578 THE POPULAR SCIENCE MONTHLY. 



excepting the right of patents.* To this has since been added, in 

 England and America, the government monopoly of the postal service. 



Yet, all railroads are monopolies in a certain sense and to a certain 

 extent ; that is to say, they are without practical competition be- 

 tween certain points. The use of the word monopoly, however, as 

 applied to railroads, should be qualified by the word natural. Natural 

 monopolies are such because, under the free and equal operation of the 

 laws of nature and of the nation, they monopolize the business by doing 

 it more satisfactorily, more economically, and more expeditiously, than 

 it can be done by any other means. Insomuch as they fail in this, 

 they are not monopolies. There should not, then, be associated with 

 the idea of natural monopolies the old and well-grounded hatred that 

 existed against legal monopolies. The latter, under the operation of 

 special laws, were operated for the benefit of the few ; the former, 

 under the operation of general laws, are operated for the greatest good 

 of the greatest number. There seems no better illustration of the 

 change which has taken place in the meaning of this term in the popu- 

 lar mind than its present application to free competing corporations ; 

 and that one, among the prominent measures of reform proposed by 

 the " anti-monopolists," is the absolute destruction of all competition 

 through the operation of the entire railroad system of the country by 

 a great government monopoly. 



Combination and consolidation being the spirit of monopoly, are 

 supposed, in the public mind, to be opposed to the common good. 

 But they contain the actual substance of natural monopoly, which is 

 such from its merits and benefits, and not from privilege. 



Consolidations produce responsibility and uniformity in their serv- 

 ice, economy in their operations, and tariffs at minimum rates. These 

 are the essential requirements of the public good, and these the public 

 constantly receive from the great corporations. By the consolidation 

 of several branch lines under a central management, an economy is 

 effected in all those expenses of general supervision, and of junction 

 and terminal stations, which, under the individual operation of the 

 roads, each has to stand by itself. This is, in fact, a reduction of the 

 ratio of expenses to the amount of business done, as it reduces to a 

 minimum those fixed expenses which have little relation to the increase 

 or decrease of traffic ; and, as the consolidated company has a much 

 larger traffic over which to distribute these fixed expenses than the 

 short line, it becomes possible for the former to make lower rates and 

 still have the same profit earned by the latter on higher rates. 



Again, consolidations are continually being effected between short 

 lines and roads without any through connections. On these the high- 

 est rates have always prevailed, because their traffic has been always 

 limited. By a combination with other lines having a common interest, 

 and perhaps by building a short line to connect them, they become 



* Blackstone, book iv, p. 159. 



