The sun., 1909-05-23

with the administration, Of. railroads,
many Of whom were deficient enough In
judgment and trustworthiness. Mr.
Mcpherson insist, however, that the
solid strata Of managers and employees
were not responsible for or connected with
the obliquity Of unscrupu!ous hnanciers
but we're battling hard on the one hand for
traffic that was bitterly competitive and
on the other hand for such improvements
in practice and economy as would make
both ends meet. :.
Another occasion for yituperation was
the common practice OF reducing the
rates between stations separated by oon-
siderable distances to O level lower than
that OF the rates TO and from inter-
mediate stations. This practice 10 com
monty designated as charging les for
the long than for the short haul Our
author comedies that the atgupspt that
II q railroad can afford to carry 100 pounds
for 1000 miles at 81 1t 10 an outrage
to charge 81 so for 600 miles over the same
line seems on its face unanswerabie. 1t
is true that the economic justice which
under certain conditions undeflies chars-
ing more for the short than the long haul,
even upon the same route, had been
pointed out by an English eoopomist as
early as ls40.' but his logic had not perco-
lated the minds OF the public. the shippers
and the majority OF the traffic mon them
selves, who we're ready to admit that they
were doing only what they had TO do
under the conditions that beset them
and did not attempt 20 justify the prao-
tioe on an economic basis. 1t was not
until several years later that the Ameri-
can economists Hadley, Seligman and
Taussig gave convincing enunciation to
the principles underlying the adjustment
OF railroad rates. Our author considers
1t beyond question that had these prin-
ciples, resting as they do upon an in
destrlctible foundation, been properly
set forth by educational institutions and
by the press and had they promptly
penetrated to and found acceptance BY
the American people the history Of the
American railroads would have lacked
many Of its most distressing pages. ''
|
III. {
In his twenty-ffth chapter Mr.. Nc
Pherson lays emphasis upon the fact that
in all the web Of condition and oircum-
stance out Of which has developed the
freight rate structure Of the railroads of
the United States was not woven ono
thread Of effective precedent. There
was entire absence of that experience OF
the past which serves as guide for the
future. The concerted use Of steam and
rails revolutionized not only the physical
mechanism Of transportation but also
! its economic relations. The charges Of
the canal boat and the WAGNER furnish
no At criteria by which TO fix the charges
of the railroads. Then again in the case
Of the United States the railroads were
not introduced into a developed and
settled nation. their services and their
rates had to be adapted progressively to
the needs Of a population which was
irregularly extending over the vast areas
of the national domain, forming communi-
ties at points Of natural advantage whose
location was not in the least determined
by intervals OF distance. We are also
bidden to bear in mind that with but few
exceptions the railroads Of the United
States have not been State owned insti-
tutions In the earlier years, it ia true,
there were subscriptions by States, cities
and towns, and thcre were grants Of
large tracts Of land by the national Gov
ernment; in the main, however. tho capi-
tai by which the railroads have been
built has been subscribed by indiv lduals.
At the beginning Of the railway epoch the
aim Of q community would be 70 have q
railroad and capital would be expended
in its construction with little or no regard
10 the likelihood of profit from its opera
ton. In later periods, on the other hand,
the return to be obtained from capital
has been the foremost consideration, and
as a rule money has not been invested
in railroads unless there seemed to be q
prospect Of return. @
Before pronounoing judgment there
fore upon the freight rate structures OF
the United States we have to keep in view
how completely those structures have had
to be pied to meet the requirements OF
an irregularly extending and rapidly
growing population and TT the rapidly
outstretching and developing processes
Of industry and commerce; and also We
must consider to what extent those struc-
lures have met the requirements Of in.
vestors for return on their capital. Mr.
Mcpherson points out that the period
prior to the civil war. when each railroad
served only the local needs Of the terri
tory which it traversed. has loft no record
that the freight rates of the railroads
were not satisfactory to their patrons
The inau gurstion Of through service in
the period Immediately succeeding the
civil war. the rapid extension Of the rail.
roads. the growing competition for both
short distance and long distance traffic
the increasing effect Of the rates of the
waterways upon the rates Of railroads
and the building OF railroads in advance
OF traffic led, as our author puts II. tc
that buneting Of the waves through which
it was necessary for both railroads and
shippers to gain the experienco that hal
enabled them to steer an evener course
The same phenomena have brought forth
problems the solution Of which has been
and is being slowly worked out. Wide
spread and radical differences of opinion
between the railroads and their patrons
and mutual Observation-Disclosures equally
videspread eliminated In the report