[419]. A few illustrations of the vigorous manner in which this law works out in practice may be of advantage here:
The Hungarian Government at a single stroke, in 1889, reduced State railway fares 40 to 80 percent. Austria and Prussia have also made great reductions in railway charges. Belgium started in the thirties with the very low rate of ⅘ of a cent on her public railways. In New Zealand and Australia also the Government managements have adopted the settled policy of reducing railroad rates as fast as possible.
When England made the telegraph public in 1870, rates were lowered 30 to 50 percent at once, and still further reductions were afterwards made.
When France took over the telephone in 1889, rates were reduced from $116 to $78 per year in Paris, and from $78 to $39 elsewhere, except in Lyons, where the charge was made $58.50.
Private turnpikes, bridges and canals levy sufficient tolls to get what profit may be possible; but when the same highways, bridges and canals become public the tolls are often abolished entirely, rendering such facilities of transportation free, and when charges are made they are lower than the rates of private monopolies under similar conditions, and generally reach the vanishing point as soon as the capital is paid off or before.
When Glasgow took the management of her street railways in 1894, fares were reduced at once about 33 percent, the average fare dropped to about 2 cents, and 35 percent of the fares were 1 cent each. Since then further reductions have been made, and the average fare now is little more than a cent and a half; over 50 percent reduction in 6 years, while we pay the 5 cent fare to the private companies in Boston and other cities of the United States the same as we did 6 years ago, instead of the 2½ cent fare we would pay if the same percentage of reduction had occurred here as in Glasgow.
According to Baker’s Manual of American Waterworks, the charges of private water companies in the United States average 43 percent excess above the charges of public waterworks for similar service. In some states investigation shows that private water rates are double the public rates.
For commercial electric lighting Prof. John R. Commons says that private companies charge 50 to 100 percent more than public plants.
We could offer many other illustrations of the law that public ownership tends to lower rates than private monopoly, but this discussion may be sufficient to indicate the complexion of the facts.
[420]. The sixteenth annual report of the Commission, dated 1905, and covering the year 1904, has come just in time for a note before the galleys are made up into pages. Of the 103 suits entered before the Commission in 1904, about a quarter (25) relate to undue preference, rebates, refusal or neglect to afford such reasonable facilities as were accorded to others under similar circumstances; and most of the other cases, charging unreasonable rates, etc., were really based on some element of unjust discrimination in one form or another. (See Appendix [B].)