The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1892-12-30
TRAFFIC ARRANGEMENTS N RAILROAD
POOLS,

They are presented In q pamphlet entitled
"The Apportionment of Traffic Among
Competing Railroads rs Means of Main
tanning Rates." The subject is a diff
cult one and it's ramiicatioDs are very
extensive, but Mr.. Nimmo reduces it to
a few general principles which seem to
give a solid basis for his conclusions.
The term pooling" as applied to rail-
road tariff rates, is associated in the
minds of most persons with q corrupt
arrangement intended to defraud the
public. In reality it is an arrangement
for the protection of railroad interests
without in any degree impairing those
of tie public. The Century Dictionary
defines q railroad pool as "a combina-
transportation lines in which all take
common ground as regards the public
and distribute the profits of the business
among themselves equally or according
to special agreement. In this sense"
continues the same authority, pooling
is q system of reconciling conflicting
interests and of obviating ruinous COM
petition. by which the several Compel
ing parties or companies throw their
evenu into one common fund, which
is then divided or redistributed among
the members of the pool IN a basis of
percentages or proportions previously
agreed upon or determined by arbitra-
tion." 1t is obvious that in this sense
a pooling arrangement is not only not
necessarily hostile to public interests,
but may be distinctly in favor of them.
The fact that railroad freights are lower
in this country than in any other in the
world is sufficient evidence that the pub
lie has not suffered to any great extent
by railroad combinations. The last edi-
ton of Mulhalrs Statistics. a work of
the highest authority, states that the
average cost per one hundred miles of
railroad transportation in Great Brit
ain is 40 pence per ton; in France, no
pence per ton; in Germany, 50 pence; in
Russia, 100 pence; in Austria, us pence;
in Italy, 125 pence; In the United States,
SO pence. Our passenger rates are also
lower than in any country of Europe.
Mr.. Nimmo bases his discussion of the
subject on two questions which he
thinks lie at the root of the matter.
These are: First, are combinations for
the purpose of restraining the full force
of competitive struggles in commercial
and industrial pursuits in any case justi-
fable upon considerations of public
policy? Second, should agreements as
to the pooling or division of traffic for
the maintenance of rates among COM
petinR railroads be regarded as in the
nature of just and beneficent combina-
tionsq
Under the first question he discusses
the subject of competition and combi-
nation, and concludes that the latter is
absolutely necessary to correct the
evils of unrestrained competition.
There are healthy and legitimate COM
binations, and there are combinations
which are neither healthy nor legiti-
mate. The very intensity of human
activity in commerce, in industrial pur-
suits and in transportation has. says Mr..
Nimmo, compelled certain restraints
through combination, the necessity for
which and the beneficent character of
which have been clearly proved by the
lessons of experience. The develop
ment of the railroad system in this cOun-
try has resulted in a development of
commercial and industrial interests
which many times exceed the interests
of transportation In point Of capital in
vested, and these commercial and in
dustrial interests have formed combina-
tons to control railroad rates which
absolutely compel combination on the
part of the railroads to resist them. IL
the railroads are prevented from COM
bining for self-protection against the
combinations of commercial and indus
trial industries. the result will be the
development of numerous and gigantic
trusts. The forces of trade are vastly
greater than those of transportation,
and as long rs the former are per-
mitted to combine it is necessary
for the protection Of the public
mitted to combine. The commercial and
industrial trust. says Mr.. Nimmo, is
formed between a select few, who keep
all the rest of the competitors out of the
combination; they then proceed to break
down all the outsiders; whereas a rail
road traffic apportionment must of me-
cessity embrace all of the competitors in
it's provisions. and. besides. it preserves
the weaker lines from destruction. His
conclusion is that, at present, ''agree-
ments as to the a~pportionment of com
petitive traffic constitute the only known
antidote to the baneful influences which
are exerted Owes transportation affairs
by commercial trusts and large ship
pers."
These views are not new with Mr..
Nimmo. In his report as Chief of the
Bureau of Statistics, in 1885, two years
before the interstate-commerce act was
passed, he discussed the same subject
and reached the following conclusions:
First-Agreements as TO the apportion.
ment of traffic between competing rail-
roads for the purpose of maintain ing rate,
are beneficial toward the public interests