as well as many other special cars adapted to the needs of perishable freight. An hourly record is kept of the movements of the latter cars from the time they leave the consignor until they are delivered to the consignee. For every freight car moved a way bill is issued, which gives the number and owner of the car, a description of its contents, with the weight and address of every package, the names of the consignors and consignees, the starting-point and destination, charges, and every detail in regard to routes and the proportions of charges due the different carriers. Duplicates of these way bills go to the auditor's department, and from these the whole record of the freight business is made, and they are afterwards put on file for reference in case of claims. The average freight charges in this country are the cheapest in the world, yet the question of rates is the most troublesome one with which railway companies have to contend. The relative rates between different roads and different points rather than the actual charges for freight involve problems which railroad pools, traffic associations, and legislators have not been as yet entirely successful in solving. The subject is too broad to be discussed here, but two of the most important troubles in fixing rates lie in the discriminations in favor of large shippers and the reduction of through rates below those of intermediate points. Both of these practices, while apparently unfair to the public, are to some extent reasonable, as the same discrimination between large and small consumers is seen in the wholesale and retail prices in all businesses, and on some through lines, especially those in competition with water routes, the traffic must either be secured by special reduced rates between such points or be lost to the railways. Competition between railways is apparently less desirable than it is in the case of other kinds of trade, as the localities where it exists are alone benefited, and the business at other places is threatened. Railways serving a certain territory find it necessary to coöperate in fixing joint rates, and the concessions in charges which are mutually agreed upon between competing lines practically effect the same division of the traffic between them which was secured by the railway pools.
In making the rates, all articles of commerce are divided into several classes, and a certain standard rate per hundred pounds of each class is fixed between two important points, as New York and Chicago. Every other city reached by the same line is figured at its agreed proportion of the standard rates. For example: From New York to Pittsburg would be figured at 60 per cent. of the standard rate between New York and Chicago, and any change in the standard would affect all other places proportionately.
Mail service is a very important department of most railways from a public standpoint, although one which yields a comparatively small revenue to the railways in proportion to the service demanded. The present system of railway mail service was not suggested until 1862, and was not put into effect on a comprehensive scale until two years later, under the superintendence of Col. G. B. Armstrong. It was not, however, until about 1875 that special fast mail trains on which mail was sorted and distributed along the routes were put in operation. Special cars are provided for this service, which are fitted up with tables, pouches, and racks, and a ‘mail catcher,’ which picks up mail pouches from posts at stations where the train does not stop.
In 1900-1901 there were 9182 clerks employed in railway mail service in the United States, working in crews on 783,358 miles of railway. This number includes the clerks employed on steamboat lines (33,970 miles in length) and electric and cable cars. Considerable of the mail carried by the railways is charged at freight rates, according to its weight, and the largest proportional earnings from this source are made by the railway companies which carry too little mail to warrant running high speed trains without extra remuneration. Considering the requirements of the mail service, which are met by the railway companies, the advantage of this traffic as a source of profit to them is doubtful. The time in transit for mail from New York to San Francisco, Cal., a distance of 3250 miles, is indicated by the Official Postal Guide as 106 hours; from New York to Chicago, 900 miles, 23 hours; New York to Buffalo, 410 miles, 9½ hours, and New York to Albany, 142 miles, 3½ hours.
Railway Capitalization. Much of the financial difficulty under which a good many American railways have labored has been the direct outgrowth of speculation, in which the properties have frequently been practically wrecked merely to effect deals in the stock market, and roads which have been the subject of these operations are generally overcapitalized or mortgaged to such an extent that the earnings which would be sufficient to provide reasonable dividends on the actual value of the property are frequently too small to pay the interest on its bonds. The amount of railway stock which has been issued without consideration of money or value is unquestionably very large, although no approximation to the real sum is possible of being estimated. Occasionally such stock is issued pro rata to the stockholders of a very profitable road to make the rate of dividends less prominent, which might otherwise invite restrictive legislation. More frequently the object of issuing watered stock is to keep the control of the railway by means of the apparent investment it represents, or to balance some difference in cases of reorganization. The bonds represent very closely the amount of the debt actually paid in. The stockholders, as owners of the road, have the entire control of the property, and the bondholders have no voice in the management so long as their interest is paid. This condition, corresponding to that of the owners and mortgagees of real estate, is entirely reasonable as long as the actual investments in stock and bonds maintain normal proportions, for the reason that the stockholders assume all the risk, while the bondholders are practically secured. In some cases, however, the amount of money supplied by the stockholders is merely nominal, and the road is bonded for all or more than its value. This can only occur where the stock is most all ‘water,’ and its result is to put the management of the road in hands of parties having but little financial or other interest in it except for the opportunity it affords for speculating with the money of the bondholders. The abuses which have grown out of railway transactions under such circumstances constitute shameful chapters
