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PUBLIC DOCUMENTS. 



petition in that country, and the greater combinations 

 and more powerful monopolies which it ultimately 

 induced, have disheartened those who regarded it as 

 the panacea for railway evils and abuses, and it is 

 said that the present tendency of the public is toward 

 state ownership as the only effectual remedy. The 

 late parliamentary commission, after an exhaustive 

 investigation of the whole subject, conclude their re- 

 view of the history of railway amalgamation with the 

 statement 



That while committees and commissioners carefully 

 chosen have for the last thirty years clung to one form of 

 competition after another, it has nevertheless become 

 more and more evident that competition must fail to do 

 for railways what it does for ordinary trade and that no 

 means have yet been found by which competition can be 

 permanently maintained. * * * It maybe taken as a gen- 

 eral rule that there is nowno active competition between 

 different railways in the matter of rates and fares. When- 

 ever different companies run between the same places 

 they arrange their prices. * * * And if a new railway 

 should ever be started with the promise of lower rates, 

 it is sure, aftera short time, to arrange with its original 

 rivals on a system of equal charges. 



The experience of our own country accords with that 

 of Great Britain in this regard. 



The theory here, as in England, has always been 

 that the transportation business, like other commer- 

 cial affairs, would regulate itself on the principle of 

 competition. On this theory our railroad system has 

 attained its present gigantic proportions. Believing 

 that additional lines would create and stimulate com- 

 petition and thereby reduce rates, towns, cities, coun- 

 ties, and States have made haste to burden themselves 

 with debt in order to secure the coveted boon. The 

 General Government having never interfered, and 

 until recently the States having made but little effort 

 to control or direct it, the system has developed it- 

 self under the influence of the natural laws which 

 govern that kind of business. Hence the tendencies 

 und results evolved by the operation of those laws, if 

 carefully studied by the light of the experience of 

 other countries, will enable us to form an opinion as 

 to what may be anticipated from railway competition 

 in the future, if left to regulate itself by the ordinary 

 laws of trade. That there is effective competition in 

 the matter of charges at many points cannot be 

 doubted, that the same natural laws which have de- 

 stroyed it in other countries are vigorously at work 

 here, and will ultimately produce the same results, is 

 also obvious. The history of railway combinations 

 in Europe, and especially in Great Britain, discloses 

 the fact that during the period of development, and 

 while each corporation was struggling to appropriate 

 to its exclusive control as large a district of country 

 as possible, competition was very sharp. When, by the 

 consolidation of separate links, through trunk-lines 

 were formed between the principal centres of popula- 

 tion and trade, competition at once sprang up between 

 those points. But self-interest very soon suggested 

 to the competing companies that, as the traffic must 

 be divided, it was desirable to divide its profits be- 

 tween themselves rather than with the public. The 

 result was an agreement as to rates and an end of 

 competition. Having become strong and rich, the 

 trunk-lines began the work of extending their power 

 by the construction of branches and the absorption 

 of weaker lines extending into the adjacent districts. 

 Then followed a great struggle for territorial domin- 

 ion, during which sharp and active competition reap- 

 peared at numerous points in the contested districts. 

 Its duration and vigor were measured chiefly by the 

 relative strength ot the giants contending for the 

 prize, but the ultimate result was seldom long de- 

 layed, and never doubtful. By purchase, lease, ar- 

 rangement of rates, or some other of the numerous 

 forms of combination and consolidation, one point 

 after another disappeared from the competing list, 

 and finally the disputed territory passed under the 

 exclusive control of one of the contestants. The 

 same motives and influences which operated in Great 



Britain are rapidly producing similar results in this 

 country. 



" Existing competition, whatever may be its extent 

 and value, is gradually disappearing from the trunk 

 lineSj and is found mainly at points in the outlying 

 districts from which these roads draw their support. 

 The contest between the great companies for terri* 

 tonal dominion is still progressing in our country, 

 and the struggle for control of the trade of some of 

 the common termini, and points of intersection of 

 branch lines and feeders owned and operated by them, 

 is apparent in the reduced charges which prevail at 

 these places. The number of such competing points 

 is, however, constantly diminishing as each of the 

 great corporations absorbs, one after another, the in- 

 ferior lines which have served as allies to its rival. 

 Thus every additional absorption defines with con- 

 stantly increasing precision the territorial boundaries 

 of the district which is certainly and rapidly passing 

 under its exclusive domination. The wide extent pt 

 our country and the colossal proportions of our rail- 

 way system (equaling one-halt of the railway mileage 

 of the globe) require a longer time for complete de- 

 velopment than in some of the states of Europe, and 

 hence the influences which induce competition will 

 extend through a longer period, but the ultimate re- 

 sult will probably be the same. And when the natu- 

 ral tendencies of corporate power working through 

 railway organization snail have wrought out their in- 

 evitable conclusions, the magnitude of our combina- 

 tions will probably be in proportion to the extent of 

 the field in which they operate. 



In illustration of the statement that competition has 

 already substantially disappeared from the main trunk- 

 lines, take those which centre in Chicago, from the 

 East the Pennsylvania line, running to New York 

 and Philadelphia; the Lake Shore & Michigan 

 Southern, running in connection with the Erie and 

 New York Central ; and the Michigan Central Rail- 

 way, in connection with the last two, and also tho 

 Grand Trunk. These lines all have agents at Chi- 

 cago, who meet together and agree on prices for east- 

 ern-bound freight ; and the prices established by such 

 agreement bind the eastern roads. Agents at the 

 eastern termini meet in convention and agree upon 

 the charges for western-bound freights. 



The evidence taken by the committee shows that 

 the principle upon which rates are adjusted on these 

 lines is not what the services are actually worth, but 

 '' What are the rates cfiaryed ly the water-lines? " and 

 " What will the property bear,, in view of its movement 

 to market ? " l>urmg the winter months, when there 

 is no water competition, the charges are usually so 

 high as to prevent a large proportion of the crops 

 which accumulate in the cities of Chicago and Mil- 

 waukee from going forward to market, and hence they 

 remain in store awaiting reductions to be caused by the 

 opening of water-routes. On the 1st of January, 1872, 

 there were in store in Chicago and Milwaukee 2.516,- 

 597 bushels of wheat, and during the months of Janu- 

 ary, February, and March, there were received at 

 those ports 1,578,790 bushels. Of this total quantity 

 in store and received, amounting to 4,095,487 bushels, 

 only 286,000, or about 7 per cent. , were shipped by rail 

 during those three months. The quantity of corn 

 received and in store at Chicago during the months 

 of January, February, and March, of that year amount- 

 ed to 8,898,236 bushels, of which only 1,702,905, or 

 19i per cent., were shipped by rail before the 1st of 

 April. In the month of April, when the water com- 

 petition began to be felt, the railways carried 462,570 

 bushels of wheat, as against a total of 286,000 in the 

 preceding three months. The effect of this competi- 

 tion on the movement of corn was to send forward in 

 April 1,018,271 } against an aggregate of 1,702,905 

 bushels moved in January, February, and March. 



The suggestive fact presented by these statistics is 

 that, while only 1,988,905 bushels of wheat and corn 

 were moved by rail during the three months named, 

 in the month of April, when the approaching water 



