The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1916-03-19
BY J. LAURENCE LAUGHLIN.

By ]. LAURENCE LAUGHLIN,
OF the University of Chicago.
Prof. J. Laurence Laughlin, head
Of the department OF economics of the
University of Chicago, Is we'll
known writer and authority on indus
trial and financial subjects. He was
a member of the Monetary Commits
sion created in 1887 and leading ng-
ure in the movement for banking re-
form which resulted in the creation
OF the Federal Reserve Bank. He Is
the author Of numerous books on
economic subjects and has made eX-
tensive studies of wages and Indus
trial conditions.
To transport goods from the mine or
factory to the user is as much a part Of
the productive process as feeding raw
materials into machines. Even cooked
food is of no use II you cannot get II TO
the mouth. Anything. therefore, which
stops the free and cheap movement OF
goods to the consumer produces indus
trial starvation That which checks the
circulation of goods from seller to buyer
has the same effect as a stoppage OF the
circulation of the blood on the health
and existence of the human body.
Whether We like 1t or not, We have
built up an Industrial organism which
could not exist for twenty-four hours
without the efficient working Of railway
transportation; it has become almost as
essential to our present daily life as rain
or sunlight. Anything so important to
our well-Deing It is to be assumed would
be most zeaiously fostered by the State,
watched and aided in all possible ways.
Reasons for Public Hostility.
Consequently. in a democracy like ours,
where public opinion controls legislation,
one would expect to find liberal and
helpful attitude towards all transpOrta-
ton lines by land or water. We are
sstOUnded. however, to find just the op-
posite: hostility toward railways. more
or less developed. on the part Of the gen
eraI public and consequently, Of legisla-
lures. A situation so unfortunate and so
illogical seems almost incredible. How
can il be explained? BY ignorance, preju-
dice, dsmagOsy and politics.
For this state of mind some railway
arrangements have provided the eX-
cuse for attack because Of arrogant
Over-reachtnE and unDrlncipal railway
''wreckinE." Thus honest management
hss been included in indictments really
based on the acts Of the dishonest. Put
at the bottom Of this subject we finl
the same kind of narrow blgUtry and
ignorance which inspired the campaign in
favor Of Ereenbaclism and free silver.
Certain minds came early to regard
the railway as the type Of the rich
and successful corporation. which it was
no crime to cheat and despOiI. It repre-
scented wealth. to the unsuc -esSful poor.
Then followed, Of course, the seeker for
place who wished to get into ONCE by
capitalizing the prejudices Of his con-
stituents. The Congressman of this
type kept in mind the great issue Of re-
election and was ready to pass any
legislation against railways. no matter
how hostile. which he believed would
satisfy his ''deestTiCt.' To those who
know American politics all this Is corr.
monplace; but to an efficient govern
ment like that Of Germany it wOuId De
uuthinkable OF course, such a state Of
mind could not possibly continue in L
country. which expected to grow in COM
meTre. industry and International trade.
The evils OF dishonest management
make a legitimate reason for regulation
Of raiIways-being quasi-public utilities
provided by private Capital-in the pub
lie interest: and honest management
should have nothing to fear under proper
regulation by the government, provided
that regulation proves to be intelligent
and just.
Evils of Oyer-reguIatIOn.
The crux OF the whole problem resides
in the kind Of regulation. To the present
time that regulation has practically re-
moved the Inequalities of Determinations
in rates in favor OF privileged Shippers
or districts On the other hand, regula-
ton Of rates has been attempted. In
1906, by the Hepburn act, the Interstate
Commerce Commission, representing the
National government, was given power
to TX rates on interstate trafic through
out the whole Of the United States.
This was a herCulean task; it involved
the interests Of every factory. farmer,
consumer. railway, and investor in rail-
ways the country over.
As II this task were not difficult enough,
the various States-under the pressure Of
the same forces which led to national