The trunk lines in the Central States maintain a very high standard of perfection; others are inferior, although mostly in such condition as admits of economical working, while improvements are constantly being carried out. The group in its entirety may be said to be passing through that stage which most American railways are undeniably approaching - a stage midway between Western and Eastern railroad conditions, but constantly getting nearer the perfection. of the latter. During the last few years technical improvements have, perhaps, nowhere been as pronounced as in the Central States.

One of the special features of transportation business in this region is the competition of water routes. Chicago is connected by Lake with Detroit, Toledo, Cleveland, Buffalo and other points; from Buffalo the Erie Canal runs to Albany, and the Hudson connects Albany with New York. There exists, therefore, an unbroken connection by water between Chicago and all the other Lake points and New York, and although it is necessary to re-load at Buffalo, freights can be moved very cheaply along this route.

This competition has for many years past been detrimental to the railways in this region, more particularly to those lines competing for through traffic with the coast, and even to-day bulky freights like grain, lumber and ores are forwarded by water in vast quantities. But, whereas it was not possible to economise much in water transportation, railways now move their freight at rates about 75 per cent. lower than the charges made twenty years ago, and as a result it is no longer the railways which complain of water competition, but the skippers who suffer from railroads. Nevertheless, the Lakes still exercise their influence, and it is chiefly to them that the low rates for through freight prevailing in this section. must be attributed. Everywhere else in America transportation charges are almost exclusively fixed between equal bodies, i.e. by railways among themselves, and this in the long run prevents them from falling to an unprofitable

level. But in this region there was competition between two unequal agencies, and, as in all analogous cases, the one which could make the lowest rates ruled the market and determined the amount to be charged. At one time rates became SO bad that railways found it difficult to compete, but owing to the low level to which they succeeded in reducing the cost of transportation the tables were turned. Formerly the water route could compete even for freights which were carried by rail from inland points to Chicago to be sent from there to the seaboard, but now rates have reached so low a point that in many cases the all-rail tariff for inland points is lower than the rail-and-lake, and certainly than the rail-lake-rail rate; transportation in itself is cheaper on the Lake, but "terminal work," hitherto of very little moment, is now such an important factor that the possibility of economising in it enters into all freight calculations. A railway may not be able to carry wheat as cheaply from Chicago to Buffalo as a vessel, but it will carry a through grain train from Omaha to New York at a rate below the aggregate charge made by the railroad which carries it from Omaha to Chicago, the vessel which takes it to Buffalo, and the barge descending the Canal and the Hudson, and in addition the delivery is accelerated about three weeks, while the grain is delivered with less loss. Moreover, the water route is closed in winter, during which season the trunk lines carry more grain than in the autumn. As to the rates between Chicago and the seaboard, these were in 1890, per bushel of wheat: by Lake and canal 6.76c., by Lake and rail 8.52c., and by "all rail" 14.30c. This shows that the railways are at a considerable disadvantage, but this is largely counterbalanced by the greater despatch in transit, while the closure of navigation during the cold season terminates the competition in November, and the result is that a little over one-half of all cereals shipped East from Chicago goes by rail, as is shown by the subjoined compilation taken from the report for 1890 issued by the

Chicago Board of Trade. Although, owing to the fact that much wheat is shipped to Buffalo from other Lake ports while vast volumes go by all-rail routes from Western and Southwestern ports, this table does not afford an absolutely correct indication of the proportions alloted to railways and vessels respectively, it is of value in so far as it shows the distribution of the principal articles of bulky freight between the railways and the Lake on the one hand, and between the railways mutually on the other. Statistics of lumber movements have been added to those relating to the cereals.

Table showing shipments of Flour, Cereals and Lumber from Chicago East by routes (1890.)

* Barrel of flour presumed to equal 4 bushels of wheat.

CHAPTER XXIII.

THE LAKE SHORE.

The Lake Shore and Michigan Southern Railway is a consolidation of three systems which were united in 1869 under the auspices of a group of capitalists presided over by Commodore Vanderbilt. The railway consists of what were formerly the Lake Shore RR., the Michigan Southern and Northern Indiana RR., (at one time famous in Wall Street as 'Old Southern') and the Buffalo and Erie RR., to which several leased lines have been added, so that the system owned, leased and operated to-day embraces 1,445 miles, consisting of the following parts:—

Owned: Main line Chicago to Buffalo

Branches of main line

Detroit, Monroe and Toledo RR.

Kalamazoo and White Pigeon RR.

540.5 miles

318.6

62.3

36.5