rect one, as may reasonably be assumed from the history of railway transportation, as well as from a consideration of the competition to which rail carriers are everywhere subject, not only among themselves but from common carriers operating via our rivers and lakes, and of the recent impetus which has been given to the construction of artificial waterways by the completion of the Manchester Canal, it is necessary to discover means for further reducing charges without at the same time decreasing net revenue so as to ultimately result in deterioration and bankruptcy of the railways. Obviously, the return to capital must not be much further reduced. With a large portion of the railways of the country in the hands of receivers, the securities of nearly all selling lower than ever before, and being returned in larger quantities from European exchanges, it is evident that the door to further reductions at the expense of capital is closed. Railway transportation, then, must become cheaper by reducing its cost to the corporations conducting it; and as it has been shown that operating expenses per mile of line have increased during the past decade, while gross revenue has remained practically stationary, it is apparent that this can only be accomplished through the introduction of economies not now practiced.
These economies, the nature of which is evident to every experienced railway manager and every intelligent student of transportation, can be effected by the actual or tacit consolidation of railway properties, and their extent and importance will be in direct ratio to the thoroughness of the consolidation and the degree in which the conflicting interests are brought into subjection. The wastes of competition are nowhere more evident nor their detrimental effect upon society as a whole more clearly apparent than in railway transportation.
The legislative restraints upon consolidation should be removed, agreements and contracts between common carriers where not in contravention of public policy should be given legal sanction, in order that the products of farms and factories may be distributed and exchanged at lower cost and with greater freedom. If necessary, the means of governmental regulation should be strengthened, and the operation of the consolidated properties brought more in harmony with public interests. If, as a final result, it should appear that absolute government ownership is safe, practicable, and likely to be productive of much good, it is not unduly optimistic confidently to expect that our institutions will be found perfectly adequate for the new task, and it will certainly be found much easier to deal with a few large corporations than with the multitude of smaller ones now in existence.
