Page:Popular Science Monthly Volume 29.djvu/15

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5
THE DIFFICULTIES OF RAILROAD REGULATION.

and means ruin to the investor, followed by consolidation. If it acts at some points and not at others, those points which have the benefit of competition have rates based on operating expenses, while the less fortunate points pay the fixed charges. Then we have discrimination in a dangerous form.

As long as competition exists, there is no escape from this alternative. If it exists at all points, it means ruin; if it exists at some points, it means discrimination. The efforts to prevent these results by law while retaining the principle of competition, only show how powerless we really are in this matter. Let us look at them in order.

The first legislators tried to treat the railroad as a public highway, over which any man should be at liberty to run cars, as he can run boats over a canal or wagons over a turnpike. This idea was incorporated in the railroad charters of England and Prussia. It has never been quite abandoned by theorists; but practically it has proved a failure wherever tried. Physically it is impossible, on account of the danger of collision; industrially it is impossible, on account of the added expense. Nobody would build a railroad on such terms unless the mere tolls for the use of the track were to be made higher than the whole transportation charge now is.

A second plan for making competition a public benefit has been that of state ownership of part of the competing lines. It has been tried on a large scale in Belgium and Prussia, and on a smaller scale in most other countries, the United States not excepted. It was thought by the advocates of the system that the government would thus obtain a controlling influence over the railroads with which it came in contact, and be able to regulate their policy by its example. These hopes have been disappointed. The private railroads under such circumstances regulate those of the government far more than the government regulates the private railroads. There is no chance to carry out any schemes of far-sighted policy. If the private roads are run to make money, the government roads must be managed with the same end in view. The tax-payers will not let the government lines show a deficit while competing private lines pay dividends. No administration would dare to allow such a thing, however important the end to be attained. As a matter of fact the government roads of Belgium and Germany were as ready to give rebates as the private lines with which they came into competition. In Belgium they went so far as to grant special rates to those persons who would agree not to ship by canal under any circumstances. The same thing has been done in New York State; but in Belgium the peculiar thing was that the canals and railroads both belonged to the government, and yet were fighting one another in this way. The system of partial state ownership was hardly distinguishable in its effects from simple private ownership. This fact has been clearly recognized within the last twelve years. Within this period, Belgium, Prussia, and Italy have abandoned the "mixed sys-