8 THE POPULAR SCIENCE MONTHLY. 



ply makes the other route a present of the through traffic. What, for 

 instance, would be the effect of a national short-haul law on the move- 

 ment of wheat from Chicago to the seaboard ? At present, it is a traf- 

 fic which the railroads can afford to make special efforts to secure, and 

 they bring the rates down nearly to the level of operating expenses. 

 If they reduced local rates to this basis, they would have nothing left 

 to pay fixed charges. The only way by which they could comply with 

 the law would be by raising through rates. This would simply have 

 the effect of sending the wheat to Europe via Montreal instead of via 

 American ports. The Grand Trunk Railroad, which would be outside 

 of our control, would have the chance to make low through rates, and 

 get the heavy through traffic. The English stockholders of the Grand 

 Trunk would be the persons most benefited by such a law. 



It is only a few years since the Prussian Government got into 

 trouble in exactly this way. It was thought by the authorities that 

 the low through rates favored the foreigners at the expense of the 

 Germans ; and an attempt was made to carry out the short-haul prin- 

 ciple rigidly. The result simply was that the foreigners sent their 

 goods by other routes which Bismarck was unable to control, and that 

 the Prussian railroads lost a part of their traffic, which, low as were 

 the rates charged upon it, was yet a matter of importance to their 

 business prosperity. 



Similar instances could be cited from almost any other country. 

 Whenever we find a competitor which our law can not reach be it 

 water-route, foreign railroad, or domestic railroad which violates the 

 law in an underhand fashion the short-haul principle simply cripples 

 the roads which obey it, without producing any corresponding good 

 effect. 



Experience has shown pretty clearly that local discrimination can 

 be avoided only by bringing competition under control. The States 

 where legal regulation of this matter has been most successful have 

 been those like Georgia and Iowa, where the pooling system has been 

 strongest and most stable, or those like Massachusetts, where competi- 

 tion has become, in local business, largely a thing of the past. Every- 

 where, in America and in Europe, periods of active competition have 

 been periods of active discrimination. To check the second you must 

 control the first. And the only practicable way of doing this, short 

 of actual consolidation, is by a system of pooling. The mere agree- 

 ment to maintain rates is not enough,; it is too easily violated by se- 

 cret rebates. An agreement to divide the traffic or the earnings, as 

 long as it holds at all, is much harder to violate secretly. This is what 

 constitutes a "pool." 



We are thus reduced to the simple alternative, pooling or discrimi- 

 nation. Each effort to prohibit both at the same time only makes the 

 necessity more clear. The governments of Continental Europe have 

 ceased to struggle against it. Rightly judging that discrimination is 



