FAEMEKS' INSTITUTES. ^ 321 



inont. This rebate was found sullicient to sliip grain to Liverpool by the way of 

 J3altimore or Thiladelphia as clieaply as it could be taken from Chicago to New 

 York. The result tended to make the ports of Philadelphia and Baltimore more 

 important than that of New York. The New York Central soon discovered its er- 

 ror, and witli its cliaracteristic consistency withdrew from tlic combination and 

 commenced a railroad war. This war was the liercest ever waged, involving 

 as it did the three strongest lines in the country, and the three strongest cities. 

 The New York Central conquered, at an immense expense, — and it estab- 

 lished the principle now reckoned as an axiom, "that the shortest lines 

 shall fix the rate and the long lines can carry for that rate if they wish." 

 So that freight can be shipped from Chicago to New Y'ork, Chicago to Boston, 

 or Chicago to Baltimore for the same rates, with certain rebates for ocean 

 freights; so that tlie price from Chicago to Liverpool shall be the same by any 

 of the routes. (This arrangement on east bound freights has not been rigidly 

 -adhered to in the past for any considerable length of time.) 



A combination has existed for some time on west bound freights, and 

 the basis by which the roads have worked harmoniously together on, is 

 found not on a scale of prices but on a scale of quantity. That is, each road 

 charges the same rate, and is entitled to a certain percentage of all west bound 

 freight, and is paid for carrying that amount whether it carries more or less. 

 The affairs of the different railroads being adjusted by a sort of clearing 

 house of which Albert Fink is the manager. 



A pool on east bound freights has been recently formed on the same basis. 



Though the present combination contains many elements of discord, and is 

 liable to be broken at any time, it still is sufficient to indicate tiiat the period 

 of competition Avill be followed by one of combination, in this country as in 

 England. The period of competition may be said to overlap the period of con- 

 struction, beginning perhaps before 1810, reaching its height in 1876, and still 

 existing with smouldering embers, which the least breeze may fan into an 

 active liame. The period of combination began in 1873 on a small scale at 

 first, and was soon broken. But every year has seen it increase in strength, 

 until to-day it seems certain that the time will soon come when combination 

 will became a fixed fact and competition a thing of the past. 



These three periods, construction, competition, combination, are common 

 in the development of the railway system in every country where it has been 

 allowed unrestricted growth. It is especially true in England where the con- 

 structive period may be said to have ceased some years before ours. There, as 

 here, combination was looked on as almost ruinous to the business interests of 

 the country, and laws as stringent as could be devised were proposed to prevent 

 it. A railroad monopoly was regarded as a national evil, and the cry became 

 that if the law did not manage the railroads, the railroads would manage 

 the law. A committee was appointed to consider the proposed condition 

 of the railroads, but before they could report, the dreaded consolidation 

 had taken place, England was divided into districts and competition had 

 practically ceased to exist. The only thing left for the English parliament 

 was to watch the railroads and prevent by wholesome legislation any extortion 

 that might arise. "The conclusion arrived at by the committee on railroad 

 combinations, was that although English legislation had cost the companies 

 over 13,200,000,000 it had never accomplished anything which it sought to 

 l)ring about, nor prevented anything whicii it sought to hinder." They 

 also concluded that competition between railroads cannot be maintained by 

 legislation. They believed it was at present not policy for the government 



