Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1882-08-29
GOVERNOR srAsroRp,s OPEN LETTER

SSeA
editor of the Argonam, and though it
would be impossible in SO brief paper to !
discuss every point in exhaustive detail, he
has succeeded in epitomizing the salient
features of the transportation question, and
has presented them 50 clearly that they
cannot be Inexperienced unless willfully.
To find fault with such an answer because
it does not deal with specified allegations
is irrational. The questions which the Gov
ernor was called upon to meet were in
themselves general, and could only be an.
swered by reference to broad principles.
And it must be understood that in a ma.
jority of instances when specific charges of
unfairness are made against the railroad,
the belief in an existing wrong is traceable
to defective information, or ignorance of
the leading principles upon which the busi-
ness of transportation is founded. The
Governor has shown conclusively that the
staple charge of discrimination involved
In the assaults upon the contract system is
wholly unwarranted, and that the princi-
pie of basing rates upon the value of the
goods carried, is the only one which renders
possible that elasticity and adaptability
Observation-Disclosures Of smallvalue to be car
ried long distances to market. 1t is, how.
ever, upon these charges that the hostility
to the railroad rests mainly, and if they
areshown to be uutenable, there remains Lit.
tie more OF the so.called anti monopoly
position than fabric of Misrepresentation
| and misconception which will not stand
analysis for moment.
1t is deserving OF remark that those who
inveigh against the practice of charging
freight rates by the classification system
confne themselves to such denunciation
and refrain from suggesting any better
method. The truth is that no other prac-
ticable method can be devised, and it is
one which is in use Upon all railroads, the
world owe. Nor is the reason of its
universal adoption far to seek. In trans.
| portation the volume of freight depends
largely upon the volume of business. Run.
ming rolling stock empty is ruinous. The
lowest rates are preferable to no business.
But in order to make low rates possible,
high rates must also be possible. In other
words, to obtain a low minimum there must
be high maximum. The hight of the
maximum, however, is controlled as com.
pletely by business considerations as the
lowness OF the minimum. The maximum
is charged upon the goods which will bear
it without curtailing the profits which
induce the shipper to use the railroad
The maximum, that is to say, must always
be rata which the shipper can afford to
pay. 1t cannot be prohibitory rate. be.
oause that would Illustrate the primary OBJ.
jects of the transportation agent. To base
freight rates upon what is called the cost of
the service to the carrier, would be to cir.
cumscribe and diminish the usefulness of
the railroad, for it would at once render
Impossible the carriage OF all low. class
freight. Whatever agency reduces the
kmaximum, by the same operation raises the
minimum, since every railroad has fixed
expenses. and must raise them out of what.
ever freight it carries, be the amount large
or small. A high maximum and low
minimum represent the ideally best con.
ditioDs OF transportation, for under them
the largest possible amount of all classes
4 of freight is carried at the lowest averags
rate TO the shipper
Under this system it is possible to carry
low class freight at rates which would
entail positive loss upon the railroad if the
elasticity of the system did not make i.
possible to recoup these losses on high class
freight. The general result is that the
r1 Dsn secure $. > volume Of
Fftel54ssehat the average lrate is very low,
that production is stimulated, that settle
ment is encouraged, and that the consumer
OF the high class article loses nothing. No
one, as we have said above, has undertaken
to show how the principle of adjusting
freight rates by the cost of service to the
carrier would operate. The first attempt
to do this must result in complete
demonstration of the impracticabiiity of the
plan. 1t could only benefit few shippers
of high class freight, at the expense of the
community, to the detriment Of the great
producing class, and to the deterioration
of railroad service. Classification in fact is
the main guarantee of low freight rates fol
the majority of shippers. In making this
clear Governor Stanford has removed q
stumbling. block, and has enabled every
intelligent reader Of his letter to perceive
that the railway system is not an arbitrary
and capricious one, inspired by blind greed,
but carefully and philossphically elabo.
rated method, which is the outcome of
long experience in transportation, and
which combines the best attainable results,
both for the shipper and the transporter.
at to the contract system, the explana-
ton of that is not less complete. 1t in
wolves neither coercion nor discrimn alton.
The general tariff is open to all. 1t is the
lowest which has been found practicable for
general business. Every citizen is equally
at liberty to do business under it. IF,
however, any person desires special rates,
and is willing in consideration for such
rates to give all his business to the rail.
road, he can make contract. The rest is
the natural and inevitable result of open
competition. To say that merchants are
coerced because they find it to their inter.
est to enter into contracts, is no more ra.
tional than to say that man is put
under coercion when he finds it necessary
to infuse new enterpriselinto his business,
to meet the efforts of q rival in the same
line. Any merchant is free to refuse to
advertise, but he must take the conse.
quences if he does so refuse. Such an one
might with equal force allege that he was
coerced into advertising because his com.
petitors whe utilized the columns of the
press left him no other alternative but to
follow their example. Nor is there any.
thing at all unreasonable or tyraunical in
the conditions applied to special contracts.
The single consideration for the TRANSPORTER
IN such a transaction is the advantage of
obtaining all the contracting merchants
business. If that is not given the trans
porter is loser by the arrangement. 1t is
therefore clearly necessary that some
guarantee of good faith on the part of the
merchant should be given. If he does not
like to give that guarantee the implication
must be that he does not intend to fulfill
his part in the undertaking. If he objects