The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-03-27
DISASTER TO RAILROADS
ACTION OF CONGRESS NEEDED At
ONCE FOR THE COUNTRY'S GOOD.
Widespread Effects of the supreme
Court Observation-Disclosures and La
Dor Interests VIII suffer.


Robert +. Porter. in New York Sun.
The economic effect of the recent Supreme
Court decisions. which makes agreements
between railways with a view Of establish
ing equal rates between shippers illegal.
strikes a serious blow at the heart of our
railway system. The disastrous effects,
should this decision be maintained as TO all
traffic agreements. are intensified by rea-
son of the present precarious condition OF
these properties. With rates now lower
than those of any country i'm the world,
with practically half the stocks and bonds
of an investment representing over a fifth
of the assets of the Republic. bringing
neither dividends nor interest. with a quar-
ter of a million less persons employed than
efficient service demands. and with all sorts
of other troubles. falling thick and fast,
comes this last and still further depress-
ing decision. Well may the thousands upon
thousands who hold these securities and
the millions or more who should be en-
gagged operating these great systems. look
with dismay upon this the latest complica-
ton in a problem so closely interviewer
with the property Of the Nation and the
welfare of seventy millions of people. The
effect of this Supreme Court decision may
be to undo the intelligent efforts on the
part of these great railway companies to
bring order and equality of rates out of
the chaos and discrimination which existed
when bankruptcy and panic overlook SO
many railways in ~1S93-1S94.
The situation is indeed serious. and there
is a uniform feeling that something should
be done at once TO avert what would seem
to be a pending catastrophe to both labor
and capital. That the necessity for action
is pressing may be seen in the fact that
the foremost journals of the country. ire
spective of politics. have. with great unan-
unity, declared that the regulation of 20O.GO
miles of interlacing lines of railways in
Crrn1, n MO " nc m host nnnCnrx~n thn nfDrQGt
Of the public and with honest regard for
the rights of investors is a too complex
and difficult problem to be settled by one
court decision. even though that
decision emanates from our highest court
The economic side of this question is al
together too vast and far-reachinS In its
effect NOT TO be taken into account.
EFFECT ON INVESTMENTS.
For this reason the newspapers are taxi
ing up not so much the legal aspect, but
the aspect which affects the investments,
the trade, the m and the labor of
the United States. on this point says the
New York Herald:
Railway managers declared that the only
way to secure stability was by having all
the competing lines in a given territory
ing pools. But the interstate act prevented
this. After experience under the working
of this law some of its original advocates
advised the repeal of the anti-pooling
clause. Many merchants and commercial
organizations favored this, and a bill to Sc
cure the repeal was introduced in Congress
and passed the House a year ago, but
failed in the Senate. Meanwhile the roads,
MANY of them bankrupted or impoverished
and tired of cutting one anothers threats,
strove TO reach some basis of agreement.
In the summer of 1895. xnen their great
meeting was held i'm this city. grain was
being carried from the Mississippi river to
the seaboard for 10 cents a hundred weight.
Al that time the mileage of an empire was
in the hands of receivers, bondholders were
foreclosing and stockholders. instead of
getting dividends. We're contributing heavy
assessments to put the companies on their
feet. The extent to which all this was
caused by inflated capitalization and dis
honest management II is aside from our
present purpose to discuss. Ii is sufficient
to say that the prevailing rates were not
only ruinous to millions of investors. but
by their uncertainty and constant varia-
tions demoralizing TO trade"
BY way of immediate remedy the Herald
suggests:
I'VE are inclined to think the solution will
be found in permitting the railways to form
traffic associations under supervision of the
lnterstate-commerce Commission"
The Philadelphia Inquirer. a journal oc-
cupying as independent a position on all
corporation questions as the New York
Herald. makes this clear distinction be-
binatiOns. which the Sherman antitrust
law would seem to cover. There is a vast
difference in railway competition and ordi-
nary trade competition, the Inquirer says,
adding:
But railroads are not on the same par
with sugar refineries and limited corpora
tions. The stock of a railroad is held by a
great many individuals. In the recent dis
cussion over the income tax it was discov-
cred that the stockholders are legion and
that small savings had been invested in
what was considered a safe way. These
rate-cutting wars have sent more than one
road into the hands of a receiver. have de-
Stroyed the earning capacity of such. and
made the holding of their stock unprofit-
able. Square and honest competition is al
ways to be encouraged. but competition
that brings disaster is quite another thing.
Rate cuts have resulted in cheap rates for
the time being. and for that time being
were of service % the shippers. but beyond
these temporary results were the losses to
the stockholders. who are by far the larger
number. 1t was long ago deemed necessary
for competing roads to come to some sort
of an agreement. This they have done or
have attempted to do at various times.
There is no general complaint of eXtortion
now. Rates are low. and as a usual thing
shippers are satisfied. If this SUPREME
Court decision shall throw open the doors
TO another era of railroad wars the country
is likely to suffer from it,"
ATTITUDE OF SHIPPERS.
Shippers are, upon the whole. satisfied
with the present condition, but would be
better pleased with the passage of the pend
ing bill permitting railways to form traf fife
associations, subject. as the Herald says.
to review by the commission. At the an
"""A hhtttHS VI tHe INdtlOldl Board or
Trade, held i'm Washington in January. 1897
an important report of the committee on
rallfoad transportation was adopted look
ing to a further remedy of existing difficult
ties through the medium of the Interstate
commerce Commission. Among other things
this report says:
lhat the great majority of railroad man.
ayers ana of shippers on railroads are sin
cereIy deSlrouS of remedying these unjust
determinations there can be no doubt: and.
with the Cooperation of this majority with
the lntSrState-commerce Commission. it
would seem that they might be gradually
eliminated, but, as a condition necessary
thereto, railroads must be given the power
TO enforce their agreements upon each
olner. which they are now prohibited from
doing by the prohibition of pooling i'm the
lnterstate-commerce law. This law should
thority and supervision of the Interstate
ommerc Commission should be allowed -
There can be no possible doubt of the wis
dom of this plan. Those who oppose il
nave not a true conception of what pooling
really is. They do not realize that il is
nothing more than the exercise of a re-
Stralning influence against rate wars and
secret rate making. Those who do not ap-
preciate this or hold that the public in
rates, will change their opinion if another
year of determination should be precipi-
tated by this decision. They will find out
that the adage. competition is the life of
trade. may he changed. with equal truth.
to competition is the death of trade.
The Philadelphia Press. as Will be seen.
makes the point that the public are chiefly
interested in solvent railways and stable
rates:
s.Tha npIIic T., fr-t anJ cb;oa., ,o.z~.-