being
+confined to their State. They were practiced throughout the Northwest,
+and the demand for reform was as loud in Minnesota, Wisconsin and
+Illinois as it was in Iowa. In 1871 laws were passed in Illinois and
+Minnesota fixing maximum charges for the transportation of freight and
+passengers and prohibiting discriminations. The railroads claimed that a
+State did not have the right to prescribe rates and refused to be bound
+by these laws. Instead of modifying their policy, they became daily more
+arrogant. Discriminations which had before been practiced under the veil
+of secrecy, or which had been defended by railroad managers as
+exceptions to the general rule made necessary by a peculiar combination
+of circumstances wholly beyond their control, were now openly and
+defiantly practiced by several of the larger roads. The Chicago,
+Milwaukee and St. Paul Railroad Company, in its effort to annihilate a
+rival, went so far as to openly announce to the public its intention to
+entirely disregard distance as a factor in rate-making. It gradually
+became the general rule to wage war against rivals at competitive
+points and to "recoup" by charging excessive rates at non-competitive
+points. Every encouragement was thus given by the railroads to the
+Granger movement, which spread in less than two years over the whole
+Northwest.
+
+In the fall of 1873 Iowa elected a Granger legislature, like Minnesota,
+Wisconsin and Illinois. The wildest predictions were made by railroad
+men as to the extremes to which the Granger legislature would go, but it
+confined itself to enacting a law establishing an official
+classification and fixing maximum rates for all railroad companies. The
+law was approved March 23, 1874, and went into effect on the 4th of July
+following. This law in no case compelled companies to carry freight at a
+lower rate than they had voluntarily carried it in the past. Many of the
+rates in force at the time of the passage of the act were considerably
+lower than the corresponding maximum rates fixed by the legislature. The
+average rates fixed by the law were higher than the rates at which the
+railroads had previously carried a large portion of corresponding
+freight. The revenues of the road were not even curtailed by this law;
+on the contrary, by equalizing rates, _i. e._, by leveling up the rates
+given to favored places and favored individuals and leveling down the
+exorbitant rates exacted from the public at non-competitive points, the
+railroad companies were enabled to effect an increase in their total
+revenue.
+
+The Granger law remained in force until 1878. Its constitutionality was
+tested by the railroad companies in the Supreme Court of the United
+States, but this high tribunal held that rate-making was a legislative
+and not a judicial function, that it was within the province of the
+State legislature to prescribe rates for the transportation of
+passengers and freight wholly within the State, and that for protection
+against abuses by legislatures the people must resort to the polls, and
+not to the courts.
+
+The Granger laws have been and are still severely criticised by those
+opposed to the principle of State control and by the ignorant. It is
+nevertheless true that those laws were moderate, just and reasonably
+well adapted to remedy the evils of which the public complained. It has
+been the policy of most railroad men to attack them as crude, intensely
+radical and socialistic. The obloquy heaped upon them was the work of
+designing men who desired to continue their impositions upon the people.
+Mr. Charles Francis Adams, however, admits that the Granger method was
+probably as good a method as could have been devised of approaching men
+who had thoroughly got it into their heads that they, as common
+carriers, were in no way bound to afford equal facilities to all, and,
+indeed, that it was in the last degree absurd and unreasonable to expect
+them to do so.
+
+The Iowa law was imperfect in detail, and yet its enactment proved one
+of the greatest legislative achievements in the history of the State. It
+demonstrated to the people their ability to correct by earnestness and
+perseverance the most far-reaching public abuses and led to an emphatic
+judicial declaration of the common-law principle that railroads are
+highways and as such are subject to any legislative control which may be
+deemed necessary for the public welfare.
+
+Defeated in the courts, the railroad managers now endeavored to make
+odious the new law which deprived them of the power to manipulate
+railroad interests to their personal advantage. By complying with only
+part of its letter and none of its spirit, they contrived to create
+hardships for certain interests and localities. Instead of charging in
+all cases reasonable rates, as the spirit of the law demanded, they
+would frequently charge the maximum rates permitted under the law, and
+when they by this practice succeeded in damaging certain interests, they
+would point to the Granger law as the source of all existing railroad
+evils. So, likewise, when they were asked by their patrons to reduce a
+high rate, they would plead the legislative schedule in excuse of their
+failure to comply with the request. When the legislature of 1878
+convened, the railroad managers appeared before it and pleaded
+submissively for a repeal of the Granger law and the establishment of a
+commissioner system. They claimed that they were ready and willing to
+submit to all reasonable regulation, but that a maximum tariff law was
+prejudicial both to the best interests of the roads and those of the
+public. They further asserted that the people had grown tired of this
+manner of regulating railroad charges and earnestly desired a change of
+policy; that the interference of the State with the railroad business
+had injuriously affected certain industrial interests and had greatly
+retarded railroad construction by driving capital and promoters of
+railroad enterprises from the State. These statements would indeed have
+argued strongly in favor of a repeal of the law if they had been based
+on facts. There had been, however, no expression of public
+dissatisfaction during the campaign preceding the session of the General
+Assembly. There were doubtless individuals and even communities to whom
+the law had been made so odious that they felt they had but little to
+lose by a change, but the masses of the people believed that the law was
+based upon just principles and desired its perfection rather than its
+repeal. As to the claim that railroad construction had been checked by
+hostile legislation, statistics prove that during the five years
+following the great panic of 1873 Iowa fared no worse in this respect
+than her sister States east, west or south.
+
+The arguments produced by the railroad managers no doubt influenced some
+members of the General Assembly; by far the greater number of them,
+however, realised that the failure of the law to bring the expected
+relief was not due so much to its own imperfections as to the absence of
+a power to enforce it. The writer, with others, was convinced that a
+strong and conscientious commission would be a much more potent agency
+to secure reasonable rates for the shipper than a maximum tariff law
+without proper provisions for its efficient enforcement; they, in short,
+preferred a commission without a tariff law to a tariff law without a
+commission. The question became the subject of many animated debates in
+both houses of the General Assembly, but the commissioner system at last
+prevailed. The act establishing a Board of Railroad Commissioners, and
+defining their duties, was approved on the 23rd of March, 1878, and went
+into force a few days later. The act empowered the commission to
+exercise a general supervision over all railroads operated in the State,
+to inquire into any neglect or violation of the laws of the State by any
+railroad corporation or its officers or employes, to examine the books
+and documents of any corporation, to investigate complaints of shippers
+that unreasonable charges had been made by railroad companies, and to
+modify any charge which they might deem unreasonable. It was also made
+the commissioners' duty to make an annual report to the Governor
+disclosing the working of the railroad system in the State, the officers
+of each company being required to make annual returns to the board for
+this purpose.
+
+Though the enactment of this law was a surprise to the people, they
+accepted it in good cheer, and determined to give it an honest trial.
+The law was extensive in its scope and stringent for that time, and, if
+strictly enforced in letter and in spirit, promised to be, and would
+have been, entirely sufficient for the thorough control of railroad
+corporations.
+
+Nevertheless, in the course of time it became apparent that either the
+law had not lodged sufficient authority in the commission or the
+commission did not make use of the authority which the law had given
+them. In spite of the commission, the railroad companies maintained
+pools and charged extortionate and discriminating rates, in direct
+violation of the law. It is true the commissioners righted many a wrong.
+In investigating the complaints of shippers against railroad companies
+they often rendered valuable services to those who had neither the means
+nor the inclination to prosecute their rights in the courts of law; but
+as they held that they could only pass upon individual charges, and did
+not have the power to revise the companies' tariffs, the companies were
+virtually in a position to become guilty of more extortions in one day
+than the commission could investigate in a year. Moreover, the railroad
+company might be ordered by the commission to return an overcharge to a
+certain shipper, but this did not prevent it from continuing the
+excessive charge. If the overcharged shipper again wanted relief it was
+his privilege to again apply to the commission, and to continue this
+tedious process until either his or the commissioners' patience became
+exhausted. The people soon found that the new system of control was
+almost as inadequate as that which it had displaced. Some attributed the
+weakness of the commission to its personnel, others to the law. There
+is no doubt that the commission might have accomplished more than it
+did.
+
+It was hoped by some that as the commission gained in experience it
+would gain in influence, and that railroad evils would gradually
+diminish. But they were disappointed in their expectations. Every year
+seemed to add to the grievances of the public. Success greatly
+emboldened the railway companies. Discriminations seemed to increase in
+number and gravity. At many points in the western part of the State
+freight rates to Chicago were from 50 to 75 per cent. higher than from
+points in Kansas and Nebraska. A car of wheat hauled only across the
+State paid twice as much freight as another hauled twice the distance
+from its point of origin to Chicago. Minnesota flour was hauled a
+distance of 300 miles for a less rate than Iowa flour was carried 100
+miles. Certain merchants received from the railroad companies a discount
+of 50 per cent. on all their freights and were thus enabled to undersell
+all their competitors. The rate on coal in carload lots from Cleveland,
+Lucas County, to Glenwood was $1.80 per ton, and from the same point to
+Council Bluffs only $1.25, although the latter was about thirty miles
+longer haul. Innumerable cases of this kind could be cited. There was
+not a town or interest in the State that did not feel the influence of
+these unjust practices. Many of the rates complained against, it is
+true, were beyond the direct control of the State commission, but there
+was an impression among well-informed shippers that if the commission
+had the power to fix local rates and exercised it judiciously, the
+railroad companies would soon find it to their interest to be as
+reasonable in making through rates for Iowans as they expected the
+commission, to be in prescribing local tariffs.
+
+The demand of the people for more equitable rates and a more thorough
+control of the railroad business increased from year to year. Repeated
+attempts were made in the General Assembly to secure the passage of an
+act looking to that end, but, owing to shrewd manipulations on the part
+of the railroad lobby, every attempt was defeated. There always was, of
+course, a large number of members who represented districts not well
+supplied with railroad facilities. These, as a rule, honestly opposed
+restrictive legislation, believing that such legislation would check
+building, and that, on the other hand, competition could be relied upon
+to correct abuses. Of those members who had less positive convictions
+many were retained as railroad attorneys and were thus made serviceable
+to the companies. Other members with political ambition were nattered or
+intimidated into subjection, and bribes in disguise, such as passes and
+special rates, were not unfrequently resorted to to strengthen the
+railroad following in both houses of the General Assembly.
+
+Railroad corruption did not pause here. It is a notorious fact that
+large sums of money were paid to venal papers of both parties in
+consideration of an agreement on their part to defend transportation
+abuses and exert their influence against progressive railroad
+legislation. The vilest means were often resorted to by these sheets to
+obtain their end. Public men who had the courage to avow their
+opposition to existing railroad abuses or to favor a more perfect system
+of State control of railways were misrepresented, ridiculed, traduced
+and denounced as demagogues and socialists by hypocritical editors, who
+prostituted their political influence as long as they enjoyed railroad
+stipends, and who at intervals became converts to the cause of the
+people for the purpose of extorting from the railroad companies a new
+and increased subsidy. But truth can not long be suppressed. The masses
+of the people may be imposed upon for a time, but even the shrewdest
+rogue will eventually be compelled to surrender. In time even rather
+unsophisticated voters learned to place a true estimate upon the motives
+of the editors, whose policy, as one of them expressed it in the
+author's presence, was "controlled by the counting-room."
+
+Railroad politicians gradually lost their influence, and the symptoms of
+public discontent greatly increased. In the political campaign of 1887
+State control of railroads became one of the main issues. Both of the
+great political parties in their platforms had declared themselves very
+emphatically in favor of such legislation as would bring railroad
+corporations under complete State control, and with very few exceptions
+the various legislative districts had nominated only such men as
+candidates for legislative offices as were known to be in thorough
+accord with the masses of the people upon the railroad question.
+
+The election resulted in an even more complete defeat of the railroad
+forces than had been generally anticipated. Yet no hasty step was taken
+when the General Assembly convened. A large number of bills
+contemplating railroad reforms in various ways were introduced, but the
+material presented was carefully sifted by the railroad committees and a
+committee bill was framed which incorporated the best features of them
+all. The committees listened patiently for weeks to the arguments of the
+representatives of both the railroads and the shippers.
+
+Never before had so formidable a railroad lobby assembled at the State
+Capitol. The danger signal had been raised, and not only were the great
+political manipulators of the State called into requisition, but experts
+from adjoining States joined them in besieging the legislature. The
+dogs of war were let loose from all quarters. A legion of hirelings were
+zealous to show their servility and loyalty to their lords. The daily
+and weekly papers of the State in the service of railroad companies
+teemed with arguments from the pens of railroad attorneys, and their
+columns were profusely supplemented with editorials copied from
+prominent corporation papers like the New York _Tribune_, New York
+_Times_, New York _World_, Albany _Evening Argus_, Boston _Advertiser_,
+and others from various parts of the country.
+
+These papers, attempting to disguise the motives that prompted them to
+come to the defense of the Wall Street interest, affected the position
+of disinterested and impartial observers. They condemned the proposed
+measures as wild and socialistic, and they painted in dark colors the
+disasters to railroad property, the injustice to its owners, and
+misfortunes to the people of Iowa, that would follow their adoption.
+Especially did they bewail the losses that would fall upon the widows
+and orphans who had confidingly invested all of their hard earnings in
+this property.
+
+They never uttered a word of condemnation, but entirely ignored or
+defended the abuses by which the stockholders were robbed at one end of
+the line and the patrons were imposed on at the other.
+
+Many of these papers were notified that their statements were altogether
+erroneous, but they would not admit a line to their columns in relation
+to the matter that indicated any other disposition than complete
+subserviency to the interests of Wall Street.
+
+There were, however, an unusual number of strong men in this General
+Assembly, and this extraordinary display of railroad forces only tended
+to impress more strongly upon them the necessity of curbing the railroad
+power, and their best energies were concentrated upon the subject, with
+a firm determination to deal with it in a manner dictated by reason and
+experience.
+
+So well did the bill which was finally adopted by the committee reflect
+the general sentiment of the members of the General Assembly that not a
+single vote was cast against it in either house upon its final passage.
+Since the adjustment of business under this law, there has been less
+friction between the people and the railroads than before for thirty
+years, and so satisfactory has it proved to all that no one, not even a
+railroad man, has to this day asked the legislature to repeal the law or
+any part of it. The act contains no new principle of railroad control.
+By far the greater part of its provisions were taken from the old law.
+Nearly every one of its features may be found either in the Interstate
+Commerce Act or upon the statute books of other States. It provides that
+charges must be reasonable and just, that no undue preference or
+advantage shall be given to any railroad patron, and that equal
+facilities for interchange of traffic shall be given to all roads; it
+prohibits pooling, a greater charge for a shorter than longer haul, the
+shorter or any portion of it being included in the longer, and
+discrimination against any shipping point. It requires that schedules of
+rates and fares shall be printed and kept for public inspection, and
+that no advance shall be made in rates or fares once established except
+after ten days' public notice; and it empowers the Board of Railroad
+Commissioners to make and revise schedules for railroads, the rates
+contained in such schedules to be received and held in all suits as
+_prima facie_ reasonable maximum rates. The act further provides
+penalties and means of enforcement.
+
+It must not be supposed that by the passage of this act the legislature
+disclaimed the right to fix absolute rates; it simply chose this
+expedient because in the present tentative stage of rate regulation it
+seemed most efficient.
+
+There has been much misunderstanding concerning the Iowa law. Many
+suppose that the Iowa commissioners have power to make confiscatory
+rates for the railroads, while in fact they can only name maximum rates
+which shall be deemed and taken in all courts of the State as _prima
+facie_ evidence that they are reasonable and just maximum rates until
+the railroads show that they are not. They are at liberty to go into
+court any day and show this, if they are able. They are, however,
+careful not to undertake it, for no one knows better than they do that
+the rates fixed by the commissioners are liberal for the railroads.
+
+There are nine States, besides Iowa, in which the power to fix rates has
+been conferred upon railroad commissioners. This feature of the law was
+therefore far from being a novel one, yet no provision of the act was,
+previous to its passage, so furiously opposed, or subsequent to it so
+stubbornly resisted as this. Railroad managers realized that a surrender
+of the right to make their own rates was virtually a surrender of the
+power to practice abuses.
+
+Soon after the passage of the law the commissioners commenced the work
+of preparing schedules of the rates for the roads. They endeavored to do
+justice to both the railroad companies and their patrons by affording a
+fair compensation to the former and at the same time giving relief to
+the depressed interests represented by the latter. Their rates were not
+as low as the special rates that had at various times been granted to
+favorite shippers, but were a fair average of the various rates in vogue
+at the time. While the schedule was under consideration, the railroad
+managers were given frequent hearings, in which they endeavored to
+impress their views upon the commissioners and to obtain many important
+concessions, which they urged as essential to the welfare of the
+railroad interests. Their views guided the commission to such an extent
+that it was generally supposed that the schedule as finally adopted
+would be accepted by the railroad companies without protest.
+
+The schedule of the Iowa commission has been sharply criticised by Mr.
+Stickney in his "Railway Problem." He finds in it inconsistencies and
+confusion, due, as he charges, to faulty mathematics. But it is claimed
+by the commission, and Mr. Stickney should know, that whenever
+mathematics were ignored in the construction of the schedule it was done
+at the earnest and persistent solicitation of the railroad managers,
+who, it seems, were more interested in maintaining their interstate
+rates than in the consistency of the Iowa schedule.
+
+The rates were published, as required by law, and June 28, 1888, was
+fixed as the day on which they were to take effect. A few days previous
+to this date the companies asked that the taking effect of the new
+tariff be postponed a week. When this request was granted by the
+chairman of the commission, the railroad managers took advantage of the
+courtesy by enjoining the commissioners in the Federal court from
+enforcing it.
+
+Several months later the commissioners modified their schedule by the
+adoption of the Western Classification. Again the railroad managers
+asked the court for an injunction, but this time met with a refusal.
+
+After many suits for penalties had been instituted against them, and
+many more threatened, they adopted the new schedule, but endeavored to
+inaugurate a policy of retaliation by reducing their train service and
+discharging a large number of employes, and in many ingenious ways
+continued their seditious course with a determination characteristic of
+a band of insurrectionists. But the impetus which railroad traffic
+received under the operation of the commissioners' schedule was such
+that they soon found it necessary to restore to the service its former
+efficiency.
+
+The Railroad Commissioners' report shows that while the number of
+employes was 24,642, and their yearly compensation was $14,212,500 in
+1889, in 1892 there were 30,492 employes, and their yearly compensation
+$18,070,915.
+
+The increase in both the gross and net earnings of Iowa lines has been
+remarkable, as shown in the following table gathered from the
+commissioners' reports:
+
+             Gross Earnings,    Net Earnings,
+   Year.         Total.            Total.         Per Mile.
+
+  1888-89     $37,369,276        $11,861,310       $1,421
+  1889-90      41,318,133         12,798,430        1,522
+  1890-91      43,102,399         14,463,106        1,720
+  1891-92      44,540,000         14,945,000        1,777
+
+It was claimed by railroad men that the effect of Iowa legislation would
+be particularly disastrous to her local roads, which had no opportunity
+to make up on through business the losses incurred in the local traffic.
+The Burlington, Cedar Rapids and Northern was particularly cited as a
+line which would have to go into bankruptcy under the new law. Its
+earnings commenced to increase, however, immediately after the adoption
+of the commissioners' schedule, and at the end of the first year they
+were large enough to change this line from a Class "C" to a Class "B"
+road. They continued to increase, and in 1891 its gross earnings on
+substantially the same mileage were 36 per cent, and its net earnings 64
+per cent. larger than they had been in 1888. The increase continued and
+enabled the company to make a dividend to its stockholders February 1,
+1893, it being the first dividend ever made by the company. It is a good
+illustration of what the Iowa law has done for weak railroads. It has
+again changed class and is now a Class "A" road.
+
+It is seen that the fears, or rather the pretended fears of the railroad
+managers, that the legislature of Iowa would bankrupt her railroads,
+were entirely groundless. As a result of the law railroads have been
+able to increase their gross earnings as well as their profits. They
+have been enabled to give employment to a larger number of men, and
+there has been no occasion for them to carry out the dishonest threat to
+decrease the wages of their employes. Had it not been for their
+increased earnings in Iowa, the losses recently sustained in other
+States by several of the through lines would have made it impossible for
+them to declare the dividends which they did.
+
+Under her beneficial railroad policy Iowa has prospered wonderfully, and
+her railroads have been more prosperous than when they were allowed to
+have their own way. The commissioners' tariff has made jobbing and
+manufacturing profitable where it was unprofitable before. It has added
+to our industries and our commerce, and has made new business for the
+people as well as the railroads. It has contributed to the increase in
+the value of our farms and factories and their products, and the time
+will come when wise railroad managers, like the majority of former
+slaveholders of the South, would not resurrect the past if they could.
+In fact, honorable managers now acknowledge that they would not if they
+could.
+
+The railroad companies are at present making a systematic effort to
+weaken the Iowa commission, but if they should succeed in doing so, the
+people, under our system of electing the commissioners, can readily
+correct the evil.
+
+Other States have much experience similar to that of Iowa. Nebraska has
+just adopted a maximum tariff law for the control of her roads. It will,
+of course, be resisted by the railroad managers of that State.
+
+The State of Texas is not so productive in proportion, but is much
+greater in extent than Iowa, and upon the whole resembles it much in its
+prominent characteristics. Both are thrifty, progressive States, with no
+large commercial or manufacturing centers where their people can easily
+organize to protect their financial interests.
+
+The people of Texas endured patiently the abuses so prevalent in
+railroad management until a few years since they enacted a railroad law
+similar to that of Iowa. The Wall Street managers of the Texas railroads
+are at the present time using all of their familiar methods to influence
+the people of that State to repeal their law. The following letter
+serves to show the spirit with which they are approached:
+
+
+      "23 BROAD STREET,
+      NEW YORK, November 30, 1891.
+
+      James B. Simpson, Esq., Dallas, Tex.
+
+      "DEAR SIR: Yours of the 26th is received and contents
+      carefully noted. Very likely you have valuable franchises,
+      or what would be valuable in almost any other state than
+      Texas; but while there are many places in Texas where we
+      would like to build some railroads--mostly short ones--we
+      cannot do anything so long as the disposition exists that
+      now seems to in Texas; that is, to do all the harm they
+      can do this kind of property, and I think my views are
+      shared by all people who have money to invest. No one is
+      disposed to create property which, after being created, is
+      not to be controlled by its ownership. Of course, we all
+      expect to be subject to the police regulations and to pay
+      the taxes of any State even as other property, but whenever
+      anything is done beyond that it checks this kind of
+      improvement, and where it approaches so near confiscation as
+      the sentiment of Texas tends it entirely prevents capital
+      from being invested.
+
+      "I think there is no road in Texas that is to-day earning
+      its operating and fixed charges. Every road, I think, has
+      been or is in the hands of a receiver, excepting our great
+      east and west line, which is supported by business going
+      entirely through the State, which business could also be
+      sent another way, and would be so sent, excepting that we
+      believe the people of Texas will some time take a sober
+      second thought and treat the railroads as they do other
+      kinds of property. When that time comes I shall be ready to
+      talk to you about your franchises, if it comes in my day,
+      and I believe it will, as I think no other people are
+      suffering from an unwise policy persistently pursued as are
+      the people of your State.
+
+      "Yours truly,
+      C. P. HUNTINGTON."
+
+               "Now, in the name of all the gods at once,
+               Upon what meat doth this our Caesar feed,
+               That he hath grown so great?"
+
+It was but a few years ago when this Mr. Huntington was keeping a small
+retail store in the city of Sacramento, and he exhibited then no greater
+ability, except perhaps that he was a little more venturesome, than
+thousands of others engaged in the same occupation; subsequently he
+engaged, with several others, in the Central Pacific Railroad scheme,
+and received from the bounties of our generous Government as his share
+of the profits in that enterprise several million dollars, which sum has
+ever since been continually swelled by the exercise of a power scarcely
+inferior to the power of taxing the property of the Pacific Coast. He
+has been so successful for years in manipulating Congressmen and State
+legislatures and shaping the policies of States that he now considers it
+impertinent and short-sighted for a people to take steps to limit his
+levies upon them. It is to be hoped that the boycotting and intimidating
+methods resorted to will have no more effect upon the people of that
+State than they had on the people of Iowa.
+
+Iowa is the queen among the States of the Union. No other State has so
+little waste land or is so productive. Her annual output of staple
+products amounts to hundreds of millions of dollars in value. Her people
+are intelligent, progressive and just. None are governed more by the
+precepts of the golden rule, or are more disposed to render unto Caesar
+the things that are Caesar's. She can well be proud of the progress she
+has made in State control of railroads. Let no backward step be taken.
+
+
+
+
+CHAPTER XII.
+
+THE INTERSTATE COMMERCE ACT.
+
+
+The Constitution of the United States was adopted nearly fifty years
+before the locomotive made its appearance. Had the steam railroad been
+in existence in 1787 and been as important an agency of commerce as it
+is to-day, there is every reason to believe that the railroad question
+would have received the special attention of the framers of that
+instrument. It is a well-known fact that the "new and more perfect
+government" had its origin in the necessities of commerce, and while the
+future exigencies of trade were beyond the reach of the most speculative
+mind, the provisions of the Constitution relating to the subject of
+interstate commerce were made broad and far-reaching. Section 8 of
+Article I. of the Constitution provides that "the Congress shall have
+power ... to regulate commerce with foreign nations, and among the
+several States, and with the Indian tribes ... and to make all laws
+which shall be necessary and proper for carrying into execution the
+foregoing powers and all other powers vested by this Constitution in the
+Government of the United States, or in any department or officer
+thereof."
+
+If any doubt ever existed as to the import of the phrase "to regulate
+commerce," it has been entirely removed by the decisions of the Supreme
+Court. In the Passenger cases, 7 Howard, 416, the court said:
+
+      "Commerce consists in selling the superfluity; in purchasing
+      articles of necessity, as well productions as manufactures;
+      in buying from one nation and selling to another, or _in
+      transporting the merchandise_ from the seller to the buyer
+      to gain the freight."
+
+And again, in the Philadelphia and Reading Railroad vs. Pennsylvania,
+the Supreme Court said:
+
+      "Beyond all question the transportation of freights or of
+      the subjects of commerce for the purpose of exchange or sale
+      is a constituent of commerce itself. This has never been
+      doubted, and probably the transportation of articles of
+      trade from one State to another was the prominent idea in
+      the minds of the framers of the Constitution when to
+      Congress was committed the power to regulate commerce among
+      the several States.... It would be absurd to suppose that
+      the transmission of the subjects of trade from the seller to
+      the buyer, or from the place of production to market, was
+      not contemplated, for without that there could be no
+      consummated trade with foreign nations or among the States."
+
+Chief Justice Marshall, in Gibbons vs. Ogden, 9 Wheaten, 196, construed
+the words "power to regulate" as follows:
+
+      "This power, like all others vested in Congress, is complete
+      in itself, may be exercised to its utmost extent, and
+      acknowledges no limitations other than are prescribed in the
+      Constitution."
+
+It is a strange fact that during the first eighty years of the
+Government's existence Congress did not exert its power to regulate the
+conduct of common carriers engaged in interstate transportation. The
+first act regulating such carriers was passed in July, 1866. It
+authorized railroad companies chartered by the States to carry
+passengers, freights, etc., "on their way from any State to another
+State, and to receive compensation therefor, and to connect with roads
+of other States so as to form continuous lines for transportation of the
+same to the place of destination." The passage of this act, it should be
+remembered, was urged by the railroad companies themselves. Seven years
+later an act was passed providing that "no railway within the United
+States, whose road forms any part of a line or road over which cattle,
+sheep, swine or other animals shall be conveyed from one State to
+another, or the owners or masters of steam, sailing or other vessels
+carrying or transporting cattle, sheep or swine or other animals from
+one State to another, shall confine the same in cars, boats or vessels
+of any description for a longer period than twenty-eight consecutive
+hours, without unloading the same for water, rest and feeding, for a
+period of at least five consecutive hours, unless prevented from so
+unloading by storm or accidental causes."
+
+Every violation of this act was made punishable by a penalty of from
+$100 to $500.
+
+Though Congress had asserted the right to regulate commerce among the
+States, it had made previous to 1873 very limited use of that power. In
+the midst of the Granger movement the Senate of the United States passed
+on the 26th day of March, 1873, the following resolution:
+
+      "_Resolved_, That the Select Committee on Transportation
+      Routes to the Seaboard be authorized to sit at such places
+      as they may designate during the recess, and to investigate
+      and report upon the subject of transportation between the
+      interior and the seaboard; that they have power to employ a
+      clerk and stenographer, and to send for persons and
+      papers...."
+
+The committee, under the chairmanship of Mr. Windom, discharged their
+duty with great fidelity, and submitted their report to the Senate
+during its next regular session. They declared that the defects and
+abuses of the then existing systems of transportation were insufficient
+facilities, unfair discrimination and extortionate charges. As the
+principal causes of such excessive rates they assigned stock watering,
+capitalization of surplus earnings, construction rings, general
+extravagance and corruption in railway management, and combinations and
+consolidations of railway companies. The committee were of the opinion
+that the promotion of competition would not permanently remedy the
+existing evils, and laid it down as a general rule that competition
+among railways ends in combination and in enhanced rates. As expedient
+and practical remedies for the existing evils they recommended the
+following measures:
+
+1. Direct Congressional regulation of railway transportation, under the
+power to regulate commerce among the several States.
+
+2. Indirect regulation and promotion of competition, through the agency
+of one or more lines of railway, to be owned and controlled by the
+Government.
+
+3. The improvement of natural water-ways and the construction of
+artificial channels of water communication.
+
+The report was accepted and considered, but there the matter rested, so
+far as the practical results were concerned.
+
+In 1878 Mr. John H. Reagan, of Texas, introduced in the House of
+Representatives a bill for an act to regulate railroad companies engaged
+in interstate commerce. This may be said to have been the first real
+interstate commerce bill before Congress. It was a progressive, thorough
+and well-planned measure, but failed to receive the approval of Congress
+because a majority of its members considered it too radical a measure.
+The bill contained many of the provisions of the present Interstate
+Commerce Act, including the anti-pooling and the long and short haul
+clauses; but instead of creating a commission it lodged in the courts,
+both State and Federal, the power to enforce the law.
+
+Other bills were introduced from year to year, but during a period of
+nine years none of them drew sufficient votes to make it a law. Congress
+may be said to have been divided into three camps upon the railroad
+question, viz.: those who favored the system of regulation proposed by
+Mr. Reagan, those who favored the commissioner system and those who were
+opposed to every mode of Federal regulation of interstate commerce. In
+the meantime, the inactivity of Congress caused considerable
+restlessness among the people, and the demand for action became louder
+every year. The issue entered into politics, and a number of Western
+Congressmen owed their failure to be re-elected to their indifference or
+enmity to Federal railroad legislation.
+
+On March 21st, 1885, under authority of a resolution adopted by the
+Senate of the United States, the President of the Senate appointed a
+select committee to investigate and report upon the subject of the
+regulation of the transportation of freight and passengers between the
+several States by railroad and water routes. Senator Cullom, of
+Illinois, became its chairman. The committee examined a large number of
+witnesses, including railroad managers and shippers, addressed letters
+to the railroad commissioners of the several States, to boards of trade,
+chambers of commerce, State boards of agriculture, Patrons of Husbandry,
+Farmers' Alliances, etc., and made every effort to obtain the opinions
+of those who had given special attention to the transportation problem.
+
+The report of the committee was submitted to the Senate on January 18,
+1886. Concerning the abuses of railroad transportation it differed but
+little from that of the Windom committee. The report declared publicity
+to be the best remedy for unjust discrimination and recommended that
+the posting of rates and public notice of all changes in tariffs be
+required. It also recommended that a greater charge for a shorter than a
+longer haul be made presumptive evidence of an unjust discrimination,
+and that a national commission be established for the enforcement of any
+laws that might be passed for the regulation of interstate commerce.
+Upon the question of pooling the report stated:
+
+      "The committee does not deem it prudent to recommend the
+      prohibition of pooling, which has been urged by many
+      shippers, or the legalization of pooling compacts, as has
+      been suggested by many railroad officials and by others who
+      have studied the question.... The majority of the committee
+      are not disposed to endanger the success of the methods of
+      regulation proposed for the prevention of unjust
+      discrimination by recommending the prohibition of pooling,
+      but prefer to leave that subject for investigation by a
+      commission when the effects of the legislation herein
+      suggested shall have been developed and made apparent."
+
+The report was accompanied by a bill representing "the substantially
+unanimous judgment of the committee as to the regulations which are
+believed to be expedient and necessary for the government and control of
+the carriers engaged in interstate traffic."
+
+The bill was before Congress for more than a year, receiving several
+important amendments before its final passage in both houses. It was
+approved by the President on the 4th day of February, 1887, and took
+effect sixty days after its passage, except as to the provisions
+relating to the appointment and organization of an Interstate Commerce
+Commission, which took effect at once.
+
+The act contains twenty-four sections, but is by no means cumbersome. It
+is, in many respects, the most important piece of legislation that has
+been had in Congress for the past twenty years. It applies to common
+carriers engaged in the transportation of passengers or property wholly
+by railroad, or partly by railroad and partly by water, when both are
+used, under a common control, management or arrangement, for a
+continuous carriage or shipment from one State or Territory of the
+United States, or the District of Columbia, to any other State or
+Territory in the United States or the District of Columbia, or from any
+place in the United States to an adjacent foreign country, or from any
+place in the United States through a foreign country to any other place
+in the United States. It prohibits unjust and unreasonable charges,
+special rates, rebates, drawbacks, undue or unreasonable preferences,
+advantages, prejudices and disadvantages, as well as all discriminations
+between connecting lines. It makes unlawful a less charge for a longer
+than for a shorter haul over the same line, in the same direction, the
+shorter being included within the longer distance, except when specially
+authorized by the Interstate Commerce Commission. It prohibits pools,
+requires schedules of freight rates and passenger fares to be kept in
+all depots and stations, permits no advance in the rates, fares and
+charges once established, except after ten days' public notice, and
+makes it unlawful for common carriers to charge either more or less than
+schedule rates.
+
+It also requires them to file copies of all schedules, traffic contracts
+and joint schedules with the Interstate Commerce Commission, as well as
+to make them public when directed by the commission, and prohibits
+combinations to prevent the carriage of freight from being continuous
+from the place of shipment to the place of destination. It makes common
+carriers liable for all damages to persons injured by violations of the
+act, and specially provides that any court before which such a damage
+suit may be pending may compel any director, officer, receiver, trustee
+or agent of the defendant company to appear and testify in the case, and
+that the claim that any such testimony or evidence may tend to criminate
+the person giving such evidence shall not excuse such witness from
+testifying, but that such evidence or testimony shall not be used
+against such person on the trial of any criminal proceeding. It likewise
+subjects such officers and employes of a railroad company as may be
+guilty of aiding or abetting in violations of the act to fines not
+exceeding $5,000 for each offense.
+
+These provisions are covered by the first ten sections of the act.
+Section 11 establishes the Interstate Commerce Commission, to be
+composed of five commissioners appointed by the President by and with
+the advice and consent of the Senate. It provides that the commissioners
+first appointed shall continue in office for the term of two, three,
+four, five and six years, respectively, from the first of January, 1887,
+the term of each to be designated by the President, and that their
+successors shall be appointed for terms of six years, except that any
+person chosen to fill a vacancy shall be appointed only for the
+unexpired term of the commissioner whom he shall succeed. No more than
+three commissioners may be appointed from the same political party, and
+the President has the power to remove any commissioner for inefficiency,
+neglect of duty or malfeasance in office. Authority is given to the
+commission to inquire into the management of the business of all common
+carriers subject to the provisions of the act and to require the
+attendance of witnesses and to invoke the aid of any court of the United
+States for that purpose.
+
+Section 13 authorizes any person, firm, corporation or association, any
+mercantile, agricultural or manufacturing society, any body politic or
+municipal organization to file complaints against any common carrier
+subject to the provisions of the act, with the commission, whose duty it
+is made to forward a statement of the charges to such common carrier and
+call upon him to satisfy the complaint or answer the same in writing,
+and to investigate the matters complained of, if the complaint is not
+satisfied. The commission is also charged with the duty of making such
+investigations at the request of State or territorial railroad
+commissions and may even institute them at its own motion. Section 14
+requires the commission to make a report in writing of any investigation
+it may make and to enter it of record and furnish copies of it to the
+complainant and the common carrier complained of. Section 15 makes it
+the commissioners' duty, when it is found that any law cognizable by it
+has been violated by a common carrier, to serve notice on such carrier
+to desist from such violation and to make reparation for an injury found
+to have been done. If any lawful order or requirement of the commission
+is disobeyed by a common carrier, it becomes their duty and is lawful
+for any company or person interested in such order to apply by petition
+to the Circuit Court of the United States sitting in equity in the
+judicial district in which the common carrier complained of has its
+principal office, and the court has power to hear and determine the
+matter speedily and without the formal pleadings and proceedings
+applicable to ordinary suits, and to restrain the common carrier from
+continuing such violation or disobedience. It is further provided by
+this section that on such hearings the report of the commission shall be
+accepted as _prima facie_ evidence.
+
+Section 17 regulates the proceedings of the commission. A majority
+constitute a quorum for the transaction of business. The commission may
+from time to time make or amend rules for the regulation of proceedings
+before it. Any party may appear before it and be heard in person or by
+attorney, and every vote or official act of the commission must be
+entered of record and its proceedings made public upon the request of
+either party interested.
+
+Section 19 provides that the principal office of the commission shall be
+in Washington, but that for the convenience of the public it may hold
+special sessions in any part of the United States.
+
+Section 20 authorizes the commission to require annual reports from all
+common carriers subject to the provisions of the act, to fix the time
+and prescribe the manner in which such reports shall be made, and to
+require from such carriers specific answers to all questions upon which
+the commission may need information.
+
+Section 21 excepts from the operation of the act the carriage of
+property for the United States, State or municipal governments, or for
+charitable purposes, or for fairs and expositions; also the issuance of
+mileage, excursion and commutation tickets, the giving of reduced rates
+to ministers of religion, the free carriage by a railroad company of its
+own officers and employes, and the exchanging of passes or tickets among
+the principal officers of railroad companies.
+
+The sections not noticed are of minor importance, relating to annual
+reports, salaries, appropriations of funds, etc.
+
+The act was amended on March 2, 1889, but the amendments made did not
+materially affect its principal provisions.
+
+When the law was passed its friends well realized that its success would
+greatly depend on the character of the commissioners whom it was
+incumbent upon the President to appoint. It was feared that if the
+railroad influence should control these appointments, the power to
+suspend the long and short haul clause would be the chief and perhaps
+the only power exercised by the commission. There was great danger that
+the office of Interstate Commerce Commissioner might become a sinecure
+for servile railroad lawyers, as similar State officers had been before,
+and that a public trust might be turned into an additional corporation
+agency for evil. The selection of the commissioners, and especially that
+of Judge T. M. Cooley, of Michigan, was greatly to the credit of
+President Cleveland. A man of unquestionable integrity, an eminent
+jurist and close student of railroad affairs, Judge Cooley was
+particularly well qualified for the office of chairman of the Interstate
+Commerce Commission, which he occupied for nearly five years with signal
+fitness, and from which he only retired to the sincere regret of the
+American people. Under Judge Cooley's leadership the commission has been
+more than a purely executive board. It was under the Constitution not in
+the power of Congress to clothe the Interstate Commerce Commission with
+full judicial authority without giving its members, like other Federal
+judges, tenure for life, instead of a term of years. The inherent force
+of the commission's decisions in its interpretation of the law made them
+in many cases virtually the equivalent of judicial rulings.
+
+A few of the most important decisions of the commission may be mentioned
+here. Construing the long and short haul clause, they held that, in case
+of complaint for violating this section of the act, "the burden of proof
+is on the carrier to justify any departure from the general rule
+described by the statute, by showing that the circumstances and
+conditions are substantially dissimilar." They also decided that "when a
+greater charge in the aggregate is made for the transportation of
+passengers or the like kind of property for a shorter than a longer
+distance over the same line in the same direction, the shorter being
+included in the longer distance, it is not sufficient justification
+therefor that the traffic which is subjected to such greater charge is
+way or local traffic and that which is given the more favorable rates is
+not; and that it is not "sufficient justification for such greater
+charge that the short-haul traffic is more expensive to the carrier,
+unless when the circumstances are such as to make it exceptionally
+excessive, or the long-haul traffic exceptionally inexpensive, the
+difference being extraordinary and susceptible of definite proof; nor
+that the lesser charge on the longer haul has for its motive the
+encouragement of manufactures or some other branch of industry, nor that
+it is designed to build up business or trade centers."
+
+Upon the question of publicity of the railroad business the commission
+held that, as the books of the defendant carriers, as to rates charged,
+facilities furnished and general movements of freight, are in the nature
+of semi-public records, the officers and agents of defendant carriers
+ought to give promptly to a complainant any statement of facts called
+for, if such statement may probably have importance on the hearing.
+
+Judge Brewer's opinion as to what constitutes a reasonable rate was
+evidently not shared by Judge Cooley and his colleagues, for in the case
+of the New Orleans Cotton Exchange vs. the Cincinnati, New Orleans and
+Pacific Railway Company the commission decided that the fact that a
+road earns but little more than operating expenses cannot be made to
+justify grossly excessive rates, and that "wherever there are more roads
+than the business at fair rates will remunerate, they must rely upon
+future earnings for the return of investments and profits." In another
+case the commission hold that "in fixing reasonable rates the
+requirements of operating expenses, bonded debt, fixed charges and
+dividend on capital stock from the total traffic are all to be
+considered, but the claim that any particular rate is to be measured by
+these as a fixed standard, below which the rate may not lawfully be
+reduced, is one rightly subject to some qualifications, one of which is
+that the obligations must be actual and in good faith."
+
+The rules governing the proper construction of classification sheets
+which the commission has laid down are founded upon common sense and
+justice. They say:
+
+      "A classification sheet is put before the public for general
+      information; it is supposed to be expressed in plain terms
+      so that the ordinary business man can understand it and, in
+      connection with the rate sheets, determine for himself what
+      he can be lawfully charged for transportation. The persons
+      who prepare the classification have no more authority to
+      construe it than anybody else, and they must leave it to
+      speak for itself."
+
+In defining what is legitimate traffic the commission made the following
+decision:
+
+      "The transportation of traffic under circumstances and
+      conditions that force a low rate for its carriage or an
+      abandonment of the business, but which affords some revenue
+      above the cost of its movement, and works no material
+      injustice to other patrons of a carrier, is to be deemed
+      legitimate competition. When, however, its carriage is at a
+      loss and imposes a burden on like traffic at other points
+      and on other traffic, it is to be deemed destructive and
+      illegitimate competition."
+
+It has been shown in a former chapter that the weaker oil refiners have
+been discriminated against by the railroads, which permitted the
+Standard Oil Company to use their own tank cars in the shipment of oil
+and charge its competitors excessive rates for like shipments in
+barrels. Complaint being made of this discrimination, the commission
+held that it is properly the business of a carrier by railroad to supply
+rolling stock for the freight he offers or proposes to carry, and that
+"if the diversities and peculiarities of traffic are such that this is
+not always practical, and the consignor is allowed to supply it for
+himself, the carrier must not allow its own deficiencies in this
+particular to be made the means of putting at unreasonable disadvantage
+those who may use in the same traffic all the facilities which it
+supplies."
+
+A most important ruling of the commission is that relating to the pass
+abuse. Complaint was made that the Boston and Maine Railroad Company
+issued in the States of Maine, New Hampshire, Vermont and Massachusetts
+free passes to certain classes of persons, among them "gentlemen long
+eminent in the public service, higher officials of the States, prominent
+officials of the United States, members of the legislative railroad
+committees of the above named States, and persons whose good will was
+claimed to be important to the defendant." The commission decided that
+such a discrimination is unwarranted, that a carrier is bound to charge
+equally to all persons, regardless of their relative individual standing
+in the community, and that the words "under substantially similar
+circumstances and conditions" relate to the nature and character of the
+service rendered by the carrier, and not to the official, social or
+business position of the passenger.
+
+It is a notorious fact that the practice of issuing free passes to
+public officials and other influential persons has been more or less
+indulged in by nearly every railroad in the country up to the present
+time. It is to be hoped that this ruling of the commission will be
+enforced in such a manner as to put an end to this intolerable abuse.
+
+The Interstate Commerce Commission has been equally efficient in its
+administrative capacity. From the very first it called attention to the
+great advantage of having one classification of freight throughout the
+country, and it has since labored diligently to unify the various
+classifications in use. As the commission in this undertaking is only
+armed with the armor of moral suasion, it is a difficult task; but there
+is little doubt that the accomplishment of this great reform is only a
+question of a few years. Iniquities in classifications and rates are
+constantly pointed out by the commission and corrected by the companies.
+Moreover, the annual reports of the commission, not to mention its very
+excellent statistical data, diffuse much useful information and dispel
+many delusions. Thus the fourth annual report of the commission says:
+
+      "A stranger to the law might infer, from some public
+      addresses and pamphlets which have assumed to discuss this
+      subject, that the railroad companies were prohibited from
+      carrying the necessities of life over long distances at very
+      low rates, unless their rates on other subjects of
+      transportation for shorter distances were made to
+      correspond. Indeed, instances have been pointed out in which
+      it was said that certain articles of commerce could not now
+      be transported for long distances, because, by reason of
+      this provision, they would not bear the charges that must
+      under compulsion of law be imposed upon them. Among such
+      instances has been mentioned the granite industry of New
+      England, as to which it has been said that valuable
+      manufactories have ceased to be profitable because it has
+      now become impossible for the proprietors to obtain from
+      the railroad companies the nominal rates for the
+      transportation of their products which they formerly
+      enjoyed, since it is now, by the long and short haul clause,
+      made criminal for the companies to give such rates.
+
+      "A complaint of this nature is not to be met by argument,
+      because it is baseless in point of fact. The instance
+      mentioned may safely be assumed to be chosen rather from
+      regard to the need of an attack upon the law than from any
+      belief in the justice of its application. The prohibition of
+      the fourth section, so far as concerns this article of
+      commerce, or any other that can be named, will have no
+      application whatever until it is made to appear that
+      elsewhere upon the lines of the road conveying it there is
+      property of the same kind, for transportation by the same
+      carriers in the same direction, upon which the carriers are
+      disposed to making greater charges in the aggregate for the
+      shorter hauls.
+
+      "The wheat of the extreme West, it is also said, can no
+      longer have the nominal rates which were formerly made for
+      transportation to the seaboard, but this assertion is also
+      without point or applicability, unless it is shown that the
+      carriers are not only disposed to give such rates, but
+      propose to make up for the consequent losses to themselves
+      by the imposition of greater charges in the aggregate for
+      the carriage of the like grain when offered for carriage by
+      growers in the States nearer the seaboard. Nominal rates
+      impartially made as between shippers of like articles in the
+      same direction and under like circumstances and conditions
+      are as admissible now as they ever were."
+
+The same report contains a rather pointed reply to Judge Brewer's ruling
+in the Iowa rate cases, viz., that, "where the rates prescribed will not
+pay some compensation to the owners, then it is the duty of the courts
+to interfere and protect the companies from such rates," and that
+compensation implies three things: "Payment of cost of service, interest
+on bonds and then some dividends." The commission reviews this stupid
+rule as follows:
+
+      "The effort has sometimes been made to indicate a rule which
+      must constitute the minimum of reduction in all cases, and
+      it has been said that rates must not be made so low that the
+      carriers would be left unable to pay interest on their
+      obligations and something by way of dividend to
+      stockholders, after maintaining the road in proper condition
+      and paying all running expenses. This comes nearer to a
+      suggestion of a rule of law for these cases than any other
+      that has come to the knowledge of the commission. But it is
+      so far from being a rule of law, that it is not even a rule
+      of policy, or a practical rule to which any name can be
+      given, and to which the carriers themselves or the public
+      authorities can conform their action. In the first place,
+      when we take into consideration the question of the
+      condition of roads and of equipment, the proper improvements
+      to be made, the new conveniences and appliances to be
+      considered and made use of, if deemed desirable, and the
+      innumerable questions that are involved in the matter of
+      running expenses, it is very obvious that there can be no
+      standard of expenses which the court can act upon and apply,
+      but that the whole field is one of judgment in the exercise
+      of a reasonable discretion by the managing powers or by the
+      public authorities in reviewing their action. It is to be
+      borne in mind that there are many roads in the country that
+      never have been and in all probability never will be able to
+      pay their obligations and to pay dividends, even the
+      slightest, to their stockholders.... If the rule suggested
+      is a correct one, and must be adhered to by the public
+      authorities, then it is entirely impossible that those who
+      operate these roads can prescribe excessive charges, since
+      it is impossible to fix any rates that would bring their
+      revenues up to the point of enabling them to pay any
+      dividends.... But the rule suggested would also be one under
+      which those roads would be entitled to charge the most
+      which, instead of being built with the money of the
+      stockholders themselves, had been constructed with money
+      borrowed; the larger the debt the higher being the rates
+      that would be legal. If a road were out of debt so that it
+      had no bonds to provide for, it must content itself with
+      such rates as would pay some dividend to its stockholders.
+      If the road were in debt, though it perhaps served the same
+      communities, it might be entitled to charge rates 50, or
+      possibly 100 per cent higher.... But over and beyond all
+      this the attempt to apply the rule suggested would be
+      absolutely futile for the reason that the rates prescribed
+      for one road would necessarily affect all others that either
+      directly or indirectly came in competition with it."
+
+It is no exaggeration to say that the annual reports of the commission
+stand unexcelled as dauntless, clear, concise and instructive public
+documents. It may also be asserted that whatever success has so far
+attended the Interstate Commerce Law, that success is in a great measure
+due to the tact, courage and ability of the men who, in the past, have
+been the guiding spirits of the commission.
+
+Efforts will be made by railroad managers in the future, as they have
+been made in the past, to weaken the commission by securing the
+appointment of men servile to the railroad interest as members of that
+body.
+
+Mr. Depew says that "all railroad men are politicians, and active ones."
+This is true as to manipulating managers and will continue to be so just
+as long as we allow such extraordinary powers to be exercised by them.
+The saloon men are politicians, and active ones. There is not a city or
+town in this broad land that is not in danger of falling under their
+sway unless their offensive efforts are resisted. The old United States
+Bank managers were politicians, and active ones. They perverted the
+trust reposed in their hands to such an extent that the indignation of
+the people was aroused, and under the lead of a stern old patriot the
+bank was swept out of existence. Shall we restrain corporation
+management within proper limits and make corporations serve the public
+welfare, or shall we let the abuses go on until the people, under the
+lead of another Jackson, demand emphatically the application of some
+remedy, for better or for worse? Perhaps Government ownership, perhaps
+something else. Nations, like individuals, should profit by the
+experience of the past.
+
+The Interstate Commerce Commission, in their sixth annual report, say,
+concerning the Interstate Commerce Law:
+
+      "It was scarcely possible that it should be so complete and
+      comprehensive at the outset as to require no alteration or
+      amendment. Those who are familiar with the practices which
+      obtained prior to the passage of this law, and contrast them
+      with the methods and conditions now existing, will accord to
+      the present statute great influence in the direction of
+      necessary reforms and a high degree of usefulness in
+      promoting the public interest.
+
+      "Whoever will candidly examine the reports of the commission
+      from year to year, and thus become acquainted with the work
+      which has been done and is now going on, will have no doubt
+      of the potential value of this enactment in correcting
+      public sentiment, restraining public injustice and enforcing
+      the principle of reasonable charges and equal treatment.
+      Imperfections and weaknesses which could not be anticipated
+      at the time of its passage have since been disclosed by the
+      effort to give it effective administration. The test of
+      experience, so far from condemning the policy of public
+      regulation, has established, its importance and intensified
+      its necessity. The very respects in which the existing law
+      has failed to meet public expectation point out the
+      advantages and demonstrate the utility of Government
+      supervision....
+
+      "Of this much we are convinced: The public demand for
+      Government regulation and the necessity for legal
+      protection against the encroachments of railroad
+      corporations have not been diminished by the experience of
+      the last six years. The act to regulate commerce was not
+      framed to meet a temporary emergency, nor in obedience to a
+      transient and spasmodic sentiment. The people will not
+      tolerate a return to the injustice and wrong-doing which
+      inevitably occurs when no correction is undertaken and no
+      regulation attempted. The evils of unrestricted management
+      will not be permanently endured, and legal remedies will
+      continue to be sought until they are amply provided. The
+      present statute, however crude and inadequate in many
+      respects, was the constitutional exercise of most important
+      powers and the legislative expression of a great and
+      wholesome principle. Its fundamental and pervading purpose
+      is to secure equality of treatment. It assumes that the
+      railroads are engaged in a public service, and requires that
+      service to be impartially performed. It asserts the right of
+      every citizen to use the agencies which the carrier provides
+      on equal terms with all his fellows, and finds an invasion
+      of that right in every unauthorized exemption from charges
+      commonly imposed.
+
+      "The railroad is justly regarded as a public facility which
+      every person may enjoy at pleasure, a common right to which
+      all are admitted and from which none are excluded. The
+      essence of this right is equality, and its enjoyment can be
+      complete only when it is secured on like conditions by all
+      who desire its benefits. The railroad exists by virtue of
+      authority proceeding from the State, and thus differs in its
+      essential nature from every form of private enterprise. The
+      carrier is invested with extraordinary powers, which are
+      delegated by the sovereign, and thereby performs a
+      governmental function. The favoritism, partiality and
+      exactions which the law was designed to prevent resulted, in
+      large measure, from a general misapprehension of the nature
+      of transportation and its vital relation to commercial and
+      industrial progress. So far from being a private possession,
+      it differs from every species of property, and is in no
+      sense a commodity. Its office is peculiar, for it is
+      essentially public. The railroad, therefore, can rightfully
+      do nothing which the State itself might not do if it
+      performed this public service through its own agents instead
+      of delegating it to corporations which it has created. The
+      large shipper is entitled to no advantage over his smaller
+      rival in respect of rates or accommodations, for the
+      compensation exacted in every case should be measured by the
+      same standard. To allow any exceptions to this fundamental
+      rule is to subvert the principle upon which free
+      institutions depend and substitute arbitrary caprice for
+      equality of right.
+
+      "The spirit of the law is opposed to usages so long
+      continued and so familiar that their unjust and demoralizing
+      character has not been clearly perceived, but it is a long
+      step towards such regulation of the agencies of
+      transportation as will make them equally available to all
+      without discrimination between individuals or communities.
+      It can hardly be the fault of those who are charged with its
+      administration if the beneficial aims of this statute have
+      not been fully attained and compliance with its provisions
+      not completely secured. A better understanding of its
+      purpose and an educated public sentiment, aided by the
+      needful amendments which experience suggests, will fully
+      vindicate the policy of Congress in undertaking to bring the
+      great transportation interests of the country into general
+      harmony with its requirements.
+
+      "It affords us gratification to add that many railroad
+      managers of the highest standing now concede the necessity
+      for Government regulation, and avow themselves in favor of
+      such further enactments as will make that regulation
+      effective."
+
+
+
+
+CHAPTER XIII.
+
+THE RATE QUESTION.
+
+
+Railroad managers frequently make the assertion that the average freight
+rates charged in the United States are lower than those usually charged
+in European countries and that this fact is in itself sufficient proof
+that they are too low. A comparison of the transportation problem of
+Europe with our own will show this argument to be fallacious.
+
+While from $25,000 to $30,000 a mile is a very liberal estimate of the
+average cost of American roads, the average cost of European railroads,
+owing to their expensive rights of way, substantial road-beds and heavy
+grades, is probably not less than $75,000 per mile. British railway
+companies have laid out for the purchase of land, for right of way and
+depot accommodations an amount about equal to the entire average cost of
+American roads for the same number of miles.
+
+For instance, the Southeastern Company paid $20,000; the Manchester and
+Leeds Company, $30,750, and the London, Birmingham and Great Western,
+$31,500 per mile. The first Eastern Counties line paid even $60,000 per
+mile for land through an agricultural district. As nearly as can be
+ascertained, the average cost of the right of way of railroads was over
+$20,000 for the United Kingdom. In Belgium the average cost of the right
+of way was $11,000. It was lower, however, in the other countries of the
+European continent.
+
+The topography of the country through which the English railways are
+built is such as necessitated enormous expenses for heavy embankments,
+cuttings, viaducts, tunnels and bridges, and in some cases increased the
+cost of the roads to fabulous sums. The Lancashire and Yorkshire Railway
+actually cost $260,000 per mile for the whole of its 403 miles. European
+roads have been built in a much more permanent manner and have terminal
+facilities whose cost is far beyond any sum paid for such purposes in
+this country. In Great Britain, moreover, the expenses of contests and
+of procuring charters have been very great and have probably averaged
+$3,000 per mile.
+
+English railway men charge Americans with having indulged in
+stock-watering to a greater extent than any other people in the world.
+This is probably true, yet the English have not been dull students of
+this art, and they are far from free of having indulged in this luxury.
+Much of their railroad stock was issued in a wasteful manner and
+represents no actual investment, and it is safe to say that from 30 to
+40 per cent. of their present railroad capitalization is water.
+
+If upon the above basis both European and American railroads are to
+yield an interest of 4-1/2 per cent. on the actual investment, the
+former will have to earn at least $2,250 per mile more than the latter,
+and this difference equals about 50 per cent. of the average operating
+expenses of American roads per mile. Labor is cheaper across the
+Atlantic, but this difference is more than equalized by the employment
+of a much larger number of men per mile, as the following table will
+show:
+
+  Countries.      No. of men employed   Average wages   Wages paid
+                       per mile.          per annum.      per mile.
+
+  United Kingdom          18                $335          $6,000
+  Belgium                 22                 210           4,620
+  Russia                  15                 240           3,600
+  Germany                 14                 250           3,500
+  France                  14                 220           3,080
+  United States            5                 555           2,625
+
+The London and Northwestern Railway is 1,793 miles long and has over
+55,000 employes, or over 30 per mile. The Lancashire and Yorkshire
+Company employs over 42 per mile.
+
+The train men of Europe work less hours and earn less per capita for
+their employers than do the train men of this country. The average
+annual gross earnings per employe on sixteen of the leading lines of
+Great Britain, as shown by Mr. Jeans, appear to be $975 against $1,600
+on fifteen leading lines of the United States, while the average net
+earnings per employe are $465 on the British lines against $720 on the
+American lines; making a difference in favor of this country of 70 per
+cent. in gross earnings and 53 per cent. in net earnings. If American
+labor is more expensive, it is also more efficient than labor is
+elsewhere.
+
+It must also be considered that the average haul in Europe is much less
+than the average haul in the United States. It has always been
+maintained by the railroad companies, and very justly, too, that the
+terminal charges are as important a factor of freight rates as is the
+cost of carriage. The terminal charges are the same for a
+twenty-five-mile haul as for a thousand-mile haul; they form a
+comparatively large part of the total charges for the former and a very
+small part of the total charges for the latter. It is therefore
+manifestly unjust to compare the rates per ton per mile of Europe with
+those of the United States without making due allowance for the
+difference in the length of their average hauls. All other things being
+equal, a fair comparison between the freight rates of different
+countries should be based upon hauls of equal length.
+
+There is another consideration which should not be lost sight of. The
+commodities in the United States which contribute principally to the
+long haul are raw products. The universally low rates of these
+commodities greatly lower the general average. In Europe, on the other
+hand, manufactured goods predominate as long-haul freight, and based
+upon increased risk and increased cost of carriage, considerably swell
+the general average of freight charges. The railroads of the United
+States also do more business per train mile than those of any other
+country excepting perhaps Austria, Russia and India. This should
+certainly enable them to do business for less than it is done by
+transatlantic lines.
+
+In addition to all this, a number of European countries, particularly
+France, require their railroads to perform large services, such as the
+carrying of the mails and the transportation of the officers and
+employes of the Government, gratuitously, and to carry soldiers at
+reduced rates.
+
+Another factor in the equation should be considered. European roads are
+built, equipped and all permanent improvements wholly made at the
+expense of the stock- and bondholders, while in this country they are
+partially constructed at the expense of the patrons of the road. In the
+former case the capitalization of the road represents what has been paid
+by the stock- and bondholders, and in the latter, not only what they
+have paid, but large contributions paid from the income of the road and
+from public and private donations.
+
+It will thus be seen that railroad rates ought to be lower, and even
+much lower, here than in Europe. If it _is_ true that the average rate
+per ton per mile is lower in America than across the Atlantic, this is
+chiefly due to the fact that water transportation has forced down
+through (or long-haul) rates and has thus lowered the general average.
+This reduction was by no means made voluntarily by the railway
+companies, but was forced upon them. Where in the United States water
+does not exist, as in local traffic, rates are usually much higher than
+in Europe.
+
+The reduction in freight rates was brought about by a number of
+inventions which greatly lowered the cost of both the construction and
+the operation of railways. Through the introduction of the steam shovel,
+of the wheel-scraper, of improved rock-drills, and of other labor-saving
+machines, as well as by a general improvement in the methods of grading,
+the cost of grading has been reduced from 25 to 50 per cent., and
+railroad bridges are now built at one-third of their former cost. Owing
+to Bessemer's great invention, steel rails can at the present time be
+bought for one-half of what iron rails cost ten or fifteen years ago,
+and about one-third of the cost twenty years ago. According to David A.
+Wells, the author of "Recent Economic Changes," the annual producing
+capacity of a Bessemer converter was increased fourfold between 1873 and
+1886, and four men can now make a given product of steel in the same
+time and with less cost of material than it took ten men ten years ago
+to accomplish. A ton of steel can now be made with 5,000 pounds of coal,
+while it required twice that quantity in 1868. When it is considered
+that rails and tires made of steel last three times as long as those
+made of iron, permit greater speed, carry a much larger weight, and
+require less repairs, the importance to the railroad interests of the
+improvements made in the manufacture of steel can hardly be
+overestimated. Similar reductions have been made in the car and machine
+shops. An average train to-day probably costs no more than one-half as
+much as it did twenty years ago. Mr. Wells, in the work just mentioned,
+says:
+
+      "In 1870-'71 one of the leading railroads of the
+      Northwestern United States built 126 miles, which, with some
+      tunneling, was bonded for about $40,000 per mile. The same
+      road could now (1889) be constructed, with the payment of
+      higher wages to laborers of all classes, for about $20,000
+      per mile."
+
+A great saving has also been made in the consumption of coal. Under
+favorable circumstances a loaded freight car can now be propelled a mile
+with one pound of coal. A similar economy of fuel has, through the
+improvement of their engines, been effected in ocean steamers. The
+invention of the compound engine has reduced the expense of running
+about one-half, while it has doubled the room left for the cargo. The
+statement has recently been made that a piece of coal half as large as a
+walnut, when burned in the compound engine of a modern steamboat, drives
+a ton of food and its proportion of the ship one mile on its way to a
+foreign port.
+
+Furthermore, the invention of the air-brake has materially reduced the
+number of train men formerly necessary to safely manage a train, just as
+the introduction of steam-hoisting and other machines, both upon docks
+and vessels, has greatly decreased the number of men employed upon the
+mercantile marine.
+
+There is certainly much similarity between the railroad and the
+steamboat as agencies of transportation. Whatever fuel and labor-saving
+causes operate on one must necessarily operate upon the other. When we,
+therefore, find that the ocean rates are only from one-third to
+one-fourth of what they were thirty years ago, we are justly surprised
+to see railroad rates maintained as high as they are. Operating expenses
+have been greatly reduced and passenger travel has largely increased
+during the past twenty years, but reductions corresponding in the
+passenger rates of the United States have not been made.
+
+It is, nevertheless, no easy matter always to determine what are
+reasonable rates. It is easier to tell what rates are unreasonable.
+Rates are unreasonable that bring an income in excess of sufficient to
+keep the road in proper condition, to pay operating expenses, including
+taxes and a fair rate of interest on the amount, not including
+donations, actually invested in the road. The patrons of a road should
+not be taxed to pay interest on their own donations, or on public
+donations, to the road, as the donations were made for the benefit of
+the public, and not for the benefit of private individuals. A rate which
+may appear reasonable to the carrier is apt to be regarded as too high
+by the shipper; and, again, one that seems reasonable to the shipper is
+denounced as too low by the railroad man. Each is tempted to consult
+only his own interests and to disregard the just claims of the other
+side. Thus, while the shipper will claim that his rates ought to be low
+enough to enable him to compete with other shippers more advantageously
+located than he is, the railroad manager will demand a rate which would
+enable him to declare high dividends on largely fictitious values. The
+owners of roads which were built merely for purposes of speculation or
+blackmailing insist on being permitted to charge exorbitant rates to
+bring up their earnings to the level of those roads for whose
+construction there was a legitimate demand.
+
+It is a settled principle of common law that all rates must be
+reasonable, but no uniform rule has as yet been adopted by which the
+question of reasonableness is to be determined. The doctrine laid down
+by Judge Brewer, that "where the rates prescribed will not pay some
+compensation to the owners, then it is the duty of the courts to
+interfere and protect the companies from such rates," and that
+"compensation implies three things: cost of service, interest on bonds,
+and then some dividends," is absurd. A question is never settled until
+it is settled right, and this rule is certainly open to very serious
+objections. A road may be bonded for several times its cost or its real
+value, it may be managed with such recklessness or extravagance that its
+operating expenses may be twice what they would be under a careful and
+economical management, yet under this rule the shipper must pay the
+premium which bond-watering and bad management command. The general
+enforcement of such a rule would place the public at the mercy of
+scheming railroad manipulators. No matter to what extent the business of
+a road may increase, a reduction of rates can always be prevented by the
+issue of new bonds and the doubling of the already lordly salaries of
+its managers. Again, under the operation of this rule a road which
+entirely suffices to do the business between two points may be
+paralleled by another and the public be compelled to pay excessive rates
+to maintain both. It might be said that the public cannot be forced to
+patronize any road, that if it would not withdraw its patronage from the
+old line, the new line would soon become bankrupt, and that in such an
+event its owners, and not the public, would be the sufferers. This
+argument may be met by the statement that, aside from the fact that
+concerted action among a large number of people can never be secured,
+few roads rely for their support solely upon local business, and that
+any loss which the older road sustains from encroachments by its rival
+upon its through traffic it is compelled to make up by raising its rates
+upon its local business. It is the almost inevitable consequence when
+one road is paralleled by another that the business which was
+previously done by one road will be nearly equally divided between the
+two, and under the rule laid down by Judge Brewer the public will be
+called upon to pay the operating expenses and the interest on the bonds
+of both, together with such dividends on the stock as the financiering
+ability of their managers may secure. The better judgment seems to be
+that to determine what are reasonable rates is not a question for
+judicial adjudication.
+
+The Interstate Commerce Commission, in their fourth annual report,
+assert that "there can be no standard of expense which the courts can
+act upon and apply, but that the whole field is one of judgment in the
+exercise of a reasonable discretion by the managing powers, or by the
+public authorities in reviewing their action." Their views upon this
+subject are still more definitely stated in the following words
+contained in the same report:
+
+      "An attempt is made to give authority to the courts to
+      interfere by the suggestion that property or charter
+      contract rights, or both, are involved in the matter of
+      fixing rates, and therefore that it is not possible the
+      conclusions of administrative boards should be final. This
+      is an endeavor, by the mere use of words, to confer
+      jurisdiction upon the courts where the substance is
+      altogether wanting. Property or contract rights are involved
+      in these cases precisely as they are in numerous other cases
+      of the exercise of power under the police authority of the
+      State, either by the State itself or by its municipalities."
+
+These views cannot fail to commend themselves to any unprejudiced mind.
+It is a well-established fact that all officials will, if permitted,
+extend their jurisdiction, and judges are no exception to the rule. It
+was therefore but natural that the courts should attempt to solve the
+problem of railroad rates.
+
+The attempt so far has been fruitless, nor will it be otherwise as long
+as the courts persist in approaching with abstract legal maxims a
+question which, above all things, requires the light of experience and
+the exercise of sound discretion. The question of railroad rates will
+never be satisfactorily settled until it is definitely referred to
+expert administrative State and National boards empowered and prepared
+to meet the many contingencies that will always arise in the
+transportation business.
+
+It is not difficult to account for the inability of the courts to
+properly adjudicate the question of reasonable rates. The legislature,
+or a board to which it has delegated its power, prescribes for a
+railroad company a classification and tariff. The company claims that
+the rates so fixed are unreasonably low and applies to the courts for
+redress.
+
+Now, if the rates were based upon the cost of service only, it might,
+perhaps, be possible for a court to determine whether the prescribed
+rates are adequate or not. But even in such a case the question would
+arise whether the capitalization and the operating expenses of the road
+are not excessive, and its determination would require expert knowledge
+and sound discretion rather than legal lore. However, since the cost of
+service is not the only, and with railroad men not even an essential,
+factor in rate-making, it is evident that the rates upon single
+commodities can not be reviewed upon their individual merits, but the
+tariff must, in the judicial determination of the question whether it is
+reasonable or not, be viewed as a whole. But as it is impossible to
+foretell what effect a readjusted tariff would have on the revenues of a
+road, even courts are forced to admit that an actual trial of the tariff
+is necessary to establish its merits or demerits.
+
+If the complaining company were as anxious to give the new tariff a fair
+trial as it usually is to demonstrate to the satisfaction of the court
+that it is devoid of every principle of justice, such a test might be
+accepted by the public as a reliable basis of judicial procedure. But
+railroad managers are not only striving to perpetuate their own high
+rates, but to show to the public that freight tariffs not emanating from
+a railroad company's office are of necessity crude and unjust to the
+carrier. They know that if they should succeed in convincing the public
+that administrative boards are incapable of dealing with that question,
+they might for years to come be left in undisputed possession of the
+power to make their own rates. This is certainly for the railroad
+manager a prize worth contending for, and no sacrifice is too great for
+him to make when there is any hope of ultimate victory. Being absolutely
+uncontrolled in his action, he finds it an easy matter, by temporarily
+diverting business from his line, by the increase of operating expenses
+and by repressing growing industries, and in many other ways, to curtail
+the business of his road and diminish its revenues. He can court losses
+in a thousand different ways discernible neither to the courts nor the
+general public. In short, it is in the power of any railroad manager to
+manipulate such a trial in his own interest, and, if determined, to
+obtain a verdict against any tariff not of his own making. This policy
+was pursued by several Iowa roads subsequent to Judge Brewer's decision
+that the alleged unreasonableness of the Iowa commissioners' tariff must
+be established by an actual trial, and was persevered in until the suit
+was withdrawn.
+
+But even if the competency of the courts to properly determine such
+questions were admitted, there would still exist one serious objection
+to their jurisdiction. Courts necessarily move slowly, while all
+differences arising between the public and the railways, and especially
+those concerning rates of transportation, require prompt and decisive
+action. There are no fixed conditions in commerce. It is a kaleidoscope
+constantly presenting new phases. Competition at home and abroad, tariff
+duties, the condition of the crops and a thousand other influences
+affect it and may require a prompt readjustment of the tariff. So long
+as railroad companies are permitted to resort to injunctions and effect
+other delays rendered possible through the machinery of the courts, to
+prevent for years the enforcement of tariffs prescribed by
+administrative authorities, so long will the public be at their mercy.
+So long as they have nothing to lose and everything to gain by a
+judicial contest, it will be their policy to delay through the courts
+the enforcement of any tariff, whether prescribed by legislature or by
+an authorized commission, that falls below their standard. It is not to
+be understood that the acts of railroad commissioners should never be
+subject to a judicial view. If such boards clearly exceed their
+authority or are otherwise guilty of maladministration, if they violate
+constitutional rights, then railroad companies, if injured by their
+acts, should be permitted to seek redress in the courts; but they should
+not be permitted to nullify an official tariff by legal maneuvers. It is
+clearly not within the province of the courts to make rates or to lay
+down rules to be followed by those to whom the law has delegated the
+power to make them, nor should the courts aid the railroads in any
+attempt to nullify an official tariff that has been legally promulgated.
+A tariff prepared by sworn and disinterested officials is more likely to
+be just than one prepared by interested railroad men, and railroad
+companies should be compelled to adopt it and continue it in use until
+it is amended or revoked by legal authority.
+
+Individual shippers are powerless as against strong corporations.
+Railroads apply to the courts for what they are pleased to term redress,
+and in the meantime refuse with impunity to accept an official tariff;
+but the shipper has no protection: he must pay their rates or go out of
+business. What reason can be assigned why the weaker should thus be
+discriminated against? A promulgation of a tariff prepared by a
+commission is equivalent to a declaration on the part of these officials
+that the rates or some of the rates charged by the railroads are
+unreasonably high. The railroad, in applying to the courts for
+protection, claims that the tariff prescribed by the commission is
+unreasonably low. Both tariffs are therefore impeached, one being that
+of an interested private company, the other that of a disinterested
+public board. It is evident that, even if the people should see fit to
+give the courts jurisdiction in such controversies, one of these tariffs
+must temporarily prevail pending the decision of the court, and sound
+public policy and justice to the patrons of the road certainly require
+that the official tariff be recognized by the courts and made to be
+respected by the railroad company until it is proved to be unreasonable
+and is set aside by lawful authority.
+
+It is claimed by railroad men that they should be allowed to make their
+own tariffs because rate-making is so intricate a subject that none but
+railroad experts can do it justice. If this were so the courts would be
+even less competent to review a schedule of rates than a State or
+National commission would be to make one. Courts cannot be expected to
+have expert knowledge in all matters that are likely to be brought
+before them. They must rely upon the testimony of expert witnesses
+whenever technical questions are involved in the determination of cases.
+The identical sources of information from which courts draw are
+accessible, or may be made accessible, to a commission, which has the
+additional advantage that its members may be selected with special
+reference to their fitness for the duties which they will be called upon
+to perform and are expected to devote their whole time to the settlement
+of questions arising in the transportation business. Such a commission
+can practically be made a court with jurisdiction over all matters
+connected with railroad business. The railroad manager, no doubt, is
+thoroughly familiar with the wants and desires of his company; but it
+may fairly be presumed that he is less familiar with the needs of the
+public than a railroad commission whose members are in constant
+communication with the people, patiently listen to the complaints of
+shippers, court and receive suggestions as to needed changes in
+classification and rates, and study the relative advantages of the
+different sections and different interests of the State or the country
+as regards transportation. A railroad freight agent, on the contrary, is
+disposed to think that shippers ought to be satisfied with any rate
+lower than those charged fifty years ago for carting or other crude
+methods of transportation. He regards their views and suggestions as
+chimerical and not worthy of any notice, and does not even hesitate to
+inform them that rate-making is a branch of the railroad business wholly
+beyond their comprehension, and ought not to be meddled with or even
+inquired into by the public. The general freight agent is the employe of
+a company which rates his usefulness solely by his ability to constantly
+increase its revenues, and he invariably proceeds upon the theory that
+the best tariff is that which comes nearest imposing upon each commodity
+offered for carriage the maximum transportation tax that it will bear. A
+man who entertains such opinions cannot be supposed to be able to do
+justice to the shipper, and should not be permitted to act as arbitrator
+in rate controversies between the public and the company whose employe
+and advocate he is. Nor have we any reason to hope for a change in the
+present tariff policy of railroads. History has sufficiently
+demonstrated the fact that reforms must come from without. As long as
+human nature remains as it is, railroad officials will, if permitted,
+arrange tariffs in the interest of the men who give them employment, for
+if they did otherwise their services would soon be dispensed with. A
+freight tariff should be in the nature of a contract between the carrier
+and the shipper, and the assent of both parties ought to be essential to
+its validity. But as it is impracticable for all the parties interested
+to meet for the purpose of effecting an agreement, the power to make
+rates has in several States wisely been conferred upon railroad
+commissioners, and there is a strong tendency in others to adopt the
+same policy. Such boards have every opportunity to obtain any
+information needed for the efficient and faithful discharge of their
+duties. They can hear the representatives of the railroads as well as
+those of the shippers, investigate carefully disputed points, summon
+experts and witnesses, and obtain official information relating to
+classifications and rates from every State in the Union, and, if
+necessary, from every quarter of the civilized world. The assertion may
+safely be made that, with experience, a commission acquires more expert
+knowledge relating to the business of rate-making than a railroad
+manager. If there is any mystery connected with the business of
+rate-making which has so far been in the sole possession of railroad
+men, it is to their interest to initiate the commissioners into their
+profound secrets. It will be their privilege to enlighten the
+commissioners as to the actual cost of their respective lines, the cost
+of every branch of the railway service, and as to a thousand other
+matters which the public has both a desire and a right to know. If,
+after a schedule of rates has been prepared, and before it is
+promulgated, railroad men can suggest any improvement in it, they should
+have the privilege to do so; or if, after giving it a fair trial, they
+should be prepared to show that any rate is unreasonably low and
+injurious to them, their complaint should be carefully investigated,
+and, if found well grounded, the wrong should at once be righted.
+
+But the same privileges should be extended to shippers. Their rights and
+their welfare should be guarded as sacredly as those of the railroad
+companies. They should have the same opportunity to examine a proposed
+schedule before its promulgation and protest against any feature of it
+which they may regard prejudicial to their interests, and their
+statements should receive the same consideration as is accorded to those
+of representatives of the railroad companies. So, likewise, when
+shippers prove to the satisfaction of the commission that a rate has
+outlived its reasonableness, their complaints should at once be
+investigated, and if their cause is found to be a just one, the tariff
+should be so amended as to give them relief.
+
+The labors of a board of railroad commissioners are onerous, and their
+responsibility is great. No uniform rule can be laid down for their
+guidance in the fixing of rates, yet there are a few fundamental
+principles which should always be adhered to. The cost of service
+should invariably be an important factor of a rate. Railroads should not
+be compelled to carry any commodity for less than the actual cost of
+moving it, nor should rates be fixed greatly in excess of such cost of
+service. The carload should be the unit of wholesale shipments. Since it
+costs the railroad company as much to move ten carloads of freight which
+belong to one shipper as it costs to move ten carloads belonging to ten
+shippers, no advantage beyond the general carload rate should be given
+to the large shipper. The difference in the rates between shipments in
+less than carload lots ought to be determined solely by the difference
+in the cost of carriage and handling. Where shipments are made in
+carload lots, the loading and unloading is usually done by the shipper
+and consignee, cars are loaded to their full capacity, and no loading or
+unloading of shipments at intermediate points is necessary. It is
+therefore but just that the consignor and consignee should have the
+benefit of the reduced cost of such shipments. Raw materials, and
+especially coal and lumber and kindred articles, the transportation of
+which requires neither an expensive rolling stock nor warehouse
+accommodations nor speedy movement, and in which the risk of loss or
+damage is insignificant, should be carried at the lowest rate possible.
+Such a policy will tend to foster other interests, which will develop
+business for the road and will build up remote sections of the country,
+and will often enable railroads to carry large quantities of these
+commodities at times when they would otherwise be nearly idle. There
+should be a uniform classification throughout the country, based upon
+considerations of justice and equity instead of railroad tradition. Such
+articles should be classed together as resemble each other as concerns
+bulk, weight and risk, or what is virtually the same, cost of carrying
+and handling. It may be safely assumed that a rate which has been made
+and used by railroad companies is remunerative. If it is claimed by
+railroad men that it is not, the burden of proof should rest upon them.
+A rate may also be considered remunerative to a road if other lines
+similarly situated have voluntarily adopted it. A schedule finally must
+be considered reasonable if it enables the company for which it is
+prescribed to earn under efficient and economical management sufficient
+to maintain its road in proper condition and a fair rate of interest
+upon a fair valuation of its road. Property is never worth more than
+what it can be duplicated for, and railroad property is no exception to
+the rule. If there has been a depreciation in the property of a company,
+it should not demand dividends upon values which no longer exist. Nor
+can the same returns be conceded to railroad property as to private
+capital. Its investment is permanent and well secured, if it is honestly
+and intelligently made; and its dividends are net returns after the
+payment of all expenses, including taxes, cost of management and
+maintenance. The three per cent. bonds of the United States Government
+find a ready sale at prices above par. Were there less speculation and
+more honesty and stability in railroad management, railroad securities
+yielding a revenue of from 2-1/2 to 4 per cent. on the actual investment
+would be eagerly sought after by conservative capitalists.
+
+Rate-making requires honesty of purpose, intelligence and discretion,
+qualities as likely to be found among the servants of the people as
+among those of corporations. A commission may err, but its errors are
+not likely to prove as detrimental to the railroad companies as the
+extortionate and discriminating rates imposed by railroad managers have
+proved to the interests of the public. Railroad managers acknowledge no
+obligation except that of earning dividends for their companies, while
+the members of a railroad commission, on the contrary, are responsible
+for their acts to the people, with us the source of all government and
+all power. To question the justice and sincerity of the people, or to
+deny the efficacy of such a control, is to deny the wisdom of popular
+government.
+
+Railroads might be permitted to reduce their rates below the official
+tariff, but they should be required to give at least thirty days' notice
+of such a change, to enable shippers to prepare for it. The companies
+should not be permitted, however, to raise rates again without obtaining
+the commissioners' consent and giving at least two months' notice of the
+proposed advance. Sudden fluctuations in rates are a fruitful source of
+disaster in those branches of business in which the cost of
+transportation forms an important factor in the price of commodities,
+and are as unjust and unwarrantable as would be fluctuations in import
+duties. As long as they are tolerated there can be no reliable basis for
+business calculations or contracts. There is little doubt that, were
+such regulations enforced, railroad wars, so demoralizing to the
+business of the country, would soon belong to the things of the past,
+and a far-reaching assurance of future welfare would be given to the
+commercial, manufacturing and all other legitimate interests of the
+country. It should always be kept in view by the rate-making power that
+the railroad company, like the gas company, the water company and the
+street car company, is acting in the capacity of a public agent, and the
+rate of compensation should be fixed by public authority.
+
+
+
+
+CHAPTER XIV.
+
+REMEDIES.
+
+
+The railroad in America is still in its infancy, both as regards extent
+of mileage and methods of operation. In 1860 the United States had in
+round numbers 30,000 miles of road; in 1870 this number had increased to
+53,000; in 1880 to 93,000, and in 1890 to 167,000. It will thus be seen
+that the average increase during each of those three decades was nearly
+80 per cent. Should this rate of increase continue during the next three
+decades there would be in the present territory of the United States a
+little over three hundred thousand miles in 1900, 550,000 miles in 1910
+and close to one million miles in 1920, or about one mile of road for
+every three miles of territory. It is not likely that the rate of
+increase of the past will continue in the future; but even if this
+should be reduced from 80 to 40 per cent. it would be less than
+fifty-five years when the railroad mileage of the United States would
+reach the million point.
+
+Even this might seem an extravagant estimate, but it must be remembered
+that there are already a number of States in the Union with a railroad
+mileage closely approaching this proportion. The District of Columbia
+has one mile of road for every 3.39 square miles of territory, New
+Jersey for every 3.79, Massachusetts for every 3.96, and Connecticut for
+every 4.96 square miles. Ohio, Pennsylvania, Rhode Island and Illinois
+follow with one mile of railroad for every 5.14, 5.20, 5.57 and 5.59
+square miles of territory, respectively, and Indiana, New York, Delaware
+and Iowa are not far behind them.
+
+It should also be borne in mind that many of the through lines have
+double, some triple, and some even quadruple tracks, which, if taken
+into the account, would increase the mileage much more; and still
+railroad construction in most of these States is far from being at a
+standstill. The United States will eventually be able to sustain a
+closer net of railways than any country in Europe, and we may rest
+assured that the time will come when the fertile prairie States of the
+Northwest will have a mile of railroad for every square mile of
+territory.
+
+In view of the future magnitude of the transportation interest the
+importance of placing its control and management early upon sound
+principles should not be under-estimated. Abuses crept into railroad
+management in the past, not because the men who controlled it were
+necessarily worse than men engaged in other pursuits, but because the
+States failed to provide adequate legislation for the control of this
+new social and commercial force, and the license enjoyed by railroad men
+gradually turned into serious evils what seemed at first only harmless
+practices. It cannot be denied, however, that the absence of restraint
+in time attracted to the business unscrupulous men whose sharp practices
+frequently forced their colleagues of better conscience to do what their
+sense of honor and justice condemned. These evils and abuses have
+increased with the growth of the railroad system, and nothing short of
+the sovereign power can now correct them. It is incumbent upon the state
+not only to correct the evils of the past, but to base legislative
+control of railroads upon principles so wise and so broad as to endure
+for ages, permitting the unlimited growth of the system and at the same
+time insuring commercial liberty and prosperity to the generations to
+come.
+
+As it is always easier to tear down than to build up, so it is likewise
+easier to point out evils than it is to provide proper remedies for
+their cure. Almost any one can criticise existing conditions, but it
+requires wise and constructive statesmanship to propose practical
+measures which will bring about desired improvement. The apparent
+magnitude of the work of correcting the evils and abuses connected with
+the transportation business, many of which have been in vogue for more
+than a generation, has discouraged many from seriously undertaking it.
+And yet we shall find the problem by no means a difficult one, if we
+properly analyze it and go to the root of the evil. Prof. Bryce, in his
+work "The American Commonwealth," refers to the fact that the people of
+this country have been equal to the task of solving the gravest problems
+which have been presented to them, and we need have no doubt of their
+ability to solve the railroad problem. Railroad regulation does not
+require the adoption of any new principle of law. If the common law is
+rightly applied and provision is made for its strict and systematic
+enforcement, it will meet every condition that is likely to arise in the
+transportation business. It should always be remembered that the
+railroad is an improved highway, and the principal reason for which it
+is built is to accommodate the people and promote their welfare, and not
+to serve the selfish ends of a few individuals, and that private
+companies were permitted to build and operate it only because the State
+believed that the public interests could best be served in this way.
+
+It is one of the duties of the State to facilitate transportation by
+establishing highways. These highways may be built by the State directly
+or through municipalities or even private corporations. Thus, under
+authority derived from the State, cities lay out, construct and
+maintain streets within their limits. But these streets become public
+and are always subject to State control. The same rule applies to
+turnpikes and ferries. Although the State transfers to an individual or
+a company its right to maintain a ferry or to build and maintain a
+turnpike, and to compensate itself for its outlay by the collection of
+tolls, the ferry and turnpike nevertheless remain highways, subject to
+the control of the State.
+
+The railroad partakes of two natures, that of a highway and that of a
+common carrier. Railroad companies therefore enjoy the privileges and
+assume the duties of both. The State justly exercises in behalf of such
+companies the right of eminent domain, _i. e._, the right of the
+sovereign to apply private property to public use; but it cannot
+rightfully appropriate private property for private use, even if legal
+compensation were to be made for it. It is only upon the theory that
+railroads are highways, constructed for the public good and subject to
+public control, that the State has authorized railroad companies to take
+private property for their own use by paying for it a reasonable
+compensation. A railroad may even take possession of and intersect a
+public road for the purpose of carrying on its functions. But while the
+sovereign may exercise the right of eminent domain, it cannot delegate
+it to any individual or number of individuals, except to its agents,
+performing its functions and being bound to comply with any rule which
+may be prescribed for the public good. Under the common law the
+individual is entitled to as full use of the railroad as he is of the
+common highway. If he is not allowed to put on his own vehicle, this
+restriction is simply due to the fact that the people believe that the
+business can be done most safely, most economically and most
+efficiently by one company or a limited number of companies operating
+the road for a reasonable compensation. Nor does this restriction differ
+materially from that which the law has placed upon the use of the common
+road. Without legislative sanction no one has a right to put upon it a
+team of elephants or a locomotive and train of cars, or other strange
+motors, and thereby obstruct the public travel. These restrictions might
+be removed by the legislative power, and there is also no doubt that
+under the common law the State has the right to permit the independent
+use of the railroad track by any person having motive power and cars
+adapted to it. The persons and freight transported on the railroad are
+taxed to maintain it, while in the case of the common road this tax is
+placed upon the people and the adjoining property. How to collect the
+tax necessary to sustain the road is simply a question of public policy,
+and it cannot be collected in any case except with the expressed
+permission of the State. If a company is permitted by the State to
+operate a railroad it should only be permitted to collect such tolls as
+are just and reasonable, and what is just and reasonable should be
+determined by the sovereign State, and not by the operating company. The
+railroads of the United States collect from our people in round numbers
+a transportation tax of eleven hundred million dollars annually. This
+tax is equal to a levy of $17 per head, or $85 per family; it is about
+as large as all our other taxes combined. In the State of Iowa it
+amounts to about $22 per head, or $110 per family, and is two and
+one-half times as large as all the State, county, school and municipal
+taxes collected within her borders.
+
+When we consider how thoroughly other public charges are hedged about,
+by careful restrictions and limitations, and with what caution the
+amount to be collected is fixed after thorough public discussion, by
+agents of the people selected by them to serve only for short periods,
+and that those who collect and disburse the funds are under oath and
+bonds for a faithful performance of their duty, is it not preposterous
+to permit agents appointed by a few interested persons, and often
+serving for a long term of years, without any responsibility to the
+public, to fix the rate of this tax, and to collect and disburse the
+immense sums levied for the support of these highways without any
+supervision or restraint?
+
+The Government might as well lease the post-office, waterways and the
+collection of import duties to the highest bidder and permit the lessees
+to reimburse themselves by the collection of such tolls as they might
+see fit, without any governmental restraint whatever, their franchises
+enabling the operating companies to tax each individual, each locality
+and each letter, parcel or article as they saw fit. How long would the
+people of this country endure such a condition of things? The collection
+of taxes has been farmed out, but not by any civilized nation in modern
+times. History shows that this system of taxation has always been
+productive of the gravest abuses, and prejudicial to the public welfare.
+As has already been shown, the railroad is an improved highway, and the
+railroad company in operating it is doing a public business and not a
+private business, and therefore it should be governed by rules
+applicable to public business, and not such as are applicable to private
+business. It is admitted by all that for the services which it performs
+the operating company should receive a reasonable compensation; but to
+say what a reasonable compensation is, how it shall be collected, and to
+prescribe rules regulating the business of the public carrier, is
+solely the right and the duty of the State. The people have never
+permitted the rate of any other public charge to be fixed by the
+beneficiary. Why, then, should privileges be conceded to one beneficiary
+which are denied to all others?
+
+The assertion is often made by railroad managers that railroad
+transportation is a private business as much as any other branch of
+commerce. It is not likely that these same managers would wish to have
+their argument carried to its logical conclusion, for, should the courts
+at any time take their view, they would be under the necessity of
+declaring null and void all their charters, which were granted to them
+upon the assumption that the railroad was a highway operated under the
+authority and control of the State by private companies for the public
+good. If, on the other hand, railroad managers are, for their own
+protection, forced to recognize the public character of railroads, they
+can no longer question the right of the State to so control their
+business as the public good may demand. And this shows the absurdity of
+the claim often made by railroad managers, that, as long as the rates
+charged by them are reasonable, the State has no right to interfere with
+their business, or, in other words, that they may discriminate between
+individuals and localities, and that they may legally practice a
+thousand other abuses as long as individual shippers find it beyond
+their power to prove that they have been charged exorbitant rates.
+
+Charles Fisk Beach, Jr., in his "Commentaries on the Law of Private
+Corporations," lays it down as a general principle of law that "whenever
+any person pursues a public calling and sustains such relations to the
+public that the people must of necessity deal with him, and are under a
+moral duress to submit to his terms if he is unrestrained by law, then,
+in order to prevent extortion and an abuse of his position, the price he
+may charge for his services may be regulated by law." And applying this
+principle to common carriers, and especially railroads, this author
+says:
+
+      "The sovereign has always assumed peculiar control over
+      common carriers as conducting a business in which the public
+      has an interest, and in the case of railway carriers an
+      additional basis of governmental control is grounded in the
+      extraordinary franchise of eminent domain conferred upon
+      these companies. For corporations engaged in carrying goods
+      for hire as common carriers have no right to discriminate in
+      freight rates in favor of one shipper, even when necessary
+      to secure his custom, if the discriminating rate will tend
+      to create a monopoly by excluding from their proper markets
+      the products of the competitors of the favored shipper."
+
+If railroads had no obligations or advantages beyond those of other
+common carriers, such as stage lines and steamship companies, their
+discriminations might be less objectionable, but, as keepers of the
+toll-gates of the public highways, they are no more at liberty to
+regulate their own business regardless of the public welfare than were
+their predecessors, the toll-collectors stationed along the public
+turnpikes and canals. As such public tax-collectors they are bound to
+give equal treatment to all persons and places.
+
+Although the business of constructing and keeping in repair the turnpike
+roads was, as a rule, left to private persons, and the promoters of such
+enterprises were permitted to reimburse themselves for their outlay by
+the collection of tolls, their schedules of tolls were prescribed by the
+State and their business was placed under the supervision of public
+officers, whose duty it was to see that neither extortion nor
+discrimination was practiced in the collection of these tolls, and that
+the private management of a public business did not become the source of
+abuse. The State thus insisted upon exercising a restraining influence
+over the business of turnpike companies because it realized the danger
+of entrusting the management of a semi-public business to companies
+organized solely for private gain, with officers responsible only to
+their stockholders, who, under ordinary circumstances, could be relied
+upon to measure the usefulness of an employe by his ability to
+contribute to the increase of the annual dividends. It will scarcely be
+claimed, even by railroad men, that since the days of turnpikes and
+stage-coaches corporations have become more unselfish and their officers
+less servile. The temptations have increased, while human frailty
+remains the same.
+
+Of course, if we consult the railroad managers as to the best policy to
+be adopted for the future control of railroad companies, we shall be
+informed that we have already gone too far in railroad legislation, that
+nearly all the present evils of transportation of which the public and
+the railroad companies complain may be traced to legislative
+restrictions, and especially to certain features of the Interstate
+Commerce Act. They reluctantly admit that this act has been instrumental
+for good inasmuch as it has corrected some of the abuses that formerly
+existed, but they insist that several of its provisions are too radical
+and do infinitely more harm than good, both to the railroad companies
+and the people; that these obnoxious provisions ought to be repealed,
+and that under such restrictions as would still remain railroad
+companies ought to be permitted to manage their own business. If we
+inquire what modification of the Interstate Commerce Act the railroads
+desire, we find that if the act were amended in conformity with their
+wishes there would be little of it left that is of value. But the
+features which are specially obnoxious to them are the long and short
+haul and the anti-pooling clauses. They even go so far as to demand that
+the Government should not only permit pooling, but should use its strong
+arm to enforce all pooling contracts which railroad companies might see
+fit to enter into. This means, in other words, that the Government
+should enforce an agreement to restrict competition, which is made in
+direct violation of the common law, and aid the companies in maintaining
+such rates as they see fit to establish. If the railroad manager is
+cross-examined and forced to confess the truth, he will have to admit
+that what he really desires is freedom from all restraint, or, if public
+opinion will not tolerate this, then only law enough in letter to
+satisfy a public clamor and permit him to violate its spirit, and to
+then trust to him and the future to bring it into disrepute and cause
+its repeal.
+
+Some shrewd managers have recently expressed a willingness to submit
+their pooling arrangements to a public commission for approval, before
+they should go into effect. This is objectionable on the ground that
+they would then, more even than before, endeavor to control the making
+of the commission. It is far safer to absolutely prohibit pooling and
+all devices used as a substitute for it. No necessity for pooling
+exists, and no good reason can be given why it should be permitted
+unless complete government control is established.
+
+State control of railroad transportation is as essential to the welfare
+of the companies as it is to that of the public. The history of the past
+twenty years has shown that railroad companies are utterly unable to
+regulate their relations with each other. They either cannot arrive at
+an understanding, and then the stronger companies resort to hostilities
+to bring the weaker ones to their terms; or, when an agreement has been
+reached among them, they find themselves unable to enforce it. Anarchy
+then reigns supreme, until finally a truce is patched up, to be again
+followed by evasions, defiance and "war." The nature of the railroad
+business is in fact such that, in the absence of strict State control,
+it is impossible for a conscientious manager to retain the business to
+which his road is naturally entitled, and do full justice to both the
+patrons and the stockholders of his road. Efforts have been made again
+and again by railroad companies to regulate their affairs and adjust
+their difficulties by resorting to pools, agreements, associations and
+combinations, formed with all the ingenuity of which men are capable,
+and supported by penalties and fines; but the unscrupulous railroad
+manager has always found a way to violate or subvert the agreement.
+There is a disposition among railroad companies to arrogate all the
+powers of sovereignty. They want to make their own laws, impose fines
+and declare war, and often go even so far as to openly defy the power of
+the State that has given them their existence.
+
+When railroad managers are shorn of the power to practice abuses, they
+are at the same time deprived of the many advantages they now have to
+speculate in railroad securities and enrich themselves at the expense of
+the public and of other railroad stockholders. The great fortunes of
+this country have been amassed within a few years, and chiefly from
+manipulations of railroad property. If the people permit these practices
+to go on without restraint but a few years more, the property of the
+nation will be largely under the control of a few bold adventurers. The
+great fortunes of Europe which it has required centuries to accumulate
+are already outstripped by the "self-made" millionaires of this country.
+However persistently railroad managers may assure the people that abuses
+in the transportation business have been reduced to a minimum and that
+more stringent legislation will be an evil, it is a fact that many of
+the graver railroad abuses are still practiced and that much more
+reformation is needed in railroad management, or in railroad
+supervision, or in both, to make the railroad what it was designed to
+be, a highway operated for the public and open to all upon equal and
+equitable terms.
+
+The virtual ruler of the United States is public opinion. It is the
+power that controls the legislative as well as the executive and
+judicial departments of the Government. Enactments of legislatures and
+of Congress and decisions of the courts, even of the Supreme Court of
+the United States, not in harmony with an intelligent and determined
+public opinion, cannot endure, and executives not in accord with the
+masses of the people cannot long retain public confidence or official
+authority.
+
+Under these circumstances no reform movement has any prospect of success
+unless it is supported by public opinion. It should therefore be the
+principal endeavor of all advocates of railroad reform to create public
+opinion in favor of the measures proposed by them. With an intelligent
+public on the alert, the Government may be relied upon to pursue a
+healthy and progressive railroad policy. Unfortunately, there are times
+when public opinion upon great questions is dormant, while pecuniary
+interests, like the force of gravity, never suspend their action. To
+arouse the masses at such times, we must rely largely upon an honest,
+independent and courageous press, not influenced by gift or patronage.
+
+Many plans have been proposed for a better control of railroads. Some of
+these are merely theoretical; others have been tried in part, and a few
+have been tried in their entirety, but under circumstances radically
+different from those surrounding us. A system which may be well adapted
+to a monarchy with a centralization of governmental powers would
+probably prove a failure here, when brought in contact with the
+principles of dual sovereignty and local rule. Unless a revolution
+should change our system of government, a dual system of railroad
+control will always be necessary in the United States; for it is not at
+all likely that the individual States will ever voluntarily give up
+their right to regulate commerce carried on within their respective
+borders. On the other hand, the common welfare requires that the
+commerce which is carried on between the States should not be hampered
+by local interference, but should be regulated only by Congress. Our
+experience as a nation has shown that such a quality of sovereignty is
+not inconsistent with strength or efficiency, nor need it be productive
+of rivalry or friction. The fact that a certain mode of railroad
+management has been successful elsewhere is not sufficient proof that it
+would be successful here, nor is the fact that it has not been
+successful elsewhere sufficient proof that it would not be successful
+here. The more the conditions which exist here resemble those under
+which it was tested, the greater is the probability that it can be
+adapted to our circumstances. Independent thought and action is an
+essential element of progress, yet it is the part of wisdom to profit by
+the speculation and experience of others.
+
+The following are the principal methods that have been tried or proposed
+for the control and management of railroads:
+
+_1. Publicity of the railroad business._
+
+It is held by some that the secrecy with which railroad business is at
+present transacted is the source of all evils. It is contended that if
+railroads were required to report to the public every item of income and
+expenditure, discrimination and extortion, as well as bribery and
+corrupt subsidizing, would soon cease. If the companies were compelled
+to render an account of all receipts, special rates and drawbacks could
+not safely be granted by railroad managers, or, if granted, would soon
+lose their charm for recipients, for it would be but a short time until
+others would demand and even exact the same privileges. An attorney
+would, as a member of the legislature, be slow to accept a retaining fee
+if the amount of such fee were made known to his constituents.
+Publishers would hesitate to apply for railroad subsidies if the
+companies were compelled to render periodically an itemized account of
+such expenditures, and railroad companies would, under similar
+circumstances, hesitate to pay subsidies, for the subsidized journal
+would soon be without patrons. If the items annually expended upon
+railroad lobbies were reported, these lobbies would soon be frowned, or
+even hissed, out of legislative halls. There can be no doubt that full
+and complete publicity in railroad business would correct a large number
+of existing abuses, and it should therefore be insisted upon as one of
+the first and essential features of railroad reform. It is questionable,
+however, whether railroad managers are so sensitive to public opinion
+that publicity could be relied upon as a cure for all railroad evils. To
+what extent it is desirable to supplement publicity by other measures
+of State control will be considered hereafter.
+
+It will, of course, be urged by railroad managers that the State has no
+right to pry into the privacy of their business and that they should be
+guaranteed the same protection against intrusion that is enjoyed by
+other branches of business. To this we must reply that not even banks or
+insurance companies are permitted to conduct their business as private,
+and that controlling the highway and levying a transportation tax upon
+every article of commerce passing over it is essentially public business
+and unquestionably subject to public control. Every citizen is as much
+interested in it as he is in the transactions of the custom-house, or of
+the public treasury, and any transaction of a railroad manager that
+shuns public inspection can be set down as a public evil and should be
+suppressed. It may safely be laid down as a general rule that the
+refusal of a railroad company to give publicity to its transactions is
+presumptive evidence of wrong. The people are not alone interested in
+such publicity. Stockholders have likewise a right to be protected
+against the sinister manipulations of dishonest managers, and publicity
+furnishes them the best guarantee of honest management.
+
+Stockholders should attend the meetings of their companies and should
+obtain full knowledge of the management of their affairs. If they will
+make thorough examination and get at bottom facts the chances are that
+contracts will be found with owners of patents, white lines, blue lines,
+refrigerator car lines, coal companies, ferry companies, manufacturing
+companies, packing companies and other kindred organizations, by which
+hundreds of millions of dollars are diverted from the treasuries of the
+railroad companies to the pockets of influential persons connected with
+the management of the roads.
+
+It has recently come to light that the officers of a Pennsylvania
+railroad company, during fifteen years, by some means of secret rebates
+and other allowances, have taken about $100,000,000 out of the treasury
+of the company and distributed it as largesses to about half a dozen
+iron and steel establishments.
+
+This is a method of getting wealthy at the expense of others not unknown
+to many another great fortune accumulated in the last twenty years.
+Railroad discriminations have been a fruitful source of those gross
+inequalities in wealth distribution which now agitate society and call
+people's parties and the like into existence. The modern millionaire
+appears to be an entirely natural creation. Perhaps this money taken in
+special rates from the Pennsylvania railroad's treasury, or, rather,
+from the pockets of the road's other patrons, and of the men who may
+have sought, without special rates, to compete with the favored ones in
+their business, only to be crushed in financial ruin, will be spent in a
+praiseworthy way, in accord with the principles of "the gospel of
+wealth." What we need now is the gospel of distribution of facilities
+for the accumulation of wealth, as well as the gospel of distribution of
+great fortunes.
+
+Whether inspired by a bull or a bear interest or neither, all will
+concede the ability of Mr. Henry Clews to picture the evils of railroad
+management; and his lack of generosity in accrediting ability or honesty
+to legislators who are called upon to provide remedies for the wrongs
+that he so well depicts will not deter me from indorsing the following
+statement made by him in a magazine article which is pertinent to this
+discussion:
+
+      "One great difficulty that present railroad legislators have
+      to contend with is the evil methods of railroad building and
+      extension. A great deal of the mileage of the last two years
+      has been premature, and doubtless for speculative purposes.
+      Most of it has been constructed, however, by old companies
+      who had good credit to float bonds and could raise all the
+      money required. Hence there has been but little financial
+      embarrassment arising from the too rapid construction. But
+      people are beginning to find out that a great deal of this
+      building has been in the interest of speculative directors
+      and their friends, who, for a mere song, had bought up
+      barren lands considered worthless because there was no means
+      of transportation. But these lands soon become immensely
+      valuable for sites of villages, towns and cities. The
+      construction companies, by which these roads were generally
+      built, raised the cost to the highest possible figures, in
+      order, I fear, to make dividends for the construction
+      stockholders. It is noteworthy that the directors connected
+      with these construction schemes have been exceedingly
+      prosperous, while the stockholders of the roads have grown
+      poor in an inverse ratio. The dividends of the latter have
+      disappeared. The new mileage, much of which, I apprehend,
+      has been made on this principle, was about twenty-one
+      thousand miles, which is greater than the entire mileage of
+      Great Britain. There should be additions to the Interstate
+      Law, or a special law regulating the methods of construction
+      companies, which are probably doing more to demoralize the
+      railroad system--and doing it very insidiously, too--than
+      any other factor connected with these great arteries of the
+      country's prosperity.
+
+      "Legislative reform is greatly needed in the matter of
+      railroad reports, especially for the safety of investors,
+      and to prevent speculative abuses among railroad officials
+      and their friends and favorites. There should be statements
+      issued annually, or perhaps more frequently, upon the truth
+      of which everybody might rely. These should be sworn
+      statements, and should bear the signatures of at least three
+      of the directors. These directors should be required to
+      call to their aid expert accountants, and should have placed
+      at their disposal all the books of the company or
+      corporation and all the other papers necessary to verify the
+      accuracy of their report. The correctness of the statement,
+      when issued, would then be a foregone conclusion, and an
+      investor in London, Paris or Berlin could buy or sell on his
+      own judgment, an experiment which, under existing
+      arrangements, might prove very costly. It is proverbial that
+      a railroad statement now is defective in the most essential
+      particulars, and, to put it mildly, usually covers a
+      multitude of sins. According to one plan approved by
+      railroad companies, the statement published to-day, for
+      instance, is made to show a surplus of many millions, but
+      there is nothing said about an open construction account to
+      which the surplus is debtor. On this favorable showing (with
+      this _suppressio veri_) the stock goes up and the insiders
+      quickly unload upon the investment public. The following
+      statement, which comes out six months later, shows that the
+      surplus has been used to settle the construction
+      indebtedness. The surplus has disappeared; consequently the
+      stock suffers a serious decline. Those who bought on the
+      strength of the large surplus sell out, on being informed of
+      its distribution. Then the inside sharks come forward again
+      and purchase at reduced prices, probably at a depreciation
+      of from ten to fifteen points or more, and keep their stock
+      until the next periodical appearance of the bogus surplus.
+      Thus the insiders grow rich, while the outsiders become
+      poor. The only remedy for this abuse is a sworn statement at
+      regular intervals, and if the directors should commit
+      perjury they would render themselves liable to State prison.
+      If a few of them should be tempted to fall into the trap,
+      and be made examples of in this way, nothing would do more
+      to work a speedy reform in this contemptible method of
+      book-keeping.
+
+      "I would also suggest a change in the character of the
+      directors. Those usually chosen for this office now are men
+      who have vast interests of their own, more than sufficient
+      to absorb their entire time and thoughts. They are selected
+      mainly on account of their high-sounding names, to give
+      tone to the corporation and solidify its credit, in order
+      that the lambs of speculation may have proper objects in
+      whom confidence can be reposed and no questions asked. The
+      management of the affairs of the corporation is frequently
+      intrusted to one man, who runs the business to suit his own
+      individual interests."
+
+We can appreciate the force of the above remarks when we consider that
+last year seventy-five companies realized a gross income of
+$846,888,000, which is equal to about 80 per cent. of the total income
+received by all of the railroads of the United States.
+
+_2. Free competition upon all railroads._
+
+Mr. Hudson, in his excellent work, "The Railways and the Republic,"
+recommends the following remedy:
+
+      "Legislation should restore the character of public highways
+      to the railways, by securing to all persons the right to run
+      trains over their tracks upon proper regulations, and by
+      defining the distinction between the proprietorship and
+      maintenance of the railway and the business of common
+      carriers."
+
+Mr. Hudson proposes to leave the track in the possession of its present
+owners, but to permit any individual or company to run, upon the payment
+of a fixed toll, trains and cars over it, under the control of a
+train-dispatcher stationed at a central point. This train-dispatcher is
+to be notified by telegraph of the movement of each train, and is to
+give his orders to the officers in charge of each train, as to what
+points they are to go, where to pass one train and where to wait for
+another. Each transportation company is to own, load and forward its own
+trains; it is to be required to run its regular train on schedule time
+or to have it follow another train as an extra. They are to be liable to
+their shippers as well as to the railway company for all damages caused
+by their neglect, while the railroad company is to be held responsible
+for the condition of its track. It will not be necessary to go into the
+details of Mr. Hudson's plan. Suffice it to say that he proposes to
+establish free competition in the railway business by making the use of
+the railway track as free as that of the turnpike or canal, subject only
+to such control on the part of the public train-dispatcher as the
+paramount considerations of speed and safety may require.
+
+The adoption of Mr. Hudson's plan would simply be a return to the first
+principle of railroad transportation. It has already been shown that the
+first English charters permitted the public to use their own vehicles
+and motive power upon the railroad track, but that shippers and
+independent carriers could not avail themselves of these provisions of
+the early charters because it was in the power of the railroad companies
+to make their tolls prohibitory. There is but little question as to the
+practicability of Mr. Hudson's plan from a purely technical standpoint,
+and its adoption might be advisable if it should be demonstrated that a
+monopoly of the track is inconsistent with the operation of the railways
+for the public good. It is seriously doubted, however, whether such
+ideal competition as Mr. Hudson desires to bring about could be secured
+except at the expense of true economy. Concentration, or, rather,
+consolidation in the railroad business has, under proper legal
+restriction, always resulted in a saving of operating expenses, and
+usually in a reduction of rates. Any step in the opposite direction,
+whatever other merits it may possess, is in the end not likely to give
+lower rates. If it is a settled principle that railroads are only
+entitled to a fair compensation for their services, it must be evident
+that what would be a fair compensation for the same or similar services
+to a large, well-organized, well-regulated and well-managed company
+cannot be sufficient compensation to an individual carrier or a small
+company, whose expenses will always be comparatively larger than those
+of its better-equipped rival. Monopoly and extortion need not
+necessarily be synonymous. In fact, States and municipalities in their
+public works often prefer monopoly to competition as the cheaper of the
+two. Nevertheless, should it ever be found that monopolies cannot be
+reconciled with justice and economy, a return to the first principles of
+railroading may become advisable.
+
+_3. State ownership and management._
+
+A number of European states, notably Prussia, France and Belgium, as
+well as Australia, British India and the British colonies in Southern
+Africa, have adopted government ownership of railroads. The motives
+which led to this step in the various countries differ greatly. While in
+Europe military and political considerations predominated, in Africa and
+Australia it was more the want of private capital and energy which led
+the government to engage in railroad enterprises. There has in most of
+these states been a desire to avoid the evils usually connected with
+private management. The experiment of state ownership and management of
+railroads has been longest tried in Belgium, and with the best results.
+With an excellent service the rates of the Belgian state roads are the
+lowest in Europe. Their first-class passenger tariffs are, next to the
+zone tariff recently adopted on the state roads of Hungary, the lowest
+in the world, and are, for the same distance, lower than those of
+American roads. In Prussia the state service, upon the whole, is also
+superior to that of private companies, and is probably equal to the
+public demand. In France the government only owns and operates less
+important lines, but furnishes upon these a more efficient and cheaper
+service than private companies would either be able or disposed to
+furnish. The oft-repeated statement of those opposed to government
+regulation to the contrary notwithstanding, government ownership and
+management of railroads is a decided success in Europe, Mr. Jeans says
+of state railroads:
+
+      "Notwithstanding the superior financial result, the lines
+      worked by the state are those kept in the best order, and
+      the working of which gives the greatest satisfaction to the
+      commercial world and the public in general as regards
+      regularity of conveyance, cheapness of transit and the
+      comfort of travelers."
+
+It is difficult to see how any unbiased person can travel on any of the
+state roads of Europe without coming to the same conclusion. State
+management offers certainly some decided advantages to the public. Above
+all, the business of the roads is not conducted for the pecuniary
+advantage of a few, but for the common good. Commerce is not arbitrarily
+disturbed to aid unscrupulous managers in their stock speculations. New
+lines are not built for speculative purposes, but for the development of
+the country. Rates are based more upon the cost of service than upon
+what the traffic will bear, and the ultimate object of the state's
+policy is not high profits, but a healthy growth of the country's
+commerce, while the sole aim of a private company is to get the largest
+revenue possible. The permanent way of the state road is kept in better
+condition, the public safety and convenience being paramount
+considerations. Rates are stable and uniform, instead of being
+changeable and discriminating, and all persons and places are as equal
+before the railroad tax collector as before the law. It may be laid down
+as a general rule that under private management of railroads efforts
+will be made to secure the highest rates possible, while it is the aim
+of the Government to grant the lowest rates possible. Mr. Jeans proves
+by statistics that the cost of maintenance of way is generally higher on
+the state lines, and that traffic expenses are higher on the lines of
+private companies. In commenting upon this difference he says:
+
+      "It might easily be contended, and even proved beyond all
+      doubt, that the first characteristic is a result of the
+      better condition in which the state keeps the permanent way;
+      and, so far as this is the case, the public convenience,
+      safety and general advantage are promoted.
+
+      "The highest range of traffic expenses on companies' lines
+      undoubtedly argues greater laxity of management, since, as
+      we have already shown, this is one of the most elastic of
+      items, and may be either very high or very low, according as
+      economy or extravagance is the prevailing system.... The
+      experience of Continental Europe points unmistakably to the
+      exercise of greater economy in state management."
+
+Judge Dillon, of the United States Court, in his order appointing Hon.
+J. B. Grinnell receiver for the Central Railroad of Iowa, in 1876, said:
+
+      "The railroads in the hands of the court--and in the circuit
+      there are eight or ten--have all been run with less expense,
+      and have made more money, than when they were operated by
+      the companies; and we hope and believe under your
+      supervision that this road will prove no exception, and that
+      the property will be worth more at the end of the
+      litigation."
+
+Upon Mr. Grinnell's resignation, after nearly three years of service,
+Judge Grant said, in asking for the discharge of his bondsmen:
+
+      "I concur entirely in the opinion of the State commissioners
+      that he has very much improved the condition of the road,
+      and he left it in far superior condition to that in which he
+      received it."
+
+Yet Government ownership and management of railroads also has its
+drawbacks. It is claimed by some that such management is more expensive
+than that of lines owned by private companies. It has already been shown
+that the permanent way is kept in better condition by the state than by
+private corporations. In Russia, Germany, Austria-Hungary, France and
+Italy the state expends from 15 to 30 per cent. more for the maintenance
+of the permanent way than the private companies. It is perhaps also true
+that the rank and file of railroad employes fare, on an average, better
+under government than they do under private management; but, as an
+offset to this, it should be remembered that quite a saving is effected
+by the state in the salary account of general officers. The people will
+not consent to pay the manager of a railroad line a salary six times as
+large as that of a cabinet officer, and provide at the same time
+sinecures for his sons, brothers, nephews and cousins.
+
+It is furthermore claimed that, as government is organized, it cannot,
+all other things being equal, respond to the demands of commerce as
+promptly as private companies. This feature, however, may be an
+advantage to the country at large rather than a detriment. But the
+strongest argument that can be produced against state ownership of
+railroads is that under a democratic form of government it might exert a
+demoralizing influence in politics. The 1,700 railroad companies of the
+United States have at present an army of about 800,000 employes. This
+number is constantly increasing, and it is more than probable that
+before the end of the present century it will have reached a million.
+When it is considered what importance is at present attached to the
+political influence of a hundred thousand Federal officers, it is not
+surprising that conservative citizens should hesitate to add to the
+ranks of these officeholders a six or seven times larger force.
+Dangerous as the railroad influence now is in politics, it would be ten
+times more dangerous if under a system of Government management
+considerations of self-interest should induce a million railroad
+employes to act as a political unit and political parties should vie
+with each other in bidding for the railroad vote. Could our civil
+service ever be so organized as to divest it entirely of political
+power, state management of railroads might still offer the best solution
+of the railroad problem.
+
+Mr. T. B. Blackstone, president of the Chicago and Alton Railroad
+Company, has recently created somewhat of a surprise by declaring in
+favor of Government ownership of railroads. That Mr. Blackstone's
+programme will eventually receive the approval of a large number of his
+colleagues there can be but little doubt. With the people wide-awake
+upon this subject, the opportunities for railroad speculation are
+lessening, and the scheme to early unload the railroads of the country
+on the Government at a highly inflated value speaks well for the
+financial farsightedness of its author. Mr. Blackstone proposes to have
+railroad stockholders do here what the former owners of the telegraph
+did in Great Britain, _i. e._, dispose of their property to the
+Government, at a price representing several times its original cost or
+even several times the cost of duplication.
+
+Mr. C. Wood Davis, formerly general freight and passenger agent of one
+of the leading roads east from Chicago, is one of the best informed and
+clearest-headed writers upon the railroad question. He has, after much
+experience and long study, been converted to the advocacy of national
+ownership as a solution of the railroad problem. In a recent article
+published by the Arena Publishing Company, entitled "Should the Nation
+own the Railways?" he presents the objections and advantages of national
+ownership. He says:
+
+      "The objections to national ownership are many, that most
+      frequently advanced, and having the most force, being the
+      possibility that, by reason of its control of a vastly
+      increased number of civil servants, the party in possession
+      of the Federal administration at the time such ownership was
+      assumed would be able to perpetuate its power
+      indefinitely.... This objection would seem to be well taken,
+      and indicates serious and far-reaching results unless some
+      way can be devised to neutralize the political power of such
+      a vast addition to the official army.... In the military
+      service we have a body of men that exerts little or no
+      political power, as the moment a citizen enters the army he
+      divests himself of political functions; and it is not
+      hazardous to say that 700,000 capable and efficient men can
+      be found who, for the sake of employment, to be continued so
+      long as they are capable and well behaved, will forego the
+      right to take part in political affairs. If a sufficient
+      number of such men can be found, this objection would, by
+      proper legislation, be divested of all its force....
+
+      "2. That there would be constant political pressure to make
+      places for the strikers of the party in power, thus adding a
+      vast number of useless men to the force, and rendering it
+      progressively more difficult to effect a change in the
+      political complexion of the administration.
+
+      "That this objection has much less force than is claimed is
+      clear from the conduct of the postal department, which is
+      unquestionably a political adjunct of the administration;
+      yet but few useless men are employed, while its conduct of
+      the mail service is a model of efficiency after which the
+      corporate-managed railways might well pattern. Moreover, if
+      the railways are put under non-partisan control, this
+      objection will lose nearly, if not quite, all its force.
+
+      "3. That the service would be less efficient and cost more
+      than with continued corporate ownership. This appears to be
+      bare assertion, as from the very nature of the case there
+      can be no data outside those furnished by the
+      government-owned railways of the British colonies, and such
+      data negative these assertions; and the advocates of
+      national ownership are justified in asserting that such
+      ownership would materially lessen the cost, as any expert
+      can readily point out many ways in which the enormous costs
+      of corporate management would be lessened. With those
+      familiar with present methods, and not interested in their
+      perpetuation, this objection has no force whatever.
+
+      "4. That with constant political pressure unnecessary lines
+      would be built for political ends. This is also bare
+      assertion, although it is not impossible that such results
+      would follow; yet such has not been the case in the British
+      colonies where the governments have had control of
+      construction....
+
+      "5. That, with the amount of red tape that will be in use,
+      it will be impossible to secure the building of needed
+      lines. While such objection is inconsistent with the fourth,
+      it may have some force, but as the greater part of the
+      country is already provided with all the railways that will
+      be needed for a generation, it is not a very serious
+      objection even if it is as difficult as asserted to procure
+      the building of the new lines. It is not probable, however,
+      that the Government would refuse to build any line that
+      would clearly subserve public, convenience, the conduct of
+      the postal service negativing such a supposition....
+
+      "6. That lines built by the Government would cost much more
+      than if built by corporations. Possibly this would be true,
+      but they would be much better built and cost far less for
+      maintenance and betterments, and would represent no more
+      than actual cost; and such lines as the Kansas Midland,
+      costing but $10,200 per mile, would not, as now, be
+      capitalized at $53,024 per mile, nor would the president of
+      the Union Pacific (as does Sidney Dillon, in the _North
+      American Review_ for April) say that "a citizen, simply as
+      a citizen, commits an impertinence when he questions the
+      right of a corporation to capitalize its properties at any
+      sum whatever," as then there would be no Sidney Dillons who
+      would be presidents of corporations, pretending to own
+      railways built wholly from Government moneys and lands, and
+      who have never invested a dollar in the construction of a
+      property which they have now capitalized at the modest sum
+      of $106,000 per mile....
+
+      "7. That they are incapable of as progressive improvement as
+      are corporate-owned ones, and will not keep pace with the
+      progress of the nation in other respects; and in his _Forum_
+      article Mr. Acworth lays great stress upon this phase of the
+      question and argues that as a result the service would be
+      far less satisfactory.
+
+      "There may be force in this objection, but the evidence
+      points to an opposite conclusion. When the nation owns the
+      railways trains will run into union depots, the equipment
+      will become uniform and of the best character, and so
+      sufficient that the traffic in no part of the country would
+      have to wait while the worthless locomotives of some
+      bankrupt corporation were being patched up, nor would there
+      be the present difficulties in obtaining freight cars
+      growing out of the poverty of corporations which have been
+      plundered by the manipulators, and improvements would not be
+      hindered by the diverse ideas of the managers of various
+      lines in relation to the adoption of devices intended to
+      render life more secure or to add to the public
+      convenience.... Existing evidence all negatives Mr.
+      Acworth's postulate that "state railway systems are
+      incapable of vigorous life."
+
+      "8. An objection to national ownership which the writer has
+      not seen advanced is that States, counties, cities,
+      townships and school districts would lose some $27,000,000
+      of revenue derived from taxes upon railways. While this
+      would be a serious loss to some communities, there would be
+      compensating advantages for the public, as the cost of
+      transportation could be lessened in like measure.
+
+      "Many believe stringent laws, enforced by commissions
+      having judicial power, will serve the desired end, and the
+      writer was long hopeful of the efficacy of regulation by
+      State and National commissions; but close observation of
+      their endeavors and of the constant efforts--too often
+      successful--of the corporations to place their tools on such
+      commissions, and to evade all laws and regulations, have
+      convinced him that such control is and must continue to be
+      ineffective and that the only hope of just and impartial
+      treatment for railway users is to exercise the 'right of
+      eminent domain,' condemn the railways, and pay their owners
+      what it would cost to duplicate them; and in this connection
+      it may be well to state what valuations some of the
+      corporations place upon their properties.
+
+      "Some years since the Santa Fe filed in the counties on its
+      line a statement showing that at the then price of labor and
+      materials--rails were double the present price--their road
+      could be duplicated for $9,685 per mile, and, the materials
+      being much worn, the actual cash value of the road did not
+      exceed $7,725 per mile.
+
+      "In 1885 the superintendent of the St. Louis and Iron
+      Mountain Railway, before the Arkansas State Board of
+      Assessors, swore that he could duplicate such a railway for
+      $11,000 per mile, and yet Mr. Gould has managed to float its
+      securities, notwithstanding a capitalization of five times
+      that amount."
+
+Among the advantages to be derived from Government ownership he names
+the following:
+
+      "First would be the stability and practical uniformity of
+      rates, now impossible, as they are subject to change by
+      hundreds of officials, and are often made for the purpose of
+      enriching such officials....
+
+      "It would place the rate-making power in one body, with no
+      inducement to act otherwise than fairly and impartially, and
+      this would simplify the whole business and relegate an army
+      of traffic managers, general freight agents, soliciting
+      agents, brokers, scalpers and hordes of traffic association
+      officials to more useful callings, while relieving the
+      honest user of the railway of intolerable burdens.
+
+      "Under corporate control, railways and their officials have
+      taken possession of the majority of mines which furnish the
+      fuel so necessary to domestic and industrial life, and there
+      are few coal fields where they do not fix the price at which
+      so essential an article shall be sold, and the whole nation
+      is thus forced to pay undue tribute.
+
+      "Controlling rates and the distribution of cars, railway
+      officials have driven nearly all the mine owners, who have
+      not railways or railway officials for partners, to the wall.
+
+      "With the Government operating the railways, discriminations
+      would cease, as would individual and local oppression; and
+      we may be sure that an instant and absolute divorce would be
+      decreed between railways and their officials on one side,
+      and commercial enterprises of every name and kind on the
+      other.
+
+      "The failure to furnish equipment to do the business of the
+      tributary country promptly is one of the greater evils of
+      corporate administration, enabling officials to practice
+      most injurious and oppressive forms of discrimination, and
+      is one that neither Federal nor State commission pays much
+      attention to. With national ownership a sufficiency of cars
+      would be provided. On many roads the funds that should have
+      been devoted to furnishing the needed equipment, and which
+      the corporations contracted to provide when they accepted
+      their charters, have been divided as construction profits,
+      or, as in the case of the Santa Fe, Union Pacific, and many
+      others, diverted to the payment of unearned dividends, while
+      the public suffers from this failure to comply with charter
+      obligations.
+
+      "There would be such an adjustment of rates that traffic
+      would take the natural short route, and not, as under
+      corporate management, be sent around by the way of Robin
+      Hood's barn, when it might reach its destination by a route
+      but two-thirds as long, and thus save the unnecessary tax to
+      which the industries of the country are subjected. That
+      traffic can be sent by these roundabout routes at the same
+      or less rates than is charged by the shorter ones is _prima
+      facie_ evidence that rates are too high.
+
+      "There would be a great reduction in the number of men
+      employed in towns entered by more than one line. For
+      instance, take a town where there are three or more
+      railways, and we find three or more full-fledged staffs,
+      three or more expensive up-town freight and ticket offices,
+      three or more separate sets of all kinds of officials and
+      employes, and three or more separate depots and yards to be
+      maintained. Under Government control these staffs--except in
+      very large cities--would be reduced to one, and all trains
+      would run into one centrally located depot; freight and
+      passengers be transferred without present cost, annoyance
+      and friction, and public convenience and comfort subserved,
+      and added to in manner and degree almost inconceivable.
+
+      "The great number of expensive attorneys now employed, with
+      all the attendant corruption with the fountains of justice,
+      could be dispensed with, and there would be no corporations
+      to take from the bench the best legal minds, by offering
+      three or four times the Federal salary....
+
+      "Every citizen riding would pay fare, adding immensely to
+      the revenues. Few have any conception of the proportion who
+      travel free, and half a century's experience renders it
+      doubtful if the evil--so much greater than ever was the
+      franking privilege--can be eliminated otherwise than by
+      national ownership. From the experience of the writer, as an
+      auditor of railway accounts, and as an executive officer
+      issuing passes, he is able to say that fully ten per cent.
+      travel free, the result being that the great mass of railway
+      users are yearly mulcted some thirty millions of dollars for
+      the benefit of the favored minority; hence it is evident
+      that if all were required to pay for railway services as
+      they are for mail services, the rates might be reduced ten
+      per cent, or more, and the corporate revenues be no less,
+      and the operating expenses no more. In no other
+      country--unless it be under the same system in Canada--are
+      nine-tenths of the people taxed to pay the traveling
+      expenses of the other tenth. By what right do the
+      corporations tax the public that members of Congress,
+      legislators, judges and other court officials and their
+      families may ride free? Why is it that when a legislature
+      is in session passes are as plentiful as leaves in the
+      forest in autumn?...
+
+      "The corporations have ineffectually wrestled with the
+      commission evil, and any number of agreements have been
+      entered into to do away with it; but it is so thoroughly
+      entrenched, and so many officials have an interest in its
+      perpetuation, that they are utterly powerless in the
+      presence of a system which imposes great and needless
+      burdens upon their patrons, but which will die the day the
+      Government takes possession of the railways, as then there
+      will be no corporations ready to pay for the diversion of
+      traffic.
+
+      "As a rule, American railways pay the highest salaries in
+      the world for those engaged in directing business
+      operations, but such salaries are not paid because
+      transcendent talents are necessary to conduct the ordinary
+      operations of railway administration, but for the purpose of
+      checkmating the chicanery of corporate competitors. In other
+      words, these exceptionally high salaries are paid for the
+      purpose, and because their recipients are believed to have
+      the ability to hold up their end in unscrupulous corporate
+      warfare where, as one railway president expressed it, 'the
+      greatest liar comes out ahead....'
+
+      "Government control will enable railway users to dispense
+      with the services of such high-priced umpires as Mr. Aldace
+      F. Walker, as well as of all the other officials of
+      sixty-eight traffic associations, fruitlessly laboring to
+      prevent each of five hundred corporations from getting the
+      start of its fellows, and trying to prevent each of the five
+      hundred from absorbing an undue share of the traffic. It
+      appears that each of these costly peace-making attachments
+      has an average of seven corporations to watch....
+
+      "With National ownership the expenditures involved in the
+      maintenance of traffic associations would be saved and
+      railway users relieved of a tax that, judging from the
+      reports of a limited number of corporations of their
+      contribution towards the support of such organizations, must
+      annually amount to between $4,000,000 and $5,000,000.
+
+      "Of the six hundred corporations operating railways,
+      probably five hundred maintain costly general offices,
+      where president, secretary and treasurer pass the time
+      surrounded by an expensive staff. The majority of such
+      offices are off the lines of the respective corporations, in
+      the larger cities, where high rents are paid and great
+      expenses entailed, that proper attention may be given to
+      bolstering or depressing the price of the corporation's
+      shares, as the management may be long or short of the
+      market. So far as the utility of the railways is concerned,
+      as instruments of anything but speculation such offices and
+      officers might as well be located in the moon, and their
+      cost saved to the public....
+
+      "Railways spend enormous sums in advertising, the most of
+      which National ownership would save, as it would be no more
+      necessary to advertise the advantages of any particular line
+      than it is to advertise the advantages of any given mail
+      route.... A still greater expense is involved in the
+      maintenance of freight and passenger offices off the
+      respective lines, for the purpose of securing a portion of
+      competitive traffic. In this way vast sums are expended in
+      the payment of rents and the salaries of hordes of agents,
+      solicitors, clerks, etc., etc....
+
+      "Under Government control discriminations against localities
+      would cease, whereas now localities are discriminated
+      against because managers are interested in real estate
+      elsewhere, or are interested in diverting traffic in certain
+      directions....
+
+      "Another, and an incalculable benefit, which would result
+      from National ownership, would be the relief of State and
+      National legislation from the pressure and corrupting
+      practices of railway corporations, which constitute one of
+      the greatest dangers to which republican institutions can be
+      subjected. This alone renders the nationalization of the
+      railways most desirable, and at the same time would have the
+      effect of emancipating a large part of the press from a
+      galling thraldom to the corporations....
+
+      "Estimated net annual saving to the public which would
+      result from Government control:
+
+      From consolidation of depots and staffs           $20,000,000
+      From exclusive use of shortest routes              25,000,000
+      In attorneys' fees and legal expenses              12,000,000
+      From the abrogation of the pass evil               30,000,000
+      From the abrogation of the commission evil         20,000,000
+      By dispensing with  high-priced managers
+        and staffs                                       4,000,000
+      By disbanding traffic associations                  4,000,000
+      By dispensing with presidents, etc                 25,000,000
+      By abolishing all but local offices,
+        solicitors, etc.                                 15,000,000
+      Of five-sevenths of the advertising account         5,000,000
+                                                        -----------
+      Total savings by reason of better administration  $160,000,000
+
+      "It would appear that, after yearly setting aside
+      $50,000,000 as a sinking fund, there are the best reasons
+      for believing that the cost of the railway service would be
+      some $310,000,000 less than under corporate management.
+
+      "That $6,000,000,000 is much more than it would cost to
+      duplicate existing railways will not be questioned by the
+      disinterested familiar with late reductions in the cost of
+      construction, and that such a valuation is excessive is
+      manifest from the fact that it is much more than the market
+      value of all the railway bonds and shares in existence."
+
+The above quotations from Mr. Davis' article hardly do it justice, and
+it should be read in full to appreciate its full force. Many of the
+predictions and estimates are undoubtedly in the main correct, yet upon
+the whole it must be admitted that it is a rather rosy and too hopeful
+view to take of Government ownership of our railroads.
+
+_4. State ownership with private management._
+
+This is a compromise between a public and a private system of railway
+ownership and management. It is claimed by the advocates of this system
+that if the Government would acquire by purchase or through condemnation
+proceedings all of the railroads of the country, pay for them by issuing
+its bonds, and then lease the various lines to the highest responsible
+bidders, prescribing a schedule and rules of management, most of the
+benefits resulting from state ownership of railroads could be secured
+while nearly all its disadvantages would be avoided. It is proposed to
+purchase railroads at their actual value and to issue in payment bonds
+bearing the same rate of interest as other Government securities. This
+would deprive managers of every opportunity to manipulate the railroad
+business for purposes of stock speculation. It would also reduce the
+fixed charges of our railroads at least 50 per cent., the benefits of
+which reduction the public would chiefly share. The acquisition of the
+railroads by the Government would, moreover, afford the conservative
+capitalist a safe and permanent investment, which, with the gradual
+disappearance of our war debt, might become a national desideratum.
+
+It is proposed by the advocates of this system that the Government fix
+rates of transportation for a certain period, to be reviewed at the end
+of that period upon an agreed basis. The operating companies would be
+required to keep their roads in repair and give sufficient bonds for the
+faithful performance of their contracts. If found guilty of persistent
+violations of the terms of their leases or of such laws as Congress
+might enact for their control, their bonds and leases might be declared
+forfeited. A new Government department or bureau would have to be
+established and charged with the duty of exercising the same control
+over railroads which the Government now exercises over national banks,
+and in addition to this complete publicity of the service would have to
+be relied upon to prevent the introduction of abuses.
+
+There are at least two valid objections that can be urged against the
+adoption of such a system. Responsible companies could not be induced to
+lease a line for a valid consideration unless their rates were
+definitely fixed for a series of years. Such a course might, however,
+in time result in great hardship to the commerce of the country, as the
+great and unavoidable difference in the rates of the various railroad
+lines of the country would give to the commercial interests of some
+sections decided advantages over those of others. Besides this it would
+be very difficult to compel the different companies to keep the lines
+leased by them in repair. Controversies would constantly arise between
+the officers charged with the supervision of the roads and the operating
+companies, which could be ultimately determined only by the courts,
+causing to the Government loss, or at least delay in the adjustments.
+
+_5. National control._
+
+Mr. A. B. Stickney, in his work, "The Railway Problem," holds that in
+the interest of uniformity it is desirable to transfer the entire
+control of railroads to the National Government. He assigns two reasons
+for the proposed change; one being that Congress would consider the
+subject of railroad control with more intelligence and greater
+deliberation; the other, that "the problem of regulating railway tolls
+and of managing railways is essentially and practically indivisible by
+the State lines or otherwise," and that the authority of Congress to
+deal with interstate traffic carries with it the right to regulate the
+traffic which is now assumed to be controlled by the several States.
+
+It must be admitted that it is a difficult matter to draw the line of
+demarcation between National and State control, and that Congressional
+regulation of railways would remedy many evils which now affect our
+transportation system; yet there is reason to believe that the proposed
+change would in the end be productive of more evil than good. It is an
+essentially American maxim that the home government only should be
+trusted with the administration of home affairs. The people of each
+State know best their local needs, and it is safe to say that for a
+generation or two no serious effort will be made to amend the Federal
+Constitution in this respect or to secure from the courts an
+interpretation of the interstate commerce clause greatly differing from
+that which now obtains.
+
+It is thus seen that nearly all the methods of railroad management which
+we have discussed are, at the present time at least, more or less
+impracticable on account of the radical changes which they would
+necessitate. It is not likely that for many years to come the American
+people could be induced to try any extensive experiments in state
+ownership of railroads; nor is it any more likely that the present
+generation will undertake the difficult task of separating the ownership
+of railroads from their operation.
+
+A nation is, like the individual, inclined to follow beaten tracks. It
+finds it, as a rule, easier to improve these tracks than to abandon them
+and mark out a new course. Any proposition made for the improvement of
+our system of railroad transportation is in the same proportion likely
+to receive the approval of the masses in which it makes use of existing
+conditions. It will, therefore, be my aim, in making suggestions as to a
+more efficient control of this modern highway, to retain whatever good
+features the present system possesses, and to only propose such changes
+as may seem essential to restore to the railroad the character of a
+highway.
+
+As has been indicated above, any system of railway regulation, to be
+applicable to our circumstances, must recognize the dual sovereignty of
+Nation and State. The great majority of our railroad corporations were
+originally created by the State, and are only responsible to the State
+as long as they do not engage in interstate commerce. Even foreign
+corporations must submit to all police regulations of the State in which
+they may do business, and as long as the American Constitution remains
+intact the individual States will, and should, assert their right to
+regulate local traffic and to exercise police supervision over all
+railroads crossing their boundaries.
+
+All power should be kept as closely to the people as is consistent with
+efficiency in the public service. It may even be questioned whether
+entire transfer to the Federal Government of the supervisory powers now
+exercised by the States in railroad affairs would tend to correct
+existing railroad evils more speedily or more effectually than they can
+be corrected through the agency of local rule. The conditions, and
+therefore the wants, of the different States differ so greatly that
+general legislation must always fail when it attempts to regulate
+matters of merely local concern.
+
+The means employed by the State for the regulation of the roads under
+its jurisdiction should be such as are least likely to lead to a
+conflict with Federal authority, and experience has shown that the
+authority of the General Government and that of an individual State over
+a railroad company, which is incorporated under the laws of the latter,
+but is engaged in interstate commerce, may be so harmonized as to avoid
+conflicts between the two sovereignties without any great sacrifice of
+power on the part of either. Judge Cooley said recently in reference to
+regulation by National and State commissions:
+
+      "There is no good reason in the nature of things why the
+      conformity should not be complete and perfect. It is
+      remarkable that up to this time there has been so little--I
+      will not say of conflict, but even of diversity of action
+      between the National and State commissions. Indeed, I recall
+      no instance at this time when anything done by the one has
+      seemed to me to afford just ground for complaint by the
+      other. This may justly be attributed to the fact that there
+      has been no purpose on the part of either to do any act that
+      could afford ground for just complaint on the part of
+      managers of the business regulated and no desire to do
+      anything else than to apply rules of right and equality for
+      the protection of the general public. The aim of all
+      regulation ought to be justice, and when it is apparent that
+      this is the purpose of the several commissions, the railroad
+      managers of the country may more reasonably be expected to
+      cooperate with them much more generally than they do now. If
+      these managers were to come generally and heartily into more
+      full and complete recognition of the rules of right and
+      justice that the law undertakes to lay down for the
+      performance of their duties in their management of the great
+      interests they represent, there cannot be the least doubt
+      that the general result would be, not only that their
+      service to the public would be more useful than it is now,
+      but that the revenues derived from their business would be
+      materially increased through the cutting off of many of the
+      drains upon them, which now, while affecting injuriously the
+      returns they can make to their stockholders, at the same
+      time have the effect of prejudicing the mind of the general
+      public against railroad management to an extent quite beyond
+      what is generally understood by those who suffer from it.
+      The prejudice is inevitable, and not at all unreasonable
+      when it is seen, as it very often is, that these drains
+      result from an unjust discrimination against the public or
+      some portion thereof, that they are of a character that
+      ought to need no law and no criminal or other penalties to
+      put them under the ban of condemnation in every office of
+      railroad management.
+
+      "I take the liberty of adding one more thought: that the
+      more perfect is railroad legislation, the less we shall hear
+      of transportation by rail being made a Government function,
+      the General Government making purchase of all the roads and
+      entering upon a course which will lead we know not where or
+      into what disasters."
+
+There has been during the past twenty years a tendency in a majority of
+the States to place the local control of railroads in the hands of
+executive boards, usually styled "railroad commissioners." Previous to
+this period the various States relied solely upon legislation for the
+regulation of the transportation business, but in time they became
+convinced that such laws were inoperative for the want of an enforcing
+power. It was found that the individual shipper was unable to cope with
+a powerful company and usually would rather suffer wrong than to enter
+into a contest which nearly always resulted in great pecuniary loss to
+him. On the other hand, it was apparent that if the claim of the
+individual were pressed by a railroad commission, even though such a
+body had but limited powers, it would, under ordinary circumstances, be
+honored, provided it was meritorious; and if the commission was
+compelled to enforce a demand through the courts, it would have the
+support of the State to poise the wealth and power of the corporation.
+
+The term "railroad commissioner" in the United States is nearly as old
+as the railroad itself; but the first officials bearing that title were
+merely successors to the turnpike commissioners of yore; their duties
+consisted chiefly in supervising, passing or reporting upon the
+construction and condition of the highway.
+
+The first railroad commission, in the present acceptation of the term,
+was created in the State of Massachusetts, in 1869. The commission
+consisted of three persons, whose principal duty was to "make an annual
+report to the General Court, including such statements, facts and
+explanations as will disclose the actual working of the system of
+railroad transportation in its bearing upon the business and prosperity
+of the commonwealth, and such suggestions as to its general railroad
+policy, or any part thereof, or the condition, affairs or conduct of any
+railroad corporation, as may seem to it appropriate." This board also
+had the general supervision of all railroads and power to examine the
+same. It was required to give notice in writing to any railroad
+corporation which, in its judgment, was guilty of any violation of the
+railroad laws of the State; and if such company continued the violation,
+after such notice, it became the duty of the commission to present the
+facts to the Attorney-General. It was further made the duty of the board
+to examine, from time to time, the books and accounts of all railroads,
+to see that they were kept in a uniform manner, and upon the system
+prescribed by the board. It was also required to investigate the cause
+of any accident on a railroad resulting in loss of life. These being the
+principal duties of the board, its powers were very limited; but its
+personnel supplied the power which the law had withheld. The success of
+this commission exceeded even the expectations of the advocates of the
+system, who, in view of the limited powers of the commission, had
+anticipated but meager results.
+
+To quiet the Granger movement the railroads favored and finally secured
+the adoption of the commissioner system in the West, and South, in which
+sections it attained its highest development. It was soon found that a
+commission after the Massachusetts model, when composed of men less
+competent or less disposed to do their duty, was liable to dwindle into
+a statistical board or even become a pliant tool in the hands of the
+railroads. Furthermore, the conditions in Massachusetts, where railroad
+owners and railroad patrons lived side by side and were in many
+instances even identical, differed materially from those found in the
+West and South, where railroad patrons were made to pay excessive rates,
+to produce liberal dividends on fictitious stocks for non-resident
+stockholders. Here a conflict between the railroads and such commissions
+as were determined to do their duty became often unavoidable. Railroad
+companies were as a rule disposed to disregard the recommendation of a
+commission to reduce exorbitant rates. This led in those States which
+suffered most from unjust tariffs to a popular demand to endow the
+commission with the power to fix _prima facie_ rates. While the number
+of States which have taken this step is at present still limited, public
+opinion in its favor is growing throughout the nation, and a general
+adoption of this policy is probably only a question of time. There is
+every reason for believing that a commission vested with the right to
+fix local rates, to require full and complete reports from railroad
+companies, and to make proper regulations for their control, aided by
+penal legislation to compel compliance with their orders, will be a
+sufficient aid to the State in exercising such control over the
+companies operating lines within its borders as its dignity and the
+welfare of its people demand.
+
+Viewing the question from a national point of view, we find that, owing
+to the great and constantly increasing importance of interstate traffic,
+improved Federal agencies for railroad control are a pressing need.
+While much has been accomplished by the Interstate Commerce Act, much
+yet remains to be done. Violations of the act are still far too
+frequent, and they have been encouraged by unfriendly decisions by some
+of the inferior Federal courts.
+
+It must be admitted that nearly all the evils connected with interstate
+transportation could soon be remedied were it not for the difficulties
+which the Interstate Commerce Commission encounters in the enforcement
+of the law. On the one hand it is not possible with the machinery at
+present provided to detect and prove a considerable part of the
+violations of which railroad managers are daily guilty; and on the other
+hand, if these violations are brought to light, there would not,
+according to the testimony of a prominent railroad man, be courts enough
+in the country to try the violators. Besides this, such is the
+artfulness of railroad managers that in a majority of cases it would be
+impossible to reach the guilty party, and subordinates would have to
+answer for the transgressions of their superiors.
+
+To provide adequate machinery for the supervision of the transportation
+business, a national bureau of commerce and transportation should be
+established. As its chief a director-general of railroads should be
+appointed by the President, on the recommendation of the Secretary of
+the Interior, by and with the advice and consent of the Senate. This
+officer should hold his office for a term of at least six years, unless
+sooner removed by the President, upon reasons to be communicated by him
+to the Senate. He should not be interested either directly or indirectly
+in railroad securities. The Interstate Commerce Commission should be
+continued as an advisory board. It should upon the whole retain its
+present functions and should be consulted by the director-general in all
+matters requiring expert investigation. A number of divisions or
+sub-bureaus should be established, and each should be entrusted, under
+the supervision of the director-general, with such duties as may be
+deemed necessary to secure the greatest efficiency.
+
+There should be a division charged with the duty of carefully examining
+and compiling the detailed reports which the various companies should by
+law be required to make to the bureau. An inspection service should also
+be established, similar to that now maintained by the Treasury and
+Post-office Departments. Its officers should be empowered to enter all
+railroad offices and examine the companies' books, board trains and
+employ other legal means to detect violations of the railroad law and
+report them to the chief of the bureau.
+
+Railroad companies might be permitted to make interstate rates, but all
+schedules should be submitted to the bureau for approval or revision.
+Legal provision should be made against every sort of speculation in
+railroad stocks on the part of railroad officers, who should, in
+addition, be prohibited from sharing in the profits of favorite rates,
+as at present. All executive officers and directors of railroad
+companies should, like officers of national banks, be required to
+qualify by taking an oath of office, and should be held to strict
+accountability for their official acts. Officers of railroad companies
+should not be allowed to receive and use proxies at stockholders'
+meetings.
+
+The director-general should have the power, when he has proof that a
+railroad manager is persistently violating the law, to remove him and to
+appoint a receiver to take charge of the road until its owners can make
+provision and furnish sufficient guarantee for a more responsible
+management. Such a procedure would not be without analogy in the sphere
+of Federal authority. The Comptroller of the Currency is authorized by
+law to remove the derelict officials of a national bank and place its
+business in charge of a receiver. The beneficial effect of this
+provision is evinced in the extreme rareness of such a step. When
+railroad managers are held responsible for their own official acts, as
+well as for those of their subordinates, and when all railroad
+transgressions are visited upon their source in such a manner as to be
+remembered by the stings of disgrace and of a blighted career,
+unfaithful railroad managers will be extremely rare.
+
+The plan here outlined is of course capable of being greatly improved.
+Experience only is a reliable guide as to the merits of the various
+details of such a system of control. What is needed above all things is
+a beginning, the establishment of the principle of complete control of
+railroad transportation by the State and the Nation. When this step is
+once taken, the friends of railroad reform may safely trust to time for
+the solution of the subordinate questions of this important problem.
+
+By thorough State and Federal supervision of the railroad business many
+of the present abuses can be prevented. But the temptations of railroad
+managers to violate the law will continue to exist as long as the
+speculative element is permitted to remain in railroad securities. To
+remove the fountain-head of the evil eventually, the way should
+gradually be paved for a change in railroad organization and ownership
+which would also greatly increase the responsibility and efficiency of
+railroad management. In the beginning of the railroad era, nearly all,
+and not unfrequently all the capital needed for the construction of a
+new line was supposed to be furnished by the company's stockholders. But
+as it often happened that the cost of construction considerably exceeded
+the original estimate, the State authorized railroad companies to
+mortgage their property for the purpose of raising the money necessary
+to complete the road. In time this provision of the law was taken
+advantage of by speculative stockholders to such an extent that roads
+were often bonded for the full amount necessary to construct them, and
+even for more, while the stock was issued simply as a bonus to the
+promoters and the bondholders of the road. But as the bonds and shares
+scarcely ever remain in the same hands, such a condition was eventually
+brought about that roads were controlled by those who had little or
+nothing invested in the enterprise, and their real owners were deprived
+of all influence in their management, retaining only the right to
+foreclose their mortgages when things came to the worst. It is evident
+that men who have only a speculative interest in property cannot have
+the same concern for its permanent value and prosperity as those who
+hold it as a permanent investment. Many of the railroad abuses of the
+past had their origin in the law permitting the bonding of railroad
+property. Were it desirable to make a property for the sole use and
+convenience of speculators and gamblers, a better scheme could hardly be
+devised than the present system of our railroad organizations. Were
+railroad companies organized like national banks, were each shareholder
+required to pay the full amount of the face value of his shares, and
+were mortgaging railroad property entirely prohibited, it is not likely
+that the proportion of bankrupted railroads would be any larger than
+that of bankrupted banks. Few, if any, railroads would be built for
+purely speculative or blackmailing purposes.
+
+Capital is naturally conservative, and speculation is only invited where
+the chances of gain are greatly out of proportion to the capital
+invested. Were the principle of ownership which applies to national
+banks and other well regulated corporations also applied to the
+railroads, and were bonds entirely abolished, only such persons would
+by the shareholders be placed in charge of their property as could give
+to them the best assurance of honest and conservative management. Such a
+change would greatly increase public confidence in, and the value of,
+railroad securities, and would eventually place them above bank stock as
+desirable investments. With the great fluctuations which under present
+circumstances obtain in railroad stocks, these securities are regarded
+as unsafe and unsatisfactory investments by conservative people. During
+a period of less than twelve months in 1891 and 1892 the stock of the
+Atchison, Topeka and Santa Fe fluctuated from 28-1/2 to 43-1/2, or 53
+per cent.; that of the Chesapeake and Ohio from 15-1/4 to 25-7/8, or 70
+per cent.; of the Chicago and Northwestern from 101 to 118, or 17 per
+cent.; of the Chicago, Saint Paul, Minneapolis and Omaha from 20-1/2 to
+38-1/2, or 88 per cent.; of the Chicago, Milwaukee and St. Paul from
+48-3/4 to 78-1/2, or 61 per cent.; of the Iowa Central from 6-1/2 to 13,
+or 100 per cent.
+
+If we look over the stock quotations of the past ten or twelve years we
+find still greater fluctuations. The following table, taken from the
+_United States Investor_, shows the range of prices of a few of the
+principal stocks during this period:
+
+        Name.                 Lowest.           Highest.
+
+  Central Pacific          26-1/2 (1888)      102-7/8 (1881)
+  Chesapeake and Ohio       1     (1888)       33-7/8 (1881)
+  Erie                      9-1/4 (1885)       52-7/8 (1881)
+  Illinois Central         79-1/4 (1879)      150-1/2 (1882)
+  Lake Erie and Western     1-3/8 (1885)       65-3/4 (1881)
+  Michigan Central         46-1/2 (1885)      130-1/8 (1880)
+  New Jersey Central       31     (1885)      131     (1889)
+  New York Central         81-3/4 (1885)      155-3/8 (1880)
+  Northern Pacific         14     (1884)       54-3/8 (1882)
+  Rock Island              63-3/8 (1891)      204     (1880)
+  C., M. & St. P.          34-3/8 (1879)      129-1/4 (1881)
+  Texas and Pacific         5-1/2 (1884)       73-5/8 (1881)
+  Wabash                    2     (1885)       60     (1881)
+  Atchison and Topeka      23-3/4 (1890)      152-1/2 (1880)
+  Chicago, Burlington and
+    Quincy                 75-7/8 (1891)      182-1/2 (1881)
+  N. Y. & N. E.             9     (1884)       86     (1881)
+  Wisconsin Central         2     (1880)       39     (1881)
+  Union Pacific            28     (1884)      131     (1881)
+
+And such fluctuations have always been rather the rule than the
+exception. It is a gross outrage upon the investing public to let this
+state of affairs continue. It should be corrected without delay.
+
+How many high officials in charge of railroad property will under these
+circumstances resist the temptation to speculate in the stock of their
+companies, and, so long as it is permitted, how many will resist the
+temptation to adopt such policies in the government of their roads as
+will cause such fluctuations? It is a common report that it is not an
+unfrequent occurrence for Senators and members of Congress to receive
+information from railway officials that enables them to raise their
+campaign funds by speculation in Wall Street.
+
+Mr. Henry C. Adams, statistician of the Interstate Commerce Commission,
+says in his third annual report:
+
+      "It certainly appears ... that the motive for ownership in
+      railroad stock is quite different from the ordinary motives
+      which lead men to invest in corporate enterprises, thus
+      presenting an additional proof that railways are a business
+      not subject to ordinary business rules."
+
+There is no safer business in the world than railroad transportation;
+there is none that has less elements of uncertainty; none whose returns
+in the aggregate are less varying. Every other business in the country,
+whether prospering or struggling, pays tribute to it. It rests on a cash
+basis, and suffers probably less from hard times than any business of
+its magnitude. Both the merchant and the manufacturer run large risks in
+doing business largely on a credit basis. The farmer sows in the spring,
+harvests in the fall, and often cannot realize on his products until
+winter; but the railroad company always receives its pay as soon as its
+work is done, and not unfrequently even before it is done. Statistics
+show that railroad revenues are, in the aggregate, remarkably uniform,
+and there is no reason why railroad securities should be less stable
+than bank or insurance stocks. Mr. Jeans says:
+
+      "It is observable, in respect to the net profits from
+      railway working, that they have not fluctuated from year to
+      year in the same way as nearly all other profits have
+      done.... It comes, then, to this, that, next after land and
+      house property, the railway interest is the largest and most
+      important in the country. But it is superior to both of
+      these rival interests in its profit-earning capabilities,
+      yielding, as it does, more than 4 per cent. on the capital
+      expended, against a possible average of 2-1/2 to 3 per cent.
+      in respect to the others."
+
+There may be some arguments in favor of bonding railroads, but this
+practice is, upon the whole, productive of infinitely more evil than
+good. The State should, therefore, compel railroad companies to
+liquidate all of their bonded indebtedness without unnecessary delay. In
+the proportion in which this is accomplished railroad shares will gain
+in stability and value.
+
+Railroad men complain that the small savings of the poor invested in
+railroad securities do not yield adequate returns and are often lost in
+consequence of the foreclosing of the roads in which these investments
+have been made. Others complain that railroads are bankrupted in the
+interest of designing bondholders. Still others charge that rich and
+powerful roads contrive to obtain a controlling interest in the
+depreciated stock of weaker roads and then manage these roads in their
+own interest and greatly to the detriment of other stockholders. All
+these evils would disappear if the law required the identity of actual
+and virtual ownership. "Freezing-out" processes could no longer be
+resorted to by expert directors to obtain without compensation the
+property of their less sophisticated fellow stockholders. One railroad
+could no longer obtain control of another by acquiring an insignificant
+part of the sum total of its securities. There would be no longer any
+clashing between the interests of bondholders and stockholders, and
+railroads would no longer be managed in the interest of a small minority
+of their owners.
+
+In addition to the cancellation of all railroad mortgages the State
+should require that all railroad stocks should, in the future, be paid
+in full. Furthermore, roads should be built only from the proceeds of
+the capital stock, and the expense of repairs should be defrayed from
+the revenues of the road. Dividends should only be paid from surplus
+earnings and should in no case exceed a fair rate of interest on the
+actual present value of the road. The statistician to the Interstate
+Commerce Commission suggests the creation of a special commission
+charged with the duty of converting the actual capitalization of
+railroad lines into a just value of their property. To do justice to
+both the railroads and their patrons in the fixing of rates, it is
+important that the just value of railroad property be ascertained, but
+the work could probably be done with less friction by a cooperation of
+National and State commissions. A number of reforms are needed within
+the province of railroad management. Passenger rates are, as a rule, too
+high, and out of all proportion to freight rates. Many passenger
+tariffs still recognize the old stage-coach principle of fixing the fare
+in an exact proportion to the distance traveled. Thus a passenger who
+takes the train for a five-mile trip pays only fifteen cents for his own
+transportation and that of one hundred pounds of baggage, while the
+passenger who buys a ticket for a journey of one hundred miles pays, on
+most American lines, exactly twenty times the amount paid by the
+five-mile passenger. Here the principle of collecting terminal charges
+is entirely ignored. Sufficient inducements are not held out to the
+passenger to prolong his journey, and as a consequence of this
+short-sighted policy of the railroad companies the average distance
+traveled in the United States by each passenger, instead of having
+gradually increased, has gradually decreased of late years until it is
+now only 24.18 miles. The average freight haul in the United States is
+120 miles, or about five times as long as the average journey per
+passenger. How can such a difference be accounted for except by the
+dissimilarity in the principles which govern the computation of
+passenger and freight charges? The same rule should be adopted in fixing
+passenger rates that is recognized by railroad men in fixing freight
+rates: the rate per mile should decrease with the increase of the number
+of miles traveled.
+
+The principle of arranging passenger tariffs on a sliding scale has
+found recognition in Europe. In Denmark first-class passenger fare is
+3.13 cents for each of the first 47 miles, 2.67 cents for each of the
+next 47 miles, and only 2.22 cents for every additional mile. The
+practical application of this principle is, in fact, only limited by the
+extent of the kingdom. In nearly all European countries a uniform
+reduction, ranging from 20 to 30 per cent., is made from regular rates
+for return trip tickets, and coupon tickets are issued to tourists
+almost everywhere at largely reduced rates.
+
+Hungary recently adopted a new method of making passenger and freight
+tariffs for its state lines. This is now generally called the zone
+system. There are two classes of tickets sold, one for short trips on
+suburban or branch lines, the other for longer journeys on the main
+lines. The distances that can be traveled on short or suburban lines are
+divided into two zones of stations, and those on main lines into
+fourteen zones. The division of the kingdom into zones is made with
+Buda-Pesth as the center. A ticket purchased for a particular zone
+carries the passenger to the end of that zone or any nearer station.
+
+The following table will show the extent of each zone and the fares
+paid:
+
+  --------------+---------------+--------------------+--------------------
+                |               |   LOCAL TRAINS.    |   FAST TRAINS.
+       ZONE     |   DISTANCE    |------+------+------+------+------+------
+                |               |First |Second|Third |First |Second|Third
+                |               |Class.|Class.|Class.|Class.|Class.|Class.
+  --------------+---------------+------+------+------+------+------+------
+    Short Lines.|               |  Fl. |  Fl. |  Fl. |  Fl. |  Fl. |  Fl.
+                |First Station. | 0.30 | 0.15 |  .10 |  -   |  -   |  -
+                |Second Station.|  .40 |  .22 |  .15 |  -   |  -   |  -
+    Main Lines. |               |      |      |      |      |      |
+       1        |    1-25 km.   |  .50 |  .40 |  .25 | 0.60 | 0.50 | 0.30
+       2        |   26-40  "    | 1.00 |  .80 |  .50 | 1.20 | 1.00 |  .60
+       3        |   41-55  "    | 1.50 | 1.20 |  .75 | 1.80 | 1.50 |  .90
+       4        |   56-70  "    | 2.00 | 1.60 | 1.00 | 2.40 | 2.00 | 1.20
+       5        |   71-85  "    | 2.50 | 2.00 | 1.25 | 3.00 | 2.50 | 1.50
+       6        |   86-100 "    | 3.00 | 2.40 | 1.50 | 3.60 | 3.00 | 1.80
+       7        |  101-115 "    | 3.50 | 2.80 | 1.75 | 4.20 | 3.50 | 2.10
+       8        |  116-130 "    | 4.00 | 3.20 | 2.00 | 4.80 | 4.00 | 2.40
+       9        |  131-145 "    | 4.50 | 3.60 | 2.25 | 5.40 | 4.50 | 2.70
+      10        |  146-160 "    | 5.00 | 4.00 | 2.50 | 6.00 | 5.00 | 3.00
+      11        |  161-175 "    | 5.50 | 4.40 | 2.75 | 6.60 | 5.50 | 3.30
+      12        |  176-200 "    | 6.00 | 4.80 | 3.00 | 7.20 | 6.00 | 3.60
+      13        |  201-225 "    | 7.00 | 5.30 | 3.50 | 8.40 | 6.50 | 4.20
+      14        |  225 km.      |      |      |      |      |      |
+                |    and over   | 8.00 | 5.80 | 4.00 | 9.60 | 7.00 | 4.80
+
+(The florin is a little more than one-third of a dollar.)
+
+A ride from a city to the first suburban station costs from 3 to 10
+cents, according to class of car, and to the second station 5 to 13.6
+cents. On through trains a person may travel 15 miles at a cost of from
+8-1/2 to 20 cents, according to kind of train and class of car, a
+hundred miles for from 85 cents to $2.00; 140 miles for from $1.15 to
+$2.80 and any distance above 140 miles for from $1.35 to $3.25. A person
+may thus travel from Buda-Pesth to Predeal, a distance of 472 miles,
+with a third-class ticket for zone 14, purchased at a cost of $1.35, or
+28-100 of a cent per mile.
+
+Our railroad men with much complacency point to the fact that these
+rates do not cover the forwarding of passengers' baggage and that this
+service must be paid for separately. These charges, however, are very
+moderate, being on 120 pounds of baggage 8-1/3 cents a distance of 34
+miles or less, about 17 cents for a distance of more than 34 and less
+than 62 miles, and about 34 cents for any distance over 62 miles. The
+additional charge for carrying 120 pounds of baggage from Buda-Pesth to
+Predeal is therefore about one-fourteenth of one cent per mile. It must
+be admitted that this system of charging separately for passenger and
+baggage is eminently just, for there is no good reason why the passenger
+without baggage should be taxed to pay for the carriage of that of his
+fellow-traveler.
+
+The zone tariff was introduced on the state railways of Hungary by M.
+Barosz, the Hungarian Minister of Commerce, on the 1st of August, 1889.
+The adoption of the new tariff was ridiculed and condemned as visionary
+by road experts, who even went so far as to prove to the satisfaction of
+practical railroad men that the innovation was destined to be a failure.
+For a month or two it almost seemed as if their prediction might be
+fulfilled, the number of passengers carried remaining behind the number
+carried during the corresponding period of previous years. But soon the
+reaction set in. The month of November, 1889, already witnessed an
+increase in the number of passengers as well as in receipts over the
+same month of the year previous. The result of the first year's trial
+demonstrated the wisdom of the "innovation." The number of passengers
+carried, which had been only 5,186,227 in 1888-89, rose to 13,060,751 in
+1889-90, and the total receipts for passengers and baggage rose from
+9,138,715 florins to 11,186,321 florins, a gain of 2,047,606 florins, or
+22 per cent., during the first year. There is a continued increase both
+in the number of passengers and in receipts, and the success of the
+system must be pronounced phenomenal. The railroad experts of Europe,
+who had predicted the signal failure of the zone system, now that the
+unexpected has happened, are trying to discover the particular favorable
+conditions which made the success of the system possible in Hungary. It
+will probably be a decade, or even two, before the railroad experts of
+both hemispheres will be entirely reconciled to this new application of
+the old principle that a reduction in the price of a commodity increases
+the demand for it.
+
+It is strange, indeed, that intelligent men should be so slow in
+recognizing an economic principle for which both history and daily
+experience furnish an unlimited number of illustrations. The post-office
+receipts everywhere have increased with a reduction in postage. The
+Government telegraph in England did not become self-supporting until
+Parliament made a sweeping reduction in its rates. The revenue from the
+Brooklyn bridge never paid a fair interest on the capital expended in
+its construction until its tolls were cut down. Were it necessary,
+hundreds of other examples could be added to these.
+
+Hungary has also applied the zone system to its freight traffic. Three
+zones are fixed for the carrying of goods, viz.: Zone I, for distances
+less than 200 kilometers (124 miles); Zone II, for distances over 200
+and less than 400 kilometers, and Zone III, for distances over 400
+kilometers. A uniform tariff is established for each zone, which is
+one-third less than the average freight rates for equal distances
+formerly in force. American railroads should profit by the wisdom and
+experience of the Hungarian Government, and adopt at an early day such
+features of its system as upon our soil and under our institutions may
+be made practicable. The Hungarian system, with some modifications, is
+now being tried by Austria and a few of the German states, and is
+increasing railroad revenues wherever adopted.
+
+There is a growing demand for lower fares. This demand increases in the
+same proportion in which the desire and the necessity for travel
+increase. European states have not been slow to meet it. Reductions are
+made everywhere, and chiefly favor the lower classes. Thus, when France,
+within the last year, changed her passenger tariff, she reduced
+first-class fare 9 per cent., second-class fare 18 per cent., and
+third-class 27 per cent.
+
+The European passenger reports show the numbers of first and
+second-class passengers are continually falling off, while those of the
+third-class passengers are fast increasing. In England and Wales the
+number of first-class passengers fell between 1875 and 1889 from
+37,000,000 to 24,000,000 while the number of third-class passengers
+increased during that same period from 350,000,000 to 601,000,000, and
+this increase still continues. In the United Kingdom the number of
+third-class passengers for 1891 was over 750,000,000. Furthermore,
+passenger revenue comes chiefly from the third class. In the United
+Kingdom the receipts from first-class passengers were in 1889
+L3,188,000; from second-class passengers, L2,705,000; and from
+third-class passengers, L19,785,000. It is thus seen that receipts from
+third-class passengers are nearly 3-1/2 times as large as those from the
+first and second-class passengers combined. A similar proportion is
+found in nearly every country on the continent. European roads
+discovered some years ago that first and second-class passengers were
+carried at a loss, and all the passenger earnings were derived from
+third-class passengers. The profits from this source show a considerable
+increase every year.
+
+The average fare per mile is 2.15 cents in the United States, and only
+1.17 cents in Germany, 1.67 cents in Austria, 1.18 cents in Belgium,
+1.29 cents in Denmark, 1.45 cents in France, 1.64 cents in Italy, and
+1.45 cents in Russia. It is often claimed by railroad men that we travel
+more luxuriously than the people of any other country in the world, but
+it should not be forgotten that traveling in the United States is also
+more expensive than anywhere else. It is contended that class
+distinctions are odious in America, and that second and third-class cars
+would not be patronized. The same argument might be applied to theaters,
+hotels, clothiers, grocers, etc. It is difficult to see why distinction
+here should be less odious than on the railroad train. The truth is,
+Americans are just like other people and will avail themselves of
+accommodations in keeping with their means if they have the opportunity.
+Many passengers who will not travel in an uncouth smoking-car would, if
+clean second-class cars were provided, gladly dispense with the luxury
+of an upholstered seat if by doing so they could save from $5 to $10 a
+day.
+
+A common laborer in this country earns from a dollar to a dollar and a
+half a day, and in the performance of his labor as a rule suffers
+greater inconvenience than does the traveler who travels the country in
+a second-class car. Is it under these circumstances at all likely that
+the American would hesitate to travel for a day in a plain but clean
+car, if by doing so he could save a week's earnings? We may even go
+further and say that it is a very reasonable assumption that the man who
+earns his bread by the sweat of his brow would choose the cheaper car if
+the difference in one day's fare were equal to one day's wages. It is a
+common saying in Europe that the first-class passengers consist of lords
+and fools, and few of the hundreds of thousands of American tourists
+traveling abroad give the natives occasion to class them with either.
+The first-class car has almost fallen into disuse in Europe, and even
+the patronage of the second-class is less than ten per cent, of that of
+the third.
+
+Reduced rates for return tickets should be provided under rules and
+regulations of commissioners.
+
+The Massachusetts legislature recently passed a law requiring the
+railways of that State to sell interchangeable thousand-mile tickets for
+$20. The State commission is given power to except any company from its
+requirements if the public welfare or the financial condition require or
+demand it. This is a step in the right direction and should be followed
+by other States. Michigan also requires certain roads to carry
+first-class passengers at two cents per mile.
+
+Railroad companies should be compelled to discard the pass as a
+courtesy as well as a consideration. The giving of passes under the
+guise of mileage books, or tickets for pretended or unnecessary
+services, is very pernicious and should be prohibited. Such a reform
+would soon enable them to offer low fares to all. An employe may be
+furnished free transportation while actually engaged in the business of
+his company, and it should be made the duty of the State and National
+commissions to make proper regulations governing such free
+transportation of employes. Half-fare tickets for adults should also be
+abolished. The pauper ticket is given to the minister of the gospel to
+secure for the railroads the influence of the pulpit, though offered
+under the pretense of charity or support of the church. The State should
+not permit the railroad companies to practice this or any other kind of
+charity at the expense of the general public. The railroad is a highway,
+and the company operating it is entitled to rates sufficient to pay
+operating expenses and a fair interest on the value of the property. It
+can therefore easily be seen that the so-called gifts show no liberality
+on the part of the railroad company, but are made at the expense of
+other people. Donations made by railroad companies should be made from
+the pockets of their stockholders and not from the pockets of their
+patrons.
+
+All perquisites of railroad officers should be abolished. When a railway
+official has become so pompous and consequential that he requires a
+special car, it is about time to look about for his successor. If we are
+to have a special-car aristocracy in this country let it be supported at
+the expense of some other interest.
+
+Another railroad reform is needed on this side of the Atlantic. While
+the great majority of railroad officials are courteous and considerate,
+and perform their duties in the most agreeable and acceptable manner,
+there are a few who do not properly appreciate the relation which they
+sustain to the patrons of their companies. They are inclined to forget
+that they are quasi-public servants, and that the public has a right to
+demand courteous treatment at their hands. All railroad employes should
+realize that their first duty is to administer to the welfare and the
+convenience of the public, and each one should have the full protection
+of the law in his efforts to do so. The American public objects much
+less to an inferior car than to rude treatment by the companies' agents.
+Railroad superintendents may justly be blamed for the incivilities of
+their subordinates. It is their duty to know the character of those whom
+they employ, and not to retain in their employ those who are derelict in
+their duty to the public. Nothing offends the feelings of a true
+American more than the display of a bureaucratic spirit on the part of
+public servants. Nothing more commends a line of railroad to the public
+than uniform painstaking kindness and courteous treatment on the part of
+its employes. It is made the duty of railroad employes of France "to so
+treat the public as if they were eager to oblige it," and the very first
+paragraph of the official instructions to the railroad employes of
+Germany enjoins them "to assume a modest and polite demeanor in their
+intercourse with the public." In this connection it might be stated that
+the second paragraph of those instructions positively forbids the
+acceptance of any gratuity by a railroad employe. If our American
+sleeping and dining-car companies would give their employes adequate
+compensation and then adopt and enforce the German rule concerning
+"tipping," their service would gain popularity and their employes
+self-respect.
+
+Entrance into the railway service should be by agreement for a definite
+time, and dismissals and resignations should be governed by rules agreed
+upon by boards of commissioners and the companies.
+
+The use of the corporation has done so much to secure for capital so
+large a share of the profits of industrial enterprises, and large
+salaries also for the officers who manage them, that laborers have been
+led to organize themselves into associations for like purposes, and
+ambitious men have not been slow in availing themselves of the
+advantages afforded them in this new field.
+
+It is right and proper for laborers to organize such associations when
+they can do so under wise and economical management, for the purpose of
+securing greater intelligence, better education, higher culture, higher
+wages, a shorter work-day, and a general ameliorating of their
+condition, all of which will tend to make them more efficient workmen
+and also better enable them to resist the aggression of centralized
+wealth; for, in the absence of organization, the single-handed employe
+of the great modern employer is comparatively helpless. But if these
+organizations are allowed to be controlled by ignorant, unreasonable or
+designing men, who will, at trifling provocations, resort to violent and
+unlawful measures, they are sure to prove harmful, and a great
+detriment, instead of a help, to their members, and the sooner they are
+abandoned the better for all.
+
+Great conflicts are sure to arise between organized capital and
+organized labor, and they must be settled in a reasonable way, or
+anarchy will prevail. They cannot be left for headstrong or
+inconsiderate men representing either side to determine, but the line
+must be drawn by the public authorities.
+
+Each year affords accumulated evidence of the necessity of extending
+legal restrictions over the management of the railway business, and the
+law, as laid down by Judge Ricks to the Ann Arbor strikers last March,
+in the United States Circuit Court, at Toledo, is undoubtedly correct
+and will meet with general approval from the public.
+
+He says:
+
+      "You are engaged in a service of a public character, and the
+      public are interested not only in the way in which you
+      perform your duties while you continue in that service, but
+      are quite as much interested in the time and circumstances
+      under which you quit that employment. You cannot always
+      choose your own time and place for terminating these
+      relations. If you are permitted to do so you might quit your
+      work at a time and place and under circumstances which would
+      involve irreparable damage to your employers and jeopardize
+      the lives of the traveling public."
+
+Mr. Powderly, in commenting upon the above decision, does not complain
+of it, but says:
+
+      "The decision shows, as I have said before, that the
+      principle of Government ownership of the railroads is being
+      recognized by the courts. While the decision is apparently
+      against the men, it emphasizes our position that the
+      Government has the right to supervise the railroads. Now it
+      is a poor rule that won't work both ways.
+
+      "The Interstate Commerce Law was passed for the purpose of
+      controlling the railroads, but up to date no railroad has
+      paid any attention to the law. Anarchy of the worst kind has
+      prevailed. By that I mean a total disregard of the law, and
+      that is what the corporations charge against the anarchists.
+      The courts hold themselves in readiness to obey the will of
+      the corporations when a charge is made against the workmen,
+      but no effort is made to carry out the mandates of the law
+      when the provokers of strikes, the corporations, violate the
+      law."
+
+There is but little doubt, if the judges of the Federal courts would
+show the same zeal in holding railroad managers amenable to the law as
+Judge Ricks has displayed in this case with the employes, they would
+secure increased confidence from the people in the tribunals over which
+they preside.
+
+All fair-minded persons will agree that labor as well as capital must be
+subjected to proper restraints, and that the public will demand nothing
+unreasonable from either.
+
+Accidents are too frequent upon American railroads. The reports of the
+Interstate Commerce Commission give the following as the numbers killed
+and injured during the years named:
+
+  ---------+---------------+---------------+---------------+---------------
+           |      1888     |      1889     |      1890     |      1891
+           |Killed. Injured|Killed. Injured|Killed. Injured|Killed. Injured
+  ---------+-------+-------+-------+-------+-------+-------+-------+-------
+  Employees| 2,070 | 20,148| 1,972 | 20,028| 2,451 | 22,396| 2,660 | 26,140
+  Passeng's|   315 |  2,138|   310 |  2,146|   286 |  2,425|   293 |  2,972
+  Others   | 2,897 |  3,602| 3,541 |  4,135| 3,598 |  4,206|  .... |  ....
+  ---------+-------+-------+-------+-------+-------+-------+-------+-------
+  Total    | 5,282 | 25,888| 5,823 | 26,309| 6,335 | 29,027|  .... |  ....
+  ---------+---------------+-------+-------+-------+-------+-------+-------
+
+For the year ending June 30, 1890, the total number of employes was
+749,801. There was, therefore, one death for every 306 men employed and
+one injury for every 33 men employed. For the previous year one was
+killed for every 357 men employed, and one was injured for every 35 men
+employed. While trainmen represent but 20 per cent, of the total number
+of employes, the casualties among them represent 58 per cent. of the
+total number of casualties.
+
+For the year 1888, one passenger was killed in every 1,523,133
+passengers carried, and one injured in every 220,024 carried.
+
+The corresponding rate in England for the year 1888 is one passenger
+killed for every 6,942,336 carried, and one injured for every 527,577
+carried.
+
+Railroads doing a large business should be compelled to adopt the most
+improved appliances for avoidance of accidents.
+
+The occupation of trainmen is especially hazardous, and too long
+continued service should not be required, but proper intervals of rest
+should be allowed. It is to the want of this, undoubtedly, that a great
+many of the serious accidents are owing.
+
+No more Sunday trains should be run than are absolutely necessary.
+Provision should be made by law to enable trainmen to procure insurance
+at the lowest rate possible, for indemnity against loss of health, life
+or limb.
+
+It was only a few days before the great disaster occurred on the Hudson
+River Railroad at Hastings, over a year ago, that an announcement had
+been made to the public of the extreme prosperity of the road during the
+year. The great slaughter that occurred there is another illustration of
+the disregard of public duty, and another instance of the sacrifice of
+life and limbs of passengers and employes by a railway corporation in
+order to secure large dividends on watered stock. It is not only gross,
+but criminal neglect for a company with such an immense income not to
+provide greater safety appliances, and the coroner's jury in this case
+was too modest when it decided that the management of the road was
+morally responsible for the disaster.
+
+Parliament has compelled the British railways to adopt, in the interest
+of the public safety, the block system and continuous brake, and great
+lines like the New York Central and Hudson River companies should be
+compelled to adopt such improvements.
+
+The traveling public has another grievous cause for complaint. There are
+but few companies that make any efforts to have their trains connect
+with those of rival roads. On the contrary, a good deal of scheming is
+often done by railroad companies to so arrange their time-tables with
+reference to those of their rivals as to inconvenience passengers as
+much as possible by delays at competing points. To remedy this evil the
+State should require that every time-table should have the approval of
+proper authorities, and no change should be permitted without their
+approval.
+
+Railroad companies are chartered for the purpose of promoting the public
+welfare, and every violation of their charter should be punished.
+
+It should be the main object of railroad legislation to compel companies
+to fulfill their public obligations without depriving them of their
+efficiency. Above all things these companies should be stripped of the
+power to use their great wealth for the purposes of corruption or the
+attainment of political influence. Our railroads to-day probably
+represent no less than one-fourth of the personal property of the
+country, and this vast wealth is controlled by a comparatively small
+number of men, many of whom have in the course of time become so
+arrogant and despotic that they have little regard for popular rights or
+the expressed will of a free people.
+
+It is reported that when, a few years ago, a representative of the press
+directed Mr. Vanderbilt's attention to the fact that the public
+disapproved of his railroad policy, the latter gave vent to his contempt
+for public opinion by the no less profane than laconic reply: "The
+public be damned." Ex-Railroad Commissioner Coffin called on one of the
+Goulds to urge the adoption of the automatic car-coupler and other
+safety appliances for the roads controlled by them. He was very curtly
+told that not a cent would be expended by the Gould roads for such a
+purpose until the West had repealed its obnoxious railroad laws. The
+Gould dynasty thus intends to accomplish the repeal of these laws by
+coercion. Railroad magnates and their lieutenants often show still
+greater arrogance in dealing directly with their employes.
+
+It may be difficult for railroad managers of the present school to adapt
+themselves to new conditions; it may be impossible for them to
+understand how any other practices than those which have long been
+established can succeed; yet in spite of them both the law and public
+sentiment have already undergone great changes, and still greater
+changes will follow. It may take years to accomplish this work; to bring
+about any great reform requires time and a deter, mined purpose on the
+part of its advocates. Yet I believe the era is not far off when
+railroads will be limited to their legitimate sphere as common carriers,
+when they will treat all persons and all places as impartially as does
+the Government in the mail service, when their chief factor in
+rate-making will be the cost of service, when they will respect the
+rights of the public and those of their stockholders, insuring perfect
+service to the former and fair profits upon the actual value of the
+lines operated to the latter.
+
+The fact should, finally, not be overlooked that it is in the power of
+the General Government to prevent many railroad abuses, and especially
+excessive freight charges, by the improvement of our rivers and harbors.
+That our water-courses act as levelers of interstate rates is apparent
+from the fact that railroad rates invariably rise with the freezing of
+the water-ways and fall with the opening of river and lake navigation.
+By connecting, wherever feasible, our large Western rivers with the
+great lakes, the Government could greatly extend the reign of
+competition in transportation, and thereby keep freight rates within
+reasonable bounds. Lake transportation even now plays an important role.
+In 1892 it was not less than 20,000,000,000 ton miles during the season
+of eight months' duration, and it is almost equal to one-fourth of the
+total ton mileage of all the railroads in the country for the entire
+year. The average rate of lake transportation has been reduced to 1.3
+mills per ton per mile, which is only about one-seventh of the average
+railroad freight rate in the United States.
+
+Where the masses hold the sovereign power, there, if anywhere, the
+welfare of the people should be the supreme law. Violent political
+commotions never disturb the government whose policy is to secure the
+greatest good to the greatest number. Thorold Rogers justly remarks that
+the strength of communism lies in the misconduct of administrations, the
+sustentation of odious and unjust privileges and the support of what are
+called vested interests. Lord Coleridge, in a remarkable article
+published not long ago, recommended a revision of the laws relating to
+property and contract, in order to facilitate the inevitable transition
+from feudalism to democracy, and laid down the rule that the laws of
+property should be made for the benefit of all, and not for the benefit
+of a class.
+
+During the middle ages, and even up to the beginning of the present
+century, nearly all the laws on the statute books looked towards the
+protection of the rights of the feudal lord. Provision was made for the
+expeditious collection of his dues and a severe punishment of his
+delinquent debtor. The peasant was forced to labor fifteen hours per day
+and three hundred and sixty-five days in the year to pay the baron's
+rentals and sustain life. The law permitted him to be flogged for
+failing to courtesy the feudal lord, and to be executed for injury to
+the lord's person, while to kill a peasant was no worse a misdemeanor
+than to kill his lordship's favorite dog or falcon. In short, all laws
+were made to protect and perpetuate the wealth and power of the few by
+impoverishing, humbling and enslaving the masses.
+
+The age of feudalism has given way to an age of democratic liberty, but
+there is many a feudal feature left in our statutes and many a feudal
+doctrine is enunciated by our judges and learned expounders of modern
+jurisprudence. In his decision in the Iowa tariff case Judge Brewer
+said:
+
+      "I read also in the first section of the Bill of Rights of
+      this State [Iowa] that 'all men are by nature free and equal
+      and have certain inalienable rights, among which are those
+      of enjoying and defending life and liberty, acquiring,
+      possessing and protecting property and pursuing and
+      obtaining safety and happiness,' and I know that while that
+      remains as the supreme law of the State, no legislature can,
+      directly or indirectly, lay its withering or destroying hand
+      on a single dollar invested in the legitimate business of
+      transportation."
+
+Had Judge Brewer taken the pains to read on, he would have found in
+section 2 of the Bill of Rights the following:
+
+      "All political power is inherent in the people; government
+      is instituted for the protection, security and benefit of
+      the people."
+
+It is strange that the learned Judge failed to see the difference
+between "men," the creatures of God, "by nature free and equal," and
+"possessing certain inalienable rights," and corporations, the creatures
+of man, having no rights except those which the State sees fit to give
+them. Had the learned Judge perused the whole of the document to which
+he refers, he would have found in article VIII, section 12, the
+following provision:
+
+      "The General Assembly shall have power to amend or repeal
+      all laws for the organization or creation of corporations,
+      or granting of special or exclusive privileges or
+      immunities, by a vote of two-thirds of each branch of the
+      General Assembly."
+
+It should thus have been plain to the learned Judge that in Iowa
+corporations have not human or inalienable rights, and government was
+not instituted for their special protection, but for the protection,
+security and benefit of her people. Nor should it be otherwise.
+
+The corporation for pecuniary gain has neither body nor soul. Its
+corporeal existence is mythical and ethereal. It suffers neither from
+cold nor from hunger, has neither fear of future punishment nor hope of
+future reward. It takes no interest in schools or in churches. It knows
+neither charity nor love, neither pity nor sympathy, neither justice nor
+patriotism. It is deaf and blind to human woe and human happiness. Its
+only aim is pecuniary gain, to which it subordinates all else.
+
+Should the State sacrifice the welfare of all her people rather than lay
+its "withering or destroying" hand on a single dollar of corporate
+wealth? Are there no human rights, for the protection of which
+government was established, more sacred than the rights of a wealthy
+corporation's dollar? Have the people made the judiciary a coordinate
+branch of the Government in order that it may protect the vested or
+rather usurped rights of corporations against legislative attempts to
+curtail them? If the courts so interpret the power which has been
+delegated to them, they will awake one day to the painful reality that
+popular convictions of right are more potent than judicial decrees.
+
+It is the duty of the State not so much to defend the so-called vested
+rights of corporations as to make such just and beneficial laws as will
+temper inequality, mitigate poverty, protect the weak against the
+strong, preserve life and health, and, in short, promote the welfare and
+the happiness of the masses. Constitutions have been made to accomplish
+these ends, to protect the lives, the liberty and the conscience of
+human beings, while laws have been sufficient to protect the dollars of
+corporations. It is a short-sighted policy on the part of the latter to
+take unfair advantage of their wealth and influence, for "As ye sow, so
+shall ye reap," is the inexorable law of Providence. There is no dynasty
+so mighty, no class so privileged, no interest so influential or wealthy
+as to obtain immunity from its operation.
+
+
+
+
+APPENDIX.
+
+
+TABLE No. 1.
+
+COMPILED FROM THE SIXTH ANNUAL REPORT OF THE INTERSTATE COMMERCE
+COMMISSION.
+
+  Mileage in the United States June 30, 1891           168,402.74
+  Number of men employed                               784,285
+  Number of employes per 100 miles                         486
+  Number of locomotives per 100 miles                       19
+  Number of passenger cars per 100 miles                    17
+  Number of cars per 100 miles                             721
+  Capital                                       $9,829,475,015
+  Capital per mile                                      60,942
+  Gross earnings                                 1,096,761,395
+  Gross earnings per mile                                6,801
+  Operating expenses                               731,887,893
+  Operating expenses per mile                            4,538
+  Net income from operation                        364,873,502
+  Net income per mile                                    2,263
+    Of gross income 67.17 per cent. was earned on freight.
+    Of gross income 25.64 per cent. was earned on passengers.
+  Received for carrying mails                     $ 24,870,015
+  Received rentals from express companies           21,594,349
+  Received from investments                        133,911,126
+  No. of passengers carried                        531,183,988
+  No. of tons freight carried                      675,608,323
+  Average journey per passenger                    24.18 miles
+  Average haul per ton of freight                    120 miles
+  Average number passengers per train                       42
+  Average number tons freight per train                    181.67
+  Average revenue per passenger per mile                     2.142 cents
+  Average revenue per ton per mile of freight                 .895 cents
+  Average revenue per train mile, passenger                 $1.06
+  Average revenue per train mile, freight                    1.64
+
+
+TABLE No. 2.
+
+STATISTICS OF THE RAILWAYS OF THE UNITED KINGDOM FOR THE YEAR ENDING
+DEC. 31, 1891.
+
+From the English Reform Almanac for 1893 and from the Report of
+Commissioners R. Giffen and Courtenay Boyle to the Board of Trade.
+
+  Mileage                                         20,191 miles
+  Double, triple or quadruple                     10,853 miles
+  Capital per mile                                     L45,536
+  Gross income per mile                                  3,873
+  Net income per mile                                    1,818
+  Income from passenger traffic                     35,130,916
+  Income from goods traffic                         43,230,717
+  Income from miscellaneous                          3,498,974
+                                                  ------------
+      Income, total                                L81,860,607
+  Operating expenses, 55 per cent                  L45,144,778
+  Rates and taxes                                    2,246,430
+  Government duty                                      321,260
+  Paid for persons injured                             165,219
+  Paid for damage and loss of goods                    257,804
+  Number of first-class passengers                  30,423,776
+  Number of second-class passengers                 63,378,397
+  Number of third-class passengers                 751,661,495
+    Number of third-class passengers over 88 per cent. of all.
+  Number of employes                                   346,426
+  Number of employes per 100 miles                       1,750
+  Number of locomotives per 100 miles                       80
+  Number of passenger cars per 100 miles                   249
+  Number of freight and other cars                       2,595
+  Revenue per train mile                                    58.37d
+  Expense per train mile                                    30.54d
+  Per cent. of earnings on capital                           4.21
+
+
+TABLE No. 3.
+
+SHOWING SALARIES AND WAGES PAID TO OFFICIALS AND EMPLOYES OF STATE
+RAILWAYS IN EUROPE.
+
+Compiled from Roell's Encyclopaedie des Eisenbahnwesens.
+
+  =======================================================================
+     POSITION.     |   AUSTRIA.  |   HUNGARY.  |  PRUSSIA.   |  BELGIUM.
+  -----------------+-------------+-------------+-------------+-----------
+                   |  Fl., equal |  Fl., equal | Mark, equal | Fr., equal
+                   |   to about  |   to about  |  to about   |  to about
+                   |33-1/3 cents.|33-1/3 cents.|  24 cents.  |  20 cents.
+                   |             |             |             |
+  President        | 7,000       |     ---     |10,500       | 9,000
+  Directors and    |             |             |             |
+   Superintendents | 4,000-5,500 | 4,000-4,800 | 4,200-6,000 | 7,000-8,000
+  Chief Engineer   | 1,600-2,000 | 1,900-2,500 | 3,600-4,800 | 2,700-5,500
+  Clerks           |   500-1,200 |   640-1,000 | 1,000-2,700 |   900-3,100
+  Station Agents in|             |             |             |
+   Cities, Division|             |             |             |
+   Superintendents | 2,200-2,600 | 2,600-3,400 |     ---     |     ---
+  Station Agents   |             |             |             |
+   in Towns        |   500-850   |   520-880   | 1,500-3,200 | 1,600-4,000
+  Locomotive       |             |             |             |
+   Engineers       |   500-850   |   520-780   | 1,200-2,000 |     ---
+  Firemen          |   300-350   |   380-480   | 1,000-1,500 |     ---
+  Conductors       |   450-550   |   520-850   | 1,100-1,500 | 2,000-2,400
+  Brakemen         |   300-350   |   380-480   |   800-1,200 | 1,200-2,000
+  Section Men      |   288-336   |   270-370   |   700-900   |     ---
+  ------------------------------------------------------------------------
+
+
+TABLE No. 4.
+
+Compiled from Roell's Encyclopaedie des Eisenbahnwesens.
+
+_FREIGHT TARIFFS._--BELGIUM.
+
+All freight is divided into three general classes:
+
+1. _Express Freight_, which is delivered by special messengers. Parcels
+weighing 5 kg. (11 lbs.) and less, if prepaid, are carried for .80 fr.
+(16c.) for all distances. Parcels not prepaid and such as weigh from 6
+to 10 kg. pay .90 fr. for a distance of from 1 to 25 km.; 1 fr. for 26
+to 75 km.; 1.10 fr. for greater distances.
+
+2. _Fast Freight_, which may be made use of for consignments weighing up
+to 200 kg. (440 lbs.) Parcels weighing up to 5 kg. pay .50 fr. for all
+distances. Parcels not prepaid and such as weigh from 5 to 10 kg. pay
+.50 fr. for from 1 to 25 km.;.60 fr. for distances ranging from 26 to 75
+km., and .70 fr. over 75 km.
+
+3. _Common Freight_, which is again sub-divided into four classes: In
+Class I 400 kg., in Classes II and III 5,000 kg., and in Class IV 10,000
+kg. is recognized as the minimum weight.
+
+       *       *       *       *       *
+
+TARIFF FOR THE FOUR DIFFERENT CLASSES OF COMMON FREIGHT.
+
+_Terminal Charges--Franc 1.00._
+
+    I Class--For 1,000 kg. (2,250 lbs.)
+      From 1 to 5 km            Fr. 1.00
+      From 6 to 75 km, per km        .10
+      From 76 to 150 km              .08 (per km. above  75)
+      From 151 to 200 km             .06 (per km. above 150)
+      Above 300 km                   .06 (per km. above 200)
+
+   II Class--For 1,000 kg.
+      From 1 to 5 km.            Fr. 0.40
+      From 6 to 75 km., per km.       .08
+      From 76 to 125 km.              .04 (per km. above  75)
+      Above 125 km.                   .02 (per km. above 125)
+
+  III Class--For 1,000 kg.
+      From 1 to 5 km.            Fr. 0.30
+      From 6 to 75 km., per km.       .06
+      From 76 to 100 km.              .03
+      From 101 to 125 km.             .02
+      Above 125 km.                   .01
+
+   IV Class--For 1,000 kg.
+      From 1 to 24 km., per km.  Fr. 0.06
+      From 25 to 75 km., per km.      .04
+      From 76 to 100 km.              .02
+      From 101 to 350 km.             .01
+      Above 350 km.                   .02
+
+  For distances from 1 to 24 km. the terminal charges are only
+      .5 fr. for Class IV.
+
+
+TABLE No. 5.
+
+GERMANY.
+
+  The tariff recognizes the following distinctions:
+      1. Fast parcel freight.
+      2. Fast carload freight.
+      3. Parcel freight.
+      4. General carload Class A1, for shipments of at least
+           5,000 kg.
+      5. General carload Class B, for shipments of at least
+          10,000 kg.
+      6. Special tariffs.
+
+  _Distance charges per ton per kilometer: (Pfennig, 1/4 c.)_
+      1. For parcel                              11.0 pfennige
+      2. For carload Class A1                     6.7      "
+      3. For carload Class B                      6.0      "
+      4. For Special Tariff A2                    5.0      "
+      5. For Special Tariff I                     4.5      "
+      6. For Special Tariff II                    3.5      "
+      7. For Special Tariff III:
+          For distances up to 100 km              2.6      "
+          For distances above 100 km              2.2      "
+      8. For fast parcel freight                 22.0      "
+      9. For fast carload freight, twice the rate of Classes
+          A1 and B.
+
+  _Terminal Changes._
+
+  1. For parcels and carload Class A1:
+      Up to 10 km                                10 pfennige
+      From 11 to 20 km                           11    "
+      From 21 to 30 km                           12    "
+      From 31 to 40 km                           13    "
+      From 41 to 50 km                           14    "
+      From 51 to 60 km                           15    "
+      From 61 to 70 km                           16    "
+      From 71 to 80 km                           17    "
+      From 81 to 90 km                           18    "
+      From 91 to 100 km                          19    "
+      Above 100 km                               20    "
+
+  2. For carload Class B:
+      Up to 10 km                                 8 pfennige
+      From 11 to 20 km                            9     "
+      From 21 to 30 km                           10     "
+      From 31 to 40 km                           11     "
+      Above 40 km                                12     "
+
+  3. For Special Tariffs A2, I, II and III:
+      Up to 10 km                                 8 pfennige
+      From 11 to 100 km                           9    "
+      Above 100 km                               12    "
+
+  _Charges for Live Stock._
+
+  (a) Horses. Terminal charge per head, 1 m. (24c.)
+      Distance charge per kl. for one head        0.30 mark
+      Charge per kl. for 2 head                    .40  "
+      Charge for each additional head              .10  "
+
+  (b) Cattle.
+      Terminal charge, per head                   0.60 mark
+      Distance charge per kl., for one head        .10  "
+      Distance charge for each additional head     .03  "
+
+  (c) Sheep, Hogs, Calves, etc.:
+      Terminal charge, per head                   0.20 mark
+      Distance charge, per kl., for each of the
+        first 10 heads                             .02  "
+      Distance charge, per kl., for each
+        additional head                            .01  "
+
+  If shipped in carloads the charges for live stock are .03 m.
+      per square meter per kilometer.
+
+
+TABLE No. 6.
+
+FRANCE.
+
+The French railroads divide all freight into six different classes. The
+following is the tariff adopted by a majority of the principal roads:
+
+                _Common Freight._
+  ==================================================
+                      | Centimes per Ton--Kilometer.
+  --------------------+----+----+----+----+----+----
+  Classes             |  1 |  2 |  3 |  4 |  5 |  6
+  --------------------+----+----+----+----+----+----
+  Up to 25 km         | 16 | 14 | 12 | 10 |  8 | 8
+  From 26 to 100 km   | 16 | 14 | 12 | 10 |  8 | 4
+  From 101 to 150 km  | 15 | 13 | 11 |  9 |  8 | 3.5
+  From 151 to 200 km  | 15 | 13 | 11 |  9 |  7 | 3.5
+  From 201 to 300 km  | 15 | 13 | 11 |  9 |  4 | 3.5
+  From 301 to 500 km  | 14 | 12 | 10 |  8 |  4 | 3
+  From 501 to 600 km  | 13 | 11 |  9 |  7 |  4 | 3
+  From 601 to 700 km  | 12 | 10 |  8 |  6 |  4 | 2.5
+  From 701 to 800 km  | 11 |  9 |  7 |  5 |  4 | 2.5
+  From 801 to 900 km  | 10 |  8 |  6 |  4 |  4 | 2.5
+  From 901 to 1000 km |  9 |  7 |  5 |  4 |  4 | 2
+  Above 1,000 km      |  8 |  6 |  5 |  4 |  4 | 2
+  --------------------------------------------------
+
+  The rates for fast parcel freight are, on all roads, for less
+      than 40 kg., per ton, km.:
+      Up to 200 km                            35 centimes
+      From 201 to 300 km                      32    "
+      From 301 to 400 km                      31    "
+      From 401 to 800 km                      30    "
+      From 801 to 1,000 km                    28    "
+      Above 1,000 km                          25    "
+
+  For more than 40 kg.:
+      Up to 100 km                            32 centimes
+      From 101 to 300 km                      30    "
+      From 301 to 500 km                      28    "
+      From 501 to 600 km                      26    "
+      From 601 to 700 km                      24    "
+      From 701 to 800 km                      22    "
+      From 801 to 900 km                      20    "
+      From 901 to 1,000 km                    18    "
+      Above 1,000 km                          16    "
+
+  Express parcels weighing up to 3 kg. (6-3/5 lbs.), pay 1 fr. for
+      all distances, and parcels weighing from 3 to 5 kg. pay
+      fr. 1.20. Delivery to the house, 25 centimes (5c.)
+      additional.
+
+  Live Stock, per piece, per km.:
+      Horses and cattle                       16 centimes
+      Calves and hogs                          6    "
+      Sheep, etc.                              3    "
+
+
+TABLE No. 7.
+
+ITALY.--_Freight Tariff._
+
+  ========================================================================
+                   |                 GENERAL CLASSES.
+        RATES.     |------+------+-----+------+-------+------+-----+------
+                   |  1   |  2   |  3   |   4  |   5  |  6   |  7  |  8
+  -----------------+------+------+------+------+------+------+-----+------
+  For the ton--km  |0.1632|0.1428|0.1224|0.1020|0.0816|0.0714|0.612|0.0510
+  Terminal charges,|      |      |      |      |      |      |     |
+    per ton.       |2.04  |2.04  |2.04  |2.04  |2.04  |1.224 |1.224|1.224
+  ------------------------------------------------------------------------
+  The rate on merchandise sent as fast freight is .452 lire (9c.) per ton
+  kilometer.
+
+                      _Live Stock--(5 Classes.)_
+  =======================================================================
+                  |        | Cattle, |                |        | Cattle,
+     FIRST-CLASS. |Horses. |Swine and|  SECOND-CLASS. |Horses. |Swine and
+                  |        | Sheep.  |                |        | Sheep.
+  ----------------+--------+---------+----------------+--------+---------
+  1 head, per km  | 0.1530 |  0.136  |1 head, per km  | 0.1530 | 0.1326
+  2 heads, per km |  .0918 |  .0765  |2 heads, per km |  .0816 |  .0714
+  3 heads, per km |  .0816 |  .0714  |3 heads, per km |  .0663 |  .0612
+  4 heads, per km |  .0765 |  .0663  |4 heads, per km |  .0612 |  .0561
+  5 heads, per km |  .0714 |  .0612  |5 heads, per km |  .0561 |  .0510
+  6 heads or more,|        |         |6 heads or more,|
+     per km       |  .0663 |  .0561  |   per km       |  .0510 |  .0459
+                  |        |         |III Class       |        |  .02244
+                  |        |         |IV Class        |        |  .01224
+                  |        |         |V Class         |        |  .00612
+  ------------------------------------------------------------------------
+
+
+TABLE No. 8.
+
+_Austrian Tariff (in kreutzers).--July 1, 1891._
+
+  =============================================================================
+               |                |  Parcel |              |   Special    |
+               | Fast Freight.  |   Rate. | Carload Rate.| Tariff Rate. |
+               |--------+-------+----+----+----+----+----+----+----+----|
+               |        |       |    |    |    |    |    |    |    |    |Excep-
+               |Ordinary|Reduced|    |    |    |    |    |    |    |    |tional
+               |  Rate  | Rate  |  I | II |  A |  B |  C |  1 |  2 |  3 |Rate
+  -------------+--------+-------+----+----+----+----+----+----+----+----+------
+  1 to 50 km   |  1.20  |0.60   |0.60|0.50|0.34|0.24|0.18|0.26|0.18|0.15|0.12
+  50 to 150 km |  1.16  | .58   | .58| .46| .29| .22| .15| .23| .15| .13| .10
+  150 to 300 km|  1.12  | .56   | .56| .42| .25| .18| .12| .19| .12| .10| .09
+  For every    |        |       |    |    |    |    |    |    |    |    |
+   addit'n'l km|  1.00  | .50   | .50| .30| .20| .12| .10| .15| .10| .08| .08
+               |        |       |    |    |    |    |    |    |    |    |
+               |              _Terminal Charges._
+  1 to 30 km   |  6.0   |3.0    |3.0 |3.0 |3.0 |2.0 |2.0 |2.0 |2.0 |2.0 |2.0
+  31 to 80 km  |  6     |3      |3   |3   |3   |3   |3   |3   |3   |3   |2
+  Above 80 km  |  8     |4      |4   |4   |4   |4   |4   |4   |4   |4   |2
+  -------------+--------+-------+----+----+----+----+----+----+----+----+------
+
+_Horses_ and _mules_ are placed in Class II, with a minimum weight of
+1,400 kg. for one head and 700 kg. for every additional head.
+
+_Cattle_ are placed in Class II, and are billed at actual weight.
+
+_Potatoes_, hay, straw, wood, coal and coke enjoy the "exceptional rate"
+when shipped in carload lots.
+
+
+TABLE No. 9.
+
+_Hungarian Tariff (in kreutzers).--January 1, 1891._
+
+  =============================================================
+                     |                |  Parcel |             |
+                     | Fast Freight.  |   Rate. |             |
+                     |--------+-------+----+----|             |
+                     |        |       |    |    |             |
+                     |Ordinary|Reduced|  I | II |             |
+                     |  Rate  | Rate  |    |    |"Sperrgueter."|
+  -------------------+--------+-------+----+----+-------------+
+  From 1 to 200 km.  |  1.3   |  0.6  |0.72|0.52|     0.9     |
+                     |        |       |    |    |             |
+  From 201 to 400 km.|  1.    |   .5  | .52| .42|      .8     |
+                     |        |       |    |    |             |
+  Above 400 km.      |  1.    |   .5  | .52| .42|      .8     |
+                     |
+                     |    _Terminal Charges for 100 kg._
+                     |  .10   |  .10  | .10| .10|     .10     |
+  -------------------+--------+-------+----+----+-------------+
+
+  ===============================================================
+                     |                |   Special    |Exceptional
+                     | Carload Rate.  |   Tariff.    |  Tariff.
+                     |----+----+------+----+----+----|-----+-----
+                     |    |    |      |    |    |    |     |
+                     |  A |  B |  C   |  I | II | III|  I  | II
+                     |    |    |Lumber|    |    |    |     |
+  -------------------+----+----+------+----+----+----+-----+-----
+  From 1 to 200 km.  |0.32|0.21| 0.16 |0.27|0.16|0.13|0.13 |0.11
+                     |    |    |      |    |    |    |     |
+  From 201 to 400 km.| .24| .17|  .13 | .15| .13| .10| .10 | .09
+                     |    |    |      |    |    |    |     |
+  Above 400 km.      | .16| .10|  .09 | .10| .09| .07| .07 | .06
+
+
+                     | .06| .06|  .04 | .05| .04| .03| .03 | .03
+  -------------------+----+----+------+----+----+----+-----+------
+
+
+Exceptional Tariff I comprises coal, wood, potatoes, stone, hay and
+straw.
+
+Exceptional Tariff II comprises manure, earth and Hungarian ores.
+
+
+TABLE No. 10.
+
+STATE OF IOWA.
+
+
+                               SCHEDULE
+                                 OF
+                   REASONABLE MAXIMUM RATES OF CHARGES
+
+                        IN EFFECT MARCH 1, 1893,
+                        FOR THE TRANSPORTATION OF
+
+
+ _Freight and Cars on each of the Railroads in the State of Iowa, together
+        with a Classification of Freights, prepared by the Railroad
+                 Commissioners, in accordance with the Laws
+                          of the State of Iowa._
+
+       *       *       *       *       *
+
+Superseding all former schedules on the said railroads, including all
+bridges and ferries used or operated in connection with any railroad;
+and, also, all the roads in use by any corporation, receiver, trustee or
+other person operating a railroad, whether owned or operated under
+contract, agreement, lease or otherwise, or which may hereafter be
+purchased, leased, acquired or operated within the State of Iowa.
+
+The classification of freights applies to all the lines, regardless of
+class. The schedule of maximum rates applies to all Class "A" roads. The
+rates on Class "B" roads will be FIFTEEN per cent. higher, and
+the rates on Class "C" roads THIRTY per cent. higher than the
+rates named for Class "A" roads. The respective roads have been
+classified by the Executive Council of the State as follows, which
+classification is adopted by the Railroad Commissioners, and made part
+of this schedule:
+
+
+CLASSIFICATION OF ROADS.
+
+CLASS "A."
+
+Where gross annual earnings, per mile, shall be $4,000 or
+more.--Burlington, Cedar Rapids and Northern Railway; Chicago and
+Northwestern Railway; Chicago, Burlington and Quincy Railroad; Chicago,
+Milwaukee and St. Paul Railway; Chicago, Rock Island and Pacific
+Railway; Chicago and Great Western Railway (operating the Chicago, St.
+Paul and Kansas City Railway); Dubuque and Sioux City Railroad; Chicago,
+St. Paul, Minneapolis and Omaha Railway; Sioux City and Northern
+Railway; Chicago, Santa Fe and California Railway; Sioux City and
+Pacific Railroad; Toledo, Peoria and Western Railway; Union Pacific
+Railway.
+
+
+CLASS "B."
+
+Where gross earnings are $3,000 or over and less than $4,000 per
+mile.--Iowa Central Railway; Kansas City, St. Joseph and Council Bluffs
+Railroad; Omaha and St. Louis Railway.
+
+
+CLASS "C."
+
+Where annual earnings are less than $3,000 per mile.--Chicago,
+Burlington and Kansas City Railway; Chicago, Ft. Madison and Des Moines
+Railway; Chicago, Iowa and Dakota Railway; Crooked Creek Railroad and
+Coal Company; Des Moines and Kansas City Railway; Des Moines, Northern
+and Western Railway; Humeston and Shenandoah Railroad; Iowa Northern
+Railway; Mason City and Fort Dodge Railroad; Minneapolis and St. Louis
+Railway; St. Louis, Keokuk and Northwestern Railroad; Tabor and Northern
+Railway; Wabash Railroad; Winona and Southwestern Railway; Keokuk and
+Western Railway.
+
+Burlington and Western; Burlington and Northwestern; Ames and College;
+Albia and Centerville.
+
+  ======================================================================
+       |      MERCHANDISE IN CENTS        | SPECIAL CARLOAD CLASSES IN
+       |          PER 100 LBS.            |     CENTS PER 100 LBS.
+  Miles|----------------------------------------------------------------
+       | First|Second|Third |Fourth|Fifth |Class|Class|Class|Class|Class
+       |Class.|Class.|Class.|Class.|Class.|  A. |  B. |  C. |  D. |  E.
+  -----+------+------+------+------+------+-----+-----+-----+-----+-----
+     5 | 14   | 11.9 |  9.34|  7   |  4.9 | 5   | 4.9 | 4.2 | 3.5 | 2.8
+    10 | 14.8 | 12.58| 10.1 |  7.4 |  5.18| 5.3 | 5.18| 4.44| 3.7 | 2.96
+    15 | 15.6 | 13.26| 10.4 |  7.8 |  5.46| 5.6 | 5.46| 4.68| 3.9 | 3.12
+    20 | 16.4 | 13.94| 10.94|  8.2 |  5.74| 5.8 | 5.74| 4.92| 4.1 | 3.25
+    25 | 17   | 14.45| 11.34|  8.5 |  5.95| 6   | 5.95| 5.1 | 4.25| 3.4
+       |      |      |      |      |      |     |     |     |     |
+    30 | 17.6 | 14.96| 11.73|  8.8 |  6.16| 6.2 | 6.16| 5.28| 4.4 | 3.52
+    35 | 18.2 | 15.47| 12.1 |  9.1 |  6.37| 6.4 | 6.37| 5.46| 4.55| 3.64
+    40 | 18.8 | 15.98| 12.5 |  9.4 |  6.58| 6.6 | 6.58| 5.64| 4.7 | 3.76
+    45 | 19.4 | 16.49| 13   |  9.7 |  6.79| 6.8 | 6.79| 5.82| 4.85| 3.88
+    50 | 20   | 17   | 13.34| 10   |  7   | 7.05| 7   | 6   | 5   | 4
+       |      |      |      |      |      |     |     |     |     |
+    55 | 20.4 | 17.34| 13.6 | 10.2 |  7.14| 7.2 | 7.14| 6.12| 5.1 | 4.08
+    60 | 20.8 | 17.68| 13.87| 10.4 |  7.28| 7.4 | 7.28| 6.24| 5.2 | 4.16
+    65 | 21.2 | 18.02| 14.14| 10.6 |  7.42| 7.6 | 7.42| 6.36| 5.3 | 4.25
+    70 | 21.6 | 18.36| 14.4 | 10.8 |  7.56| 7.8 | 7.56| 6.48| 5.4 | 4.32
+    75 | 22   | 18.7 | 14.67| 11   |  7.7 | 8   | 7.7 | 6.6 | 5.5 | 4.4
+       |      |      |      |      |      |     |     |     |     |
+    80 | 22.4 | 19.04| 14.94| 11.2 |  7.84| 8.2 | 7.84| 6.72| 5.6 | 4.48
+    85 | 22.8 | 19.38| 15.2 | 11.4 |  7.98| 8.4 | 7.98| 6.84| 5.7 | 4.56
+    90 | 23.2 | 19.72| 15.47| 11.6 |  8.12| 8.6 | 8.12| 6.96| 5.8 | 4.64
+    95 | 23.6 | 20.06| 15.73| 11.8 |  8.26| 8.8 | 8.26| 7.08| 5.9 | 4.72
+   100 | 24   | 20.4 | 16   | 12   |  8.4 | 9   | 8.4 | 7.2 | 6   | 4.8
+       |      |      |      |      |      |     |     |     |     |
+   105 | 24.8 | 20.89| 16.35| 12.33|  8.69| 9.35| 8.63| 7.4 | 6.17| 4.96
+   110 | 25.6 | 21.38| 16.7 | 12.66|  8.98| 9.7 | 8.86| 7.6 | 6.34| 5.12
+   115 | 26.4 | 21.87| 17.05| 12.99|  9.27|10.05| 9.09| 7.8 | 6.51| 5.28
+   120 | 27.2 | 22.36| 17.4 | 13.32|  9.56|10.4 | 9.32| 8   | 6.68| 5.44
+   125 | 28   | 22.85| 17.75| 13.65|  9.85|10.75| 9.55| 8.2 | 6.85| 5.6
+       |      |      |      |      |      |     |     |     |     |
+   130 | 28.8 | 23.34| 18.1 | 13.98| 10.14|11.1 | 9.78| 8.4 | 7.02| 5.76
+   135 | 29.6 | 23.83| 18.45| 14.31| 10.43|11.45|10.01| 8.6 | 7.19| 5.92
+   140 | 30.4 | 24.32| 18.8 | 14.64| 10.72|11.8 |10.24| 8.8 | 7.36| 6.08
+   145 | 31.2 | 24.81| 19.15| 14.97| 11.01|12.15|10.47| 9   | 7.53| 6.24
+   150 | 32   | 25.3 | 19.5 | 15.3 | 11.3 |12.5 |10.7 | 9.2 | 7.7 | 6.4
+       |      |      |      |      |      |     |     |     |     |
+   155 |32.8  |25.79 | 19.85| 15.63| 11.59|12.84|10.93| 9.39| 7.87| 6.56
+   160 |33.6  |26.28 | 20.2 | 15.96| 11.88|13.18|11.16| 9.58| 8.04| 6.72
+   165 |34.4  |26.77 | 20.55| 16.29| 12.17|13.52|11.39| 9.77| 8.21| 6.88
+   170 |35.2  |27.26 | 20.9 | 16.62| 12.46|13.86|11.62| 9.96| 8.38| 7.04
+   175 |36    |27.75 | 21.25| 16.95| 12.75|14.2 |11.85|10.15| 8.55| 7.2
+       |      |      |      |      |      |     |     |     |     |
+   180 |36.8  |28.24 | 21.6 | 17.28| 13.04|14.54|12.08|10.34| 8.72| 7.36
+   185 |37.6  |28.73 | 21.95| 17.61| 13.33|14.88|12.31|10.53| 8.89| 7.52
+   190 |38.4  |29.22 | 22.3 | 17.94| 13.62|15.22|12.45|10.72| 9.06| 7.68
+   195 |39.2  |29.71 | 22.65| 18.27| 13.91|15.56|12.77|10.91| 9.23| 7.84
+   200 |40    |30.2  | 23   | 18.6 | 14.2 |15.9 |13   |11.1 | 9.39| 8
+       |      |      |      |      |      |     |     |     |     |
+   210 |41.6  |31.18 | 23.7 | 19.24| 14.78|16.56|13.45|11.49| 9.71| 8.3
+   220 |43.2  |32.16 | 24.4 | 19.88| 15.36|17.22|13.9 |11.88|10.03| 8.6
+   230 |44.8  |33.14 | 25.1 | 20.52| 15.94|17.88|14.35|12.27|10.35| 8.9
+   240 |46.4  |34.12 | 25.8 | 21.6 | 16.52|18.54|14.8 |12.66|10.67| 9.2
+   250 |48    |35.1  | 26.5 | 21.8 | 17.1 |19.2 |15.25|13.05|10.99| 9.5
+  260  | 49.6 | 36.08| 27.2 | 22.44| 17.68|19.86|15.7 |13.44|11.31| 9.8
+  270  | 51.2 | 37.06| 27.9 | 23.08| 18.26|20.52|16.15|13.83|11.63|10..
+  280  | 52.8 | 38.4 | 28.6 | 23.72| 18.84|21.18|16.6 |14.22|11.95|10.4
+  290  | 54.4 | 39.02| 29.3 | 24.36| 19.42|21.84|17.05|14.61|12.27|10.7
+  300  | 56   | 40   | 30   | 25   | 20   |22.5 |17.5 |15   |12.5 |11
+       |      |      |      |      |      |     |     |     |     |
+  310  | 56.5 | 40.5 | 30.5 | 25.5 | 20.5 |23   |18   |15.5 |13   |11.5
+  320  | 57   | 41   | 31   | 26   | 21   |23.5 |18.5 |16   |13.5 |12
+  330  | 57.5 | 41.5 | 31.5 | 26.5 | 21.5 |24   |19   |16.5 |14   |12.5
+  340  | 58   | 42   | 32   | 27   | 22   |24.5 |19.5 |17   |14.5 |13
+  350  | 58.5 | 42.5 | 32.5 | 27.5 | 22.5 |25   |20   |17.5 |15   |13.5
+       |      |      |      |      |      |     |     |     |     |
+  360  | 59   | 43   | 33   | 28   | 23   |25.5 |20.5 |18   |15.5 |14
+  370  | 59.5 | 43.5 | 33.5 | 28.5 | 23.5 |26   |21   |18.5 |16   |14.5
+  380  | 60   | 44   | 34   | 29   | 24   |26.5 |21.5 |19   |16.5 |15
+  390  | 60.5 | 44.5 | 34.5 | 29.5 | 24.5 |27   |22   |19.5 |17   |15.5
+  400  | 61   | 45   | 35   | 30   | 25   |27.5 |22.5 |20   |17.5 |16
+       |      |      |      |      |      |     |     |     |     |
+  410  | 61.5 | 45.5 | 35.5 | 30.5 | 25.5 |28   |23   |20.5 |18   |16.5
+  420  | 62   | 46   | 36   | 31   | 26   |28.5 |23.5 |21   |18.5 |17
+  430  | 62.5 | 46.5 | 36.5 | 31.5 | 26.5 |29   |24   |21.5 |19   |17.5
+  440  | 63   | 47   | 37   | 32   | 27   |29.5 |24.5 |22   |19.5 |18
+  450  | 63.5 | 47.5 | 37.5 | 32.5 | 27.5 |30   |25   |22.5 |20   |18.5
+       |      |      |      |      |      |     |     |     |     |
+  460  | 64   | 48   | 38   | 33   | 28   |30.5 |25.5 |23   |20.5 |19
+  470  | 64.5 | 48.5 | 38.5 | 33.5 | 28.5 |31   |26   |23.5 |21   |19.5
+  480  | 65   | 49   | 39   | 34   | 29   |31.5 |26.5 |24   |21.5 |20
+  490  | 65.5 | 49.5 | 39.5 | 34.5 | 29.5 |32   |27   |24.5 |22   |20.5
+  500  | 66   | 50   | 40   | 35   | 30   |32.5 |27.5 |25   |22.5 |21
+  ----------------------------------------------------------------------
+
+NOTE.--When rates are not shown in this table for the exact
+distance, the rates given for the next greater distance will prevail.
+When these rates and the classification conflict, these rates will
+govern.
+
+  A = Wheat, flour, millet, flaxseed.
+  B = Corn, oats, barley, other grain and mill stuffs.
+  C = Hard and soft lumber, lath, shingles, sash, doors and blinds.
+  D = Salt, lime, cement, plaster, stucco.
+  E = Horses and mules in carloads--minimum weight 20,000 lbs.,
+        31-foot cars, inside measurement.
+  F = Fat cattle in carloads--minimum weight 19,000 lbs.,
+        31-foot cars, inside measurement
+  G = Hogs (single deck) in carloads--minimum weight 15,000 lbs.,
+        31-foot cars, inside measurement.
+  H = Sheep (single deck) in carloads--minimum weight 15,000 lbs.,
+        31-foot cars, inside measurement.
+  I = Hard coal.
+  J = Soft coal, lump and nut.
+  K = Soft coal, pea and slack.
+
+  =======================================================================
+       |   CARLOAD CLASSES IN  |  LIVE STOCK IN CENTS  |COAL IN CENTS PER
+       |   CENTS PER 100 LBS.  |     PER 100 LBS.      |TON OF 2,000 LBS.
+  -----+-----------------------+-----------------------+-----------------
+  Miles|  A  |  B  |  C  |  D  |  E  |  F  |  G  |  H  |  I  |  J   |  K
+  -----+-----+-----+-----+-----+-----+-----+-----+-----+-----+------+----
+     5 | 4.5 | 3.75| 3.5 | 3.25| 5.37| 5.13| 5.67| 8.4 |  .60|  .30 | .25
+    10 | 4.7 | 3.92| 3.66| 3.39| 5.75| 5.53| 6   | 8.8 |  .64|  .34 | .28
+    15 | 4.9 | 4.09| 3.82| 3.53| 6.12| 5.92| 6.33| 9.2 |  .68|  .38 | .31
+    20 | 5.1 | 4.26| 3.98| 3.67| 6.5 | 6.32| 6.67| 9.6 |  .72|  .42 | .34
+    25 | 5.3 | 4.43| 4.14| 3.81| 6.87| 6.71| 7   |10   |  .76|  .46 | .37
+       |     |     |     |     |     |     |     |     |     |      |
+    30 | 5.5 | 4.6 | 4.3 | 3.95| 7.25| 7.11| 7.33|10.4 |  .80|  .50 | .40
+    35 | 5.7 | 4.77| 4.45| 4.09| 7.62| 7.5 | 7.67|10.8 |  .84|  .54 | .43
+    40 | 5.9 | 4.93| 4.6 | 4.23| 8   | 7.89| 8   |11.2 |  .88|  .58 | .46
+    45 | 6.1 | 5.09| 4.75| 4.37| 8.37| 8.29| 8.33|11.6 |  .92|  .62 | .49
+    50 | 6.3 | 5.25| 4.9 | 4.51| 8.75| 8.68| 8.67|12   |  .96|  .66 | .52
+       |     |     |     |     |     |     |     |     |     |      |
+    55 | 6.5 | 5.4 | 5.04| 4.65| 9.12| 8.95| 9   |12.4 | 1.00|  .70 | .55
+    60 | 6.7 | 5.55| 5.18| 4.79| 9.5 | 9.21| 9.33|12.8 | 1.04|  .74 | .58
+    65 | 6.9 | 5.7 | 5.32| 4.93| 9.87| 9.47| 9.67|13.2 | 1.08|  .78 | .60
+    70 | 7.1 | 5.85| 5.46| 5.07|10.25| 9.74|10   |13.6 | 1.12|  .82 | .62
+    75 | 7.3 | 6   | 5.6 | 5.2 |10.62|10   |10.16|14   | 1.16|  .85 | .64
+       |     |     |     |     |     |     |     |     |     |      |
+    80 | 7.5 | 6.15| 5.74| 5.33|11   |10.26|10.32|14.4 | 1.20|  .88 | .66
+    85 | 7.7 | 6.3 | 5.88| 5.46|11.37|10.53|10.48|14.8 | 1.24|  .91 | .68
+    90 | 7.9 | 6.45| 6.02| 5.59|11.75|10.79|10.64|15.2 | 1.28|  .94 | .70
+    95 | 8   | 6.6 | 6.16| 5.72|12.12|11.05|10.8 |15.6 | 1.32|  .97 | .72
+   100 | 8.1 | 6.75| 6.3 | 5.85|12.5 |11.32|10.96|16   | 1.36| 1.00 | .74
+       |     |     |     |     |     |     |     |     |     |      |
+   105 | 8.24| 6.87| 6.41| 5.95|12.75|11.53|11.12|16.3 | 1.40| 1.015| .755
+   110 | 8.38| 6.99| 6.52| 6.05|13   |11.74|11.28|16.6 | 1.44| 1.03 | .77
+   115 | 8.52| 7.11| 6.63| 6.15|13.25|11.95|11.44|16.9 | 1.48| 1.045| .785
+   120 | 8.66| 7.23| 6.74| 6.25|13.5 |12.16|11.6 |17.2 | 1.52| 1.06 | .80
+   125 | 8.8 | 7.35| 6.85| 6.35|13.75|12.37|11.8 |17.5 | 1.55| 1.075| .815
+       |     |     |     |     |     |     |     |     |     |      |
+   130 | 8.94| 7.46| 6.96| 6.45|14   |12.58|12   |17.8 | 1.58| 1.09 | .83
+   135 | 9.08| 7.57| 7.07| 6.55|14.25|12.79|12.2 |18.1 | 1.61| 1.105| .845
+   140 | 9.22| 7.69| 7.18| 6.65|14.5 |13   |12.4 |18.4 | 1.64| 1.12 | .86
+   145 | 9.36| 7.79| 7.29| 6.75|14.75|13.21|12.6 |18.7 | 1.67| 1.135| .875
+   150 | 9.5 | 7.9 | 7.4 | 6.85|15   |13.42|12.8 |19   | 1.70| 1.15 | .89
+       |     |     |     |     |     |     |     |     |     |      |
+   155 | 9.63| 8.01| 7.5 | 6.95|15.25|13.63|13   |19.3 | 1.73| 1.165| .905
+   160 | 9.79| 8.12| 7.6 | 7.05|15.5 |13.84|13.2 |19.6 | 1.76| 1.18 | .92
+   165 | 9.89| 8.23| 7.7 | 7.15|15.75|14.05|13.4 |19.9 | 1.79| 1.195| .935
+   170 |10.02| 8.34| 7.8 | 7.25|16   |14.26|13.6 |20.2 | 1.82| 1.21 | .95
+   175 |10.15| 8.45| 7.9 | 7.35|16.25|14.47|13.8 |20.5 | 1.85| 1.225| .965
+   180 |10.28| 8.56| 8   | 7.44|16.5 |14.68|14   |20.8 | 1.88| 1.24 |  .98
+   185 |10.41| 8.67| 8.1 | 7.53|16.75|14.89|14.2 |21.1 | 1.91| 1.255|  .995
+   190 |10.54| 8.78| 8.2 | 7.62|17   |15.11|14.4 |21.4 | 1.94| 1.27 | 1.01
+   195 |10.67| 8.89| 8.3 | 7.71|17.25|15.32|14.6 |21.7 | 1.97| 1.285| 1.025
+   200 |10.8 | 9   | 8.4 | 7.8 |17.5 |15.53|14.8 |22   | 2.00| 1.30 | 1.04
+       |     |     |     |     |     |     |     |     |     |      |
+   210 |11.07| 9.23| 8.61| 8   |17.87|16   |15.22|22.3 | 2.04| 1.32 | 1.06
+   220 |11.34| 9.46| 8.82| 8.2 |18.25|16.47|15.64|22.7 | 2.08| 1.34 | 1.08
+   230 |11.61| 9.69| 9.03| 8.4 |18.62|16.95|16.06|23.1 | 2.12| 1.36 | 1.10
+   240 |11.88| 9.92| 9.24| 8.6 |19   |17.42|16.48|23.5 | 2.16| 1.38 | 1.12
+   250 |12.15|10.15| 9.45| 8.8 |19.37|17.89|16.9 |23.9 | 2.20| 1.40 | 1.14
+       |     |     |     |     |     |     |     |     |     |      |
+   260 |12.42|10.37| 9.66| 8.99|19.75|18.37|17.32|24.3 | 2.24| 1.42 | 1.16
+   270 |12.69|10.59| 9.87| 9.18|20.12|18.84|17.74|24.7 | 2.28| 1.44 | 1.18
+   280 |12.96|10.81|10.08| 9.37|20.5 |19.32|18.16|25.1 | 2.32| 1.46 | 1.20
+   290 |13.26|11.03|10.29| 9.56|20.87|19.79|18.58|25.5 | 2.36| 1.48 | 1.22
+   300 |13.53|11.25|10.5 | 9.75|21.25|20.26|19   |25.9 | 2.40| 1.50 | 1.24
+       |     |     |     |     |     |     |     |     |     |      |
+   310 |13.8 |11.48|10.71| 9.95|21.6 |20.53|19.13|26.7 | 2.44| 1.52 | 1.25
+   320 |14.07|11.71|10.92|10.15|21.95|20.79|19.25|27.1 | 2.48| 1.54 | 1.26
+   330 |14.34|11.94|11.13|10.35|23.3 |21.05|19.37|27.5 | 2.52| 1.56 | 1.27
+   340 |14.61|12.17|11.34|10.55|22.65|21.32|19.5 |27.9 | 2.56| 1.58 | 1.28
+   350 |14.88|12.4 |11.55|10.75|23   |21.58|19.62|28.3 | 2.60| 1.60 | 1.29
+       |     |     |     |     |     |     |     |     |     |      |
+   360 |15.15|12.62|11.76|10.94|23.35|21.84|19.75|28.7 | 2.64| 1.62 | 1.30
+   370 |15.42|12.84|11.97|11.13|23.7 |22.11|19.87|29.1 | 2.68| 1.64 | 1.31
+   380 |15.68|13.06|12.18|11.32|24.05|22.37|20   |29.5 | 2.72| 1.66 | 1.32
+   390 |15.94|13.28|12.39|11.51|24.4 |22.63|20.5 |29.9 | 2.76| 1.68 | 1.33
+   400 |16.2 |13.5 |12.6 |11.7 |24.75|22.89|21   |30.3 | 2.80| 1.70 | 1.34
+       |     |     |     |     |     |     |     |     |     |      |
+   410 |16.47|13.72|12.81|11.89|25.1 |23.15|21.12|30.7 | ....| .... | ....
+   420 |16.73|13.94|13.02|12.08|25.45|23.41|21.25|31.1 | 2.88| 1.74 | 1.36
+   430 |17   |14.16|13.23|12.22|25.80|23.67|21.37|31.5 | ....| .... | ....
+   440 |17.27|14.38|13.44|12.46|26.15|23.93|21.5 |31.9 | 2.96| 1.78 | 1.38
+   450 |17.54|14.60|13.65|12.65|26.5 |24.19|21.62|32.3 | ....| .... | ....
+       |     |     |     |     |     |     |     |     |     |      |
+   460 |17.80|14.82|13.86|12.84|26.85|24.45|21.75|32.7 | 3.04| 1.82 | 1.40
+   470 |18.06|15.04|14.07|13.03|27.2 |24.71|21.87|33.1 | ....| .... | ....
+   480 |18.33|15.26|14.28|13.22|27.55|24.97|22   |33.5 | 3.12| 1.86 | 1.42
+   490 |18.60|15.48|14.49|13.41|27.9 |25.23|22.12|33.9 | ....| .... | ....
+   500 |18.87|15.70|14.70|13.60|28.15|25.49|22.25|34.3 | 3.20| 1.90 | 1.44
+  -------------------------------------------------------------------------
+
+* Stock cattle or feeders and calves take 75 per cent. of fat cattle
+rate; 31-foot car (internal measurement) is adopted as the standard for
+minimum weight, as per heading in table; 28-foot cars, 90 per cent. of
+above; 33-foot 6-inch cars, 108 per cent. of above; other lengths of
+cars to take same proportion as above.
+
+
+
+
+INDEX.
+
+
+  Abbett, Gov., 113
+
+  Absentee ownership, 287
+
+  Abuses, 101
+    cardinal, 134
+    for protection against, must resort to polls and not to courts, 332
+    increased, 129
+    of railroads, 124
+    origin of, 434
+    still practiced, 400
+
+  Accidents, 450
+
+  Acworth, Mr. W. M., 276
+
+  Adams, C. F., Jr., heresy, 260
+    difficulty not in legislation, 258
+    favors pooling, 260
+    on character of railroad men, 257
+    on Iowa law, 332
+    H. C., motive for ownership, 436
+
+  Africa, 61
+    roads constructed, 22
+
+  Agriculture among Babylonians and Assyrians, 19
+
+  Albany _Evening Argus_, 340
+
+  Albia, 324
+
+  Algiers, 62
+
+  Algona, 328
+
+  American colonies, 100
+    experience, 303
+    investments a reproach, 313
+
+  Americans would avail themselves of low rates, 445
+
+  American Transfer Company, 119
+
+  Amsterdam, 97
+    owes to canal, 32
+
+  Ann Arbor Strikers, 449
+
+  Area of land grants, 329
+
+  Argentine Republic, 68
+
+  Arrogance, 453
+
+  Asia, 59
+    early nations of, 18
+
+  Athens connected with Piraens, protected road, 24
+
+  Atkinson, Edward, 248
+    fallacious argument of, 249
+    relies upon a figurehead commission, 249
+
+  Atlantic nurseryman, 148
+
+  Attorney-General held that legislature had not the power to prescribe
+    rates, 330
+
+  Attorney, slow to accept fee, 402
+
+  Augustus instituted postal service, 27
+
+  Australia, 64
+
+  Austria, 54
+
+  Average fares per mile, 444
+
+
+  B. & M. Co., 324
+
+  Baker, C. W., 262
+
+  Balkan Peninsula, 59
+    physical features, important factor, 24
+
+  Ballou, H. S., 139
+
+  Baltimore and Ohio, watered stock, 172
+
+  _Bankers' Magazine_, 301
+
+  Banks and insurance, not private, 403
+
+  Barosz, M., 441
+
+  B., C. R. & N. Railroad Co., increased prosperity of, 344
+
+  Beach, C. F., Jr., 395
+    law of private corporations, 316
+
+  Bering Strait, 89
+
+  Belgium, 56, 409
+    cost of right of way, 370
+
+  Bessemer's invention, 374
+
+  Blackstone, T. B., 413
+
+  Blatchford, Justice, 213, 290
+
+  Blinkensop, 48
+
+  Board of Railroad Commissioners, 428
+
+  Bolles, A. S., 303
+
+  Bonded debt of M. & M. R. R., 322
+
+  Bonham, John M., 268
+
+  Boone, 327
+
+  Boston _Advertiser_, 340
+
+  Bradley, Justice, 213
+
+  Braithwaite, 49
+
+  Branch roads, 306
+
+  Brazil, 69
+
+  Brewer, Justice, 214, 215, 455
+    doctrine, 376
+    opinion of reasonable rates, 360
+    reply to ruling of, 364
+
+  Bridge across the Mississippi, 319
+
+  British railways, cost of right of way, 370
+
+  Brown, Justice, 214
+
+  Bryce, Prof., 391
+    on decadence of bar, 222
+    on lobby, 222
+
+  Budd vs. N. Y., 213, 290, 295
+
+  Buddha, commended roads to care of pious, 18
+
+  Burmah, 61
+
+  Burstall, 49
+
+
+  California railways, 122
+
+  Calmar, 328
+
+  Camden and Amboy charter, 113
+
+  Camden and Amboy Railroad Company, 102
+
+  Canada, 73
+    canals, 43
+
+  Canadian Pacific, 74
+
+  Canal, Erie, 40
+    from Bitter Lake to Red Sea, 23
+    Nicaragua, 44, 174
+
+  Canals, Canadian, 43
+    in Great Britain, 33
+    Italian, 34
+    private companies, 42
+    Spanish, 34
+
+  Candidates, railroad, 226
+    servile to railroads, 206
+
+  Cape Colony, 63
+
+  Capitalization of railroads, 86
+
+  Capital of Standard Oil Company, 121
+
+  Carey, H. C., 110
+
+  Carload lots, 386
+    rates, 140
+
+  Carthage, harbor, fleets, roads, 24
+
+  Carthaginians, 91
+    commerce of, constructed roads, 22
+
+  Cars refused, 120
+
+  Cassat, Mr., testimony of, 121
+
+  C., B. & Q. R. R. strike, 285
+
+  Cedar Rapids and Missouri River R. R. Co., 324
+
+  Central America, 70
+
+  Central Pacific, 175
+    scheme, 347
+
+  Ceylon, 61
+
+  Charlemagne repaired and built roads, 28
+
+  Chicago and Milwaukee system, cost of, 235
+    and Omaha pool, 194
+    convention, 224
+    Iowa    and     Nebraska Railroad, 328
+    third-rate lawyer, 222
+
+  Chile, 68
+
+  Chinese built roads before the Christian era, 21
+
+  Classification, 363
+    rule, 361
+    unjust features, 151
+
+  Clay, Mr., 303
+
+  Clews, Henry, 304
+    pictures evils, 404
+    "Twenty-eight Years in Wall Street," 185
+
+  Clear Lake, 328
+
+  Clerk of U. S. Court, 217
+
+  Cleveland, President, 359
+
+  Clinton, 328
+
+  Club address of C. F. Adams, Jr., 257
+
+  C., M. & St. P. R. R. Co. vs. Minn., 213
+
+  Coal and kindred articles, 386
+
+  Coffin, Mr. L. S., 452
+
+  Colbert, idea of postal service, 30
+
+  Coleridge, Lord, 454
+
+  Combinations, 189
+    regulate, 299
+
+  Commission evil, 420
+
+  Commission received, 119
+
+  Commissioner system, 246
+
+  Commission, Interstate, reviews Judge Brewer's rule, 365
+
+  Commissions acquire expert knowledge, 384
+
+  Commission's decisions, 359
+    acts subject to judicial review, 381
+    become a pliant tool, 429
+    character of, 359
+
+  Commission system adopted in Iowa, 335
+
+  Committee bill passed, 354
+
+  Commodities, character of, 373
+
+  Common law, sufficient in theory but fails in practice, 268
+
+  Competition, 190, 196
+    a great educator, 260
+    and enhanced rates, 352
+    in United States depended upon, 129
+    the death of trade, 298
+    vicious, 300
+
+  Communism, strength of, 454
+
+  Conduit company, 117
+
+  Confiscation of railroads, 293
+
+  Conflicts between labor and capital, 448
+
+  Congress, appropriations for improving rivers, 44
+    in three camps, 352
+    responds to demand of Pacific road, 183
+    to cease futile attempts 299
+
+  Congressmen imposed upon, 17
+
+  Connecticut railroad construction, 288
+
+  Conscientious managers cannot retain business, 399
+
+  Consolidation of C., R. I. & P. R. R. Co., 323
+    tendency to, 262
+
+  Conspiracies should not be legalized, 260
+
+  Conspiracy, 296
+
+  Constitutions made for, 457
+
+  Contests, expense of in Great Britain, 371
+
+  Contributions to Pacific roads, 180
+
+  Control, suggestions for, 425
+
+  Cooley, Judge, 315, 359
+    in reference to State and National Commissions, 426
+
+  Corporations, danger from, 223
+    willing to pay for questionable services, 222
+
+  Corrupt practice act in Mass., 223
+
+  Cost of American roads, 187
+    of building roads at present, 186
+    of existing railway system, 422
+    of operating M. & M. R. R., 322
+    of railroads, 172, 370, 417
+
+  Council Bluffs, 324
+    line completed to, 323
+
+  Courteous employes, 447
+
+  Courts ordered restoration of Erie securities, 170
+    should not aid, 381
+
+  C., R. I. & P. Railroad, 284
+
+  Crosby, J. O., story of tramp, 178
+
+  Crusaders, 92
+
+  Cuba, 70
+
+  Cullom committee report, 131
+    Senator, 353
+
+  Customs laws, 15
+
+
+  Dabney, W. D., drift toward railroad centralization, 261
+    favors pooling, 261
+    favors State control, 261
+
+  Darius I., work on canal, 23
+
+  Dartmouth College case, 315
+    decision, 259
+
+  Davis, C. Wood, 413
+    on cost of roads, 187
+
+  Dows, David, & Co., 138
+
+  Davis, Jefferson, plea, 276
+
+  Delegates to conventions, 224
+
+  Demand in other States for reform, 331
+
+  Denmark, 35, 58
+    first-class passenger rates, 439
+
+  Depew, Mr., 138
+
+  Depew says all railroad men are politicians, 366
+
+  Devices, various, 296
+
+  Differentials, 296
+
+  Discriminations, 118, 137, 143, 156, 147, 160
+    damaging, 248
+    in classifications, 148
+    in Iowa, 337
+    practiced openly, 331
+
+  Dillon, Judge, 411
+    Sidney, 273
+    on cost of Pacific roads, 185
+
+  Directors and officials of corporations, 316
+    character of, 406
+    with personal interests 317
+
+  Director-General, 431
+    should have power to remove managers, 432
+
+  Distance disregarded, 331
+
+  Dividends, 164, 187
+    by fluctuations, 302
+    Standard Oil Company, 121
+
+  Donations, 329
+    for benefit of public, 376
+    made by railroad companies, 446
+    to Pacific roads, 176
+    to railroads, 125
+
+  Donation to road completed, 320
+
+  Doud amendment, 331
+
+  Dual government, 401
+
+  Dual sovereignty must be recognized, 425
+
+  Dubuque & S. C. Co., 324
+
+  Dutch East India Company, 97
+
+  Duties of common carriers, 315
+
+  Duty of state, 456
+
+
+  Earnings diverted, 403
+    of first Iowa railroad, 320
+    gross, larger in United States, 281
+    of C., B. & Q., 175
+    of Iowa roads increased, 264
+    of Massachusetts railroads, 175
+    of Lake Shore, 175
+
+  Earnings of Liverpool and Manchester, 50
+    of Terre Haute, 175
+    of railroads, 86
+    per employe, 372
+    per train mile in the United States and United Kingdom, 270
+    per train mile larger in United States, 281
+
+  East India Company, 99, 303
+
+  Economy of fuel, 375
+
+  Editors, 221, 231
+    controlled by counting-room, 339
+
+  Egyptians, commerce of, constructed roads, 22
+
+  Electoral Commission, 215
+
+  Eminent domain, 314
+    Spelling on, 317
+
+  Employes fare better under Government management, 412
+    in Iowa, compensation, 344
+    in Iowa, number, 344
+    number of, in various countries, 371
+    number of, per mile of road, 269
+    number of, as related to gross earnings, 269
+    organized for political work, 277
+    quasi-public officers, 447
+    should have passes, 209
+
+  England, 99
+    roads maintained by statute and parish labor, 32
+
+  English landlords, 287
+
+  Entrance into railway service regulated, 448
+
+  Ericsson, 449
+
+  Erie Canal, 40
+    Railroad, 170
+
+  European and American investments compared, 371
+
+  European history began in Greece, 24
+
+  Evans, Oliver, 47
+
+  Executive charged with construction and maintenance of roads and
+    canals, 22
+
+  Executives influenced, 225
+
+  Experiments with wooden rail, 46
+
+  Extortion, effects of, 111
+
+
+  Farmers' Alliance, 300
+
+  Farmers' pool, 300
+
+  Federal agencies, need of improved, 430
+
+  Federal courts, influence of, 212
+
+  Ferocity of public opinion in the West, 312
+
+  Feudal features, 455
+
+  Field, Justice, 214, 269
+
+  Fink, Albert, 200
+
+  First rail tracks, 46
+
+  First railroad survey in Iowa, 319
+
+  Fort Dodge, 325
+
+  Fortunes, great, 400
+    made, 301
+
+  France, 54
+    duty of employes, 447
+    first system of roads, first artificial waterways, 30
+    large number of canals, 30
+    rates on freight and passengers, 293
+
+  Frederick the Great built turnpikes and canals, 31
+
+  Frederick William IV., 53
+
+  Free competition, 407
+
+  Freight agents, 383
+
+  Freight carried by railroads in the United States, 292
+
+  Friction under Iowa law, 341
+
+
+  Galena and Chicago Union, 164
+
+  Gallatin advocated roads and canals, 38
+
+  Garfield, President, 224
+    on Dartmouth College case, 316
+
+  Garrett, J. W., 83
+
+  Germany, first mail service, 31
+    first railroad, 53
+
+  German instructions to employes, 447
+
+  Georgia prescribed rates, 289
+
+  Glenwood, 337
+
+  Gibbon, 92
+
+  Gibbon concerning postal service, 27
+
+  Goodman, Mr., testimony of, 138
+
+  Gospel of wealth, 404
+
+  Goeta canal, 35
+
+  Gould's bulldozing, 452
+
+  Gould, Jay, 212, 224, 269
+    on cost of Pacific roads, 184
+
+  Governor called extra session of General Assembly, 321
+    importuned, 228
+    of Iowa, 311
+    influenced, 227
+
+  Government ownership drawbacks, 412
+
+  Granger cases, 212
+
+  Granger, Judge, 229
+
+  Granger law did not retard construction, 335
+    of Iowa, 332
+
+  Granger laws, moderate, 322
+    repealed, 246
+
+  Granger movement, 84
+    a necessary one, 258
+    spread, 332
+
+  Granger system in Wisconsin, 245
+
+  Grant and Conkling, 224
+
+  Grant, Judge, 411
+
+  Great Britain, canals, 33
+    crossed by Roman roads, 27
+    recent origin of public roads and postal service, 32
+
+  Great Northern Railroad Co., 185
+
+  Grecian civilization passed to Romans and then to other nations, 24
+
+  Greek geographers, praise of highways of Hindostan, 19
+
+  Gresham, Judge, 212
+
+  Grinnell, Hon. J. B., 411
+
+  Gross and net earnings in Iowa, 344
+    earnings, increase in Iowa, 287, 293
+    earnings of Iowa roads, 265
+
+
+  Hadley, Prof. A. T., 245
+    on passenger rates, 278
+    on State legislation, 286
+
+  Hadley's address before Bankers' Association, 284
+    ignorance, 287
+    mistake, 290
+
+  Hadrian improved postal service, 27
+
+  Hagar, Mr., 109
+
+  Hackworth, 49
+
+  Hale, Lord Chief Justice, 316
+
+  Harrison, President, 214
+    on watered stocks, 174
+    on Nicaragua Canal, 44
+
+  Hanseatic League, 94
+    object, extent, power, 95
+
+  Haul, length of, compared, 372
+
+  Hayes-Tilden contest, 215
+
+  Hayti, 71
+
+  Hepburn committee, 137, 146
+
+  Hindoo culture and broad statesmanship, 18
+
+  Hoe printing-press, 231
+
+  Holland, 98
+    largest canal of, 31
+
+  Hoyt, J., & Co., 138
+
+  Hudson, J. F., 250, 266, 407
+
+  Hudson River Railroad accident, 451
+    Co., 167
+    stock watering, 167
+
+  Humboldt said of roads of Incas, 36
+
+  Hungary, 54
+
+  Hungarian zone system, 282, 440
+
+  Huntington, C. P., 347
+    letter of, 346
+
+
+  Illinois canals, 42
+    Granger laws, 331
+
+  Importance of transportation facilities, 17
+
+  Improved appliances should be used, 450
+
+  Income of railroads, 128
+    per capita, 292
+
+  Increase of traffic under zone system, 442
+
+  India supplied Nineveh and Babylon, Greece and Rome, 18
+
+  Individual entitled to full use, 392
+
+  Inflation, 163
+
+  Influences at work to create public sentiment, 294
+
+  Iniquitous taxation, 307
+
+  Injunction asked for, 323
+
+  Inspection service should be established, 432
+
+  Insurance provided for, 451
+
+  Interchangeable 1,000-mile tickets, 445
+
+  Interstate Commerce Act, 85, 319
+      amended, 358
+      approved, 354
+
+  Interstate Commerce Commission, sixth annual report, 160
+
+  Interstate Commerce law attacked, 162
+
+  Intimidation of railroad employes, 226
+
+  Inventors, 126
+
+  Investments, none pay so well, 248
+
+  Iowa attorney, 210
+    Bill of Rights, 445
+    Central Air Line, 324
+    City, road built to, 319
+    Commissioners enjoined, 343
+    Commissioners' valuable service, 336
+    Falls & S. C. Co., 325
+    General Assembly passed maximum tariff act, 264
+    General Assembly passed act authorizing commissioners to make _prima
+      facie_ rates, 264
+    law, features of, 341
+    misunderstanding of, 342
+    vindicated, 266
+    legislation, 319
+    politics, 311
+    prosperity accelerated, 345
+    railroad construction, 288
+    the queen, 348
+
+  Irish tenants, 287
+
+  Iron strap rail, 46
+
+  Itaki Atabeck, road seen to this day, 19
+
+  Italy, 57
+    canals, 34
+
+
+  Jackson, President, 367
+
+  Japan, 60
+
+  Java, 61
+
+  Jeans, Mr. J. S., 269
+    on railroad revenues, 437
+    on state railroad, 410
+
+  Jefferson's inquiries, 37
+
+  Judges, servile, 162
+    use passes, 208
+
+  Jurists, eminent, 234
+
+
+  Kansas Midland, 187
+
+  Kent, 314
+
+  Kirkman, M. M., 239
+
+
+  Labor organizations, 448
+
+  Labor-saving causes, 375
+
+  Lake transportation, 453
+
+  Land grant policy, wisdom of, 320
+    to Dubuque & S. C. R. R., 325
+
+  Land grants to Iowa railroads, 320
+    value of, 325
+
+  Languedoc Canal, 30
+
+  Lawyer and farmer, 209
+
+  Lawyers, briefless, 219
+    political, 223
+    third-rate, 222
+
+  Legislation, 299
+    of California, 123
+
+  Legislative campaign of 1887, 339
+    reform needed, 405
+    reports, 110
+
+  Lincoln, President, 216
+    story of the Irishman, and the pig, 271
+
+  Lines projected, 288
+
+  Lobbies frowned out of legislative halls, 402
+
+  Lobby, 219
+    formidable, 339
+
+  Locomotive, early inventors, 47
+    reward for, 49
+
+  Long and short haul clause, 297
+    of Iowa law, 341
+
+  Louis XIV., 98
+
+  Louis XI. transferred postal service to state, 30
+
+  Lowest rates in Europe, 409
+
+
+  Mails carried free in France, 373
+
+  Managers arrogant, 331
+    concede necessity of regulation, 369
+    have lost influence, 230
+    make law odious, 333
+    naturally despotical, 151
+    of great parties, 144
+
+  M. & M. R. R. Co., 319
+
+  Marshall, Chief Justice, 350
+
+  Marshalltown, 324
+
+  Massachusetts Commission, 428
+
+  Mathews, Judge Stanley, 269
+
+  Maximilian established postal route, 31
+
+  Maximum charges, 331
+
+  McDill, Hon. J. W., as a lobbyist, 238
+
+  McGregor grant resumed, 326, 327
+
+  McGregor Western R. R. Co., 325
+
+  Means employed to control legislation, 218
+
+  Mesopotamia, inhabitants perfect cart, 19
+
+  Methods for control, 402
+    impracticable, 425
+
+  Mexico, 72
+
+  Mileage of the future, 389
+    to area, 112,389
+    to population, 292
+
+  Minneapolis and Chicago conventions, 224
+
+  Minnesota case, 295
+    Granger laws, 331
+    politics, 311
+
+  Missouri Pacific, 187
+
+  Mitchell, Alexander, 232
+
+  Modern doctrine, Kent's rule, 314
+
+  Monopoly, 317
+    in transportation, 90
+
+  Morgan, Appleton, 250
+
+  Mortgaging prohibited, 434
+
+  Munn vs. Illinois, 213, 290
+
+  Muscatine, branch line to, 319
+
+  Mushroom millionaires, 307
+
+
+  National banking system, 303
+
+  National bureau should be established, 431
+
+  National control, 424
+
+  Nation inclined to follow beaten tracks, 425
+
+  Nations should profit by experience, 367
+
+  Napoleon Company, 108
+
+  Navigation act, 98
+
+  Nebraska maximum tariff, 346
+
+  Net earnings increased in Iowa, 265
+    in 1890 and 1891, 187
+
+  Netherlands, canals, 31
+
+  Net profit of passenger traffic in United Kingdom, 270
+
+  Nevada, 324
+
+  New England railroad construction, 288
+
+  New Orleans Cotton Exchange case, 360
+
+  Newton, 47
+
+  New York canals, 41
+
+  New York Central, gross earnings, 167
+    stock watering, 165
+
+  New York delegation, 224
+
+  Nicaragua, 70
+    Canal, 44, 174
+
+  Nile, canals, roads, people, 23
+
+  Notice given when rates are changed, 388
+
+  Number of employes per mile, 372
+    of hours' work of employes, 372
+
+
+  Office of railroad public, 368
+
+  Officers of railroads should not be allowed to use proxies, 432
+    should take oath, 432
+
+  Officials not likely to resist temptation, 436
+
+  Ohio canals, 42
+
+  Oliver Cromwell, 98
+
+  Operating expenses reduced, 375
+
+
+  Pacific railroad, 81
+    diplomacy, 180
+    prejudice, 45
+
+  Pacific roads before boards of equalization, 186
+    comparative cost, 186
+    cost to duplicate, 185
+    easy grade, 185
+    indebtedness to Government, 184
+
+  Papin, constructed steamboat, 47
+
+  Parliament compelled British railways, 451
+
+  Party organs, 221
+
+  Pass abuse, ruling of commission, 362
+
+  Pass, purposes for which given, 209
+    should be discarded, 446
+
+  Passenger rate-making principle wrong, 439
+
+  Passenger rates not reduced, 375
+
+  Passenger rates too high, 438
+
+  Passengers carried by railroads in the United States, 292
+
+  Passengers, English third-class, 270
+    killed and injured, 450
+    third-class, 269
+
+  Passes, 207, 208
+    plentiful, 420
+    to delegates, 226
+
+  Pauper tickets for the clergy should be abolished, 446
+
+  Pausanias shown well-kept road, 19
+
+  Pedigree of a proverb, 298
+
+  Peik vs. Chicago, 213
+
+  Pennsylvania canals, 41
+
+  Pennsylvania Central R. R. Co., 171
+
+  People prone to believe, 245
+
+  People's parties called into existence, 404
+
+  People will not tolerate, 397
+
+  Perquisites abolished, 446
+
+  Persian Empire, magnitude, 20
+
+  Peru, 67
+    roads, 35
+
+  Phoenicians, 90
+    built great roads,
+    traders of antiquity, 20
+    first great maritime nation, 19
+
+  Pipe line, 116, 119
+
+  Plan capable of being improved, 433
+
+  Policy of delay, 381
+
+  Political campaigns in Iowa, 339
+
+  Politicians as railroad employes, 229
+
+  Pooling, 261, 398
+    committee does not recommend prohibition, 354
+    contracts void, 317
+    grave effects of, 268
+    means of swelling railroad earnings, 267
+    should be prohibited, 203
+
+  Pools, 85, 194, 195, 251, 297
+    defended by Mr. Hadley, 247
+    defended by Mr. Morgan, 250
+    maintained in Iowa, 336
+    suppress competition, 198
+
+  Poor's, H., opinion, 187
+    estimate of cost, 86, 173, 247
+
+  Poor's estimate of watered stock, 186
+
+  Porter, Horace, _North American Review_ article, 290
+
+  Porter, John, 104
+
+  Portugal, 58
+
+  Portuguese, 96
+
+  Postal communication, royal road from Susa to Sardes, 21
+
+  Postal service not carried on by state, 30
+
+  Potential value of interstate law, 367
+
+  Powderly, T. V., 449
+
+  Prediction of Mr. Walker, 299
+
+  Predictions of railroad men, 332
+
+  Press abuse, 221
+
+  Press, efforts of railroads to control, 271
+    servile to railroads, 228
+
+  _Prima facie_ rates, 341
+
+  Prize worth contending for, 380
+
+  Procopius, statement of, concerning Via Appia, 27
+
+  Problem would be solved if abuses, 297
+
+  Providence, 136
+
+  Psammitichus cuts canal, 33
+
+  Ptolemaic kings built canals, 24
+
+  Public at mercy of managers, 381
+    not unreasonable, 450
+
+  Public opinion dormant, 400
+    efforts to influence, 273
+    rules, 400
+
+  Publicity advantageous, 402
+
+  Purchasers of land made the donation, 321
+
+
+  Question not settled until settled right, 377
+
+
+  Railroad attorneys, 214
+
+  Railroad-building after 1873, 246
+
+  Railroad business not private, 403
+    safe, 436
+    changes in Iowa, 393
+    company public agent, 388
+    competition, 190, 338
+    consolidation, 82
+    construction, 287
+    diplomate, 228
+    first line, 77
+    first steam engine, 47
+    improved highway, 339
+    like common road, 391
+    literature, 231
+    magazine literature, 273
+    managers do not do things by halves, 223
+    managers' opportunities to speculate, 399
+    men always oppose reductions of rates, 283
+    officials, 257
+    papers, 340
+    precursor of, 46
+    president's letters, 229
+
+  Railroads, abandoned, 79
+    bonded for more than cost, 175
+    capitalization of, 86
+    but few that do not pay, 52
+    cost to build, 186
+    earnings of, 86
+    in Asia, 59
+    in Austria, 54
+    in Belgium, 56
+    in Denmark, 58
+    in France, 54
+    in Germany, 53
+    in Granger States did not comply with law, 246
+    in Hungary, 54
+    in Italy, 57
+    in politics, 205
+    in Portugal, 58
+    in Russia, 58
+    in Switzerland, 56
+    in Spain, 57
+    in the Balkan Peninsula, 59
+    in the Scandinavian Peninsula, 58
+    in the United States, 76
+    in Turkey, 60
+    land grants to, 80
+    partake of two natures, 392
+    propitiate judiciary, 211
+    public tax collectors, 396
+    rebelled against Iowa law, 344
+
+  Railroad stations, number of, 190
+
+  Railroad tax, amount of, 393
+
+  Railway acts, first in England, 127
+
+  _Railway Age_, 288
+
+  Railway benefits, 231
+    employes in politics, 308
+    first act, 49
+    organs, 229
+    Pan-American, 88
+
+  Railways, highways, 13
+    weakened their arguments, 237
+
+  Railway system, growth of, 87
+    length of in the world, 87
+
+  Rate-making a legislative and not a judicial function, 332
+
+  Rate-making difficult, 244
+    not a judicial question, 378
+
+  Rate of 1870, 248, 249
+    per ton per mile on Camden and Amboy Railroad, 109
+    question, 370
+
+  Rates, fixing of by commission demanded, 430
+    fundamental principles in making, 385
+    in France, 293
+    lower will prevail, 256
+    lower, reason for, 374
+    might be reduced, 417
+    on Milwaukee road, 233
+    reduced by zone tariff in Austria-Hungary, 283
+    should be lower here than in Europe, 373
+    should be referred to National and State boards, 379
+    under Granger laws, 246
+    under Wisconsin Granger laws, 236
+    what are reasonable, 376
+
+  Reagan, John H., bill of, 352
+
+  Reform demanded, 295
+
+  Reasonable rates, 376, 387
+    fixing of, 361
+
+  Rebates Standard Oil Company, 115
+
+  Redfield, J. F., 312
+
+  Reduced rates on Government business in France, 293
+    increased business, 282
+
+  Refineries closed, 116
+
+  Reforms needed, 438
+
+  Remedies, 389
+    proposed by committee, 352
+
+  Remedy proposed by Mr. Hudson of doubtful efficiency, 268
+
+  Reorganization of the M. &. M. R. R., 322
+
+  Report of Cullom committee, 353
+
+  Reports of Interstate Commission, 366
+
+  Revenues increased by Granger law, 246, 332
+    uniform, 437
+
+  Revolution and anarchy, 299
+
+  Rhenish League, 94
+
+  Ricks, Judge, 449
+
+  Ridgeway, Jacob, 106
+
+  Right of control rests upon firmer ground, 318
+
+  Right of way, cost of, 370
+
+  River and harbor improvements, 453
+
+  Rivers, improvement of, 44
+
+  Robber knights, 93, 149
+
+  Robbers and feudal knights, depredations being tax, 29
+
+  Rob Roy, 258
+    policy, 102
+
+  Robinson, H. P., railway in politics, 308
+
+  Rocket, the, 49
+
+  Rogers, Thorold, 454
+
+  Roman Empire, after downfall roads destroyed, 28
+
+  Roman postal service, 27
+
+  Romans learned art of paving roads from Carthaginians, 24
+
+  Rome, 91
+    connecting link between antiquity and mediaevalism, 24
+    extent, population, roads, etc., 25
+
+  Roads built from proceeds of stocks and bonds, 373
+
+  Roads built only when immediately profitable, 328
+    early, 37
+    pioneers of enlightenment and political eminence, 17
+    subject to legislative control, 327
+    utility of good, recognized in colonial times, 36
+
+  Russia, 58
+    roads, 35
+
+  Rutter, J. H., agent of New York Central, 116
+
+
+  Salaries, American railways pay the highest, 420
+
+  Saloon men politicians, 366
+
+  San Domingo, 71
+
+  San Salvador, 70
+
+  Sanspareil, the, 49
+
+  Savings under Government management, 422
+
+  Scandinavian Peninsula, 58
+
+  Scandinavian roads and canals, 35
+
+  Schedule rates made by Iowa Commission, 342
+
+  Schedules should be submitted to bureau, 432
+
+  Scriptures, roads of the, 22
+
+  Second-class passenger rates,
+    why not successful, 282
+
+  Secrecy a source of evils, 402
+
+  Select committee, 353
+
+  Select Committee on Transportation, 351
+
+  Senate committee, 172
+
+  Senators and Congressmen raise campaign funds, 436
+
+  Servility of Interstate Commerce Commission, 203
+
+  Sesostris cut canal, 23
+
+  Shippers given favors, 219, 221
+    powerless, 382
+
+  Sioux City, 325
+
+  Smyth Judge, 229
+
+  South America, 66
+
+  Southern Pacific Railroad Company, 122
+
+  Southern pool, 200
+
+  Southern Railway and Steamship Association, 194
+
+  South Sea Company, 303
+
+  Spain, 57
+    canals, 34
+
+  Spain and Gaul, roads of, 27
+
+  Special arrangements, 295
+
+  Special-car aristocracy, 445
+
+  Special contracts, 137
+    rate agreement, 141
+    rates, 120, 138
+
+  Speed of railroads, 279
+
+  Spelling, T. Carl, 317
+
+  Speculative element should be removed, 433
+
+  Speculators and gamblers, 434
+
+  Spirit of Interstate Law, 369
+
+  Standard Oil monopoly, 114
+    discrimination, 160, 362
+
+  State control encourages building, 130
+    in Iowa asserted early, 330
+    Spelling on, 318
+
+  State, duty of, 391
+    management, advantages of, 410
+    ownership and regulation, 409
+    with private management, 422
+    railway system, 277
+
+  States to cease futile attempts, 299
+
+  Steam engine, first account, 47
+
+  Stephenson, 48
+
+  Stevens, Mr., 107
+
+  Stewart, A. T., & Co., 138
+
+  Stickney, A. B., criticises President Mitchell's letter, 23
+    his criticism of Iowa rates, 343
+    his error, 256
+    favors entire control by Nation, 255
+    on interstate law, 255
+    on national control, 424
+
+  Stock a bonus, 434
+
+  Stock and bond inflation, 163
+
+  Stockholders, 131
+    dissatisfied, 112
+    interested in publicity, 403
+
+  Stock market controlled by few, 308
+
+  Stocks, fluctuations of, 435
+    should be paid in full, 438
+    shrinkage of value, 284
+
+  Stockton, R. F., 103
+
+  Stock watered 50 per cent., 307
+
+  Stock-watering, 164, 165
+    in America, 270
+    English, 371
+
+  Stock wiped out, 326
+
+  Stone, Governor, 324
+
+  Subordinates have to suffer for superiors, 203
+
+  Subsidies, 329
+    to press, 271
+
+  Sunday trains restricted, 451
+
+  Superintendents responsible for uncivil subordinates, 447
+
+  Supreme Court, 215, 289
+
+  Switzerland, 56
+
+
+  Taney, Justice, 216
+
+  Tariff, a tax, 135
+    prepared by sworn officials, 381
+
+  Tariffs impeachable, 382
+    official, should stand until proved unreasonable, 382
+
+  Texas legislation, 346
+
+  Text books, 312
+
+  Thiers, M., 51
+
+  Third-class passengers in Europe, 443
+
+  _Times_, New York, 340
+
+  Tipping, 447
+
+  Traffic associations, 149, 300
+
+  Trainmen should be allowed rest, 451
+
+  Train mile earnings, 269
+
+  Trains, number of, per mile, per annum, 281
+    should connect, 451
+
+  Transportation not a commodity, 368
+
+  Trevithick, Richard, 48
+
+  _Tribune_, Chicago, 244
+    New York, 340
+
+  Turkey, 60
+
+  Turnpike, first American, 37
+
+  Turnpikes in Great Britain, 32
+
+  Turnpike tolls, 396
+
+  Twelfth General Assembly, 323, 330
+
+
+  Umpires, high-priced, 420
+
+  Unanimous vote on Iowa law, 341
+
+  Union Pacific, 175
+
+  United States Bank, 303, 366
+
+  Unscrupulous men attracted, 390
+
+
+  Value of land grants, 329
+
+  Vanderbilt, 82, 452
+
+  Vedas, testimony of, 18
+
+  Venetian council, 253
+
+  Venezuela, 66
+
+  Venice, 93
+
+  Via Appia and other roads, 26
+
+  Violations of law encouraged by courts, 430
+
+
+  Wabash Railroad, 212
+
+  Walker, A. F., 294, 295, 311
+
+  Wall Street, defense of, 340
+    managers, 346
+    method, 302
+
+  War, 399
+
+  War rule, 331
+
+  Washington among the first to advocate internal improvements, 39
+
+  Water courses as levelers, 453
+
+  Watering stock, Mr. Jeans on, 270
+    methods of, 174
+
+  Water transportation, 145
+
+  Watered stocks, 172
+    Hadley on, 247
+
+  Watt and Stephenson's inventions, 126
+
+  Watt, James, 47
+
+  Weak roads helped, 344
+
+  Western candidates, 224
+
+  Water classification, 343
+
+  West Indies, 71
+
+  Western politician outwitted, 225
+    pool, failure of, 200
+    Traffic Association, 299
+    Union Telegraph Company, 127
+
+  White House, the, 215
+
+  Whitney, Asa, 81
+
+  Whitney's cotton gin, 231
+
+  Why Western people do not invest in railroad stocks, 308
+
+  Wells, David A., 374
+
+  Windom committee, 351
+
+  Wisconsin Granger laws, 331
+
+  Witnesses recusant, 134
+
+  Wrecking roads, 305
+
+  Wrought-iron rails patented, 47
+
+  _World_, New York, 340
+
+
+  Zone tariff, 409
+    ridiculed, 441
+
+
+
+
+A Standard Book on an Important Subject.
+
+THE
+
+RAILROAD QUESTION.
+
+A HISTORICAL AND PRACTICAL TREATISE
+
+ON
+
+RAILROADS, AND REMEDIES FOR THEIR ABUSES.
+
+BY
+
+=_William Larrabee_=,
+
+Late Governor of Iowa.
+
+12mo, cloth extra, gilt top (488 pages), $1.50.
+
+I.--History of Transportation. II.--The History of Railroads.
+III.--History of Railroads in the United States. IV.--Monopoly in
+Transportation. V.--Railroad Abuses. VI.--Stock and Bond Inflation.
+VII.--Combinations. VIII.--Railroads in Politics. IX., X.--Railroad
+Literature. XI.--Railroads and Railroad Legislation in Iowa. XII.--The
+Inter-State Commerce Act. XIII.--The Rate Question. XIV.--Remedies.
+Appendix:--Tables and Statistics. There is also a bibliography on the
+subject of Railroads, embracing ninety-eight titles, and a carefully
+prepared alphabetical index.
+
+
+Opinions of the Press.
+
+"No work has ever before told so completely and clearly what the public
+want to know, and ought to know, about the secret management and true
+legal status of railroads. What journalists and magazine writers have
+studiously left unsaid, whether from lack of knowledge or from motives
+of 'revenue only,' Governor Larrabee has said, and said it
+well."--_Western Rural._
+
+"This book is evidently the result of long study and experience and much
+thinking. While it is radical in its treatment of the question, no side
+of it has been overlooked. It deserves careful reading by every person
+who is interested in this great question. No subject is more worthy the
+profound study of the statesman, the man of affairs, the scholar and the
+citizen. Surely all who are trying to understand the good and evil of
+railroads can turn to the pages of this book with the certain
+expectation of learning much both in the way of fact and
+suggestion."--_Bankers' Magazine._
+
+"Perhaps the most interesting chapters are the two in which the author
+reviews and criticises former publications on railway questions, and the
+one in which he reviews the various remedies which have been from time
+to time advanced for railway abuses. The book is concisely and clearly
+written."--_Engineering News._
+
+"Ex.-Gov. Larrabee of Iowa has written a highly meaty book on the
+railroad question. It is a topic he is well qualified to handle, viewing
+that he was no small part of the movement in former days to repress
+railroad abuses in the West, and particularly in his own
+State."--_Chicago Tribune._
+
+"A careful study of an important question, fortified by facts and
+figures which are both interesting and valuable."--_New York Recorder._
+
+Hon. Thomas M. Cooley says: "I have read the book with interest,
+especially that part which discusses State ownership and management. I
+have not before seen the side you advocate so clearly and so ably
+presented."
+
+"The book is the most valuable work yet issued on its subject."--_Des
+Moines News._
+
+"Mr. Larrabee is eminently fitted for the task to which he has set
+himself. He is not a mere theorizer. He brings to the discussion the
+ripe knowledge that comes from long experience in dealing with the
+railroad question, not only as a State Senator and Governor, but also
+'as a shipper and as a railroad promoter, owner and stockholder,' and
+likewise as 'a director, president and manager of a railroad company.'
+In his treatment of the railroad problem, moreover, Mr. Larrabee
+displays a breadth of view and an earnestness of purpose that must
+command respect even where they fail to carry conviction."--_Public
+Opinion._
+
+"It is devoid of the animus which usually enters into the works of the
+reformers, but on the contrary is written in admirable style, enhanced
+by happy anecdotes, and altogether is a much more readable book than one
+is accustomed to find upon so practical a question."--_Kansas City
+Journal._
+
+"It justifies a claim to a place among the standard books upon the
+railroad problem. It is particularly in those portions of the work which
+deal with the relations of the Government to the railroads and the
+solution of the difficulties that have arisen between the railways and
+the people that the experience of the author both in guiding and
+executing the railway legislation of Iowa comes into prominent
+play."--_Omaha Bee._
+
+"We commend the book to the careful reading of the railroad
+stockholder."--_Railroad Record and Investor's Guide._
+
+"A thoughtful volume, showing careful research and
+reflection."--_Chicago Inter-Ocean._
+
+"A most interesting, valuable and timely book. Every student of the
+subject will need to read it, and the popular vein of narrative makes it
+very interesting and instructive to the general reader."--_New England
+Home._
+
+"This work will present Governor Larrabee in a new and novel light
+before the public. Heretofore he has been known as the successful man of
+affairs and business; as the earnest and zealous legislator; as the
+persistent and vigorous executive; and now he comes as the laborious
+student upon a great economic and practical question who has aptly and
+clearly put his views into a book."--_Dubuque Herald._
+
+"A thorough treatise by an able mind. The authorities quoted are the
+best in print."--_Coming Nation._
+
+"By far the best work on the popular side of the railroad
+question."--_Gen. M. M. Trumbull in the Open Court._
+
+"Gov. Larrabee's book will rank among the greatest productions of the
+day on that question."--_Cedar Rapids Gazette._
+
+"The book is the result of extraordinary observation, great reading and
+careful study. * * * This element of completeness, of massing so much
+information between the covers of a book of ordinary size, makes it
+invaluable for reference. Of all the many books called out by the
+agitation of the railroad question, this one will be oftenest referred
+to, not so much for its opinions as for its stores of facts."--
+_Davenport Democrat._
+
+"Governor Larrabee has always been a careful and conscientious student
+of the railroad question, and in exposing the abuses to which the
+railroad system has committed itself he renders a service from which the
+public may derive great benefit."--_Good Roads._
+
+"The high character and well known reputation of the author will create
+a demand for this book, aside from the fact that it contains a vast
+amount of information as well as sound reasoning on the railroad
+question."--_American Journal of Politics._
+
+"The author's attitude, while firm, is by no means a sinister or
+fantastic one. He writes obviously from honest conviction, and he writes
+with skill and force."--_Philadelphia Press._
+
+"A temperate and instructive contribution to railroad
+literature."--_Chicago Times._
+
+"A mine of facts gathered by a man who has made a specialty of his
+subject and who is evidently in earnest in his desire to lessen the
+burdens of the American people."--_San Francisco Chronicle._
+
+"In point of authenticity the book is absolutely to be relied
+upon."--_St. Louis Post-Dispatch._
+
+"Governor Larrabee came to Iowa before any railroad had reached the
+Mississippi. Engaging in manufacturing, the inconveniences which he
+suffered from want of transportation facilities instilled liberal
+opinions concerning railroads. He made private donations to new roads
+and he advocated public aid to them. As a legislator he introduced a
+bill authorizing a 5 per cent. tax in aid of railroad construction. He
+believed that the common law and competition could be relied upon to
+correct abuses and to solve the rate problem. It has not been until
+since these efforts were made that he has become convinced, as he says
+in his preface, that 'where combination is possible competition is
+impossible.' The object of this work is explained to be to set forth the
+objections which lie against the management of railroads as private
+property. They are used by their managers for speculative purposes. They
+cannot perform their proper functions so long as they are used only for
+the interests of their stockholders. In order to serve their real
+purpose, 'they must become in fact what they are in theory, highways to
+be controlled by the Government as thoroughly and effectively as the
+common road, the turnpike and the ferry, the post-office and the
+custom-house.'"--_Council Bluffs Nonpareil._
+
+
+  ="THE RAILROAD QUESTION"=
+
+  may be ordered through any bookseller,
+  or will be sent by mail to any address,
+  on receipt of price, by the publishers.
+
+  The Schulte Publishing Company,
+  334 DEARBORN STREET,
+  CHICAGO.
+
+
+
+
+    +-----------------------------------------------+
+    | Transcriber's Note:                           |
+    |                                               |
+    | Inconsistent hyphenation and spelling in the  |
+    | original document have been preserved.        |
+    |                                               |
+    | Roman numeral page numbers in the Appendix    |
+    | have been changed to Arabic numerals.         |
+    |                                               |
+    | Typographical errors corrected in the text:   |
+    |                                               |
+    | Page  13  Ackworth changed to Acworth         |
+    | Page  25  Jerusalen changed to Jerusalem      |
+    | Page  26  Brundusium changed to Brundisium    |
+    | Page  27  af changed to of                    |
+    | Page  27  if changed to of                    |
+    | Page  29  Strasburg changed to Strasbourg     |
+    | Page  37  Pittsburg changed to Pittsburgh     |
+    | Page  45  subsides changed to subsidies       |
+    | Page  65  Williamston changed to Williamstown |
+    | Page  70  Cabello changed to Caballo          |
+    | Page 107  resolulution changed to resolution  |
+    | Page 215  prejudiee changed to prejudice      |
+    | Page 232  aquainted changed to acquainted     |
+    | Page 236  omiting changed to omitting         |
+    | Page 252  Bastile changed to Bastille         |
+    | Page 266  possiple changed to possible        |
+    | Page 342  Is changed to It                    |
+    | Page 346  their changed to there              |
+    | Page 350  cammerce changed to commerce        |
+    | Page 361  upan changed to upon                |
+    | Page 368  iujustice changed to injustice      |
+    | Page 373  Eurpean changed to European         |
+    | Page 407  despatcher changed to dispatcher    |
+    | Page 408  despatcher changed to dispatcher    |
+    | Page 417  Sante changed to Santa              |
+    | Page 422  aquire changed to acquire           |
+    | Page 478  reasonaable changed to reasonable   |
+    | Page 482  addres changed to address           |
+    | Page 485  Potuguese changed to Portuguese     |
+    +-----------------------------------------------+
+
+
+
+
+
+End of Project Gutenberg's The Railroad Question, by William Larrabee
+
+*** END OF THIS PROJECT GUTENBERG EBOOK THE RAILROAD QUESTION ***
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