against all Ohio points as far as the shipment of grain was concerned, in order to get the long haul from Chicago, and Mississipi, Lake, and especially Erie Canal navigation were thus conspired against, as a rule with the utmost success. In America one does not find nearly as much traffic on the Missisippi as, say, on the Rhine or the Danube, and although at present there seems to be no other cause than the low rail rates, water competition was nipped in the bud by discrimination. It is for example well known that the New York Central never ceased to war against the Erie Canal by means of discrimination, although a more effectual weapon is employed now, namely low rates. There can hardly be any doubt that in the long run the Canal will be killed. For many years it has been a financial failure, and it would no longer be available as a water route if it were not supported by the State of New York.

In addition to these discriminations connected with the goods traffic there was and still is one of another kind, the free pass abuse, which ranks among the favours bestowed on individuals. The free pass was, and yet is, to some extent, a means of buying people. It was often given to secure freight; oftener to buy influence. Judges, sheriffs, and policemen, senators, congressmen, editors and reporters got them, until, eight or ten years ago, half the number of passengers were carried free. It is evident that whereas numerous passengers did not pay, others practically paid double fares, for the railroads had to make a profit on running trains. Now, no doubt a railroad president should have the power to grant a free pass to people especially entitled to it. But if somebody who wants to go with his family on a holiday to California can get one, because he happens to know the "G. P. and T. A." or some other official, it is clearly a fraud upon shareholders. 1

1 I recollect having been once in the New York Office of a Railroad Company when a gentleman came and asked for a free pass for himself, his wife and four children, from New York to a watering place about 300 miles distant. The pass was given to him, and after his departure I learned that he was a Wall Street

The result of all these discriminations in their various forms is evident. Of course they made many friends among the public. The press, the bench, and the legislators were bought cheaply, and backed by the leaders of public opinion, by the administrators of the law, and by the Congresses the railway magnates were omnipotent. During their annual trips their railway was a very via triumphalis. Legislatures bowed before them and individuals kneeled, because they were the most powerful class of people. They could shape politics, could make States and counties poor or prosperous at will, could make an individual wealthy or bankrupt if they chose, could bestow valuable favours or withhold them. And this being generally recognised, the subserviency of their favourites practically enhanced their power. But vast as was the number of their friends and supporters, their actions gradually made bitter enemies. The village which was discriminated against complained. The individual ruined by favours extended to others revolted. The man who had to pay a high fare while his neighbour in the "car" showed a free pass to conductors, grumbled; the tyrannised cities, the crippled industries made numerous irreconcilable enemies, who after some time gathered themselves into a formidable force bent upon attacking the common foe. When it came the conflict was fearful, and for a moment it seemed as though the enemy would be crushed, as if the fortress, representing a capital of two thousand millions sterling, commanded by the best brains of the nation, protected by press and legislatures, but at the same time a stronghold of tyranny, injustice and corruption, would perish. But it was too

Reporter of a reputable evening newspaper. The free pass nuisance has abated to a very great extent. Ten or twelve years ago most business men carried their "annual" and if they required a free ride it was but necessary for them to go to a railway and threaten to ship no more goods over it to get one. At present the practice is less common, and some States have gone so far as to forbid their legislators to accept them. But the practice is still too much in vogue. In the West at least one fifth of all passengers travel on free passes. In the East a pass is rarely seen. Another regrettable usance is that Railroad advertisements as a rule are paid for with tickets, which are frequently sold.

strong, and when the smoke of battle passed away it could be seen still standing, damaged, it is true, but standing. Whether the unsuccessful besiegers will ever be compelled to renew the attack remains to be seen, but I think they will not. They have learnt that war waged against the railroads means self-destruction at its best; and on the other hand the railways have been taught that it is dangerous to rouse the wrath of the public. This experience must needs be wholesome in its effects upon both sides.

How the public commenced to fight the powerful corporation, how it succeeded, and what means were employed, whether these means were effective, just or unjust, will be seen in a future chapter. But before speaking of this matter we must deal with some other practices as condemnable as discriminating rates or free passes. After that we shall have a brid's-eye view of conditions which caused the Inter-State Commerce Act to be passed.

Although this does neither mitigate the guilt of railways, nor detract a particle from the nefarious nature of a pernicious practice, it cannot be seriously argued that the various kinds of discrimination resorted to by railways except, perhaps, discriminations against water routes - originated in a desire to tyrannise or injure the public; they merely sprang from the erroneous belief that they would increase the earnings of those companies which brought them into practice. No matter whether managers belonged to the honest or to the unscrupulous class their own interest compelled them to strive after an increase of the earnings of their company. If a "boss" had commendable motives he resorted to discriminations because he considered them a direct means of securing patronage for his railway, whereby earnings, dividends, and credit of his company would be improved. If he possessed no full measure of integrity improved earnings were equally desirable because larger receipts

would afford further opportunities for delusion and widen the field for successful manipulations. Hence every departure which might be reasonably expected to increase earnings and to improve business was eagerly resorted to, and among the various ways open to managers there was none which at first sight appeared as desirable as discriminations. In due course it was seen that this appearance, like so many other appearances, was deceptive; but before the truth was recognised the practice was universally indulged in. Why it took so comparatively long before the true effects of discriminations were recognised is, with the average shrewdness Americans are rightly credited with, somewhat mysterious; but it seems as if everybody, although aware of the fact that all his competitors availed themselves of differential tariffs, thought he could beat all others as far as discriminating propensities were concerned, and thus steal a march upon his rivals and attain an ultimate advantage. Like gamblers in a Montana mining camp everybody knew he had to be on his guard against others, yet confidently expected not only to hold his own, but to be "one too many" for all players, no matter how many cards each might have up his sleeve.

Discrimination commenced to assume perceptible proportions about 1870, when there were over 50,000 miles of railways, and from then it grew in extent until the middle of the eighties, when it became alarmingly prevalent. By that time nearly 130,000 miles of track had been laid. No trifling proportion of this mileage was superfluous and built less because it was wanted than because to numerous unprincipled persons the building of a railway afforded opportunities of amassing wealth at the expense of those who provided the money. As the various methods of duping the investor by means of construction companies and so forth will be discussed later (Chap. VIII.) it is not necessary to dwell upon them now; suffice it to say that for various reasons far more railways were constructed than were needed, and that in consequence the supply of transportation exceeded

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the demand to a very considerable extent. With regard to this overdose of competition, its causes and effects, it will be necessary to again refer the reader to a coming chapter (Chap. V.) in which details are given a summary of which would merely obscure our present subject, so that for the present we will only point to the undisputed fact that it became necessary to either allay or to combat competition. The latter mode was first resorted to. Every railway strived to beat its rivals, sometimes by means of open rate wars, but oftener by secret scheming, by discrimination. "If I favour particular centres or particular persons for whose business I have to compete with others," every 'railroad boss' argued, "I can no doubt secure a very large business and defeat or oust the rival. Meanwhile I will, of course, only discriminate where it is necessary, namely at competitive points. At other points I will make the most of my monopoly, and thus I shall get much business at low rates, and some at good rates."

Now, no doubt, this was nicely argued; but time proved the reasoning to be defective because every railway manager reasoned alike. The outcome was that all railways were secretly discriminating at competitive points, and thereby reducing rates without any one of them receiving compensation in the shape of a greater volume of business; and as, in the meantime, there existed a mutual desire to drive competing companies into insolvency in order to get rid of rivals, the entire business became unprofitable in spite of the inequality between local and competitive rates, so that gradually the idea dawned upon railway managers that wars and discriminations were not likely to lead to the millennium.

From the point of view of railways the failure of discriminations as a means to improve earnings was the more regrettable because owing to countless malpractices, mistakes and swindles the entire system had become overburdened with “water," in consequence whereof it was necessary for the companies to earn considerably more than would have been