under single corporate management had been established it was found that the control over rates was farther from realization than before. The tendency of rates was constantly downward and discriminations continued. At last the companies which had indulged in the policy of expansion, to their astonishment discovered that they had created new elements of competition more powerful and destructive than those which they had hoped to eliminate. Thus they were brought to realize the fact that elements other than the way of carriage control both rates and the course of traffic. At last it was realized by every intelligent student of the transportation problem that the whole trouble arose from a lack of administrative control; for no great organization can long exist without some sort of central directory. The world's history is replete with illustrations of this fact. The plan of railroad federations as a means of self-government and of protecting the public interests against the evils of an uncontrolled and demoralized transportation system was therefore devised. The late Albert Fink, a man of surpassing genius as an organizer and administrator of complex and involved commercial interests, was the author of this system.

The plan adopted had for its object the maintenance of order and the maintenance of rates. Boards of trade, chambers of commerce and representatives of trade interests of the country heartily concurred in this conclusion; for the demoralization of rates before alluded to had set the commerce of the country in confusion.

The railroad companies clearly perceived that in order to prevent unjust discriminations, the most important duty devolving upon them was to agree as to the relative rates which should prevail between competing points, as for example the relative rates which should prevail between Chicago and Boston, Chicago and New York, Chicago and Philadelphia, and Chicago and Baltimore. This was necessary in order to compose the competitive struggle between those four seaboard cities. The merchants of the cities mentioned also perceived the absolute necessity for agreement between the companies as to relative rates. In the absence of such agreements their trade with the great West had fallen into confusion; financial ruin confronted the merchants as well as the railroad companies. This in brief is the historic origin of agreements both as to absolute rates and as to the relative rates which shall prevail as between competing sections, cities, markets, and centers of production and distribution.

For years it was difficult, and finally it became impossible to maintain such rate agreements, none of which were enforceable at

law. It became evident, therefore, that the companies must devise some remedial measure, suggested by the incidents of their own interaction, and by the commercial needs of the country with respect to transportation. Evidently such rule must also be sustained by that enlightened sense of self-interest which Blackstone has declared to be the substantial foundation of beneficent law. The expedient finally adopted was that of agreements as to the share of the competitive traffic which should be awarded to each competitor; as the first object in all competitive traffic struggles is to secure the largest possible amount of traffic, and the second to secure on it the best possible paying rates.

I think I mistake not in saying that in the minds of thoughtful men engaged in transportation, in commerce, in manufactures and in the great productive industries of the country the expedient thus adopted constituted the logical and beneficent adjustment of struggles which had run to demoralization and ruin. I think I am also justified in saying that the majority of the reflecting men who have been appointed to positions as state and national railroad commissioners are in favor of the maintenance of rates through agreements as to the division of competitive traffic. From the foregoing the following conclusions appear to be justified:

First. While the railroads cannot, for the reason before stated, be free to all carriers, they can and must be free and impartial to all shippers.

Second. Experience, the only safe guide, has proved beyond all doubt that unrestrained competition in railroad transportation invariably runs to unjust discrimination and to disorder.

Third. Restraints of competition through combination in railroad transportation have been beneficial toward the public interests.

Fourth. Combination in railroad transportation under the limitations and restraints upon it which prevail in this country, has been beneficial toward the public interests.

When Mr. Nimmo concluded, the conference adjourned until 10:30 o'clock, September 14.

The Committee on Organization and Program held a protracted session before the conference assembled for the second day's work. The business before the committee was the question of the appointment of a committee on resolutions. This action. was opposed in committee, but it was decided, after long debate, in the affirmative.

MORNING SESSION, SEPTEMBER 14.

The conference was called to order at 11 o'clock by Chairman Howe. The Committee on Organization and Program presented a report recommending the appointment of a committee on resolutions, said committee to be composed of fifteen delegates to be appointed by the chair, the committee to have authority to pass upon all resolutions presented, which should be sent directly to the committee without being presented to the conference.

Claggett of Idaho moved the adoption of the report, and was seconded by a number of delegates simultaneously.

An amendment was offered by McQuirk of Iowa that the committee be enlarged to include one from each state and national organization, and the members be selected by the state delegations.

Weil of Pennsylvania opposed the passage of any resolutions on the ground that the conference was for educational purposes and under the call could not adopt a policy.

Jones of Indiana and Rosewater of Nebraska led the debate in favor of a committee on resolutions. The opposition was led by Prince of Texas and Atkinson of West Virginia, who moved to lay the report on the table. A substitute was offered that all resolutions be referred to the Committee on Organization and Program.

The debate was exceedingly warm, but no party or sectional lines were drawn. A dozen delegates clamored for recognition. Cockran of New York secured the floor and moved the previous question, that of adopting the committee report. In doing so the speaker pointed out that the debate was doubtless the result of a misconception of the duties of the committee. He was desirous of careful action by which alone a harmonious conference could be completed, but was satisfied with the resolution, adding, however:

"I presume, with the consent of the mover, that on the last day of the conference motions shall be in order to discharge

that committee from the consideration of any resolution which may have been committed to it and on which it has not been able to report."

The amendatory clause was accepted. The substitute sending the resolutions to the general committee was lost.

The report was then adopted with the amendments offered by Messrs. McQuirk and Cockran.

The chairman introduced the morning speakers in turn as named by Program Committee.

LAWSON PURDY.

New York Reform Club.

Lawson Purdy, of the New York Tariff Reform League, was then presented to the conference, and said:

The Commercial Year Book for 1899 defines the popular meaning of the word "trust" as "any consolidation, combine, pool, or agreement of two or more naturally competing concerns. which establishes a partial or complete monopoly, in certain territory, with power to fix prices or rates in any industry."

This definition may seem to include some concerns which it is not my purpose to discuss, and in order that they may be excluded, I wish to call attention to the words of the definition, "naturally competing concerns." I believe it is now generally conceded that there are certain kinds of business in which competition is not natural, and consequently any attempt to introduce competition in such businesses is certain to fail. Moreover, so long as competition continues, the public suffers by reason of the unnecessary expense of conducting the business. A broad distinction between naturally competitive concerns, and those which are not naturally competitive, lies in this, that any business which can be prosecuted by an individual or corporation without assistance from the state, and is, therefore, open to all. is naturally competitive business, and any business which can only be prosecuted if some state power is delegated to the individual or corporation which desires to engage in it, is naturally noncompetitive.

Examples of naturally noncompetitive businesses will occur to everyone. To supply a city with gas requires an exercise of governmental power, and it is at once seen that competition is extremely wasteful because of the necessity of the duplication of

the plant. In the same way it is impracticable to have true competition in the carriage of passengers through the streets of a city on a street railway, and no one can build such a railway without the delegation of state power.

Everyone is familiar with the attempt to foster and maintain. competition in the supplying of gas and electricity and in the carriage of passengers and goods on railways, and the result has been the merging of competing lines, or some combination between them to maintain prices and divide the business.

The difference of opinion which now exists as to the manner in which natural monopolies such as these should be treated, is a difference of degree rather than a difference of kind. The opinion is practically unanimous that there must be some governmental regulations and supervision, and more and more are coming to the conclusion that governmental regulation should extend to the point of absolute ownership and operation.

It is the combination of concerns which are naturally competitive, and such combination as establishes a partial or complete monopoly, which I wish to discuss.

Mr. Charles F. Beach, Jr., in an address on "The Trust an Economic Evolution," delivered before the Union League Club, Chicago, in 1894, says: "Nothing is so certain as that the profit of any sort of business can never be raised by increase of price to the consumer, beyond a normal amount for any length of time, without tempting the cupidity of men in other lines, and creating at once an outside competition. No combination of manufacturers, not protected by government patents, by an iniquitous tariff, or by unholy alliances with railways, can, by never so stringent a compact between themselves, prevent any other set of men from going into their business, whenever the condition of the trade promises more than an average profit." The important part of this statement by Mr. Beach is the exception, for the combinations not protected by an iniquitous tariff are few in number. Of some four hundred trusts enumerated in the Commercial Year Book, more than two-thirds are directy affected by the tariff, and there are very few which do not get some tariff assistance, directly or indirectly.

It is loudly asserted by some that England is a free trade country and that there are as many trusts in England as in the United States. In the first place, England has not pushed the doctrine of free trade to its logical conclusion by any means, and still suffers from tax restrictions upon production and trade. In the second place, those who assert that England is plastered with trusts have so far failed to name any which compare with hun