320 statp: board op agriculture. 



speculation docd not burst upon the oountr}-, avc may expect soon to sec con- 

 stant and uniform rates. 



There has been great difMculty in securing a combination of raih'oads, and in 

 some instances it has appeared that tlic only way to secure such a result was to 

 place a single man in nianagenient of all the lines. This belief of the 

 capitalists has placed Vanderbilt in control of two of the trunk lines, and 

 given him such a position as to stop competition over two more lines. 



The ditliculties in the way of a combination are many, and as yet no combi- 

 nation on east bound freight has been devised that has proved permanent. 

 One element which has done much to prevent the adoption of a permanent 

 rate by railroads is the competition of water routes. To meet that, it has been 

 the custom for some years to maintain lower freight rates during seasons when 

 the lake could be navigated, than during the winter. Another element which 

 has affected, and must always affect freight rates is, the commercial interests 

 of the terminal cities. Thus in the system under consideration, the Grand 

 Trunk leads to Montreal (although it has branches to Boston and Portland), 

 the Kew York Central to New York mainly, but also to Boston. The Penn- 

 sylvania road to Philadelphia, although it has a branch to New Y^ork. The Bal- 

 timore & Ohio to Baltimore, although this also has branches or connections to New 

 York and Philadelphia. The eastern termini mentioned are all seaport towns, 

 tind all directly interested in building up foreign trade. The tiercest railroad war 

 over known was waged during the year 1S7G, entirely to settle the question of 

 rates from Chicago to the various ports mentioned. In 1873, as before men- 

 tioned, was the first railroad combination including the managers of trunk 

 lines. This combination did not include either the Baltimore and Ohio or the 

 ■Grand Trunk, consequently it was of short duration, as no combination could 

 <3xist unless all the roads would enter. A short but bitter war with the Balti- 

 more and Ohio soon brought them to terms and forced them into the combi- 

 nation. Thus the combination was made to include all the roads but the 

 Grand Trunk. 



In this case the Grand Trunk alone prevented the combination from efficient 

 working for more than two years. Now the Grand Trunk has no Chicago line, 

 neither has it a line to New York ; but being a bankrupt road, and in connection 

 with the Detroit and Milwaukee also a bankrupt road, it presented a line from 

 Milwaukee to Boston. Consequently during this time the rates from Milwaukee 

 to Boston were much less than from Chicago to Boston, and the rates from 

 Boston to Milwaukee were less than half the rates from New York to Chicago. 

 The result was disastrous to all business in both New York and Chicago, while 

 the prosperity in Milwaukee and Boston were unexampled. The grain that 

 formerly had gone over the Chicago routes now passed through Milwaukee. 



The New York Central hesitated about declaring war against a bankrupt 

 road, — it was like undertaking to collect damages of a beggar, — but finally 

 the solicitations of the Chicago and New York merchants lead them to declare 

 war. In this case the declaration of war produced peace. The Grand Trunk 

 entered the combination Nov. 1875. This combination, although managed by 

 the New Y'ork Central, proved more disastrous to its interests and to the in- 

 terests of New Y'ork than did the competition of the Grand Trunk. 



Before this combination Nov., 1875, because of shorter distance, the Balti- 

 more and Piiiladelphia roads were allowed to carry from Chicago, for five cents 

 per hundred less rate than the New York Central. These were changed so that 

 the Baltimore ami Philadelphia roads were allowed to charge 12^ per cent less. 

 Tlie result was more disastrous to New York than had been any previous arrange- 



