PUBLIC DOCUMENTS. 



719 



cheapest and in many respect* the best railroad MV- 

 t. in in existence haa been developed, the charge* on 

 fuurth-cloMgoodi are graded aooording to dUunce, 

 a* follows : 



Chargtptr tonptr milt in 1888, including terminal*, 

 on Belgian Railways. 



C.BU. 



15 mile* M 



31 Hill.- 1.M 



4l\ Mllk-ll 1M 



f.-j mi;<- 1.38 



77 miles l.H 



98 mile* l.W 



ins milrit W 



r.'-i mile* M 



189 miles 80 



153 mile* 74 



A similar decrease in rates in proportion to increase 

 ; iwuiU in fvtTv country in Kurope, and I 

 may add on every road in the United Stiiti-s. 



The enforcement of equal mileage rates, instead of 

 bringing r.Tirt' t. the producers in the distant interior 

 of the continent, would add very largely to their 

 present burdens. The average charges for trans- 

 jMirtiiiir "11 freights on the leading trunk lines be- 

 tween Chicago and New York, in 1872, was about H 

 cent per ton per mile, which on a bushel of wheat 

 would amount to about 44 cents. The actual average 

 charge by rail, per bushel, was 334 cents. Hence, an 

 equal mileage rate on those lines, if adjusted upon 

 the basis of their average charges, would have re- 

 duced the value of the 213.000,000 bushels of wheat 

 and corn moved that year about 10 cents per bushel, 

 amounting to an aggregate loss to the producers of 

 $21,000,000, with no compensating gain to the con- 

 sumers. And as the price of wheat and com at the 

 . as well that part which remains at homo as 

 that which is sent abroad, is fixed by the market 

 price in Liverpool, less the cost of transportation, the 

 loss to the Northwestern States on the entire crop 

 of that year, estimated at over 900,000,000 bushels, 

 would have amounted to the enormous sum of $90.- 

 000,000. Such a law, if permanently enforced, would, 

 by the reduction of 10 cents per bushel on the value 

 of the cereal crop of the Northwest, reduce the value 

 of the farms in that section by an amount which 

 would build and equip all the trunk-lines of railroad 

 from Chicago to New York. 



Not only would on equal mileage rate, if applied to 

 the whole country, impose additional burdens on 

 those sections most La need of relief, but it would 

 tend to destroy whatever of competition now exists. 

 This fact is demonstrated by the operation of ihepro 

 rota law of the State of Illinois. At many points in 

 that State the people have contributed largely to aid 

 the construction ot a second road for the purpose of 

 securing competition. The two roads are not the 

 same length. But the law savs that both shall 

 charge the same rate per mile. The longer one, be- 

 ing compelled to charge more to the common point of 

 destination, is of course driven out of competition, 

 and the shorter one takes a monopoly of the business. 

 The people who have contributed to build competing 

 roads thus fiud themselves taxed to pay the cost of 

 transportation for others who have been less enter- 

 prising. A general pro rota law applied to the whole 

 country would indefinitely multiply such evil results 

 at competing points, without any compensating bene- 

 fits at other places. The non-competing points would 

 not be benefited, for, if by reason of low rates, at the 

 point of competition, a largely-increased traffic should 

 be created, Irom which the company could make a 

 small profit, it would be enabled, to the extent of 

 such profit, to reduce the rates at the intermediate 

 point. 



2. " Bate to be Axed by relation to cost and profit on 

 capital." If the difficulties of this mode of regulation 

 are found to be " practically insuperable " in Great 

 Britain with fifteen thousand miles of railway, what 

 Khali be said of the United States with their seventy 

 thousand miles I In order to establish intelligently a 



rule of charges baited upon coat and profit, we mtut 

 investigate thoroughly the clrcumcUnoe* and condi- 

 tion* of every one of tho thirteen hundred rood*. 

 We mutt know all about each Individual road, it* 

 original coat, how much of iu capital U real and now 

 much fictitioua; how much WON actually paid on iU 

 took, and what proportion of tho profit* charged to 

 capital account should have been charged to expense*. 

 Having completed thin detailed investigation, which 

 \\.MiM necessarily involve an examination and read- 

 justment of the account* of the company from iU or- 

 L'lmi/ation, wo next turn our attention to its profit*. 

 In order to adjust charges to profits by a general rule 

 (if law. we must know what tho actual pro tit* are now, 

 ::nl what they will be in the future. This requires a 

 knowledge of its grades and curvatures ; the cost of 

 furl, Hupplics, and other items of working expenses : 

 the amount of business it now doea, and what it will 

 continue to do; the economy or extravagance with 

 which it will be managed : the condition and charac- 

 ter of its construction ana equipment ; how long its 

 iron, tics, and rolling-stock will last, and what it will 

 cost to replace them ; the storms of winter and the 

 floods of summer it will probably encounter; and. 

 finally, the losses which will result from accidents ot 

 all kinds. This completed, we must study carefully 

 tho nature of its trulnc, so as to know what relation 

 the various classes of goods bear to each other in cost 

 of transportation ; what charge each class will bear 

 without injury to the busineHs interests of the coun- 

 trv, and how much the expense of carrying a ton of 

 silk goods twenty-five miles per hour exceeds that of 

 carrying a ton or corn ten miles per hour. 



When we have thus informed ourselves with rea- 

 sonable accuracy in regard to all these details, and 

 many more that might be named, we will be pre- 

 pared to commence the investigation of the next road 

 on the list, and so on through the 1,300. By tho 

 time wo have completed the investigation, the changed 

 conditions and circumstances of the roads, and tho 

 rapid changes in the business of the (jountry, will 

 render a reexamination imperatively necessary. 



8. " Immediate reduction of rates and fares." In 

 addition to the fact that this would be only a " tem- 

 porary remedy," it involves all the difficulties men- 

 tioned under the lost proposition ; for, if the reduced 

 rates are to stand the test of practical experiment, 

 they must be just and reasonable, and hence all the 

 circumstances and conditions of each road must bo 

 understood in order to establish a standard of reduc- 

 tion. 



4. " Periodical revision of rates." Stating their 

 reasons for the conclusion that this method of regula - 

 tion is u inexpedient and impracticable," the parlia- 

 mentary committee from whose report I have quoted 

 say : 



How Is it to be performed, and by whom T If It Is to 

 be purely arbitrary, if no rule is to be laid down to guide 

 the revisers, the power of revision will amount to a 

 power to confiscate the property of the companies. It is 

 not likely that Parliament would attempt the exercise 

 of any such power itself, still less that it would confer 

 such a power on any subordinate authority. 



Assuming for the present that Congress would at- 

 tempt the exercise of a power from which the Parlia- 

 ment of England shrinks, let us inquire how such re- 

 vision of rates con be mode in this country. Shall it 

 be done by Congress itself, or by some tribunal act- 

 ing under its authority ? Surely not the latter, for 

 the power of Congress over the subject is only a dele- 

 gated power, which it cannot delegate to another. Tho 

 revision must, therefore, be made by Congress itself, 

 if at all. It is said in tno English reports that " tho 

 rates in the case of all the great companies are num- 

 bered by millions." In this country each of the 

 1,300 roads has its through rates to every station on its 

 own line, and to every station on the lines with which 

 it connects, its scores of special rates, and its numer- 

 ous classifications of goods. A bill which should 

 enumerate them all, il such a bill could be framed, 



