Consolidation. 
377 
Persons will ordinarily do business only when then they see a 
fair chance of profit; and if press of competition renders a par¬ 
ticular trade unprofitable, those engaged in that trade will sus¬ 
pend or reduce their operations, and apply their capital and 
labor to other uses, until a reasonable margin of profit has been 
reached. But the capital invested in the construction of a rail¬ 
road can not be withdrawn when competition renders the oper¬ 
ation of the road unprofitable. . . . Public policy clearly 
does not demand that railroad companies operating competing 
lines shall engage in strife causing their financial ruin; and so 
far as agreements among companies are designed to effect this 
result their purpose is not injurious to the public or illegal." 1 
“ There is no principle of public policy which renders void a 
traffic arrangement between two lines of railway for the purpose 
of avoiding competition. ” 2 
It is a source of delight to be able to bring together such an 
array of high legal authorities — and the list could easily be 
extended — in support of a proposition for which many of the 
leading economists have long contended. It seems that at last 
the vast rubbish of futile legislation on railway matters is to 
be destroyed, and that a more rational policy, based upon a 
recognition of the limitations of competition and the fundamen¬ 
tal differences existing between railroads and ordinary business 
enterprises is to be pursued. 3 4 
As I have already stated, there are no supreme court deci¬ 
sions on railroad consolidation in Wisconsin, and it does not ap¬ 
pear to me profitable to enter into a more comprehensive presen¬ 
tation of the discussion of the consolidation movement in this 
state, because such a presentation could contribute nothing new 
or instructive on the question, as it has frequently been dis¬ 
cussed in the light of the railroad history of other states.* 
1 Morawefz, On Corporations, §1131. 
2 1 Redf. R. R., §146; quoted in Hirschl, p. 6. 
3 The failure of the doctrine of free competition when applied to railroads 
could be conclusively shown in an historical account of the competition 
between railroads and (1) canals, (2) turnpikes, and other roads, (3) river 
navigation and certain steamship lines, and (4) other railroads. 
4 However, it may not be out of piace to introduce references to a num- 
