tial to the proper discharge of that difficult duty, and that, for the meantime, as a matter of prudence, if not justice, the railroad companies should be allowed entire freedom as to freight charges, except as to the restrictions hereinafter mentioned and the further simple provision that they shall not charge higher rates than those they were actually charging on a certain date, say June 1, 1873.

But the plan more especially referred to above, is different from this; being, namely, to leave the matter of rates of charges for transportation of freight wholly to the companies, turning the surplus into the public treasury. To this plan there are some serious objections:

First-The tendency of such a system would be to induce a covering up of real 'profits, or the charging to capital what correct principles require should be charged to net earnings.

Secondly-In the case of companies able to earn the maximum of profit, the effect of an absolute limit would be to remove one of the most powerful incentives to economy, and, in that degree, to lead to extravagance in expenditures.

Thirdly-It would tend to encourage an increase of capital stock, no matter what the restraints put upon the practice of "watering." Fourthly-Even if these objections could be overcome, and the whole possible surplus of profits could be turned into the public treasury, there would still remain this further objection, namely, that to the extent of a large proportion of the surplus, the state would be imposing a tax upon productive industry, compelling the productive classes, through payment of excessive charges, to bear more than their share of the public burdens.

Another method of applying the principle of limitation of profits, and a less objectionable one, would be, to fix a somewhat lower maximum of profit and provide for a division, as in France, of the surplus, between the state and the companies. This would also be open to the objection last above named, but would have the advantage of leaving to the companies a pecuniary inducement to economy after the maximum had been reached.

The most of these objections would be removed were a limitation of profits accompanied by an appraisal of actual property, as suggested and discussed in another part of this report.

PUBLICITY OF RATES OF FREIGHT.

Of great practical importance in this connection would

be the enactment of stringent provisions of law requiring a greater publicity of rates of freight, together with sufficient previous notice of changes in rates. The commissioners are of opinion that the adoption of such a requirement would not only prove beneficial to the public, but also to the companies. Under a system of practical secrecy in charges, favoritism is the necessary rule, and every shipper is inclined to demand proof from the company of that partiality to himself which he knows is claimed and obtained by others. The interests of business, moreover, demand certainty and uniformity in current expenditure, and no man with personal credit and fortune at stake ought to be subject either to the caprice or partiality of public agents. Whatever the rate demanded for any class of freight, that rate should be equal to all under the same circumstances, and be definitely known to all, and none should be subject to the loss or annoyance of changes in that rate without an allowance of sufficient opportunity to accommodate his business to the exigency. The enforcement of such a regulation, furthermore, would necessarily go far toward removing public suspicion of speculative management on the part of the directors and agents; and if accompanied by accurate reports of business done, under its proper classification, would strongly tend to extinguish any just cause of complaint on this account.

Publicity of rates is nearly or quite universal in continental Europe, and is likely to become so in England also, if we may judge by the vigorous manner in which the necessity for publicity is urged by the Joint Select Committee of 1872, who say:

"Passenger fares are comparatively simple, and the companies are now required to exhibit at each station a list of all the fares from that station to every place for which tickets are there issued. But with rates for goods it is very different. There are distinctions of all sorts. There are the rates to each station on the company's own line; there are the rates to every station on the lines of every other company to which the company books (or ships); aud those rates will vary according to the arrangements made by the company with every other company over whose lines the goods are carried. There are the seven or eight classes of goods for which the company charge different rates. There are the equal mileage charges where the principle of equal mileage is adopted, and the special rates charged in the more numerous cases, where sea or other competition induces the company to charge special rates. And there are the numerous cases still less reducible to principles or rules capable of general statement, where the companies, in consideration of large and eonstant custom, or for other reasons, make especially favorable bargains with particular traders."

8-R. R.

"On the other hand, the case of the public against the railway companies is a very strong one. They are monopolists who are unlimited in their charges, except by the parliamentary maximum, and who are restricted by no definite limit whatever as regards terminal charges; which two charges they mix up together, and under the present system they do not separate them. They are practically under no restriction except that of their own interest, which may not be the same as that of the public; they claim and exercise the right to vary their charges to any extent they please within the parliamentary maximum; to favor one place, or one description of trade at the expense of another; to charge high rates for short distances and low rates for long distances; or to charge two different rates for the same service, if they think it to their interest to do so. And they not only claim to exercise all these powers, but they refuse to tell the public how they exercise them, or why they exercise them.

"It is not surprising, under these circumstances, that there should be discontent and suspicion, even though there may be no real ground for it; and if the companies should become rich and prosperous, this discontent and suspicion may be aggravated to such an extent as to become dangerous to them. If they are dealing fairly, it is to their interest to court observation and criticism, and to give to the public all possible information about their charges and their reasons for making them."

"Under these circumstances, the committee are of the opinion that the recommendation of the Royal Commission should be adopted; that every company should be compelled to keep at every station a book of all the rates, including special contracts chargeable at that station, and distinguishing terminals from mileage rates; that no rate should be legally chargeable unless first entered in this book, and that this book should always be accessible to the public."

GREATER STABILITY OF RATES.

We are unable to learn any sufficient reason why rates, when left to the discretion of railroad companies, are so fluctuating. It is easy to see that with freedom to make just discriminations, such as they ought to have, all rates cannot be permanent, or even fixed for an entire season, perhaps. But why should there be such fluctuations in the rates on staple articles of transportation, where the rates are not special but general? And if fluctuation be necessary, why should they come so frequently and so irregularly that the producer and shipper are utterly unable to make their calculations with any certainty? There are, doubtless, private reasons, or supposed reasons, but they can hardly be of so much importance to the railroad companies as a greater stability of rates is to the public.

As these matters are managed at present, every dealer in grain

or produce of any sort, must make an extra charge to cover the contingency of a rise in the rates of transportation before he can get his purchase into the hands of the consignee; and so the producers are constantly receiving less than its real value for what they sell, and the consumer is paying more. Nor is it any better for the middle-mán, unless he be so fortunate as to have special relations with the transportation companies who handle his shipments.

TIMELY NOTICE OF PROPOSED CHANGES OF RATES.

To obviate the embarrassments just referred to, and incidentally to prevent one very common means of dscriminating in favor of particular traders and localities, every railway company should be required to give timely notice of proposed changes as a condition of the legality and collectibility of the new rates. And the notification should be made in such form and manner, moreovere as would give to all persons using the stations and lines an equal opportunity to know of the change.

In most other countries such an obligation has long been imposed; the length of notice varying from one month to six months.

UNIFORMITY IN CLASSIFCATION OF FREIGHTS.

Allusion has already been made to this subject in the earlier portion of this report, and to the purpose of the railroad commissioners of this and the neighboring states to encourage the adoption of a system of classification more uniform for at least the northwestern states.

Uniformity in the classification of articles of freight is hardly more important to the shipper than it is to the railway company. For where each company has its own classification, it is less convenient determining what the charge should be over two or more lines. Uniformity throughout the state is very desirable, and we can see no sufficient reason why greater uniformity throughout the whole country would not be a matter of great convenience.

The remarks already made touching the determination of passenger rates apply equally in general terms to freight rates. For many of the classifications of articles of freight appear to have been in good degree an arbitrary creation-to have been formed without regard to either usual quantity, risk of carrying, convenience of handling, or other discoverable consideration.

In

many cases, moreover, the classifications are too rigid for the

proper convenience of shippers in the matter of quantity. There should at least be some general rule for making a reasonable deduction where a car is loaded, even though it be with an article not usually ordered by the car load. For example, why should a manufacturer of wagons be forced to pay $120 for hauling a car loaded with steel and bar iron, instead of $40, the price for hauling a car load of pig iron or lead? By reason of the superior value of the steel and iron he could afford to pay something more for the hauling perhaps; but the difference between a car-load of pig, in a special class, and ten tons of bar-iron, rated in a general class by the 100 pounds, is too great for the encouragement of this manufacturing industry.

It is certainly of great importance that each railroad company should be able to give a through rate to any point on any other company's road. It should also have the right, where lines connect or gauge of track does not prevent, to send such freight through without transhipment, by paying for use of track and hauling of his car or cars.

This could be done under the law as it stands, if provision were made for a division of earnings, so that quarrels between companies would not arise on account of inequality.

PROHIBITION OF UNJUST DISCRIMINATION.

Manifestly, a very large proportion of the evils connected with railway management, arise from discriminative charges. But this fact does not prove the propriety of an exact uniformity of tolls under all circumstances. The existing law clearly recognizes a broad distinction between the cost of transporting one class of freight and another. It also recognizes a difference in the value of service performed, based upon the distance of transportation. Under the law, grain is charged one rate and lumber another, and the rate of either is greater for the first twenty-five miles than for the second twenty-five miles. In principle these discriminations are just. But by what rule are discriminations denied in other cases, when equally founded upon principles of equity or necessity? The actual cost of railway transportation depends upon a vast number of peculiar and constantly varying conditions. In the transportation of freight, value of track and equipment, grade of