260 



SCIENCE. 



[Vol. VII., No. 163 



ject. but which, unfortunately, has impressed it- 

 self but little on the public mind — is. that there 

 is no one solution of the railroad problem, and no 

 one remedy for the evils which exist. The prob- 

 lem is a vast and complicated one : in truth, there 

 is not any one problem. There are a number of 

 different problems : and it is not the least of the 

 merits of this book that it clearly distinguishes 

 them. Perhaps the best part of the book is the 

 discussion of the most difficult of them all, — the 

 question of railroad-rates. Mr. Hadley makes 

 a plea, unanswerable in its essentials, in favor of 

 the much-maligned and much-abused principle of 

 charging ' what the traffic will bear.' 



Some things we have learned on these prob- 

 lems ; but a great deal more must be learned, and 

 learned chiefly from experience, before the rail- 

 road system settles down into a permanent form. 

 For example, it is pretty well agreed, even in this 

 land of non-interference, that government regula- 

 tion in some form is desirable. Almost every 

 state in the union has its railroad commission. 

 But how far public interference shall go, is quite 

 an open question. There are those who believe 

 that it should go far. and that the tendency is and 

 should be toward eventual state ownership and 

 management. German economists have adopted 

 this view pretty generally, and they have follow- 

 ers in this country. They may be right ; but ex- 

 perience up to the present time is by no means 

 clear in favor of their view. Mr. Hadley, in his 

 chapters on the railroad experience of European 

 countries, and especially in his concluding chapter 

 on the results of state railroad management, shows 

 that, even in continental Europe, the question of 

 state railroads is by no means settled. Only in 

 Prussia is state management an established fact, 

 and apparently a success. But in Prussia the con- 

 ditions are peculiarly favorable; and even there 

 the future must be awaited, before we can judge 

 of the system. How far public regulation can go 

 and ought to go in this country, at the present 

 time, is still more an open question. Mr. Hadley 

 evidently believes that a federal railroad commis- 

 sion is pretty sure to come in the future, and be- 

 lieves it to be desirable. But he does not commit 

 himself as to the extent of the powers it should 

 have, although he presents strong reasons for its 

 having, at least at first, only advisory, and not 

 judicial or administrative powers. 



In his chapter on competition and combination. 

 Mr. Hadley expresses strongly his opinion that the 

 economic principles which apply to most forms of 

 production and trade do not apply to railroads. 

 In fact, he says that the law of competition, as 

 laid down by Ricardo and his followers, is ' false 

 in theory,' so far as railroads are concerned. I 



must confess that this seems to me to be over- 

 straining the matter. Whether one considers the 

 theory to be false, depends very much on what 

 is one's conception of it. Correctly stated, the 

 theory of Ricardo and of ' orthodox ' economists, 

 simply says that, given such and such premises, 

 such and such conclusions follow. If the prem- 

 ises do not correspond to facts, the theory does not 

 apply. Perhaps it ' breaks down ;' but does it be- 

 come ' false in theory ' ? No doubt the premises 

 correspond, in important respects, to facts, in a 

 less degree in the case of railroads than in almost 

 any other branch of industry. The theory, then, 

 fails to apply in a corresponding degree, and we 

 must approach the economic problem from other 

 points of view. But Mr. Hadley himself points 

 out that the theory is by no means without its 

 force and application, even in railroad matters. 

 He tells us in one place that, ''where the profits 

 of an existing concern are high enough to tempt 

 it. a competitor will come into the field" (p. 103), 

 and refers to the West shore road as a conspicu- 

 ous instance. And elsewhere he tells us that 

 when the legislature of Wisconsin, by the Potter 

 law. fixed rates at unremunerative figures, rail- 

 road construction stopped, faculties on existing 

 roads could not be kept up, and the state was com- 

 pelled to repeal the law. '-The laws of trade 

 could not be violated with impunity " (p. 135). Are 

 not these applications of Ricardoan laws, at least 

 after some rough fashion? No doubt we cannot 

 solve all economic problems by these laws, and no 

 doubt, in some directions, the development of in- 

 dustry in modern times requires us to apply them 

 more and more cautiously. But we should not 

 therefore throw them entirely overboard, as if 

 they did not yield us any help at all. 



But this is a question which interests chiefly the 

 economic student : and perhaps, after all, it is only 

 a question of choice of language. There is no 

 ground for substantial difference with what Mr. 

 Hadley has to say in his chapter on competition 

 and combination. There, and throughout the 

 book, are the marks of thorough study and clear- 

 headed thinking. F. W. Taussig. 



MINOR BOOK NOTICES. 



Reiseerinnerungen aus Alger ien und Tunis. Von Dr. W. 

 Kobelt. Frankfurt-am-Main, Dieste)~weg, 1885. 8°. 



It is curious to contrast this ponderous and 

 thoroughly scientific work of a German physician 

 with that of the vivacious Monsieur Melon, which 

 we noticed some time ago, — the one so chatty and 

 superficial, the other so dull and accurate. We 

 read the Frenchman's book, and cast it away with- 

 out the slightest thought of ever looking at it 



