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4 Cbc Conservative
KAllWAY ECONOMICS. "
( Written far TIIK CONSKHVATIVK by James
Denton Hancock , of Franklin , Pennsylvania ) .
I have read and re-rend with the
greatest pleasure and profit "Railway
Economics. " I regard it as the most
concise , clear and comprehensive expo
sition of the problems involved in the
management of railroads which I have
ever heard or seen. It rightly rises to
the dignity of a work upon economics ,
which should not only be in the hands
of every railway officer and employee ,
but it should bo read and taught by
every newspaper especially country
newspapers and by every teacher and
clergyman in the United States. A
chief object of instruction in a country
like ours , the government of which is
based on general suffrage , should be to
teach the teachers. For this work "Rail
way Economics" is peculiarly adapted ;
and surely a system of transportation in
which is invested capital to the amount
of $11,000,000,000 , which has brought
every person and every commodity in
our vast continent into close connection
with each other , which has doubled the
productive power of labor , and cheap
ened the necessaries and luxuries of life
to all consumers , is a worthy subject of
study by intelligent and patriotic citi
zens of the country.
Competition.
Even a careless reader of the book
must perceive that the most serious
problems of railway operation grow out
of competition. It is the old , old strug
gle for existence and the survival of the
fittest , which commenced and will only
end with time.
m
Tin's struggle has a double aspect.
On the one hand it has been the incen
tive and excuse for the exercise of the
direst passions of man , has overwhelmed
all obstacles in its ruthless career , and
by the destruction of the monuments
and instrumentalities of civilization has
often set back progress forages. On
the other , when controlled by justice ,
and inspired by the reciprocal regard for
the rights of our fellows enjoined by the
Prince of Peace , it has proved the
greatest element of individual and na
tional advancement. In either case
"from the ashes of our dead ambitions
a loftier manhood has been evolved. "
Individual Rattles.
Before society was organized the nor
mal condition of men was that of pri
vate war. When society was established
private wars ceased , and the necessity
for the reign of justice was recognized.
With the advent of Christianity , came
the highest principle of civilization , the
binding obligation to pay due regard to
the rights of others. Justice was en
forced in two ways ; by prevention
through injunctions and police regula
tion , and by recompense for and punish
ment of wrongs inflicted. Through the
enforcement of these principles , peace
has been proved to bo consistent with
competition ; while competition exists ,
peace has become the normal condition ,
and competition has been largely
stripped of its destructive character.
The author of "Railway Economics"
seems to have been inspired by this
thought. Ho has shown that unneces
sary competition creates waste and
eventually adds to the burdens of the
public ; that discrimination is not neces
sarily unjust , but is an essential element
of success in the railroad business , as it
is in every other line of business ;
that intense competition between in
dividuals , places and commodities
is the most potent cause of unjust
discrimination , by controlling rates of
transportation and by forcing unreason
ably low rates at competing points , etc. ,
at the expense of unreasonably high
rates at non-competing points , etc. ; that
competition among the public , had in
many cases subjected railroad compan
ies to unjust taxation which had either
to be charged back to the public
in higher rates , or by which were pre
vented extensions and improvements
necessary to public accommodation and
development of the country.
Ail Example.
In my own experience I know a good
illustration of the effect of this competi
tion forced upon railroads. Three rail
roads centered in a city in which existed
a plant limited to one line of manufac
ture. The owners of this plant owned a
number of other plants located in differ
ent competing cities. Here were several
railroads competing for the same busi
ness. If one refused the rates offered ,
another was ready to take it. If they
all refused , the owners of the plant
could remove the business to other
places and the city in question be left
to moulder with the dry rot. Of course
the railroads took the business at the
rates offered , and the loss was in part
made up by unjust charges to other
persons and commodities.
Under well-regulated
any govern
ment , such conditions are intolerable.
They build up the few at the expense of
the many ; they make legitimate busi
ness impossible. That receptacle of
wisdom , the common law , has provided
that upon public instrumentalities like
railroads , rates should be reasonable and
that there should be no unjust discrim
ination ; but the limitations of the con
stitution prevented the enforcement of
this rule as to interstate commerce with
out statutory authority , and it was in
interstate commerce that the evil most
prevailed , and through it , under the
complications of business , it was im
practicable to enforce it in those states
where the common law did prevail. Out
of this condition grew the interstate
commerce law.
In recognition of the extreme com
plexity of the transportation business in
its economic relations , the law in its
original conception was intended princi
pally to prevent unjust discrimination
and unreasonable rates. It has been
somewhat the fashion to deride the
value of this law. I think that those
who thus deride have no proper concep
tion of the great work it has accom
plished under unfavorable conditions.
It has required a publication of rates ,
and has thus given the shipper a knowl
edge of his rights. It has secured fre
quent statements by transportation com
panies of the condition of their property
and business , and has thus given stock
holders a knowledge of their investments.
It has led to scientific classifications of
commodities in reference to rates. In
many cases it has prevented unreason
able rates and unjiist discriminations ,
and has been a standing menace to dis
honest shippers and railway officers.
From a medley of rates , conditions and
rules in which confusion was unbounded
and darkness was impenetrable , it has
done much to transform transportation
into a scientific system of business.
Finally through the decisions of the
commission , more than all other instru
mentalities combined , it has educated
both railway employees and the public
upon the intricate problems in which
transportation is involved ; and I doubt
whether , without it , we would have had
this valuable volume of Professor New-
comb.
Non-Pooling Provisions.
The unfavorable conditions above
mentioned are the outgrowth of a clause
forced into the interstate commerce
law forbidding railway pools , either of
business or profits , followed by the anti
trust law forbidding all combinations
and agreements between corporations
relating to the joint handling of their
business. The effect of these laws has
been practically to invalidate all ar
rangements between railroad compan
ies by which it was possible to alleviate
the barbarous conditions resulting from
the extreme exercise of economic laws ;
and we are in the anomalous situation in
which the transporting companies are
forbidden the use of unreasonable rates
and unjust discrimination , while by the
same laws they are deprived of the
power to prevent such rates and discrim
inations by the use of the only means
possible for that purpose , to-wit : com
promise and agreement. Contrary to
the whole trend of civilization , contrary
to our highest ideals of ultimate social
order , these laws have decreed perpet
ual war among railroad companies.
Inevitably economic lawc prevail over
statutory enactment. In places served
by many railroads and as to commodi
ties produced in many places , where
competition is intense , the laws against
discrimination and unreasonable rates
are evaded ; the railroad lines instead of
aiding , are thus forced into an attitude
hostile to the commission , and to a con-
