Sacramento daily record-union., 1882-12-25
Tbs REDucr,os OF RAILROAD RATES.


"world" is stupid ialsehood. In short
the course of the Tribune on this question is
dishonest and foolish, and altogether un-
worthy journal which possesses either
self.respect or conscientiousness. The truth
is, as we showed in recent article, that
the rates of fare and freight on the Central
Pacific Railroad are being constantly and
largely reduced, and that this is the tend
ency, and the inevitable tendency, on every
railroad. Tde nonsense talked about this
question, however, is really amazing, It
is perhaps a commonly held notion that all
railroad corporations, if lefs to themselves,
will invariably keep up their rates at the
highest possible point. The general ina
bility to comprehend the law of reduction
OF charges arises, no doubt, from a con-
fused idea that reduction involves some
philanthropic manifestation. and the belief
that railroad managers are not philah-
thropists. THIS is perfectly true. Rail-
road managers are business men, and neither
more nor less selfish than their fellows.
But it is precisely because they are busi-
ness men, and governed by selfish consid-
erations, that the tendency toward reduc.
tion is so steady and trustworthy.
Reductions are not made out of spirit
of benevolence. Nobody believes that,
and nobody need be asked to believe il.
They are made because they increase the
business of the roads, and for no other
reason. And the fact that reduction of
charges increase business is go certain and
so thoroughly demonstrated that all rail-
road business is based upon it. It pays
better to carry large volume of freight at
| low rate than small volume at high
rate. That is the explanation Of reductions
in freight charges; and because this is the
| fact it is certain that reductions will pro-
ceed, on all railroads, without any outside
pressure whatever, until equilibrium has
been reached that is to say, until the ut
most extent of traffic obtainable has been
secured. Beyond that point it is evident
that reduction would bring loss instead of
gain, but up to that point the principle of
reduction is the key to success. When,
therefore, it is argued that railroad COM
panies cannot be trusted to reduce their
charges without legislative interference,
| Ignorance of the principles of the trans-
| portation business is shown. Nor is any
talk about benevolence and philanthropy
wiser. Benevolence and philanthropy
have no place in any business enterprise.
Their introduction to any business would
result in its ruin. But commercial laws
govern all business, and transportation is
quite as much under their control as eny
other enterprise.
Every railroad seeks to obtain such q
volume of traffic as will employ all its re-
sources to their full capacity. A small
amount of traffic at high rates does not
afford as much profit as large amount at
low rates and therefore it is inevitable
that the latter condition will always be
preferred. Doubtless if a small amount OF
traffic at high rates paid best, railroad
managers would have no sufficient incen-
tive to reduce their rates. It NAV be
admitted that they would be no more
likely than any other business men to
diminish their own profits in order to
benefit the public. But since their own
interests are best advanced by low rates
and large volume of traffic, il is ger.
fectly clear that they require no external
pressure to cause them to carry cut reduc.
tions of rates as rapidly and as extensively
as possible. We showed in the article
referred to already that the Central Pacific
has made reductions amounting to % per
cent. since 1879. On the face of this
showing it looks as though the company
had lost money by these reductions, since
if it had obtained the 1879 rates upon the
traffic of 1881 il could have been 81 OOO,.
600 better off than it was. But the fact
is that it could not have secured the
traffic of 1881 at the rates of 1879. The
increase in the volume of traffic is due to
the reductions. And despite the apparent
loss referred to it is easily demonstrated
that the corporation made larger profits on
the increased traffic at lower rates than it
had made On the smaller volume at higher
rates.
In this inevitable tendency Of all trans.
portation agencies to the reduction of rates
so long as it is possible to increase the
volume of traffic, lies the solution of the
railroad problem. Natural laws, the selfish
interests of men, are more potent for the
protection of the community than any
statutes The fact that it pays better to
carry large quantity of freight and a
great number of passengers, at low rates,
than it does to carry small amount of
freight and few passengers at high rates,
constitutes the most effective guarantee
conceivable for the conservation of the
public interests. Whatever interests are
dependent for protection upon moral ideas
and the general sense Of justice, must be
in constant jeopardy, because those ideas
and THAT sense of justice do not operate
continually and strongly upon either ind;.
viduals or the community, but are mani
tested only spasmodically and at intervals.
But whatever interests are dependent for
protection upon the self h motives of bust.
ness men, are guarded in the moat secure
manner since the moment it is made pro.
fitabie to anyone or any class to protect
those interests, they will be taken care Of
unfailingly. The public are guaranteed
continuous reductions of transportation
charges because it pays the railroads to
carry much freight at low rates. The limits
of such reduction will be determined by
two factors the capacity of the roads,
and the volume of traffic available. Ii the
Chicago Tribune, and other journals which
pretend to discuss the railroad question.
had mastered this elementary principle.
they would avoid the perpetration of an