Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1884-04-25


risonville, No, by stringing him up several
times and he was then taken to Jail
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The RAILWAY AND THE STATE"
Gierit L. Lansing, in the North american
Reriar for May, has an essay on "The
Railway and the State" which is deserv-
ing of broad reading. We can do no more
IN this space than present the salient points
ne makes. They address themselves with
peculiar force at this time to the people
who delude themselves with the idea that
the immutable laws of commerce are to be
BE- diverted hindered or overcome by
that panacea for all supposed ills-lcgis
iation. Commerce in free action takes
the direction Of the least resistance, and
State control always moves on the line of
It's obstruction, without supplying new or
more direct channels. Thus control is
ever upon the verge of interference and
has ever been falling over the verge into
the abyss below" Experience invariably
shows the result of control to be interfer-
ence, and the production of results it is
invoked to prevent, and hence whenever
exercised it has been withdrawn, and there
mas been substituted only such control as
fhe State exercises over all property.
The popular belief has been and is that
railways afford an exceptional case for the
management of their policy and direction
OF their traffic by State control This is
based on the theory that railroads are not
controlled as are other commercial insti-
buttons, by competition, but in fact rates
are the product of competition, and deter
mined by the natural law of all CONNER
cial transactions, which tends to reduce
profits to 4 minimum.
The value of money depends upon the
relations between the demand for its use
and the supply. This value represented
by the rate OF interest paid for its use, CON
tinually tends to equalize itself in all in
veStments. Capital in railroads cannot for
long earn a higher interest than that 9TH
erwise invested where the uncertainty of
return is not greater. Governmental in
reference with railroad tariffs introduces
an element of uncertainty, and hence the
capital invested demands the promise of a
larger return So such interference, ex-
cept to redress wrongs and prevent inius-
;,,-,.t,,,,,+ o,,J
the demand for higher rate of interest
on capital invested or to be invested in
new lines
This has been exemplifed in the West,
where arrested railroad development arose
from the importance of the item of trans
portation Of agricultural products to dis
tant markets. The suggestion of excessive
charge aroused agriculturists, and was
availed of by politicians to increase the
misunderstanding between producer and
carrier The result was that the former,
through his Legislature, interfered by laws
fixing .,,.s. ard abroad enterprise was
paralyl. nd the prosperity Of State, re-
duced to me minimum, until the Railroad
Commissioner for Minnesota recommended
non-interlcreuce with rates, in order to re-
new progress and foster development
Other causes Of course, contributed to the
8crr-- %. lint the luminosity of the people
Ia ia -a.- vas the chief and sufficient
cat.se 81. Lansing concludes that il is
now established that interference increase,
the risks Of capital, drives it from an I'M
certain field, and raises the interest rate,
and so tends to the maintenance Of higher
rates Of transportation.
Competition of parallel line. by water
or rail is the surest possible guarantee, he
holds, of the lowest rates and best service
indeed, this is a generally admitted truth,
and is proven by all experience. The Sc
lect committee of the United States Sen
ate came unanimously to that conclusion
in 1874. Markets that are common to va
rious % ITS of production or supply CON
troll tn ties from all these points by the
competition which may exist with any one
of them. The lowest rate to market by
any route controls the rates by all other
routes. So, lines may come directly into
competition though not parallel. This
principle is illustrated in the grain market
Of the United Kingdom, which is supplied
by Russia, the United States Egypt, Can
ada. India, etc. So, the rate from Odessa
TO Liverpool affects the rate by sea from
California. a. well as by rail from Dakota.
If the cost of production in Dakota and
Germany were the same, and the supplyof
either equal TO the demand at Liverpool,
the rate from Dakota to Liverpool would
be the same as from Germany, otherwise
Dakota could send no grain to England.
But. if the cost is less in Dakota, the rate
would tend to equalize the cost of produc-
ton in the market Transportation is
part of the cost in market, but not in
volved in the cost at the place of Produc-
zion, and hence the power of markets in
the regulation Of rates of transportation.
The selling price is determined by the
competition of sources of supply, hence
the carrier must make rates 50 low that
products from distance may enter the
market at Il profit to the producer, as
against the product near the market. This
force Of competition enters into the deter
mination Of the rates of nearly all COM
modities and in nearly all places, but OPP
crates most powerfully upon those things
consumed in the largest quantities, as in
such there is greatest competition. Hence
it tends to reduce to minimum rates on
grain, provisions, coal, etc, and conse-
quently least effects rates on silEs, broad