Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-07-01
TIE TENDENCIES OF RAILROAD CON-
SoLIDATIoN.

countries in this respect has disproved the
accuracy of the forecasts which have been
almost universally made. More than
twenty years ago the British Parliament
was vehemently urged to legislate against
railroad combinations. 1t was represented
that the tendencies of railroad growth
were all in that direction, and that if the
more powerful corporations were allowed to
unite they would establish monopolies
against which resistance must be vain, and
which would hold the country at their mer-
cy The British Parliament then, according
to its custom, appointed a Commission, and
an elaborate investigation was had, result
ing in sundry ponderous blue-books. But
no restrictions were found advisable at the
time, or at all events none were imposed.
Perhaps the influence of the railroads in
| the House of Commons was too great to
be overcome. Perhaps the conservative
spirit which is natural to English law
makers withheld them from rash expert
ments which affected important interests.
Meantime consolidation went on among
the railroads, until at last four great cor
porations came to control the bulk of the
transportation in the four quarters of the
island. And when this change had
been in operation some time it was discov-
cred that none of the alarming predictions
had really been fulfilled, but that on the
contrary rates had everywhere been
lowered, the service greatly improved, and
the whole system carried much nearer to
perfection. This was the result of the
natural growth of transportation, and the
results of further development on the
same lines have since been in all respects
equally satisfactory.
In this country the few patient and dis.
passionate observers OF the transportation
problem long ago pointed out that what
had happened in England might be ex-
pected to happen here, and that the popu-
lar prejudice against consolidation was
certainly not founded in reason or ex.
perience. The history of railroad COM
petition in the United States, in fact, has
been a record of fierce and reckless and
costly rivalries, for all the expenses of
which the public have eventually had to
pay. Competition has never permanently
reduced charges, for the sufficient reason
that its essential principle is the increase
of cost of operation. AS this is accom-
panied by abnormal reductions of rates
for the time, it is clear that it can only
produce deficit which must be made up
subsequently if the road is to be kept out
of bankruptcy. As matter of fact it has
been found thatafter every fierce cut throat
competitive exhibition there has been
reconciliation, followed by sharp up
ward movement in freight rates. This is
the rule, and all other results are ex-
ceptional.
But the normal development of trans
portation is always in the line of consolida.
ton, because that is the arrangement which
assures the least friction. Consolidation
in railroad management implies increased
economy of operation, increased scope for
adaptation to commercial requirements,
and increased certainty and stability of re-
turns. Each of these considerations is
powerful argument in favor of combina.
ton, and quite as powerful from the pop
ular standpoint as from that of the corpo-
rations. Nor is this theory merely one of
the closet, but it has been amply confirmed
and justified by experience, and it is rap
idly bringing about the consolidation of
the more important lines of transportation
throughout the Union. Mr.. Edward At
kinson OF Boston, one OF the most trust
worthy and able statisticians in the coun-
try, has recently been calculating the &C.
tual outcome of this tendency up to the
present time, ard he has found that the
results which were long since predicted
by the most careful students of the prob
lem have in fact followed combination
wherever it has been introduced. Thus he
shows that on the Lake Shore and AIichi-
gan Southern the traffic has increased 202
per cent. since 1870, while the charges
have decreased 81 per cent. On the New
York Central, during the same period, the
traffic has increased $50 per cent, and the
charges have been reduced 81 per cent. A
| similar increase Of traffic and reduction of
charges is shown on all the trunk lines
where Consolidation has obtained, while
these improvements and economies are
significantly absent upon the short routes
and trunk lines which have failed to profit
by consolidation.
The conclusion which Mr.. Atkinson
reaches, namely that the railroad problem
will solve itself if it is left to the natural
evolution of its own forces, is fully justi-
fled by all the Facts in the case The popu.
lar apprehension that monopoly, or con-
solidatiOn, whichis the correct phrase, would
result in the establishment of excessive
charges, and general plumber and oppression,
has been shown to be fallacious. Railroad
CUT potaIions are Vi COURSE Selfish, puV lH6y
are not necessarily foolish They perceive
thatthe cheapest service is thatwhich brings
them the largest returns, ana that over
charging destroys their business, and there
fore they endeavor to reduce their rates to
the lowest possible point consistent with
profit. The absence of destructive rivalry
of course enables them to operate the roads
much more economically, and the public
get the benefit OF this increased economy
instead of, as formerly, having at brief In
tervals to foot the heavy bills which had
been run up by reckless competition In
short, it is apparent that consolidation is
the one great solvent of railroad diff
culties, and that it ought TO be encouraged
instead of being opposed. Commercial
sagacity and the elementary rules of bust
ness can be relied upon to protect the pub
! lie against extortion, and there is every
reason to believe that the process which
\ has, wherever it has had fair scope, pro.
duced such satisfactory results, will have
tho same narration in this couDLry