The Conservative * 9
been excluded unless they bad been for
tunate enough to marry a bug-eater. "
One may imagine the hearty mirth
that greeted each repetition of this
pleasing epithet in the professor's hu
morous speech , but it appears that there
were some present who did not enjoy it.
In the course of a meeting of Old Settlers
that followed "W. F. Davis wanted to
enter a protest against the name 'bug-
eaters' as applied to Nebraskans. Mr.
Durham wanted the sous and daughters
to make a move for a more euphonious
title. Farther consideration was post
poned until the next meeting. "
Aye , and they meant the word. Some
body made it his business to keep the
thing in mind for three years. At the
meeting in January , 1895 , "on motion
of J. A. MaoMurphy , the society ap
proved the change proposed by the Old
Settlers' Association , that the totem for
Nebraskans be changed from "Bug
Eaters" to "Tree Planters. " It was also
moved and carried that the title "Tree
Planters" be put ou the stationery of the
Historical Society , and that the society
do all it can to forward the proposed
change. " And so some badges bearing
the " Eaters" in
legend "Bug Librarian
Barrett's show cases are all that now
remain of that happy inspiration.
Of which , not the least of our causes
for thanksgiving , it would be fitting
that all our governors should make
special mention in their annual pro
olamations to the end of the series.
A. T. RICHARDSON.
OBSERVATIONS CONCERNING THEORY
OF RAILWAY CHARGES.
It is not at all likely that the student
who interests himself in the economic
aspects of railway transportation will
ever have at his disposal more accurate
or complete information concerning the
history of railway charges in the United
States , during the most notable period
of the development of American rail
ways than that which is now available.
An examination of the data that have
been rendered available by recent in
vestigations concerning the history of
railway charges in this country wil
show that the following facts have been
completely established by abundant
evidence :
First Since 1870 there has been
fairly regular and practically uninter
rupted decline in railway rates which
has extended throughout the entire con
tinental territory of the United States
and has affected all classes of traffic.
Second Although there have been
notable reductions in the prices of rail
way supplies and important economies
in operation have been introduced , the
decline in rates has more than offset the
amounts thus saved and there has been
a material decrease in the rate of return
to capital invested in railway enter
prises.
Charges Tend to Doorcase.
The study of railway history had s
ar impressed the facts which are thus
made the premises of this paper upon
he writer that he felt justified , as early
as the year 1805 , in formulating his con-
lusions in a generalization , which , with
an unimportant modification , was subse
quently expressed as follows :
* * * railway charges tend un
ceasingly toward the lowest rates that
will produce a revenue sufficient in the
aggregate to meet operating expenses ,
nolndiug necessary repairs and renewals ,
and , in addition , return to capital the
owest recompense for which it can be
eonred. "
It is not contended that the foregoing
generalization must , of necessity , be
accepted by all who recognize that the
facts are as previously stated , but it will
undoubtedly be evident to everyone
that , if the latter have been correctly
summarized , the theoretical interpreta-
; ion of the conditions of the business of
railway transportation has not kept pace
with the determination of the practical
results of those conditions.
No satisfactory answer has ever been
given to the question :
How has a large portion of the revenue
that with the maintenance of former
rates of interest and of dividends would
have accrued to the owners of railway
securities been diverted to the travelling
and shipping public in the form of re
duced charges ?
Omitting , for the present , any refer
ence to the other reasons for rejecting
the crude , though frequently urged ,
explanation that the competition of
rival lines offering to carry between
identical points has caused the decline
it is sufficient to direct attention to the
inadequacy of that explanation. The
decline has affected traffic for which
there is no such competition ( i. e. local
business ) in quite as notable a manner
as it has that for which two or more
routes are available. The explanation is
therefore much narrower than the facts
to which it is addressed. This in
adequacy has by no means escaped the
attention of students and publicists ,
although occasional expressions , which ,
on account of the seriously erroneous
principles of regulation which they
foster are regarded as especially unfor
tunate , indicate that the more superficial
opinion has not entirely disappeared.
The existence of a wider and more
potent form of competition that is not
limited to traffic carried between
junction points has frequently been
alleged by students of transportation ,
by whom it has been variously denom
inated the competition of "producers
and consumers" of "markets" of "con
necting lines" of "railways for traffic , "
etc. , etc.
Competition of Remote Linos.
The best statement of the nature of
this wider competition known to the
.writer is found in a paper contributed
stun
o the Annals of American Academy of
blitical and Social Science , by Dr.
Walter E. Weyl. In this article Dr.
Weyl said :
"Freight rates have been lowered
hrongh the competition of railroads , or
other transportation agents , situated
hundreds of miles from each other. It
8 regrettable that the problem of rail
way competition has been studied too
ocally , and with insufficient emphasis
upon its national and international bear-
.ngs. Strictly speaking , permanent
competition can exist , not between rail
ways struggling for the Fame traffic ,
but solely between those railways which
have no territory in common. Qiven
two railways which tap a given circum
scribed wheat area in Dakota , and how
ever bitter and fierce the struggle for
patronage may temporarily be , the in
evitable result is the adoption of a
modus vivendi , which places rates upon
a permanent basis. But Dakota wheat
enjoys no monopoly , and the freight
rates on these roads must be low enough
to allow the Dakota farmer to compete
with the farmers of Nebraska or Kan
sas. In consequence the freight charges
on Kansas and Nebraska roads will de
termine a maximum above which the
Dakota railroads cannot permanently
charge. The same fact is true of foreign
competition. Our wheat roads must
compete not only with those of Canada ,
but with Indian" , Russian and Argentin
ian railways , as well as with numerous
maritime agencies all over the world.
* * * This competition * * *
will at all events keep down freight rates
and induce the railroads to make , if
necessary , repeated concessions to the
needs of their patrons. * * * This
competition * * * is practically
non-existent in the transportation of
passengers. "
In common with all other statements
in regard to this form of competition
there is , however , a total absence of any
explanation of the manner in which it
operates. The necessity of such an ex
planation is beyond question , for the
most superficial examination will show
that the competition indicated is not
within the terms of any of the custom
ary definitions of that economic process.
These definitions all contemplate a
rivalry for the privilege of supplying or
obtaining similar commodities or ser
vices and certainly do not refer to a
rivalry between agencies which offer
such widely different services as those
involved in transporting wheat , respectively -
ively , from Dakota and from Argentina
to their common European markets.
Closer examination of the conditions of
which the quotation constitutes but a
sketch in outline will show that the dis
tinction is only superficial and that by
remembering that transportation is
really a part of the process of produc
tion and then resorting to the simple and
scientifically correct expedient of con
sidering the producers of utilities of
place as cooperating with the producers
of utilities of form in a joint productive
process and as joint campetitors with