share-holders have awakened to the fact that their revenues have been seriously injured by disastrous rate-wars, which often originate from trifling causes, but once entered upon and indorsed by the responsible management of the line are persevered in because the officials are too proud to recede, or feel that they can not afford to assume the responsibility involved in apparent surrender. In other cases the president or directors of corporations have learned to appreciate the danger involved in committing the rate-making power to subordinates whose training and experience have not generally fitted them to deal with matters that involve wide questions of policy, and who being unable to grasp facts or principles outside their range of vision, determine important matters under influences often no higher than the small personal prejudices and rivalries which the business engenders. If boards of direction were frequently to exercise their authority of supervision the influence would no doubt be wholesome, but it would be even more so if stockholders' meetings were to manifest unmistakably their purpose that their interests should not be recklessly and needlessly sacrificed.

A rate-war, under the present law, is a much more serious matter than formerly; but apparently this is a fact only to be learned by severe individual experience. Rates between terminals can not now be lawfully reduced without at the same time requiring large reductions at intermediate points, affecting purely local traffic. A reduction once made must remain operative until the notice required by law for its restoration can be given. Reductions often affect many other points than those at first in contemplation, and rates on many other commodities are drawn into the current. As is said elsewhere, the rates after a short duration are accepted by the public as the measure of future right, and even of comparisons at widely different points. Localities insist upon protection, and all manner of business interests are affected unfavorably. Values of accumulated products are depressed at innumerable points. Cut-rates must be open to the public, and not distributed to individual shippers as before.

In view of these considerations, and others that might be men; tioned, the question often becomes of high moment whether, as a broad proposition, it is wiser to meet the reduced rates of a competitor, or to let the business go. Yet the decision of this question is left by important lines in the hands of subordinates who apparently have no other notion upon the subject beyond the rule that every cut rate must be promptly "met," and who are ready to proceed upon the idea, which is a further inheritance from former systems, that any methods of competi tion whatsoever which are deemed to yield unfair advantage, are to be assailed and reformed by cutting rates upon traffic generally, or upon such classes thereof as have been the occasion of the unfriendly controversy.

The difficulties of the whole subject are freely admitted, but the manner in which they are now met can not fail to be unqualifiedly condemned. Nothing seems more surprising than the fact that a railroad manager who will neither take steps by law to put a stop to a secret cutting of rates which he publicly charges, nor furnish evidence upon which others may do so, will nevertheless sacrifice for his share-holders millions of revenue to punish it. This is grasping the blade to strike down an adversary with the hilt. The average citizen can hardly fail. to see, if the railroad manager does not, that the employment of a weapon which may injure the user even more than the adversary is not wise warfare. Rate cutting is such a weapon.

UNITY OF RAILROAD INTERESTS.

One of the chief perplexities encountered in dealing with complaints against railroad companies arises from the fact that to the public mind the railroad interest of the country seems to be in some sense a unity, so that when there is cause for complaint in the system anywhere, the whole interest is chargeable with some degree of moral if not legal responsibility.

In the guarded exercise of the power of Congress to regulate commerce, the authority to regulate it on the railroads of the country as if they were all under the same ownership and had the same charter rights and liabilities has never by any act of legislation been asserted. The several carriers have always been treated and still are treated under the act to regulate commerce as individual and independent entities, each being responsible on its own behalf but not for others, and no attempt has been made by legislation to impose liabilities or to disturb rights contrary to the provisions of the State charters or State laws.

On the other hand, it is perfectly reasonable to expect that the carriers of the country will, in so far as it is found practicable to do so, make such joint and general arrangements among their number that the public, when availing themselves of their services, shall find an arrangement with one adequate for the purposes of any single transaction. The dealer in the most distant part of the country having occasion to make a consignment from thence to the sea-board, should, if practicable, be enabled to make his arrangement with the local agent for the whole transportation, with the understanding that the initial carrier will then see that the implied obligations which attend the undertaking of carriage are observed throughout. This, unquestionably, is what is required by general public convenience, and this requirement should, as far as possible, be met. For the most part, it may be said to be now met by the leading carriers of the country, when the consignment does not pass off their roads upon side lines which are not under their control. But it is not so universally met by the shorter and weaker lines; nor would it be so easily met by them if the disposition to do so were general.

One difficulty in the way of making such arrangements universal is connected with the necessity of having some means of enforcing among the carriers themselves the obligations, moral or legal, that would grow out of them. If one carrier is to place itself in position to be responsi ble for what may be done by another, it will be deemed necessary to have some means of promptly indemnifying itself when it is made to respond for the other's nonfeasances or misfeasances. And when it is considered how vast is the number of transactions which every important road must have with others, some of which before they are concluded reach out to distant parts of the country, and may involve liabilities that could not be foreseen, it must be evident that a means of indemnification sufficiently prompt and effectual would hardly be found in the right to bring a suit at law. The strength and even the solvency of a carrier might be impaired by the requirements of such a resposibility unless it had the means of prompt re-imbursement.

But the voluntary establishment of such extensive responsibility would require such mutual arrangements between the carriers as would establish a common authority which should be vested with power to make traffic arrangements, to fix rates and provide for their steady maintenance, to compel the performance of mutual duties among the

members, and to enforce promptly and efficiently such sanctions to their mutual understandings as might be agreed upon. Something faintly resembling this as heretofore has been done through the railroad associations, but the only effectual sanction which they have as yet contrived whereby the observance of good faith in their mutual dealings could be enforced was through the device of pooling their freight or earnings. Even this was imperfect, because the arrangement could always be withdrawn from at pleasure, but pooling is now out of their power, being forbidden by law. With pooling prohibited the tendency among the railroads seems likely to be in the direction of consolidation as the only means of effectual protection against mutual jealousies and destructive rate wars. The need of protection would be still greater with greater extension of liability.

But anything equivalent to consolidation of all the roads of the country under a single head, or even those of a considerable section, whether by merger or by the formation of a confederation which should have powers of legal control, or by the creation of what is now technically denominated a trust, could hardly be supposed possible even if the parties were at liberty to form it at pleasure. If the parties could come into harmony on the subject an arrangement of the sort would be so overshadowing, so powerful in its control over the business interests of the country, and so susceptible of being used for mischievous purposes in many ways that public policy could not for a moment sanction it, at least unless by statute it were held in close legal restraints and under effectual public supervision and control. The voluntary ar rangements of the kind in other lines of business are already sufficiently threatening to the public interest, and the most ardent advocate of the concentration of railroad authority can not reasonably expect that anything of the sort to control the transportation of the country will be provided for by legislation. Without legislation to favor it little can be done beyond the formation of consulting and advisory associations and the work of these is not only necessarily defective, but it is also limited to circumscribed territory.

In the absence of any such concentration of authority the carriers by rail have it in their power to do very much towards establishing better relations with the public at large and towards performing better service for the public by first establishing better relations among themselves. The need of this is very imperative. So long as they are legally independent of each other it is quite possible for each of them to keep strictly within its legal obligations and still, by failing to extend the accommodations within its power, to cause great and needless inconvenience to the public. The obligation to avoid doing this, and, on the other hand, to do the exact opposite, will be obvious to any one who has in mind the purposes for which railroads are constructed.

The first requisite to the establishment of better relations among the carriers by rail would seem to be a recognition on their part of the fact that they seem to the public to constitute a class, with to some extent at least common interests, and likely to be controlled by the same motives. They offer to the public certain conveniences, and if the offer is accepted, they unite as far as may be necessary in complying with it. In the great majority of cases in which the service of more than one is required in a particular transaction the party requiring it comes personally into relations with one only, and however numerous may be those who unite in performing the service, he does not even in thought distinguish the parts performed by each severally, but in his mind he is one party to a transaction to which all the carriers who have served

him constitute together the other party. Then, all the carriers of the country seem to be making jointly a like offer of common service to all who will apply for it; they seem to be working together for a common object, and they share between them the results of such transactions as under their joint offers they may be called on to participate in.

It is not surprising, therefore, that to the public there should seem to be something in the nature of mutual responsibility resting upon the whole class and extending to the conduct of its members severally while engaged in the performance of services in which they thus co-operate. If this comes to be clearly seen and so far appreciated by the carriers as to be made the basis of practical action, we may reasonably hope that many things which are now done, and which are in various ways mischievous, will be abstained from, because it will then be seen how insignificant in general are the benefits, and how great and widespread are the evils that must arise therefrom.

In all cutting of rates the party beginning it makes charges or in sinuations against its competitors. The public is either told that the rate which is cut was too high, and then the competitor is charged with intentional extortion, or the competitor is accused of some underhanded or dishonorable conduct which renders the cut necessary in order to teach a lesson or force proper terms for future relations. Cases have been observed of a carrier cutting rates very largely, and proclaiming to the public that the reduced rates were all that could be justly demanded, when at the same time it was apparent to all persons having expert knowledge that persistence in such rates would lead directly to bankruptcy.

In such cases there are ulterior objects in view which the cutting is expected to accomplish, but meantime the public is being misled as to what are just rates, and what is perhaps even more damaging to the carriers, it is being practically told by the parties participating that the members of their class are not deserving of the confidence commonly extended to each other by business men, but may be expected to deal unfairly whenever anything can apparently be gained by doing so. If the cases are not common, they are certainly not unknown, in which the agents of one railroad company make active efforts to poison the minds of the public against the management of another; insinuating against it wrongs and illegalities which exist only in the imagination or perhaps the invention of the party making the charges, and thus embarrassing the business of the other in every way in which it can be done with impunity.

In so far as conduct of the nature indicated is designed merely to secure business that otherwise would be given to a competitor, it proba bly does not go beyond the practices to be met with in other employments; but in no other employment could practices of the kind, for the reasons herein before stated, be so harmful to the parties by or upon whom they are practiced. In other employments competition and separate action are facts as prominent before the public eye as co-operation and apparent joint interest are in this; and the public does not charge the parties following them with joint responsibility; but when business methods are abandoned and resort is had to destructive warfare to punish a competitor, or to secure any coveted advantage, the carriers go quite beyond what is common in other employments, which indeed do not offer the opportunity for destructive acts of like nature.

In considering whether there is any reasonable or even plausible excuse for them, we may freely concede all that is said by railroad mana

gers regarding the difficulty of supporting their mutual arrangements in the absence of any power to prescribe an effective sauction for their enforcement. Nevertheless an impartial observer is compelled to say that the methods now so frequently resorted to for the remedy of supposed grievances or for the punishment of supposed wrongs are methods which do not belong to the present age. They correspond to the methods whereby in a barbarous age a rude redress by force is sought for individual injuries. To make the adversary feel and fear the power to inflict injury is often the first and principal thought, and a rate is cut when in a ruder age it would have been a throat. The motive in each case is the same, to obtain a right or extort a privilege or punish a wrong, and the hostile act may be resorted to irrespective of any question whether there are not legal remedies which are adequate for all purposes of substantial justice.

It is a pertinent question in this connection, Who is hurt by this species of private warfare? The carrier aimed at primarily, perhaps, but the injury never stops there. The attacking party is almost inevitably injured, and the injury may even go to the extent of the destruction of the interests of holders of its stocks or securities. If it stops short of destruction, it may nevertheless impair the capacity of the road for usefulness, and in either event what is done is matter of serious public moment. But the injury goes beyond the belligerents; it is likely to affect in a direct way many others, while indirectly injuring the whole class.

What beyond this is specially important is, that such action strengthens and perpetuates a feeling of distrust and hostility, which is and for a number of years has been the chief obstacle to the profitable management of railroads. In sections of the country where the antagonism to railroads has been strongest nothing is more evident than that, for their own interest, what is needed above all things is that the management of the roads shall be such as to convince the public that in respect to railroad service it is to have fair treatment and the application of just business principles. But the public is not likely to be convinced. of this so long as the carriers in their dealings with each other, as well as in their givings out to the public, are assuming the opposite to be the case. What a railroad manager says against another is taken as an admission against the whole class, and the whole class must bear the consequences. Like all admissions, too, apparently against the interest of the party making it, it is supposed to express less than the truth.

But the evils arising from the want of friendly business relations between the railroads fall largely upon the public also. This is inevitable so long as each road has an independent existence, and its traffic arrangements with other roads are matters of choice and contract. The difference between performing the legal duty grudgingly, though to the letter of the bond, or on the other hand performing it in an accommodating spirit and with the purpose to make the service as valuable as possible, may in some cases be the difference between a general annoyance and a great public convenience. A short road may sometimes make itself little better than a public nuisance by simply abstaining from all accommodation that could not by law be forced from it. It would not be likely to do this unless for some purpose of extortion from other roads, but the existence of the power to annoy and embarrass is a fact of large importance.

The public has an interest in being protected against the probable exercise of any such power. But its interest goes further than this; it