6 Conservative.
monts are frequently of little use. How
cnu snrh agreements be made effective ?
The history of American railway prac
tice affords a ready answer. To give
effectiveness to snch arrangements has
been the aim of nearly every practical
railway manager since , at least , the
year 1870. but no scheme ever devised
has been even moderately successful
unless it has provided for the distribu
tion of traffic between points connected
by two or more mutes in shares fixed in
the agreement or determined in accord
ance with its terms. Popular will ha ?
attached to such arrangements the name
'pool , ' and though it is in many respects
inaccurate and misleading , not much
can bo gained by quarreling with an
accepted designation. We shall not be
terrified by the name , for we have dis
covered that the thing to which it refers
is nothing more than a device for giving
effect to agreements which are in the ni
sei ves wise and beneficial , which tend
to secure justice in the distribution of
the cost of transportation , and also to
reduce its aggregate.
Those who are only superficially
acquainted with the history of railway
administration in the United States will
inquire how it happened that so bene
ficent a practice was prohibited by con
gressional enactment. The interstate-
commerce law was intended to prevent
unjust discrimination in railway
charges , yet it was weighted down and
some of its most salutary features ren
dered nugatory by the aiiti pooling
clause , which is in irreconcilable conflict
with every other substantial provision
that it contains. The 'power to com
pete , ' in the words of the statesmanlike
chairman of the Interstate-Commerce
Commission , who is an honored member
of this conference , 'is the power to dis
criminate. ' Why , then , did congress
attempt to perpetuate competition while
endeavoring to prevent its natural re
suits ? One might answer , not incor
rectly , that this action was in obedience
to a 'Texas idea' not unlike that which
refuses here to consider the nature and
consequence of industrial combinations
while vehemently demanding their
statutory condemnation and prohibi
tion , for the anti pooling clause was
actually forced into the interstate-com
merce law by a faction led by a member
of the house of representatives from the
state of Texas , and against the judg
ment of the most enlightened members
of both houses of congress , the alter
native presented being the defeat of the
measure under consideration and the
indefinite postponement of all regulative
legislation.
When the committee on interstate-
commerce of the United States senate
conducted the exhaustive investigation
which preceded the passage of the act
to regulate commerce pooling had been
an important feature of American rail
way practice for at least fifteen years.
Yet objections to the system are infre
quently found among the large number
of opinions gathered in the public hear
ings , and explicit expressions of ap
proval are numerous. Students of trans-
porfation and public officers charged
with the duty of studying railway
methods had previously declared in favor
of agreements for the division of traffic.
A. member of this conference , Dr.
Joseph Nimuio , Jr. , who was for many
years at the head of the Bureau of
Statistics of the United States Treasury
Department , declared in the case of an
official report published in 187 ! ) that
railway pooling was then favored by
the general public because it had proved
to be the means of 'arresting discrimi
nations , ' and the Iowa Railroad Com
mission in its report for 1878 expressed
the same opinion by declaring that it
considered 'the pool as the only agency
that can compel the through traffic to
bear , as it should , its proportion of the
interest on the cost and expenses of
maintaining and operating the roads. '
Whatever public condemnation the
pooling system received aside from that
inspired by the irresponsible utterances
of demagogues , who found attacks upon
railway corporations , just as their
prototypes a few decades earlier had
found the enthusiasm for railway con
struction , an easy and convenient means
of attaining office , was due to the fact
that those arrangements were never
permanent , and in consequence never
wholly eradicated the evils they were
intended to correct.
Indeed at almost the same time that
the officials referred to gave their ap-
approval of the pooling system , Mr.
Albert Fink , the originator , organizer
and official head of the most complete
pooling association ever established , was
complaining of their lack of permanence
and stability and urging the necessity of
legislation that would give them legal
sanction and effect.
In fact , all railway pools in the
United States were extra-legal arrange
ments , dependent for their execution
upon the good faith of the parties , upon
the violation of which none of them
would venture to appeal to the courts
for redress. So lacking were these
arrangements in the necessary cohesive
qualities that each railway considered
their abrogation an inevitable incident ,
pending which constant vigilance was
ue3essary in order that the day of disso
lution should not find it an unready or
tardy contestant in the struggle for
traffic. The period during which a
pooling contract was in force was con
sequently one of armed neutrality , and ,
as in many cases between nations , that
relation was regularly disturbed by the
depredations of irresponsible members of
thu rival forces. As the apportionment
of business in any pool which should
follow a period of warfare would prob
ably be based upon the proportion
offered ( if a tonnage pool ) or carried ( if
a money pool ) prior to the disruption of
such an agreement , there was a strong
incentive to take advantage of every
opportunity to gain traffic by its viola
tion which promised immunity from i
detection.
Thus there was never an entire
abandonment of the baneful practices of
competition , there were always dis
criminations in favor of competitive
traffic , and there were frequent periods
during which all the evils of unjust
discrimination operated to their fullest
extent. Nevertheless , as indicated in
the quotation from the Iowa Railroad
Commission , the evils of excessive com
petition were in some degree mitigated ,
and the pooling arrangements , unstable
and unsatisfactory as they too frequent
ly were , indicated a means of securing ,
in a largo measure , that substantial
identity among the interests of the
carrying corporations which is a pre
requisite to the lowest and most equit
ably adjusted rates.
When the interstate-commerce law
became effective all pooling contracts
were discontinued , and there is evidence
that the railways generally sought in
good faith to observe its provisions.
Railway associations were formed
which announced as their objects the
maintenance of reasonable rates and the
enforcement of the regulative provisions
of the law. The cooperation of the
weaker lines was in many instances
purchased by permission to charge
slightly lower rates than those collected
by their stronger rivals. Subsequently
other efforts were made to effect the
satisfactory division of traffic without
its actual transfer from one line to the
other after consignment and without
resorting to the methods technically
characteristic of tonnage pools. The
practical failure of these measures is
generally recognized , and most railway
patrons now agree with railway owners
and managers in urging a modification
of the interstate-commerce law that
will permit agreements for the appor
tionment of traffic ; operations there
under to be conducted under the super
vision of the federal authorities.
This change has been recommended
by several annual conventions of
national and state railway commission
ers , by the national board of trade , by a
conference of representatives of boards
of trade and other commercial organiza
tions of the principal cities of this
country ; it has been approved by mem
bers of the Interstate-Commerce Com
mission and by the author of the anti-
pooling section of the present law. A
bill embodying it and including also
several very desirable amendments to
the interstate-commerce law which had
been strongly urged by the commission
passed the house of representatives dur
ing the last session of the Fifty-third
Congress , and would unquestionably
