organic unity lacking the means of administrative control. The situation, for years, was thus described by the late Albert Fink:

"The stockholders, in the first place, surrender their control to a board of directors, the board of directors surrender it to the president, the president surrenders it to a general manager, who in turn surrenders it to the general freight agents of his own and a great number of other roads, who again surrender it to a large number of soliciting agents, and finally these soliciting agents surrender it to the shippers. The shippers practically make their own rates. The result is confusion and demoralization of traffic, and no end to unjust discrimination between shippers and localities.”

In a word the railroad system of the country fell into disorder for lack of the means of self-government. In the fierce struggle for traffic which ensued, the executive officers of the railroads lost the power of maintaining rates, and the transportation and commercial interests of the country fell into confusion. Outrageous and absurd discriminations prevailed extensively. The situation became intolerable. The presidents of certain of the great trunk roads adopted, as a remedial measure, the expedient of so extending their lines as to gain control over the commerce of large areas, hoping thus to preserve order and at the same time to maintain just and remunerative rates. But after enormous organiza-. tions under single corporate management had been established it was found that the control over rates was farther from realization than ever before. In spite of all that railroad managers could do the tendency of rates was constantly downward. Besides unjust discriminations continued. The companies had actually created elements of competition more powerful and demoralizing than those which they had attempted to

control. Thus they were brought to a realization of the fact that elements other than those of the way of carriage control both rates and the course of traffic. At last it became apparent to every intelligent student of the transportation problem that the whole trouble arose from a lack of administrative control, for no great organization can long exist without some sort of central directory. The world's history is replete with illustrations of this fact. The plan of co-operative railroad organizations as a means of self-government and of protecting the public interests against the evils of an uncontrolled and demoralized transportation system was therefore devised. The late Albert Fink, a man of surpassing genius as an organizer and administrator of complex and involved transportation interests, was the author of this system.

The plan adopted had for its immediate object the maintenance of order and the maintenance of rates. It was also devised with special reference to the prevention of unjust discriminations. Boards of trade, chambers of commerce and representatives of trade interests of the country heartily concurred in this settlement, for the demoralization in rates had set the commerce of the country in confusion.

The railroad companies perceived that in order to prevent unjust discriminations the most important duty devolving upon them was to agree as to the relative rates which should prevail as between competing points. For example, an agreement was entered into as to the relative rates which should prevail between Chicago and Boston, Chicago and New York, Chicago and Philadelphia, and Chicago and Baltimore. This was necessary in order to compose the competitive struggle for Western business between those four seaboard cities. The merchants of the cities mentioned also perceived the absolute necessity for agreement be

tween the companies as to relative rates. In the absence of such agreements their trade with the great West had fallen into confusion. Financial ruin confronted the merchants as well as the railroad companies. This, in brief, is the historic origin of agreements as to the relative rates which shall prevail as between competing sections, cities, markets and centers of production and distribution.

For years it was difficult, and finally became impossible, to maintain such rate agreements, none of which were enforcible at law. It became evident, therefore, that the companies must devise some remedial expedient, suggested by the incidents of their own interaction, as well as by the commercial needs of the country with respect to transportation. Evidently such rule should also be sustained by that enlightened sense of self-interest which Blackstone has declared to be the substantial basis of beneficent law. The expedient finally adopted was that of agreements as to the share of the competitive traffic which should be awarded to each competitor. This was practical and it was philosophical; for the first object in all competitive traffic struggles is to secure the largest possible amount of traffic, and the second to secure for it the best possible paying rates. In many instances, however, it is found to be entirely practicable to omit any formal agreement as to the apportionment of traffic, and simply to agree as to the relative rates over competing lines; while in other cases satisfactory results proceed, without formal agreement, from rates made and facilities provided in the spirit of justice and fair play, which rates are deemed by all the contestants to be just and equitable. The tendency toward kindly usages of this sort seems to be rapidly growing as knowledge of governing conditions increases.

I think I mistake not in saying that in the minds of thoughtful men engaged in transportation, in commerce, in manufactures, and in the great productive industries of the country the expedients adopted constitute the logical and beneficent adjustment of struggles which had run to demoralization and ruin. I believe I am also justified in saying that the majority of the reflecting men who have been appointed to positions as State and national railroad commissioners are in favor of the maintenance of rates through expressed or implied agreements as to the division of competitive traffic.

In the great struggle through which the transportation interests of the country have passed each railroad has been loyal always to the particular sources of traffic upon which its traffic interests are dependent. Thus the real contest has been not so much between the railroads, as between commercial and industrial forces behind the railroads, and mightier than the railroads. This force of commercial and industrial competition is persistent. It has expression as a latent force in every railroad rate agreement, and is ever ready to assert itself as a regnant force whenever the companies shall attempt through combination to violate or even unduly trespass upon that uncontrollable tendency toward a parity of values of which I have already spoken. The history of the evolution of the American Railroad System conveys the law of its being, for it is a record of law-making experiencies. Such law was denominated by Lord Bacon lex legis.

SELF GOVERNMENT THROUGH CO-OPERATION.

A fair and philosophical consideration of all phenomena of railroad transportation seems to indicate beyond all question, that competition and combination operate as centrifugal and centripetal forces in the ad

justment of the railroads to the public interests thus securing the orderly conduct of the affairs of commerce and transportation. This is the lesson of experience the verdict of history. The same thing is distinctly observable in labor organizations based upon the trades-union principle, a fact which has been so clearly and ably presented by Mr. Samuel Gompers, President of the American Federation of Labor, that it would be a work of supererogation for me to enlarge upon what has been so clearly demonstrated by that distinguished writer and administrator of the affairs of labor organizations. Other industries likewise exhibit in their orderly and beneficent adjustment to the public interest that equipoise which proceeds from the adjustment of the centrifugal forces of competition and the centripetal force of co-operation. Thus human activities have their orbits. The analogy runs throughout human experiences, for we are all tethered in a thousand ways for our mutual benefit and advancement. It is the story of that conservatism which inheres in the untrammelled interaction of forces.

The main work of legislative restraint and regulation consists in holding men, in their individual and co-operative relationships, within the limits of their proper orbits. This at once prescribes the proper field of governmental regulation and defines the limitations of the beneficent exercise of governmental power.

It would be monstrous to assume from what has been said, or from any facts of record, that the Government of the United States should ever attempt to interpose its fiat for the results of the interaction of forces in the affairs of commerce and transportation, as has been proposed by the Interstate Commerce Commission touching the matter of commission rate-making. Such power in the hands of that body would be a political