— 49 — 



"Our rate, then, is four cents per pound." 



This rate, as you see, was based on the " value of the service," or in 

 other words, " all the traffic will bear." It is the system of the robber 

 barons of old. 



" The good old rule, the simple plan, 

 That they should take who have the power 

 And they should keep who can." 



The shipper assumes all the risk, the railroad consumes all the 

 profits. No car is dispatched until the shipper signs a " release and 

 guarantee." The railroad company thus holds somewhat the position 

 of a pool-seller at a race. No matter who wins or loses, he gets his com- 

 mission. Keep in the game long enough, the railroad gets it all — spot 

 cash — no bad debts! They divide the business with you, truly; they 

 take the kernel and give you the shell; you fatten the beef, they eat 

 it. How does your share of the transaction suit you? 



It was stated as long ago as 1864, that a ton of goods can be con- 

 veyed 100 miles for 33 cents — about $10 a ton to New York from San 

 Francisco — and a passenger 100 miles for 8 cents. Modern improve- 

 ments have still further reduced these figures. And now, a ton can be 

 hauled 100 miles for 20 cents; San Francisco to Chicago, $4. It 

 was also shown, at the same date, that freights and fares, within certain 

 limitations, can be raised or lowered with comparatively little difference 

 in profit to the shareholders of the road. Traffic increases or decreases 

 according to rates charged. 



It was hoped that competition might be relied upon to bring down 

 rates to the lowest possible figures. Competition, however, has proved 

 but a broken reed. Competition can never give satisfactory results, for 

 very obvious reasons. When three roads are built and operated to 

 compete for the traffic that one road could carry, there is much lost and 

 little finally gained. There is a three-fold capital claiming interest, 

 three-fold the land condemned as a roadbed and withdrawn from pro- 

 duction, three-fold labor and fuel, three-fold wear and tear of rolling 

 stock and roadbed, three-fold the buildings, three-fold staff of presidents 

 and managers and clerks and agents, three-fold expenses of advertising, 

 and three-fold taxation. And who ultimately pay this three-fold 

 expense but the shippers and travelers who patronize the lines? Were 

 the whole business done by one line, it could obviously be done at 

 about one third of the cost, a thing Mr. C. P. Huntington is ever trying 

 to impress on the public. So, I say, that competition is a failure. It is a 

 failure for another reason. Rate wars may temporarily reduce freights 

 and fares to cost; but, as the President of the Louisville and Nashville 

 Railroad once said, " All wars must end in peace, and peace between 

 rival railroads can only last when there is some community of interest. 

 That may obtain in two ways — by a pool, or by consolidation under 

 one ownership. The best that a pool can accomplish, after all, is but a 

 partial community of interest, and, where the rivalry is bitter, consoli- 

 dation is very apt to result. Now, let pooling be forbidden, or let it 

 fail, and consolidation must be the inevitable result. It will become 

 simply a commercial necessity, as resistless as the downward flow of 

 the Mississippi to the sea. It may be temporarily checked in any 

 manner theorists think good, but it will have its wa}^ in the end." 

 These are also the views, I believe, of Mr. C. P. Huntington. In other 

 countries, statesmen foresaw that this must be the issue of the railroad 



