CHAPTER XII 



TRANSPORTATION 



TRANSPORTATION, like credit, is now one of the vital forces 

 in agriculture. It is part of the very life of the agricultural indus- 

 try. The two, transportation and agriculture, must develop 

 together, with equal steps, prospering together, suffering together. 

 The State itself would not develop in a healthy and well-balanced 

 manner without a concomitant development of a well-rounded 

 transportation system. One speaker has called the road the 

 foundation of the State. 



We have a six-fold transportation system at the present time, 

 not counting the airship and the submarine. Our system, in brief, 

 includes transportation by ocean, rail, lake, river, canal, and wagon 

 road. And of these six, the one showing the highest degree of 

 development and progress in the United States is the railroad. 



Railroads. In the United States, as in England the two 

 countries where the railroad was first and is now best developed 

 the railroad began as a private institution, and so remained up to 

 the time of the World War. In some foreign lands, however, the 

 railroad is owned and operated by the government. In the 

 United States, when railroads were first built, the accepted eco- 

 nomic theory was to the effect that competition would be adequate 

 to govern both service and rates. It was discovered, however, 

 that the railroad is a natural monopoly and is therefore not gov- 

 erned by competition. This left to the government the alternative 

 of regulation or ownership. Hence, in the course of fifty or sixty 

 years, the government adopted the policy of regulation both of 

 rates and services. 



Evils. Like any other great institution, the railroads change 

 their business standards and practices with the changes in society 

 about them. In the past the most crying evils of the roads were 

 their rebates to favored shippers, their discriminations in freight 

 rates (between persons, between localities, and between commodi- 

 ties), and their corrupt participation in party politics. These 

 evils were finally eliminated or scotched, due to legislation, to the 

 administration of the Interstate Commerce Commission, and to 

 the changing sense of business honor among the railway magnates 

 themselves. At the present time, however, there seems to be a 

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