be able and fully disposed to advance the interests of the company in some manner, and is thought, on this account, to be entitled to special favors.

The opinion has been very often expressed to your commissioners. during their travels over the state, that unfair discriminations have been a more prolific source than any other of the dissatisfied feeling recently shown by the people of many sections-a fact in itself constituting a reason for a prompt correction of this evil.

The principle that should govern in the matter of making discriminations will be discussed further on.

INEFFICIENCY OF MANAGEMENT.

Another evil of practical railway management, and a crying one in this country, is inefficiency. No one who has traveled extensively upon European railways, can have failed to note that a certain slackness is too common with us in every department of the service. Section hands are not thorough enough in looking over every foot of the track. Switch-tenders, who should be as vigilant as a sentinel in face of the foe, are not sufficiently mindful of how truly they hold in their hands the issues of life and death. The inspector of engines either has no existence, or takes far too much. upon trust. The car-inspector is not sufficiently quick to detect a flaw in wheel or axle, or a fault in gear of truck. The freight agent is gruff and slow about the shipping and delivery of freight. The ticket agent is inattentive to the questions of the foreign or inexperienced traveler, and sends him by the wrong route. The baggage men are reckless and smash up the baggage, to save themselves the trouble of careful handling. The engineer, however careful of the engine itself, so manages it, in switching, and taking up and cutting off the coaches belonging to his train as to bang up the rolling stock and knock passengers off their feet, and even off their seats. The conductor runs his train with a provoking unpunctuality. And finally, the system of book-keeping is rarely such that the general agent, the chief engineer, the superintendent, or the general manager can report, under three months time, the exact amount and kind of business done, the cost to the company of operating any one division of its road, or the average cost per passenger or ton of freight per mile, or the cost per train-mile. Scarcely anything is done with that scrupulous precision, efficiency

and thoroughness so much more common in Europe, and so very essential to economy, comfort, and security everywhere.

EXCESSIVE CHARGES.

Unjust charges for transportation are commonly denounced, because just here is the point of universal and painful contact between the public and the corporations. And yet, in most cases, they are only the immediate result of the more primary evils already noticed. They are the symptoms in many cases, rather than the disease, Considered as an evil in themselves, they are hard to deal with, for the reason that, beyond a rather uncertain limit, it is quite impossible for any one not possessed of the data for a nice mathematical calculation to say whether this tariff or that is excessive.

If, in the absence of such data, the attempt is made to determine the question by a comparison of the tariffs of different roads, such method is likely to be found unsatisfactory, owing to the great number of modifying circumstances, that require to be taken into the account. But leaving out of view causes and particulars, it is unquestionable that the public in almost every state have had to pay more for transportation than should have been necessary; certainly more than was compatible with the welfare of the industrial classes.

THE RAILROAD SIDE OF THE QUESTION.

Having thus dwelt at considerable length on the evils of railway management, it is perhaps essential to a just consideration of the measures to be employed for their correction, that we should recur for a moment to the very important part raflroads have played in promoting the industrial, social and political progress of the world.

To present in detail the beneficial results of railways is of course impossible. They are at once innumerable and immeasurable. Nor is it possible to make a summary that will convey an adequate general conception of the benefits they have conferred.

Having mileage enough for a continuous track six times around the entire globe; moving annually a tonnage of some twenty thousand million dollars in value, and passengers scarcely less in number than the population of the whole earth; stimulating the productive forces of industry everywhere; rendering easy many

5-R. R.

(Doc. 16.)

otherwise impossible exchanges of products between different countries; leading to commercial treaties which else had not been effected for generations to come; promoting social as well as business relations between widely separated communities; binding together as a homogeneous people, the inhabitants of remote and unlike divisions of a common country; encouraging friendly intercourse between the peoples of many lands; and so helping to establish a brotherhood of the nations, the railway is every where justly regarded as being foremost among civilizing agencies.

For these reasons it is believed there is but little danger that the $6,000,000,000 of capital said to be invested in railways will be sacrificed, or that the people of any country will knowingly cripple this immensely important interest.

THE PROBLEM TO BE Solved.

From all the foregoing considerations, it is manifest that the railway problem, simply stated, is this, namely: how to devise a system of control in the interest of the public that will, at the same time, be entirely just to the railway corporations?

ATTEMPTS TO SOLVE THE RAILWAY PROBLEM IN EUROPE.

1. Attempts in England.

As the railway had origin in England, so was it there that the conflict between the railway companies and the public first developed itself. The earliest acts of incorporation established maximum rates for each company chartered. Nevertheless, for a long time, as was natural, the reliance of the public and of Parliament, for security against mismanagement and unfair rates, was mainly upon competition, in one form or another. So little was at first understood of the capacity of the railway for the carrying business that it was even supposed common wagon-roads would hold it in check. Then canals were to compete for the heavier traffic. The concessions made to the first companies were accordingly very indefinite. Treating the railroad as an improved highway for the accommodation of a general freight and passenger traffic, it was expected to be open to all persons who might choose to run trains upon it, subject to the tolls prescribed by the owning company, within limitations to be fixed by Parliament. This plan did not work to satisfaction, however, and as early as 1839-'40 a committee of parlia

ment, including Sir Robert Peel and other distinguished statesmen, reported against the practicability of this form of competition, declared in favor of a single management for each railway, and suggested the necessity to protect the public interests, in view of the important fact "that the interest of the companies was to a certain extent only, that of the public."

It was not until 1844 that competition between separate lines of railways seems to have gained public attention. A committee then appointed, with Mr. Gladstone as chairman, had the whole subject of competition and general management under consideration for some time; making five successive reports, the third one embodying the following important conclusions:* That the indefinite concessions made to the earlier companies had become unnecessary; that competition between railways would do more harm to the companies than good to the public; that the effect of monopoly, however, both on the public directly, and indirectly on the railway companies, was to be dreaded and guarded against; and that with regard to new lines, at any rate, the government and parliament should reserve certain powers to be exercised after a time.

It is apparent from the reports of a date even earlier than this, that the fear of monopolies and hence of consolidation (" amalgamation") of railways had taken deep root in the public and legislative mind-a hold it maintains to this day.

The final report of the Gladstone committee quite fully discusses the question how to secure, by subsequent legislation, "the greatest amount of accommodation at the least cost;" the general conclusion being that regulation was to be depended on rather than competition.

The fruit of these reports was the passage of a law in 1844, containing these as the chief provisions relating to rates and fares, and to state purchase, to wit:

" "1. If after 21 years, any new railway has made 10 per cent. for three years, Treasury may reduce rates, but are to guarantee 10 per cent. The revised rates and the guarantee to continue for 21 years.

"2. After 15 years, Treasury may buy any new railway for 25 years' purchase of the average annual profits for the preceding three years; but if the profits are less than 10 per cent., the amount to be settled by arbitration.

"3. No railway less than five miles in length to be bought; and no branch to be bought without buying whole railway.

"4. Recites that the policy of revision or purchase is not to be prejudged; *Parliamentary Committee's Report (1872), page v.

and that 'public resources' are not to be employed to sustain undue competition with independent companies, and provides that no revision or purchase is to take place without an act of Parliament authorizing the guarantee or purchase, and determining how it is to be done."

The report of 1844 also led to the creation of a board, subordinate to the Board of Trade of the United Kingdom, whose duty it was to report upon new railway schemes, and bills with reference to their position and comparative advantage to the public, and especially with reference to questions of extension of lines, amalgamation and competition.

Owing to various causes, this board accomplished but little, and the next year was abolished; the Board of Trade being left to make on its own responsibility, such special reports on questions of public safety, violations of railway law, consolidations, etc., as to it should seem proper.

The first report of the Board of Trade touching the consolidation schemes of 1845 (of which there were many), is of special interest as having laid down the guiding principles that should govern parliament in passing upon such measures, namely: "That amalgamations should not be generally or precipitately conceded; that they should be allowed either where the amalgamated lines were branches or feeders, or where they formed part of one continuous line of connection; but that they should not be allowed where the companies had an independent existence, or where the object was to put an end to competition; and they suggested that working arrangements, being temporary, and capable of revision, would often be found preferable to amalgamations."

In 1845, important acts were passed for the encouragement of the competition observed between railway companies and canals, and the policy was adopted of incorporating the following provision into all railway acts subsequently passed:

"Nothing herein contained shall be deemed or construed to exempt the railways by this act authorized to be made, from the provisions of any general act relating to railways, or the better and more impartial audit of the accounts of railway companies now in force, or which may hereafter pass during this or any future session of Parliament, of the maximum rates of fares and charges, or of the rates of small parcels, authorized by this act."

In 1846, the pressure of amalgamation bills became so great that the House of Commons appointed another special committee to take testimony and report upon the subject.