New-York tribune., 1873-03-15
THE RAILWAY PROBLEM.
REGULATION OF RAILROADS BY THE STATE
VIEWS OF CHARLES FRANCIS ADAMS, JR.-
STATE OWNERSHIP OF ALL THE RAILWAYS
IMPRACTICABLE BUT ONE ROAD SHOULD

Mr.. Charles Francis Adams, jr., on behalf
Of the Board OF Railroad Commissioners delivered
able address before the Joint Standing Committee on
Railways Of the Massachusetts, Legislature on the 18th
OF February, In support OF proposed resolution
THAT the Governor and Council be requested to
ascertain and inform the Legislature, as soon
as may be practicable, upon what terms, II
any, the Commonwealth can purchase the rights,
titles property, and franchises Of the Fltchburg
the Vermont and Massachusetts, and the Massachusetts,
Central Railroad corporations and further to ascertain
and report what legal it would be necessary
or advisable to take to enable the Commonwealth to
assume possession under any powers reserved to by
law or under the right Of eminent domain OF the roads,
properties and franchises aforesaid, with estimates
TO what would be the probable cost to the Common
wealth OF so doing"
In meeting the common objection that Government
ought not interfere with industrial undertakings, Mr.
Adams says:
ment has do with the railroad business than
it do with the business OF making shoes, or spin
presented by opponents OF the innovation now pro
posed and proceed to point out where the distinction
winch has escaped them lies.
COMPETITION AND SUPPLY AND DEMAND.
What Is the principle upon which the cotton factory
the shoe factory, and the bakeh are by common
consent exempted from all Government interference
1t is simply because those conducting business In them
are completely subject to the laws OF supply and de-
free to how' no monopoly can cyst no"
what ia the regards railroads You, gentle
men, perfectly well know that wherever combination Is
possible Ut IL the shrewd aphorsn OF old George Ste
pnenson) competition is impossible. The only thing
which enable competition to exist Is the presence OF
cnmpeting forces too 10 combine Look
abroad TINS country and you VIII SOC at glance
what competition amounts to so far as railroads are con-
cerncd. Take pray YOU tns cas9 % ne" iVIs t aau
Chicago two cities "a thousand miles apart, Detween
which railroads have been constructed as fast as private
capta could construct them. Every gentleman on TINS
committee knows that not rate is charged between
NewYork and Chicago that Is not established by comDl-
nation You know that every time the tarin Is To be
raised or lowered the freight agents OF the several COM
panies convention. and they decide how much IL
snail be raised how much it shall be lowered aud the
change agreed upon takes effect upon all tue roads on
given day
As regards railroads, however even the combination
of competitors IL limited to few localities. Except at
competing points, points th9t IL upon when ralr9as
converge, transportation by rail Is pure absolute
monopoly affected only by municipal law and consldera-
tions OF senterest and IN no degree subject 10 the IN
1uence either OF competition or OF supply ana demand
Now how large proportion OF all the towns on our rail-
roads are points OF railroad convergencei In other
words, OF them can look for even pretense
of protection from monopoly through competition
Take for example Boston and Albany Road. 10 runs
through densely inhabited region filled with manuiac-
turing cities and towns Is 200 miles IN length IL mas 81
stopping pace but OF points OF railroad convergence
places ut which possibility OF competition exists, u
numbers Just seven. Take again the Central Road OF
New-York. Including iCs Auburn division II has 4O5
miles of road IN the very garden and central thorough
fare the continents on the whole 400 miles there exist
INST nine points OF conveyance Six hundred milesOf
railroad with G competing localities; and those lnhaDt-
Albany may be- or stay at home Just as they
prefer But is it not something OF mockery refer
this system tor It's regulation to the principles which CON
trol the production OF boots and cotton cloth!
Nor is the railroad competition Is limited TO
ways remain small proportion of the whole merely
theoretical evil In this state OF Massachusetts since
have been n commissioner, a railroad superintendent
has frankly acknowledged 10 that where freight was
shipped and paid for the end Of his line II that freight
was switched of at a nOncOmpeng point but 10 miles
from where il to his line, and 100 miles short
paid destination he always charged that car s2O
lola farm " "A
Aud he justified his eXtorton He SAID tat MS ROAD
must live, and that he had TO haul Tor cost TO compet
ing points double profits out OF points which
couldn't compete In other words, gentlemen-dnd this
fact Will bear some degree oil reflection tnc result
of ordinary competition is TO reduce aId equalze prices,
tue result Of rarOdd competition Is 20 produce local
inequalities aud arbitrarily to raise and depress prices
Let us suppose for a moment that concede the
prnno,tjon fhat the Government has no right 90
nfo me railroad business;" but II concede this We
must cOneede it in its full length ana breadth Incn inc
Goyernment must exercise supervision whatever
over railroads any than IL exercises it over cotton
mills factories the railroads must De absolutely
free TO get all they exchange tor what 1t may be
fIr interest TO furnish TO all 10 deal with
them. This, however, 1 do not understand that the
enemies ot state ownership at ali admit On the CON
trarv they strenuOusly insist that the Government
should supervise and regulate the railroads, should limit
their profits should x naxima to tIeir charges That 1t
shoui In word coniiue itself TO unlimited meddling
should never own. Then, after All, railroads 90 not
occupy position similar to tnat OF cotton mills. "hat
indeed would De the consequence, today should this
Legislature assume toward manufacturers the attitude
which IL assumes, and which the opponents Oh state
ownership call upon 1t to assume, toward railroads
Suppose JOu appointed your commissioners and Obliged
yOr cotton mills render annual returns OF all the de-
tails their business aud then you provided that tey
should not divide more than 80 much per cent or IN
crease or combine their mills and for certain class In
the community they should manufacture goods az
nominal price. In what would TINS result IL womb III
decd bring your cotton mills into the category
your railroads. but II would reduce your Industrial sys
TEN ~ a chaos.
TIE REAL POLICY MEDDLISG.
In fact there is "a about this whole analogy which
wish with all my heart could get out OF the heads
OF the community IL has got to come out before We
can approach this railroad problem with any hope OF
solution OF II; 1t is indeed the opponents OF State
ownership who the firm consistent friends OF gov
ernmentil medding in industrial enterprises They
isist that The Government shall the OF the
railroad managers and they call II regulation" They
insist that Government shall reduce meddling to
,sIem. and they call IL supervision" They muddle
our railroad legislation into mass OF absurdties and
they call that leaving the railroads alone. We have,
insist az re CARDS railroad SYSTEM been wholly
wrong track We have been trying 10 regulate IT,, and
All the while say We were not regulating IL; we have
heen irving TO NEEDLE, and say we were not meddng;
we have been trying TO manage and control and super
yise and all the while We have chattered ana canted
about competition and the law OF supply and demand.
liz is high that we began to see things as they are
and 10 call them by their right names There is nothing
which renders legislation difficult more subty
perncous than tins getting hold OF correct principle
and in dull, mOnotonOus, parrot-ke manner making
false application OF 1t; and then dsmssing the argu
ent disposed Of AS regards railroads. we have done
IT, then the fundamental principle which forbids the
Interference OF Government with industrial enterprises
must in this be sacrihced-if lamentabe innova
tion on il is Indeed necessary this be effected
with the least degree Of public detrment That some
deriment must result that some public danger must be
incurred, all agreei-how can It be reduced To a
minimum
WHAT Is STATE OWNERSHIP
But if the regulation OF railways, which all agree to be
necessary cannot be accomplished by legislation. how
can It be accomplished How has it.been accomplished
lseyherei II has been accomplished by what known
s the state ownership OF railways But what this
state ownership of >railwaysi The general idea and
think IL the idea which peryades the minds OF gentle
men who here day after day. Is that the Govern
,nent ia 10 railroads and them IL does the
nosta system that Is to assume every railroad In the
Country large or sma-that Ia word It to go into
bc railroad business full tilt In other words the sub
IL L.. Ill AaIaLl.n