The records are made up from daily reports, by every conductor, of every car, home or foreign, handled in his train, and from every station-agent of all cars in his yard at certain hours. From these returns the car accountant reports to their respective owners all movements of foreign cars and gives the transportation department information where cars are lying. The honesty of each other's reports concerning car movements is generally relied upon by railroads, but "lost car agents" are kept travelling to hunt up estrays, and to watch how the cars of their roads are being handled.
It has been suggested that a great step in advance would be to have all the roads in the United States unite and put all cars into a common stock and let them be distributed, record kept of movements, and mileage paid through a general clearing house. This would practically form a single rolling-stock company owned by the roads contributing their cars to it. It could gradually introduce uniform patterns of construction, improved couplers, and air-brakes, and could concentrate cars in different sections of the country in large numbers as different crops required movement, thus avoiding the blockades which often occur in one section while cars are superabundant in another. Consolidations usually render more efficient and cheaper service than separate organizations can do, and this may come about in the course of time.[18]
We have now seen how the road is maintained and its trains safely handled. The next step in order is to see how business is secured and the rates to be charged are fixed. This department may be controlled by a traffic manager, with two assistants—the general freight agent and the general passenger agent—or the officers may report directly to the general manager without the intervention of a traffic manager. But it would be a more accurate expression to say, not that these officers "fix" the rates, for if they did few railroads would ever fail, but that they accept and announce the rates that are fixed by conditions of competition between different markets and products, and between different railroads and water lines. Among these complex forces a railroad freight agent is nearly as powerless to regulate rates as a professor of grammar is to regulate the irregularities of English verbs. He can accept them and use them, or he may let them alone, but the irregularities will remain, all the same. There is no eccentricity, for example, more idiotic or indefensible to the ordinary citizen than a habit railroads have of sometimes charging less money for a long haul than they charge for a shorter haul. Yet I believe there is not a railroad line in the United States which will not be found guilty of this apparent folly of charging "less for the long haul" if its rates to distant points are followed far enough. For if followed far enough we shall come to the ocean, and find the railroad accepting business between two seaports. For instance, all railroads running westward from New York through some of their connections finally reach San Francisco, and compete for freight between these ports. But the rates they are able to obtain are limited by steamers using the ocean for a highway, and sailing vessels using the wind for motive power, and able to carry heavy freights at one-tenth the average cost to railroads across mountains and deserts. This average cost must fix the average rates charged by the railroads to intermediate points, such as to Ogden, in Utah. So the railroad must either charge less for the long haul to San Francisco, or leave that business to be done solely by water. Yet it may be profitable to the railroad to accept the business at such rates as it can obtain; for, as in all business ventures, manufacturing or mercantile, new business can be profitably added at less than the average cost. And if profitable to the railroad its tendency is beneficial, even to the intermediate points which pay higher rates, as promoting better service, besides being advantageous to the whole Pacific Coast in tending to keep down the rates by water.
But it would lead too far from our subject to follow this and several other questions which are suggested by it. Only it may be said briefly that the original Interstate Commerce Bill, introduced by Mr. Reagan, absolutely prohibited "less for the long haul." The Senate amended by adding "under similar circumstances and conditions," and the Interstate Commerce Commission has held that "water competition" makes dissimilar circumstances and thus legalizes it.
And in this connection it may be added that the other Senate amendment to the Reagan bill, creating an Interstate Commerce Commission, was, next to the above amendment, the wisest measure of the bill. It forms a body of experts whose opinions and decisions must gradually educate the public, on the one hand, to a better understanding of transportation problems, and restrain the railroads, on the other, from many of the abuses incident to unchecked competition among them. For, however theorists may differ as to the advantages or disadvantages of competition in manufactures and commerce, either absolutely unchecked or checked only by high or low tariffs, I think all will agree that unchecked railroad competition is a great evil, because it results in fluctuating rates and private rebates to large shippers. The rebates, to be sure, are forbidden by law, but they can be disguised past recognition. I have known a case, for instance, where a receipt was given for 75 barrels of whiskey, when only 73 were shipped. The shipper was to make claim for two barrels lost and be paid an agreed value as a rebate on his freight bill. In another case, a road agreed with a certain shipper to pay his telegraph bills for a certain period in order to control his shipments. Understating the weight or class of the shipment is another common device for undercharging or rebating.
In nearly every foreign country there is either a railroad pool or a division of territory, to prevent this sort of competition, which is only pernicious. A merchant needs to feel assured that rates are stable and uniform to all, and not that he must go shopping for secret rates, in order to be on an equality with his competitor. In the United States the railroads had largely resorted to pools before the Interstate Commerce Law forbade them. The result of this prohibition has generally been very advantageous to the best lines, which, under the pool, really paid a sort of blackmail to the poorer lines to maintain rates. If the penalties of the law can restrain such lines from rebating and under-billing, to be rid of the pool will be a great blessing to the well-located roads. If not, then the roads will be driven into consolidation, for the end of fighting will be bankruptcy and sale. Fortunately consolidation has already gone so far in many sections of the country that the difficulties of abolishing rebates have been greatly reduced. And as far as it has gone it has proved of much advantage both to the public and to the stockholders.
Fortunately, too, the other results attendant upon consolidation have been sufficiently demonstrated to remove any intelligent fear of extortion in rates or deterioration of service. Who would to-day desire to undo the consolidations which have built up the Pennsylvania Railroad or the New York Central, and call back to life the numberless small companies which preceded them? The country has outgrown such service as they could render, and the local growth and development along the lines of these consolidated companies certainly indicates improved conditions. In this connection, too, the improvement in cost and character of service is instructive. In 1865 the average rate per ton per mile on the principal Eastern lines was about 2.900 cents; in 1887 it was 0.718 for a service twice as speedy and efficient.
There are many other live issues of great interest and importance in transportation suggested by this subject, such as "re-billing" or "milling in transit," and "differentials," but space forbids more than an explanation of the meaning of these two especially prominent ones.
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