PUBLIC DOC i 



717 



competition began to exert iU Influence, the reduc- 

 tion ot' rail-niton induced 1,480,841 bushels to go for- 

 ward by the railroad*. Hence, if the farmer* of the 

 \ere compelled to rely upon railway competi- 

 tion for the movement of tin -ir < -rops, they would be 

 unahlo to reach the Eastern markets. 



An Uuproedion has prevailed tlmt during the winter 

 11 r. nth.-, oil tlio ruil-lim-H from Chicago to the Eaat are 

 h..k< d with iliu surplus products of the Went, but 

 .tcta aeem to demonstrate tlmt the com- 

 panies prefer not to move them at all, rather than to 

 do it at rates which those product* will hear. 



two great companies wliich largely control the 

 traili.- of Wisconsin and Minnesota the Chicago & 

 \vesteru, and the Milwaukee <fc St. 1'aul af- 

 tinT illustration of the value and extent of 

 . tition when regulated by its own laws. 

 ami i -it it -s favored with a line belonging to, or 

 led by, one of these companies have contrib- 

 uted UU-nilly to aid in the construction of a second, 

 \i hi.-li .-I,.>uid bo in the interest of the other company. 

 i T.I I years, while those great colorations have 

 been extending their branches and absorbing weaker 

 lines, oompetltioD has, at times, been active at certain 

 . but the territory which each can hope to con- 

 < ing now pretty well defined, an agreement an 

 to rates has been made, and the people are alarmed 

 by rumors, but too well founded, of a contemplated 

 arrangement for pooling receipts. Thus the people 

 of the great wheat-growing region of the continent, 

 alter having hopea and struggled for years for 

 < I nites through competition, and after hav- 

 ing in many cases imposed upon themselves griev- 

 ous burdens of taxation for that purpose, now find 

 that, instead of bringing into the field a competitor, 

 tin y have not only doubled the power with which 

 they have to contend, but they have quartered upon 

 themselves a new and expensive organization which 

 must be supported from the products of their toil. 



The history of railway management in every State 

 of the Union, and throughout the civilized world, 

 proves that competition invariably ends in combina- 

 tion. Hence the well-known aphorism, " Where 

 combination is possible, competition is impossible." 



In view of these facts, it is probable that additional 

 railway lines, under corporate control, will materially 

 reduce the cost of transportation ? 



What reason have we to suppose that the same 

 principles of combination which govern existing lines 

 will iiot control the new ones ? If, as already shown, 

 competition with the water-routes and " the highest 

 charge the commodity will bear" now rule the rates, 

 have we any guarantee that they will not do so on 

 the additional lines i In fact, every new line from the 

 Mississippi to the Atlantic Ocean will add from 

 seventy-five to one hundred million dollars to the 

 capital on which the transportation business of the 

 country must pay five to seven million dollars annual 

 interest, in addition to the cost of maintaining the 

 new organization. Will not this afford an irresistible 

 inducement to combine with existing companies, in 

 order to make the largest possible profits out of the 

 business to be performed ? Is there any thing in ex- 

 perience, or in the known principles of railway man- 

 agement, which teaches us to hope that the new com- 

 peting line would not at once participate in the coun- 

 cils of its rivals and be governed by their policy 'i 



For these reasons, and others stated in the report 

 of the committee, they have come to the conclusion 

 that no substantial reduction in the cost of transpor- 

 tation is to be anticipated from unregulated competi- 

 tion between existing railways, nor in competition to 

 be induced by authorizing the construction of addi- 

 tional lines, it they are to be under private manage- 

 ment and control. 



Let us therefore consider the second remedy pro- 

 posed, namely : 



2. DIRECT REGULATION BY ACT OF CONGRESS. 



Railway regulation, though untried by Congress, is 

 by no means a novel experiment in the States, or in 



other countries. It has many earnest advocates, who 

 seem to regard it as a certain and effectual remedy 

 for high charges a panacea for all the ills of our 

 present systems of transportation. In the discussion 

 of this branch of the subject, 1 wish it distinctly 

 understood that the considerations which apply to 

 the vast system of railways in the United States do 

 not apply with the same force to the smaller number 

 of roads and the leas diverse conditions existing in a 

 ninu'lu State. The regulation of railway rates and 

 fares, by law, is one of the most dinWlt problems 

 ever presented to the Legislature of a State; but 

 when extended to a great nation, composed of many 

 independent sovereign States, having within their 

 limits over thirteen hundred different railways, and 

 embracing every conceivable variety of conditions 

 and circumstances, the problem becomes one of mucn 

 greater difficulty. 



1 have no doubt of the power of Congress to regu- 

 late interstate commerce, when carried on by rail- 

 roads constituting continuous lines between two or 

 more States. Under the power to regulate commerce 

 among the several States, I believe Congress may 

 prescribe the rules by which the instrument*, agents, 

 and vehicles engaged in such commerce shall be gov- 

 erned ; and that it may prevent undue impositions by 

 corporations of one State upon the commerce of other 

 States ; and, in the maintenance of commercial equali- 

 ty among the States, it may prescribe a rule of charges 

 for interstate commerce. Otherwise it would bo in 

 the power of the State of New York, extending as 

 she does from Canada to the ocean, to authorize her 

 railway companies to impose such charges as would 

 virtually place an embargo upon the trade between 

 New England and the West. That she probably will 

 not do so is no answer to the argument. The ques- 

 tion is not what will the State of New York permit in 

 this regard, but what are the commercial rigltU of the 

 States, and by what power are those rights to bo 

 guaranteed ? Were the illustrious men who framed 

 our Constitution so incompetent for their high duty 

 as to have created an instrument which leaves it in 

 the power of any one State to cripple and destroy the 

 commerce of another ? Is it conceivable that such a 

 blunder could have been committed in view of the 

 fact that " the design and object of that power (the 

 power to regulate commerce), as evinced in the his- 

 tory of the Constitution, was to establish a perfect 

 equality among the several States as to commercial 

 rwltts, and to prevent unjust and invidious distinctions 

 which local jealousies or local and partial interests 

 might be disposed to introduce and maintain /" (14 

 Howard's Reports, page 574.) But if the power to 

 prevent unjust and invidious distinctions exist, how 

 is it to be exercised if any one State may create cor- 

 porations with unliinitea power to levy tribute at 

 pleasure, and without control, upon the commerce of 

 other States ; 



Take another case in illustration of this position. 

 For five months each year there is practically no 

 means of transportation for a large section ot the 

 country but by railroads. Illinois and Kentucky ex- 

 tend from the lakes on the north, around to the Alle- 

 ghany Mountains at the east, thus rendering it im- 

 possible for the products of those States lying west 

 and south of them .to reach a market without passing 

 through their limits. 



Now. suppose those two States have granted to all 

 the railroad companies within their jurisdiction the 

 right to charge such rates as they please for transpor- 

 tation, and that those roads have become parts of the 

 great through lines of transportation between the 

 States to the west of them and the Atlantic seaboard. 

 Suppose, further, that, in a season of short crops in 

 the East and in Europe, the managers of those roads 

 combine, purchase a large quantity of brcadstutiB. 

 ship them to the East, and. having them safely stored 

 in New York and other Eastern cities, put up the 

 tariff for transportation so high as to prevent the 

 products of other States from going forward. Can 

 any one doubt that in such a case it would be not 



