THE PROBLEMS OF TRANSPORTATION 111 



have a joint interest. Consider particularly the last case above 

 mentioned, the financing of the Rock Island system, where less 

 than $55,000,000 gives entire control of a holding company through 

 its preferred stock, and thereby wields the entire destinies of a 

 railroad system capitalized at over $500,000,000 and aggregating 

 more than 15,000 miles of line. The commonwealth of Massachu- 

 setts did not hesitate many years ago to undertake the control of 

 operations of this sort. That some way will be found for extension 

 of federal power over this sphere is devoutly to be wished. 



The third objection to the fixing of freight rates by purely private 

 initiative lies in the rigidity of freight-rate adjustment as between 

 competing carriers. This often makes it impossible for a road to do 

 what it concedes to be in the public interest and what it would do if 

 its hands were free. This case we may best illustrate by experience 

 in the Southern States. Two systems of transportation compete 

 for the carriage of cotton from the great Mississippi delta to the mills 

 in New England. One of these operates east of the Allegheny 

 mountains and the other west. The lines east of the Alleghenies 

 desired some years ago to lower their rates on cotton from the 

 Mississippi Valley to Carolina mills, inasmuch as the rate to those 

 Carolina mills was in fact four cents a hundred pounds higher than 

 the rate through the same territory away up to New England. Natur- 

 ally the Southern cotton-mill men objected to this discrimination, 

 yet it took repeated pressure to prevail upon the lines operating 

 west of the Alleghenies to acquiesce in the change. A widespread 

 and rigid adjustment had grown up through years, many of whose 

 arbitrary exactions would be endangered by modification. The 

 Western lines would not permit the Eastern lines to make a change 

 without exacting from these Eastern lines similar concessions for 

 which they had struggled in vain. In other words, each competitor 

 insisted upon jac king-up the other's rates regardless of the welfare 

 of the community. Precisely an analogous case was found in 1880, 

 when a committee of the Southern Railway and Steamship Asso- 

 ciation proposed to put in force an adjustment of rates throughout 

 the South, having reference in some degree to the factor of distance. 

 This proposed improvement was based, to take the words of the 

 committee of traffic experts themselves, upon " necessity for more 

 intelligent and defensible methods of making comparative freight 

 rates than the following figures descending to us from tariffs named 

 on arbitrary bases of conditions now obsolete." Such instances of 

 opposition to reasonable adjustment, not by carriers serving a definite 

 territory, but by competitors often far distant, might be multiplied 

 indefinitely. They emphasize most certainly the need of a regu- 

 lative force to be applied, not only in the interests of the public, but 

 in the permanent interest of the carriers themselves. 



