committed errors of judgment when forecasting such evil results as they did. Mr. Poor, who added " if rigidly enforced," seems to have taken the most accurate view of all. And it is fortunate indeed for the people as well as for the railroads that the Act had from the outset such weaknesses as would prevent its being applied rigorously, and as would destine it to become a failure. But with all that the question is not settled. The demands of the public, in some cases just, and in most, if not all instances, provoked by the railways, remain. So does the great curse of the railroad system, excessive competition. But this fault is rapidly being cured by the self-application of that potent remedy, the growth of the Republic, which causes a development of trade travel and traffic that will obliterate the most evil effects of competition. But a law which endeavours to abolish discrimination, a consequence of competition, and permits competition itself to rage unabated, is to say the least incomplete, and according to some even an injustice; and if it is a success as a law it still must be a pitiful failure as a means of settling a vexed question in the interest of all concerned; for it must be remembered that the public has as great an interest in a just settlement of the question as the railways. There is nothing which would have such disastrous effects upon the community at large as the breakdown of a vast interest like railroads.

From all that has been said before the complicated nature of the railroad problem will be apparent; and it is evident too, that the question of its solution is of a still more complex nature. To do it by law is extremely dangerous, perhaps, I may say, is sure to be disastrous. The question now is, Will a similar settlement be attempted once more? I believe not. There are numerous signs that legal interference will not work, and that it falls back upon the country. This has been proven in Iowa, as we shall see below; and the inference is that the solution of the problem will be left to time, and to time alone. To do this has been the

tacit advice given by the effects of the various laws as they now stand. They have been a very effective warning to all parties concerned. They have shown the people how dangerous it is to interfere with the railroads. They have taught the railroads how dangerous it is to wrong the people. The lesson will be wholesome for both parties. The people will become less assuming and preposterous in their demands. The railways will take care not to again rouse public indignation by renewing the causes of the old grievances. The result will be a more amicable understanding, a clearer conception of the strong ties of mutual interests connecting the two great antagonists. Moreover, the railways are at present conducted upon principles contrasting with those of the old "railroad people" as day contrasts with night. The unscrupulous, reckless, dishonest element is being gradually expelled from the rank and file of railroad directors, and men of integrity, fully conceiving their responsibilities and their duties, are replacing it. This is the best guarantee against dangerous laws. They were provoked by rascalities; now that these are fast disappearing the provocation vanishes too.

As to the State laws, something must be added respecting them also. They have this in common with the Interstate Law, that they aim at the prevention of discriminations; they differ from it because they fix tariffs, and hence they are more dangerous. At the same time they are more hostile and less reasonable. The farmer is malcontent and often unreasonable all over the world; especially in the States. Moreover, he is stubborn, and his intellectual range of view is rather limited. The outcome of this is that his laws are unjust, unfair, and in the end as injurious to himself as to the railways. Controlling the Northwestern State Legislatures, the Granger passed laws and appointed Railroad Commissions. The latter made rates, but lacked the knowledge required to understand their importance. Rates undoubtedly are the most difficult part of railroading. There is no hard

and fast rule according to which they can be fixed or regulated, and the elements of calculation are vague and vary constantly. To understand them requires a vast amount of experience, of labour and of investigation, of knowledge and of patience. To fix them requires a greater amount of judgment, impartiality, and reason than the Grangers or their railroad commissioners possess. Hence their laws and rates were irksome and dangerous. Sometimes their tariffs were above existing rates, sometimes below; but they never did any good. Perhaps they may have saved the farmer a dollar now and then in a direct, tangible way; and beyond that he does not look, not even if he suffers indirectly. But these small individual gains were offset a thousand times by losses befalling the entire community. State interference had the result that States meddling with the railroads suffered in their growth. In a marked degree this has been the case with Iowa, and gradually the Granger commences to see the error of his ways. On the whole the effect of State intervention, therefore, has been akin to that of the Interstate law. It was a warning to either side, and as such it is likely to have wholesome effects upon both parties.

The inference to be drawn from all that has been said of the relations between the legislative bodies and the corporations, therefore, is not of a nature that need cause alarm. If the railways give no reason for complaint the Legislatures will have no reason to interfere with them; if they revive the old or raise new grievances, the worst results may ensue. But the great and rapid improvement in the standard of railroad morality safeguards, I think, against a return to the objectionable practices of byegone days. They cannot be reasonably expected to cease at once; but even a gradual improvement is valuable, and it is fortunate that such improvement, perhaps even more than gradual, is one of the characteristics of the American railroad system of to-day.

PART II.

THE RAILWAYS AND THEIR RIVALS.

CHAPTER IV.

COMPETITION AND ITS CONSEQUENCES.

6

1

In 1890 the United Kingdom had a population of 37,740,000, and the total mileage of all railways was 30,926; In the same year the inhabitants of the United States numbered 62,622,000, and according to Poor's Manual the railways of that country had a total length of 166,817 miles. Hence for every thousand inhabitants the United Kingdom had/% of a mile of railway, the United States 22/3. We know how far railway competition goes in England; and after making due allowance for the larger area of the Republic and the greater necessity for railways in that country we can still understand that with a mileage per capita exceeding ours to the extent of approximately 200 per cent. competition must assume proportions unknown in Europe.

I have already called attention to the fact that before he has gone through the formalities of the Custom House of New York the stranger receives proof of the intense rivalry existing between American railways; but no description could convey such a clear idea of its extent as the following comparison between English and American conditions. Let us remember that probably no other two cities in Europe have better communications with each other than Liverpool and Manchester, nor a heavier interchange of traffic. Of these two towns, as is well known, each has a

1 Hazell's Annual, 1892, p. 584. The figures given for English railways include first and second track only; those relating to America indicate the total trackage. This alters the proportion slightly in favour of English railways.

population of approximately 800,000 inhabitants, and the country tributary to the lines connecting them contains, say, four million people. Yet between the two great centres there are but three direct and different railway connections. Now let us see how matters stand in America. Chicago and St. Louis have an aggregate population of 1,750,000, and the State of Illinois, through which nearly all connecting lines pass, boasts of 4,000,000 inhabitants, those of Chicago of course included; seven railway companies cater for traffic between the two points, There are four great direct lines between such points as Omaha and Denver, five between Chicago and Cincinnati, six between St. Paul and Kansas City, and seven between Chicago and Des Moines (Iowa) while as many railways connect the western metropolis with St. Paul and with Peoria. These numbers only relate to direct routes, and if we would count all intermediate lines most of them would be considerably increased. For instance there are twenty-two different "lines" 1 between Chicago and New York, and between the latter city and New Orleans there are not less than a hundred and six "lines" along which freight can be and is shipped almost daily, although the distances vary from the minimum of 1,180 miles to the maximum of 2,053. The rates in all cases of course are the same for through shipments, otherwise these "lines" would not be competitive.

This excessive competition was an inevitable result of circumstances to some of which we have already referred. The absence of all restraint or supervision whatsoever on the part of the Government, the general desire of everybody to see railways everywhere, and the safe profits to be made out of railway construction2 account for it. Railways, like landed property, frequently have their booms in the United States, and if a railroad craze once possesses itself of the

1 A "line" in American railroad parlance means a combination of small railways forming a through route between main points.

2 See Chapter VIII.