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About The Conservative (Nebraska City, Neb.) 1898-1902 | View Entire Issue (Oct. 12, 1899)
' v jjSjjSjdj'iSss Conservative. lar paid for personal transportation a few decades ago , even though the dis tance traversed be but little greater at present. The public has preferred to have improved accommodations and better service rather than very much lower charges , and , as usual in America , has had its way. The same rise in the standard of living that has given the American farmer his top buggy , his piano in the parlor , his Sunday suit and Brussels carpet has given him the luxur ious coaches and well-ballasted roadbeds , the safety and the speed of modern pas senger service. But has the competition of rival routes produced these reductions in rates and improvements in the quality of service ? I think not. Such competition has caused numer ous extravagant expenses ; it has made railway business unnecessarily costly , and some one must have paid the bills. Let us examine some of these expenses , though it is not easy to secure authentic statistics , and those available serve to suggest , only , the possible aggregates. The Interstate-Commerce Commission has reported that nine roads paid out an aggregate sum of more than one million dollars in a single year as commissions for securing competitive passenger busi ness , and it is known that as much as $20.70 has been paid to secure a single second-class passenger from this city to San Francisco. The multitude of out side agencies and traveling agents main tained solely for the purpose of securing business for their respective lines that might otherwise traverse those of their competitors involves an expenditure so great , even during periods of compara tive harmony , that it has been deemed necessary to restrict their immber by contract. An agreement in force for a considerable time limited to eight the number of agencies that might be main tained in New York city by eacli of the nine roads competing for westward- bound traffic from that city. As it is a fact of ordinary observation that such agencies always cluster in particular regions and around particular corners , it is obvious that a system of joint agencies would afford the public equal accommodation at lower cost. During the periods of unbridled com petition , popularly known as 'rate wars , ' each participating carrier sends its freight and passenger agents to every important city in the country at a total expense for rents , clerk hire , advertis ing , etc. , that must be enormous. Four roads operating westward from Chicago are known to have expended $1,288,585 for outside agencies and advertising in a single year , during which rates were fairly maintained , while during an equal period one road terminating at New York city expended $871,291 for similar purposes. , , ' The competition of long , circuitous s . --/and commercially illegitimate routes for * - ttat'r' traffic that would5naturally traverse cheaper and more direct lines is another gross extravagance too frequently observed. The president of an import ant line lias said : "Illegitimate business is always the pride of the average traffic manager. To secure a share of some competitive business not naturally or fairly belong ing to a carrying line always appears to inspire heroic efforts and to be regarded as meriting special commendation. " Illustrations are numerous. Between Chicago and St. Paul traffic is regularly forwarded over a route practically double the length of the shortest. From this city to New York there are 21 routes , varying from 912 to 1,370 miles in length ; from New York to New Orleans , beside many water carriers , there are more than ninety all-rail routes , one of which involves carrying the freight nearly to this city. As an example of the. waste of competitive train service , it is not necessary to add to the bare statement that forty-four trains leave this city every day for New York , and that practically similar dupli cation of service exists wherever the same cities are connected by competing railways. The construction of unnecessary lines is another gross extravagance in volving an expenditure from the store of energy available for the satisfaction of human wants that produces no good result. The West Shore , the Nickel Plate , and many other wholly super fluous routes will occur readily to any one as illustrations. If competition , while involving these wastes , has still reduced railway charges , these extravagant expenditures must have been met by investors in railway property. If this were the case would it have been possible to secure the capital necessary for the rapid development of the American railway system , for the new construction that has gone on dur ing the years subsequent to 1870 ? "But the arguments are by no means all of a negative character. The decline in rates has affected those from and to points served by single carriers , as well as those served by one or more. There is no important point and no article of traffic that moves in considerable vol ume that has not felt the effects of reduced charges. A little thought will suggest a cause that may have produced the decline , in ppite of , though some what hindered by , the wastes just dis cussed. For lack of a better phrase this cause may be designated as the competition among producers for the privilege of selling in the dearest markets , and that of consumers for the privilege of pur chasing in the cheapest markets. This needs to be qualified by the suggestion that railways must be considered as producers for the reason that the pro ductive process cannot be regarded as complete in connection with a particular article until that article is available for consumption. In more technical words , that are , however , perfectly clear in their meaning , production consists of the creation of utilities of place as well as of utilities of form. Railways , therefore , are partners in the production of the commodities that they carry. Partners with whom ? The answer is with every separate productive establishment , farm or factory , work shop or mine that exists along their lines and furnishes traffic for their trains. Each railway forms in effect a separate combination ( the word combination is here used in a clearly innocuous sense ) with each separate productive establish ment , and , as either place or form utilities might bo useless without the other , these combinations are essential to the completion of the productive process. Obviously , any railway may participate in many such combinations which produce the same article. These combinations may compote among themselves , and as most producers of form utilities have a definite cost of production per unit of product , while most of the costs of producing transpor tation cannot be assigned to particular services , it is not difficult to force rail ways to assume the greater share in the sacrifices which such competition in volves. There is no other possible ex planation of the decline in rates that will account for the fact that while rail way mileage is now three times as great as in 1871 , the aggregate amount of dividends paid on railway stock has been lower during every year of the present decade than it was in that year. The student who will carefully and * impartially investigate the circum stances attending the decline in railway charges , its relation to prices and cost of production , its effect on the comp ° tition among the producers of form utilities , and its consequences as expressed in rates of interest and dividends , will find convincing evidence that compe tition of railways as partners in the business of production is always power ful enough to force railway rates to the lowest point at which the revenue derived from them will pay operating expenses , under whatever methods of operation are for the time being in force , and afford the lowest return to the capital invested which in a developing country will induce capitalists to pro vide the additional facilities from time to time required , and to maintain those existing in a state of satisfactory effi ciency. The foregoing analysis shows that the substitution of effective agreements in regard to rates for the competition of rival routes prevents unjust discrimi nations in charges , and permits econo mies in operation which inevitably accrue in the form of reduced rates to the benefit of shippers and travelers. I say 'effective agreements' for ex perience has shown that such arrange- I . v > tj.
