The times. [volume] (Richmond, Va.) 1890-1903, 1897-03-31
An ECONOMIC EKEOK.

The bill filed by the United States IN
the Trans Missouri Freight Association
case the recent decision Of which has so
stirred public opinisn, contains one aver
ment that has in it the germ of all the
popular error upon the subject and OF the
error that The majority of the judges who
sat in The case fell into. 1t complains
that the railroads in the pool agree
ment did not Fix their rates for transport
tation of freight and passengers by nav
inc a regard to what the roads cost, but
rather by having a regard 10 what ihey
thought proper to extort from the pub
lie. That is another form of asserting
the long exploded idea that competition
Is the life of trade" 1t is true that in
one sense competition is the life of trade,
but it is Just as true that in this day Of
modern machinery, railroads and tele-
graphs. unbridled competition Is the
death of trade. A means must be found
for putting some restrictions upon COM
petitions OF competitors will eat each
other up in Kilkenny cat sort OF war,
and tnen the SuINlNDI VIII IttOulb iihi-
self Of mis- losses upon defenceless pub
lie. The restriction which evolution has
developed is the modern agreement TO
pool issues and divide expenses and pro-
fits. This, however, the majority Of the
judges of the Supreme Court, who sat
in the case mentioned. have denied au-
thority TO the railroads TO do, and We
are to have an indiscriminate rate war
unless the roads can hit upon some sub
etltute for their former pooling arrange
ments.
The true principle Of this case IS that
without regard TO their cost railroads,
like all other businesses. are 10 charge
for their services all that the subject
will bear. The modification Of this Drin-
ciple IS the cognate one that when man.
ayers OF business are left alone by the
Legislature they will never charge more
than what will bring them a reasonable
profit. We do not mean TO say that some
men will not. or that every business is
going TO be adjusted TO that principle
within day OF a week or a month. But
1t will get TO that principle after awhile.
becauso IL Is by observing that princi-
pie that men make their enterprise yield
the largest profit. Money is made by
selling great quantities at a small profit
rather than small quantities at a great
profit. This law then will bring every
business. in time, down TO a plane when
no more than a reasonable profit is made
IL is shown by the testimony before the
Lexow Committee in which il was proved
that the sugar trust has brought the
price OF graduated sugar down from 10
cents pound to cents pound. and the
margin between the price Of raw and re-
fined sugar is only three quarters Of
cent pound.
The railroads. If left TO themselves.
therefore would charge all that a sub
jet would bear. but all that II will bear
IL what is the lowest price consistent
with a reasonable profit. because IT
makes more money by charging that min
imum price than by charging more.
This is the great economic law which
10 wholly ignored by the averment IN
the United States bin that we have re-
ferred to- and which has never found a
lodgment in the minds OF the Ave judges
who decided the case.