PUBLIC DOCUMENTS. 



721 



(1. nt with power to appoint oommUalonem authorized 

 il.liMi rates that will increase or dimiuuth th 

 divid. -n.1.1 i in over $8,000,000,000 of railway capital is 

 Bi-rimi-lv i|iiotttionod. If there U any truth in the oft- 

 repeateu aatertionji that railway companies already 

 i so a corrupting influence over legislative bodie*, 

 we expect when the power* which now be- 

 .i?reM shall be transferred to a commission 

 . . uill n-'iuiro tlu-ia t'> ilet-ilf what profits 

 made up-m thi- immense capital I 

 In t : Mr. Charles Francis Adams, Jr., I 



consistent with ideas of common-sense, is 

 ii within tlir hounds of reason, to suppose that tho 

 in, ;n ,. ill not do his bust to control tho man 



' Thy immense money power with 

 which such u connnisM'iii would have tocontend may 

 '< iippreeiuteil from tin- tUet that in 1878 the gross ro- 

 .I'tii.- niihrays of tho United States amounted 

 . .'>. 000,000. The proposed commission is to 

 tionary power to increase or diminish this 

 ,1-uH revenue. Five per cent, reduction would 

 th companies over $20,000,000. Five per cent. 

 .IMJ would fiiiiblu tlu-m to place ten millions 

 " where it would do the most good," and to make as 

 much more by the operation. 1 am inclined to think 

 much that is said about the use of money by railway 

 corporations, in influencing legislation, is born of 

 the imagination, or perhaps of the spirit of calumnv 

 which disgraces the period in which we live. But I 

 confess that, so long as poor human nature remains 

 unchanged, I hesitate to expose it to temptations so 

 powerful us would bo encountered by such a commis- 

 Mnn. Especially do I hesitate to place the interests 

 r the public in 'the hands of men who are to be sub- 

 jected to such temptations. 



Nor am I inclined to confer on any executive officer 

 of the Government power so unlimited as the appoint- 

 ment of such a commission would give. 



Hut granting that the commission be honestly ap- 

 pointed, and composed of men whose integrity shall 

 Did defiance to temptation, can substantial benefits, 

 in the matter of reduced charges, be reasonably an- 

 ticipated from their action ? 



Maxima rates, whether established by Congress or 



by a commission, must bo high enough to pay the 



actual cost of transportation and leave a margin large 



enough to provide a fair return for capital honestly 



invested, and to cover all contingencies. The actual 



average charge on all cereals moved by the trunk 



lines of railway between Chicago and New York in 



1872 was less than 12 mills per ton per mile. The 



evidence taken by the Committee on Transportation 



shows that the average cost of movement, exclusive 



of interest and dividends, was from 8 to 9 mills per 



f ton per mile. Assuming the cost to be 84 mills, there 



j would be left for the payment of interest and diyi- 



1 dends Si mills. The number of tons carried one mile 



I on the Pennsylvania Railroad in 1878 was 1,190,052,- 



l 075, which, at 81 mills, gives $4,165,185. The actual 



\ cost of the road, with its equipment, was something 



V over $42,000,000 ; hence, if the same rates had been 



charged on all the tonnage moved, the margin between 



the actual cost of movement and the actual average 



charges that year would have paid a little less than 



10 per cent, on the cost of the road. Is it probable 



that either Congress, or a commission, could have 



established a maximum rate with less margin above 



actual cost than the rates which were in fact imposed i 



In practice the maxima rates established by law in 



England, France, and Germany, are seldom charged. 



The parliamentary committee of 1872 say : 



Legal maxima rate? afford little protection to the 

 pnblic, since they arc always fixed so Uffa that it Is, or 

 becomes sooner or later, the interest of the companies to 

 carry at lower rates. The same thing is true of terminal 

 charges. The circumstances are so various and so con- 

 stantly changing that any legal maxima which might 

 now be fixed would probably be above the charges now 

 actually made, certainly far above thoM- which will here- 

 after be made. Indeed, attempts made In 1861 and Wi 

 to fix a maximum for terminals broke down, because the 

 VOL. xiv. 46 A 



only maximum that could be ftfrwd npon WM ao mock 

 beyond tbii charge then actually IBM* to coaJ-ownera 

 that the coal-owners feared U would lead to a rUo In ttut 



< tin IV 



Captain II. W. Tyler, in hi* report to the aecn-tary 

 of the railway department, hoard of Trade, aay : 



The attempt to limit ratct and terra by the principle 

 of fixing a maximum hat almot nlway* failed in prac- 

 tice, ana la almotl always likely to fail, for the aimple 

 ruuun that the parliamentary committee* and aulhcri- 

 tlei by whom tuch limit* are decided cannot do other- 

 wife than allow some margin between the actual prob- 

 ab.e rate. BO far as they can forecast It, and the maximum 

 rate; ana cannot foresee the contingencies, of competi- 

 tion, of increase In quantities, of fatilUle*, or economy 

 in working, or of alteration in commercial condition 

 which may occur In the course of yean after each Uinlu 

 have been arranged by them. 



The practical results, in tho matter of charges at- 

 tained under the various systems ot management and 

 governmental regulation, are shown by the following 

 comparative statement. Great Britain may represent 

 the system of direct governmental regulation without 

 financial aid ; France, the system of financial aid with 

 the most rigid surveillance and regulation ; Belgium, 

 the system of indirect regulation of tho whole through 

 state ownership and management of a part, and entire 

 non-interference with the private corporations except 

 in matters of safety and police. The charges per toil 

 per mile on fourth-class goods on the leading railways 

 in each country and under each system, for the dis- 

 tance stated, are as follows : 



GREAT BRITAIN. CraU. 



On the London & Southwestern and London & 

 Northwestern Railways, for 192 miles, per ton 

 per mile 3.16 



On the Great Northern Railway, for 155 miles, per 

 ton per mile 4.4 



On the Great Northern, London, Chatham & Dover 

 Railways, for 198 miles, per ton per mile 4.5 



On the Great Northern. Northeastern, North Brit- 

 ish, and Highland Railways, for 594 miles, per ton 



per mile 1.98 



TBANCE. 



On the line between Paris and Orleans, for all dis- 

 tances over 186 miles, per ton per mile.... 1.74 



BELGIUM. 



On the Bejglum state railways, for all distances 

 over 155 miles, per ton per mile 74 



From this statement it will be seen that the expe- 

 rience of other countries affords little encouragement 

 to seek reduced railway charges through direct Gov- 

 ernment regulation. The rates both in England and 

 France, where legislative regulation has been most 

 freely practised, are higher than even in this country 

 upon roads doing a largo amount of business. The 

 remarkably low rates in Belgium furnish a powerful 

 argument in favor of state ownership, and also in con- 

 firmation of the principle that cheap transportation is 

 to be obtained only through competition under gov- 

 ernmental control. 



If the experience of other nations is worth any thing 

 as a guide to the solution of the difficult and impor- 

 tant problem under discussion, it proves that the 

 adoption by Congress of any one of the seven methods 

 of regulation just mentioned would be to delude the 

 public with false hopes, without accomplishing the 

 end sought. 



I believe that a rule of maxima charges may be es- 

 tablished by the States which will prevent local ex- 

 tortions ana discriminations, and also that in certain, 

 coses Congress may impose such a regulation with 



O6 secured oy sucn congressional icgisiuuon. ADU. 

 as the adoption of ill-advised measures will only tend 

 to postpone the accomplishment of the desired object, 

 it becomes important to consider well our action be- 

 fore entering upon experiments, the uniform failure of 

 which is demonstrated by the experience of all other 

 nations 



