The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-04-03
Cause of Steady Advance in Freight
Rates Discussed by AN Interstate
Commerce Commissioned.
ABSENCE OF COMPETITION
WHEN RAILWAYS COMBINE OR FORM
POOLS THE MAIN REASON.
Plea for the strengthening of the
LAW i'm the Interest of Both
Carriers and Shippers.

oO1AdNiOAl dAu AANA SONSNcs w.
present at the banquet of the organization,
which was held this evening. The pro-
gramme called for but one set speech,
which was delivered by Interstate-com-
merce Commissioner Charles A.. Prouty, of
Vermont. The subject of Colonel Prouty's
address was: THE Cause of the Steady
Advance in Freight Rates"
Charles H. Deere. of Moline, presided at
the banquet and introduced COMMISSIONS
Prouty in a neat address. Mr.. Prouty said
in part:
Il was a little astonished and a good deal
pleased to know that you were beginning
TO realize here, at the center of railway OPP
e%ratiOns, that such a thing as an advance
In rates was possible. The general impress
sion is the other way. The statement that
rates in the United States are the lowest
in the world, that they are too low, that
they are continually becoming lower. has
been so persistently circulated that il has
come TO be almost an axiom that discrim-
ination is the only real evil, and that there
is no possible danger to be apprehended
from unreasonably high rates.
My own opinion is, and always has been,
exactly the other way. While 1t is, per-
haps, true that the crying evil of to-day
is the railway preference, and, while the
magnitude of that wrong can scarcely be
overstated. the ltimat danger which con-
fronts us is in the excessive transportation
charge; that this species of property, large
- 80 t'A-o 49, ~ NV
very wealthy. will impose upon every other
species of property, and, therefore, mainly
in the end upon the poorer classes, an un-
just tax. Monopoly has beer odious in all
ages, not because it discriminates, but be-
cause IL EFFORTS. We are face TO face with
railroad monopoly.
The cost of moving traffic has steadily
declined, and is steadily declining. One
man to-day transports more tons one mile
than he did ten or three years ago. Cars
are more heavily loaded, trains are longer,
grades and curves are easier The DTOfit
of operating a railway increases rapidly
with the increase of traffic. The track is
there, and must be maintained. TIL office
force of the company must be kept up.
In other words the fixed charges are much
the same, whether the amount of traffic
be great or little. and even the actual ex-
pense of moving decreases in prOpOrtion
as traffic increases.
Now, why is II that when cost of trans
pOrtation Is decreasing, when tonnage is
increasing, when gross revenues are stead
lily growing larger and net revenues are
still more rapidly gaining. the rate itself
should also advance? / am not inquiring
into the Justice of the thing. If rates were
too low they ought to advance. The ques-
ton is as to the reason for the thing itself.
AS / see it the reason is this-because by
various processes there is being eliminated
from the railway operations of the United
States the factor of railway competition. q
COMPETITION REDUCES RATES.
at is vigorously insisted that railway
competition does not reduce railway rates,
and that no danger is to be apprehended
from the removal of such competition. Up
on the contrary, Il. undertakes to affirm
that no important reduction of general i'm
port has been made in the published rate
during the last decade which was not
mainly due to railway competition. L af-
firm the contrary, that no advance has
been made in the published rate, or in the
actual rafn IN raoapf vrbiob bao ro@
been effected by the elimination of some
railway competition.
IF you could sit, as l do, receiving COM
plants from all parts of the country, you
would realize in n way which il is impos-
sible TO state, how the process of gradually
advancing the rate is taking place every
where, and how in almost every instance
II is due to the restraint, in one form or an
other, of railway competition. Ten years
ago, yes, five years ago, the strife between
railroads for business tended everywhere to
reduce the rate. Some terminal privilege
was given by one line and followed by
other lines; some stop-over privilege was
allowed, some concession in the way of "A
classification made. To-day the reverse is
true. The terminal privilege is cut of,
the stop-over privilege is cut off. the CLASH
fcation privilege is cut off; and, just as
formerly, the granting of the privilege was
due 10 the competition between carriers. so
now the removal of the privilege is due to
an agreement between carriers.
IF competition has been the regulator
III 4 al "a AaNto III Ai1 past diAd that 1bll-
petition is fast becoming a vanishing guam
tity, what is the remedy? The natural an
swer is. compel competition by law. pro-
hibit combinations by statute. That is the
remedy of Governor Van SAINT. That is
the remedy of the attorney general. 1t
never can be made an effective one. The
Northern Securities Company may be dis
solved; If il be an Illegal institution ii GER
tainly ought tc be. But what has been
gained by the dissolution? A little over
capitalization has perhaps been blotted out
D4IsD oI-o hos ronllr- haon nnonDnn1ichnH
The Great Northern and the Northern Pa
cihc railroads are still owned by the same
men. They are friends in fact, and no
amount of legislation can ever compel them
to fight like enemies. What is true there
is true in every other case. You cannot
secure satisfactory railway competition by
law. You may compel 1T in spots and by
SpaSms. You may even secure II, perhaps,
upOn the surface, but actual, effective COM
petition, competition which completes, will
soon be a thing of the past in the railway
world. The quicker we appreciate this fact
the better shall we deal with the problem.
IF the owners of railway property are
free to say what shall be charged for the
service of transportation, they will i'm the
sophistry can disguise it; such "A condition
is against common sense. common expert
ence and common decency.
THE REMEDY.
''What then. is the remedy? The rail.
way is a public servant. It's rates are sub,
ject to public regulation. The government
not only may but should compel the charg'
ing of just and reasonable tariffs. That
remedy is perfectly adequate. perfectly
just and perfectly capable of application
In that way and in no other way can the
dangers presented by combinations. by the
elimination of railway competition, be deal
with. When there is some competent
tribunal. clothed with the power to inquire
whether a railway rate is just and TO MAKE
il Just if found unjust, the danger of com
bination largely ceases. You and | nigh
prefer competition. but If in the very ma
ture of the case competition cannot be haC
we must take the only remedy available.
"A further reason for the exercise of thi,
power by the government is To be fOunC
i'm the fact that when il is possible To eff
f~ectively control the rate il also become.
possible TO permit within certain propel
limits the restraint of railway competition
one of the most potent factors to-day IL
the building up and the perpetuating O
these great industrial moncpolies, of tn
enormous private fortunes, which seem L
be a menace 10 our civilization, is tn
freight rate discrimination. These discrim
nations result largely from cOmpetitiv1
conditions. While / do not admit the i'm
possibility OF preventing them without tn
restraint of competition, / do believe tina
If that remedy could be safely applied /
would be IN many cases the most ~effectiv
and the most just one. i also believe tina
the railways should be permitted TO form
traffic associations for the purpose o