I go UNIVERSITY OF COLORADO STUDIES 



the United States have been obliged to pay more for the sake o/ having 

 their grain hauled to other and less advantageous seaports than New 

 York. In other words, the entire people have been taxed for the purpose of 

 benefiting the men who have put their capital into railroads which could 

 not compete with those on the main route to the seaboard without some 

 kind of an arrangement that would keep the price of hauling higher than 

 would otherwise be the case. 



The power of the government to fix rates is sufficient to stop the build- 

 ing of one railroad parallel to another. It is well kno^m that there have 

 been several instances in the United States where one railroad has been 

 built parallel to another, not for the purpose of carrying freight and pas- 

 sengers, but solely for the sake of compelling the established road to buy 

 it out or to divide the profits vdth it. When a railroad has become a great 

 dividend-earner and its stock is at a high price, it will occur to certain 

 unscrupulous persons that by building another road alongside of it they 

 can compel it to buy the new road or divide the profits with them. It is 

 a species of blackmail. The most conspicuous example of this is the 

 West Shore railroad that was built from New York City to Buffalo. It 

 parallels the New York Central nearly all the way. This road was built 

 for the purpose of selling out to the Central, and after a rate war this 

 wished-for consummation was brought about. The Nickel Plate is an- 

 other example of the same thing. In these cases it is necessary for the 

 older road to buy out the new one or its business is ruined. There is no 

 one to control the freight rates that the bandit railroad can make, and as 

 it is in the business for the purpose of selling out, it will make these rates 

 so low that it will get all the trade away from the older road unless that 

 road meets its rates, and it will continue this practice till the old road is 

 obliged to buy the bandit road to save itself from destruction. Then, 

 when the war is over and the bandit road has passed into the hands of the 

 older road, the pubHc is made to pay for the costs of war and the building 

 of the robber railroad in the increased rates that must be made in order to 

 recoup the older road for the deficit caused by the attack of the railroad 

 banditti. It has even been suggested that this is one of the reasons why 

 the government should not attempt to fix rates, because the railroads 

 would not then have the opportunity of recouping themselves by increas- 



