DISCRIMINATION IN RAILWAY RATES. 595 



country at rates which to it were satisfactory, it adopted the principle 

 that no through rates should be given except on the basis of these 

 local charges. Thus traffic, for instance, between Belgium, or Holland 

 and Austria, might be brought up to the German frontier at whatever 

 rate those states chose to fix, but, immediately upon entering on Ger- 

 man territory, the local tariffs should apply. As a result, the through 

 traffic was driven from the railroads to the rivers, and exports from 

 Austria found their way to the sea on the Elbe and the Rhine. After 

 the enforcement of the policy had " utterly destroyed " this through 

 traffic on the German railways, the administration decided to profit by 

 the experience to abandon their unnatural policy, and attempt to get 

 back the traffic. Accordingly, they issued a tariff, which is instructive 

 as showing how completely they gave up their artificial system and 

 recognized in railway rates the natural forces controlling commerce. 

 The heading of the tariff reads : " Exceptional tariff to and from 

 the German seaports, for goods traffic between Hamburg, Harburg, 

 Bremerhaven, Geestemiinde, Bremen, and Regensburg, and Passau sta- 

 tions. To come in force on and from March 1, 1882. This tariff will 

 apply only to goods traversing Germany and passing beyond Regens- 

 burg and Passau, and out of the district of the German customs, and 

 in consignments of ten tons per truck and above (wool excepted). 

 Smaller consignments will be charged at usual rates. Articles included 

 in the exceptional tariff." It then continues to enumerate articles under 

 seven "special tariffs." The testimony before the commission on 

 this subject concludes as follows : " Now that shows that the strongest 

 government in the world, I suppose, can not interfere with the course 

 of traffic except at its peril, and, if they attempt to impose upon 

 the commerce of the country an impossible system, they come to 

 grief." * 



I have attempted to show that the rates on railroads are regulated 

 by natural principles of competition, and that it is from the operation 

 of these principles that discriminations are produced. This is but 

 saying, in other words, that discriminating rates result from competi- 

 tion. An examination of the cases reported by the various State Rail- 

 road Commissioners will show that this is true ; for it will be found 

 that the discriminations effect a reduction in rates, not an inci'ease. 

 They are concessions made to secure traffic, which at former rates 

 would not be carried. If this were not at least believed to be the re- 

 sult, there would appear no incentive for the company to make the 

 reduction. In brief, the cause of discrimination is competition, the 

 effect is reduction. 



* Report to the House of Commons, July, 1882, pp. 170, 171. 



