FREIGHT RATES AND MANUFACTURES IN COLORADO 39 



Pacific said they were not receiving any freight from the Rio Grande at 

 that time. A similar case happened with the Santa Fe. As soon as it 

 was learned that the coal came from Colorado, a prohibitory tariff 

 was fixed. 1 



It is stated in the report of the railroad commissioner for the year 

 1885 that the price of coal was exhorbitantly high to the consumers in 

 many parts of the state. This was due to the large profits secured by 

 the dealers and not to any extreme cost of production. It appeared that 

 the dealers in many instances had been able to secure a monopoly of 

 the business through connivance with the railroad companies. Dis- 

 crimination had, therefore, become so common that it became a settled 

 conviction in the public mind that a coal measure in the state was without 

 value unless owned by or in connection with a railroad company, and that 

 the transportation companies controlled the price of the entire product. 

 Whether or not this was true, the report does not say. 2 



The explanation of the railroads being engaged in the business of 

 coal mining is, however, not without great interest because of the light 

 it throws on the development of manufactures in the state. When 

 the railroads reached Colorado in the summer and fall of 1870, a demand 

 for coal was created. The consumption by the railroads was more than 

 the mines could produce with their equipment at that time. Hence, 

 the era of railroads created a demand for the investment of more capital 

 in the coal mining business. This capital was not furnished by private 

 parties as their wealth was invested in the mining of precious metals. 

 The Colorado immigrant of the earlier decade came for the purpose of 

 mining gold and not coal. His relation to the coal mining industry was 

 that of consumer rather than producer. If the railroads had not engaged 

 at that time in the mining of coal, it is quite possible that their excessive 

 demands on the small amount of private capital invested in the business 

 would have added a scarcity value to the product. It was on this account 

 that the railroad ownership and operation of coal mines was not in the 

 earlier decades considered a serious menace to the welfare of the state. 3 

 The commissioner of railroads stated that as private enterprise entered 



1 Ibid., pp. 104, 105. 



* Report of the Railroad Commissioner, pp. 63, 65, 1885. J Ibid., p. 66, 1885. 



