New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-07-20
R4ILWAY POOLS AND THEIR EFFECTS.

The Senate Committee on Interstate Com
merce should not have been surprised at the
feeling against railroad pools at Chicago For
many years the existence of every railroad aSso-
citation in turn has been threatened by com
binations of Chicago dealers, whose power to
concentrate their shipments upon one route to
the exclusion of others has been frequently
exercised with great effect The railroad man
ayers with scarcely an exception have regarded
the pooling system favorably, as the most effi-
cient method yet discovered of protecting their
interests, and they argue that charges for trans
portati0n have not been advanced by that sys-
tenn. but are in fact lower now than they were
ten wears ago. The average rate on grain from
Chicago to New-Yorb, for instance, was 25.l
cents per 90 pounds in 1879, and thus far In
18S has been trifle less than 20 cents. Hence
II is reasoned that the public has been benefited
by the pools, while the railroads claim to have
gained largely
This reasoning involves deception. The
natural tendency is toward lower charges. AS
tho traffic on any road increases with the growth
of population, the charge per ton which Will
Weld given profit correspondingly decreases.
Improvement in the management road-bed and
v
TRANSPORTING service. Hence gradual reduction
in rates is the normal result, which has been IN
a measure prevented during the last ten years
by railroad combinations. The average rate
charged for transportation Of wheat from Chl-
cago to Newly orll in 1860 was 81 cents per
90 pounds; in 1869 and 1873 it was Oh
cents in 1870 it was 25.1 cents, and'n 1889
if is still % cents The railroads complain that
they do not make any more profit on the larger
traffic now than they did ten years ago. But
that is because the pools encouraged the COM
pletion of many competing lines, which now
divide the traffic. Benefits to the public as to
rates charged have thus been prevented by
railroad combination and its results, without
real advantage to the railroad companies.
The Chicago Board Of Trade does not explain
its opposition to pooling, but reports to the
committee that the Canadian competition is
beneficial because it tends to break down rail
road combinations and pools. The separate
attitude of the Canadian roads, however, Is
distinctly due to the American Interstate law.
That act as il has been interpreted, requires
the American roads to make their through rates
proportionate to the local rates over the same
routes. while the Canadian roads are subject to
| no such restriction. The latter can carry
through freight as cheaply as they please with
out being required to make any corresponding
alteration in their charge for local or short
distance transportation, and therefore have
enormous advantages in the compehtl0n Tor
through traffic advantages which they persisO
in utilizing. To Chicago dealers this is hcne-
fetal. because it tends to draw grain to and
through that city, whereas the same grain but
for the competition of Canadian lines, might
be more proftably sent eastward by rail over
American lines which do not pass through
Chicago. In the control of grain markets, also,
the Canadian competition gives Chicago larger
powers.
What is the public interest here? Clearly the
producers of the West want the cheapest pos
sibIe transportation to the worlds markets, be-
cause that tends to give them better price for
their products. The consumers of the East
want the cheapest possible transportation, be-
cause that gives them cheaper food. These two
classes embrace an enormous majority of the
people Only a small minority is interested
in preventing reduction of charges for trans
portation The contention Of Chicago dealers
| that railroad pools have on the whole tended to
prevent or at least to retard the natural reduc-
| ton in rates for transportation, is apparently
sustained by experience from 1879 to 1889.
But the same reasoning goes to condemn the
Interstate Act, because that act has interfered
with the free competition by which charges
were reduced from "a cents in 1869 and 1877 3
to 81 8 cents for grain in 1885.
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