The Savannah morning news., 1901-05-24
REASON FOR RAILROAD CoMBINA-
TIONS

Mr.. Jacob H. SchiR, the leading mem
| Der of the firm of Kuhn, Loeb & Co..
! did not reveal secret on Wednesday
when he told the subcommittee of the
| United States Industrial Committee. that
! the reason the railroads were being con-
solidated into great systems was the re-
fusal of Congress 20 give railroad com
panies the privilege of pooling their earn
ings. Every member of the committee
knew the reasons for the consoiida tons,
but it was desired that some one promi-
nent in the work of bringing about such
consolda tons should make a public
statement 10 that effect. What use the
committee will make of the information
is mol OF course known. 1t may be that
ii will recommend that railroad COM
panies be given the right to pool earn
ings. If so. the recommends tion will
come zoo late. Pretty nearly every road
of the country is now part of some one
of the great systems that have been
formed within the last two or three
years.
1t must have been apparent to every
Congressman of ordinary ability when
anti-pooling legislation was enacted that
the railroad companies would have to
adopt some method of protesting them
selves, because competition meant the
ruin of all of them but the very strong
est 1t also meant consolidation
by purchase, the weaker going
into bankruptcy and then into the possess
sion of the stronger companies
Congressman, however, were afraid to
enact laws, which their judgment ap-
proved, for the protection of railroads
Their constituents entertained the idea
that there must be competition in order
90 get anything like fair rates, and they
did what their constituents wanted done;
they enacted laws preventing railroads
from pooling their earnings. And the
largest shippers also used their influence
with Congress to prevent pooling. They
wanted competition because it enabled
them to get transportation for less than
smaller shippers could obtain it, and thus
ruin the small shippers and lessen the
competition with which they themselves
had TO contend.
II Congress had acted wisely, had per-
mitted pooling and provided for the su-
pervision of rates so as to protect ship
pers from oppressive rates, railroad con-
solidstion would not have taken place to
the extent that 1t has. Congress is to
blame for the formations of the vast rail-
road trusts. Under the anti-pooling legis-
lation there had to be consolida ton to
avoid ruin. 1t is hardly probable that
Congress will adopt another policy now.
There is no particular reason why 1t
should, because there is no probability
that the railroad system would be broken
up if pooling were permitted.
State and national legislation for rail-
roads has been most unwise for years.
Little or no protection has been afforded
railroad property. When millions of
dollars have been expended in building
railroad there has been no hesitation in
granting charters to wreokers to build
a parallel line. Competition, instead of
wise supervision, has been encouraged
though evidence was constantly accumu-
lating that unlimited competition led d.
rectly and swiftly to bankruptcy or con-
solidation. If the reputation of Congress
for wisdom rested upon it's legislation rel
alive to railroads that body would not
have much to be proud of.