CHAPTER II.

RAILWAY RATES

-THEIR BASES, AND THE INFLU

ENCES AFFECTING THEM.

Public injustice is the result of misapprehensionrarely, if ever, of criminal intent; it originates in ignorance. The injustice railways have suffered in the United States, at the hands of the people, has been due to a lack of knowledge of the principles that govern carriers. The owners of railways are largely to blame for this. Many of them know little about political economy, and, while they have conformed to its laws, have not recognized its presence in their work. It is a common belief of the public, that all that is necessary to make a rate is the disposition—that it may be put up or down at will. This is not true. Rates are governed by influences beyond the control of the carrier. Some of these influences I propose to notice.

Those who have charge of the traffic of railroads must conform in all they do to the laws governing commercial affairs; otherwise their work would be fruitless. They are practical economists. While they may not have studied political economy, they are yet thoroughly versed in its subtleties, so far as relates to their business. They may not understand the theory; but they understand its bearings, and conform thereto in everything they do.

The rates charged by carriers affect the cost of everything we use. They appeal especially to the producer and consumer. Each sees that the amount is added to the cost. The subject is, therefore, one of universal interest. Each day adds to its gravity. It is a favorite theme with those who wish to catch the public ear-to pose as reformers. The effort to make the masses believe that, through legislative action, they may arbitrarily regulate the affairs of railroads, without detriment to themselves, has been persistent and adroit. The idea sought to be conveyed is, that railroads are something apart; that their traffic is not governed by laws known to regulate other commercial transactions-to fix the price of other commodities. The credence these misrepresentations have met with encourages those who utter them to pursue the subject. The outcome can not be foretold. Railways, like other institutions, are capable of withstanding a certain amount of pressure a pressure equal to their reserve. Then they collapse. The subject is one of the greatest importance, and worthy of careful examination-of honest and intelligent action.

The rates of railways are governed by the same laws that fix the price of other necessaries of life. There are no exceptions to the rule. We can no more change them arbitrarily, than we can the price of fish or flour. The same principles govern in each

case.

In considering the question of railway rates, one of the first questions asked is: What is a reasonable

or country may not be in another. The question is purely a local one. It can not be generalized or made to fit any formula. It is a practical, not a theoretical, question. There is nothing ideal about it.

In the enunciation of theories regarding rates, the fact that particular railroads are intended to serve particular districts is oftentimes overlooked, and an attempt made to make them conform to the interests of the country as a whole. This, practically, is the confiscation of private property to the general public-the robbery of individuals and communities to benefit other individuals and communities. It is wrong, unnecessary, and indefensible. Generally speaking, reasonable rates are such as enable carriers to furnish the accommodation the communities they serve require; to keep their property in repair; to pay necessary expenses; to make a reasonable return on the capital invested. The last named governs only qualifiedly, however. The question is a practical one.*

"To determine whether a rate is reasonable it is necessary, in every instance, to go beyond the single article and consider the whole subject of classification and the whole business of the carrier under it. To challenge the charge for the carriage of a single article is to challenge to some extent the whole rate sheet, and calls for careful consideration of the question whether the rate to be charged to the one article is out of just proportion, when all the circumstances and conditions which the railway officers must be supposed to have had in mind in making the classification and the rating are considered.

. . If policy or necessity requires the giving of unprofitable rates as to one article, compensation is expected to be made by a proper adjustment of charges in respect to others. A rate imposed upon any article of commerce may affect rates in distant

The rates charged by carriers affect the cost of everything we use. They appeal especially to the producer and consumer. Each sees that the amount is added to the cost. The subject is, therefore, one of universal interest. Each day adds to its gravity. It is a favorite theme with those who wish to catch the public ear-to pose as reformers. The effort to make the masses believe that, through legislative action, they may arbitrarily regulate the affairs of railroads, without detriment to themselves, has been persistent and adroit. The idea sought to be conveyed is, that railroads are something apart; that their traffic is not governed by laws known to regulate other commercial transactions-to fix the price of other commodities. The credence these misrepresentations have met with encourages those who utter them to pursue the subject. The outcome can not be foretold. Railways, like other institutions, are capable of withstanding a certain amount of pressure a pressure equal to their reserve. Then they collapse. The subject is one of the greatest importance, and worthy of careful examination-of honest and intelligent action.

The rates of railways are governed by the same laws that fix the price of other necessaries of life. There are no exceptions to the rule. We can no more change them arbitrarily, than we can the price of fish or flour. The same principles govern in each

case.

In considering the question of railway rates, one of the first questions asked is: What is a reasonable

or country may not be in another. The question is purely a local one. It can not be generalized or made to fit any formula. It is a practical, not a theoretical, question. There is nothing ideal about it.

In the enunciation of theories regarding rates, the fact that particular railroads are intended to serve particular districts is oftentimes overlooked, and an attempt made to make them conform to the interests of the country as a whole. This, practically, is the confiscation of private property to the general public-the robbery of individuals and communities to benefit other individuals and communities. It is wrong, unnecessary, and indefensible. Generally speaking, reasonable rates are such as enable carriers to furnish the accommodation the communities they serve require; to keep their property in repair; to pay necessary expenses; to make a reasonable return on the capital invested. The last named governs only qualifiedly, however. The question is a practical one.*

"To determine whether a rate is reasonable it is necessary, in every instance, to go beyond the single article and consider the whole subject of classification and the whole business of the carrier under it. To challenge the charge for the carriage of a single article is to challenge to some extent the whole rate sheet, and calls for careful consideration of the question whether the rate to be charged to the one article is out of just proportion, when all the circumstances and conditions which the railway officers must be supposed to have had in mind in making the classification and the rating are considered. If policy or necessity requires the giving of unprofitable rates as to one article, compensation is expected to be made by a proper adjustment of charges in respect to others. A rate imposed upon any article of commerce may affect rates in distant