the main evil, they recognize pools as the most effective method of combating it. State roads enter into pooling contracts with private roads, railroads divide traffic with competing water-routes. The law, recognizing such contracts, is able to regulate them, and to deal with organizations of railroads better than it could deal with railroads individually.
In this respect they have the advantage over us in America. In our vain effort to prohibit pools altogether, we have simply intensified their worst features. By refusing to recognize them at all, we have rejected the chance to regulate them. We have done worse than this. By taking all permanent guarantees away from them, we have forced them to pursue a short-sighted policy. The prejudice against pools, as we have often seen them, is not an unreasonable one; but the fault is in the law quite as much as in the system. Admit, if you please (though it is by no means clear), that the disastrous multiplication of roads in 1882 was mainly due to the short-sighted manipulation of rates under the pooling systems: what then? Such short-sighted policy was an almost necessary result of a legal theory which refused to enforce pooling contracts, and made their continuance depend upon the voluntary adhesion of all parties. The pool was compelled to adopt a policy which should keep every one in good-humor for the day. The moment the directors of a single road were dissatisfied with present results, they could break the system down, regardless either of the rights of others or of their own permanent welfare.
No policy can be more suicidal than this. The temporary interests of the railroads often diverge widely from those of the community which they serve. Their permanent interests are almost identical. The sound and strong roads, with a permanent character to sustain, are much more likely to be managed in the public interest than roads on the verge of bankruptcy, whose only thought is for the present. Yet all our legislation is directed against roads of the former class. We place them at the mercy of reckless competition in the matter of rates. We allow the building of insolvent competitors by construction companies whose operations are no better than blackmail. We strive to limit their dividends, when the only practical results of such a measure will be diminution of enterprise and increase of extravagance. In our fear that the influence of railroad managers may become too great, we have devised laws which seriously interfere with their power for good, and leave their power for evil almost unchecked.
To this sweeping statement one important exception must be made. More by accident than by design, the railroad commissioners in a number of our States have become the representatives of the permanent interests of the railroads and community alike, against the short-sighted policy of extremists on either side. The history of the Massachusetts Commission has presented the most marked instance of what can be done in this way, by a body of men having no power except the