Omaha daily bee., 1888-02-07
The Rate War.

threatened war OF railroad rates in the
west and northwest have been noted.
Frequent conferences have been held
within n couple of months with the OBJ
ject OF averting the conflict, at which
temporary truces were arranged, the
effect of which was to postpone the
declaration Of hostilities. The antago-
nistic conditions, however, could not be
satisfactorily adjusted on permanent
basis, and at last the war is on in full
force. The great trunk lines are ar
rayed against each other in bitter
earnest, and what starts out as
the most formidable conflict in
many years promises also to be
the most prolonged. Already rates
have been cut to point which it is said
will bring loss to the roads, and it is
apprehended that the end is not yet
reached. All parties to the fight are
reported to be determined, and the
hostility between the Chicago, Mil
waukee & st. Paul and the Chicago,
Burlington g. Quincy is said to be es-
pecially bitter. Without endeavoring
to fix the responsibility for the war.
which is of course charged to bad faith,
we simply remark that the consequences
are pretty sure to be damaging to the
railroads, and perhaps of no very great
advantage, in the end at least, to the
public.
1t is undoubtedly a mistake to count
conflicts of this nature as necessarily
beneficial to the public. The first i'm
preston of almost everybody is that
when the railroads begin war upon
each other by slashing rates the people
get the full benefit. But as matter of
fact only very few shippers are in a
position to take advantage OF the situa-
tion, while the great body of consumers
rarely discover that there has been any
material gain to them. There may
ensue for a time a rush of shipments,
overcrowding certain localities and de-
pressing prices in the interest of the
consumer, but there must inevitably
come a reaction that is apt to fall heavily
on the class of merchants who were over
Jealous to crowd in stocks under the
reduced rates. A portion Of the people
will have purchased commodities at
somewhat lower prices, but as whole
the public gain cannot be great, and
when the unhealthy stimulus given to
commerce shall have subsidized the
aggregate benefits to merchants and
consumers are very likely to be found
| disappointing. There is not distribu-
tion of benefits. Fair and reasonable
rates, steadily maintained, are much
better for commerce and all interests
than conflicts that result in loss to the
railroads. And the bearing of such
loss upon the general prosperity is not
| to be carelessly considered. The rail
roads constitute most important
factor in the business and fnan-
cial system of the country. II
their earnings fall below their necessary
| expenses the consequences are wide
| spread. They are felt by their thou
| sands Of stockholders, the labor they
employ may sooner or later experience
the effects, the improvements they
would otherwise project are delayed,
and in other ways the loss operates un-
favOrably. Whether or not there are
balancing or compensating gains is q
question not easily determined.
A war of this kind is more easily en-
tered upon than ended, particularly un-
der present conditions. There is nc
law that prevents the cutting OF
rates, which can be done at q
moments notice, but in order tc
restore them there must be ten days
public notice. And any agreement made
cannot. as formerly, include a pooling
of earnings to help out those roads that
suffered most by the war. Furthermore,
difficulty to be encountered in restor-
ing rates will be in satisfying the public
whether such rates are fair and reason.
able. When the roads shall come tc
terms, as they must sooner or later,
shippers will probably demand to- be
assured that the rates agreed upon are
reasonable, and they have recourse to
the Interstate commerce commission to
determine that question. In all
probability the roads will dis
cover that as the result o
the conflict they will hereafter be com
PEELED to accept lower rates than pre-
vailed before hostilities were declared
If this shall be so the war will effect ,
readjustment of rates in the interest o
the public that is justly demanded, ant
which will not be less acceptable becaus,
brought about in this way. Meantime
the progress of the fight will be regarded
with widespread interest.
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