a reasonable relationship between services and charges, one that is just from the public point of view and equitable to the carrier, it is necessary to place in the hands of some competent and responsible commission the power to regulate the services and the rates of railroads.

There are, it is true, many people who believe it is not wise to give to a commission, state or national, the power to say what a railroad charge shall be. This is hardly the place to enter upon a discussion of that large question, and I must content myself with the mere statement that I believe the time has now come when we must accept not only the soundness of the theory, but the desirabilty of the practice, of investing in some public body the power to say to the carrier that his charge, from the public point of view, is or is not a reasonable one. Moreover, I do not believe that we thereby run into any serious danger.

The American people are conservative. Much is said about our radicalism, about the tendency of our legislators to follow public whims, but candidly is the charge true? Is it not rather the fact that the American people, in their attitude toward capital and labor, are on the whole and in the long run, conservative? Is it not a wiser policy to continue along the line of evolution which we have followed for thirty years, instead of reversing our policy because of the present temporary depression in business? I believe that we shall not turn back, but that we shall go ahead developing the power of the states and of the nation, so that they may bring about, as regards the regulation of transportation services and charges, the fullest measure of equity to carrier, to passenger, and to shipper.

THE NATION AND THE RAILWAYS

BY STUYVESANT FISH,

New York

Our country is pre-eminently the railroad country of the world. For over fifty years we have had more miles of railroad in operation than all Europe. In those well-settled countries the building of railways simply provided a cheaper and better means of handling an existing traffic. For us they have made a wilderness habitable, rendered its settlement and civilization possible, and created the traffic which they now carry. The amount of money invested in our railways exceeds that in any other one thing, except lands and buildings, and more of our people are employed in and about the railways than in any other pursuit except farming.

Our railroads, like those in England, have been built by private corporations, organized for that purpose and never by the government. It is said that the words "periculum privatum, utilitas publica" appeared on the seal of the first railway company incorporated in England; and with us, as with them, the risk has ever been private, although the benefit as well as the use has been public.

In the United States the building of railroads began in or just before 1830, at the close of which year there were twenty-three miles in operation. The vastness of our territory, the absence of wagon roads, and the inability of the states and the municipalities to build them, made the construction of railroads a prerequisite to the settlement and civilization of the interior. Liberal and perpetual charters, which often carried exemptions from taxation, were freely granted by all the states. Many of them ran largely into debt, and not a few into bankruptcy, in order to obtain these means of creating and developing commerce in what were then waste places.

In order to induce the investment of private capital in the construction of new railroads, the federal government began, in 1850, to make grants of public lands. Within about twenty years (from September 28, 1850, to March 3, 1871) Congress passed acts granting 159,125,734 acres, or 248,634 square miles, of public lands

for that purpose. This exceeds the present area of all the thirteen original states, excepting only South Carolina and Georgia, and is more than five times that of Pennsylvania. Only a part of these enormous grants became available through the actual construction of the railroads.

The need of transportation became such that during and after the Civil War, the federal government also issued its bonds for many millions of dollars in further aid of building new railroads. In the decade from 1860 to 1870 counties and towns bonded themselves in enormous sums to secure the development of their latent resources by the life-giving touch of the railway. Thus far all legislation, federal, state and municipal, has been in aid of the construction of additional railroads.

Down to 1870 our railroads had been operated as private corporations for gain without much if any regard to the public. The sole question seemed to be the profit to the stockholders. Then began the enactment of the so-called "Granger Laws." This was an effort on the part of the several states, each for itself, to reduce charges and secure better service and accommodations. When some states attempted to regulate rates from points within their borders to points in other states, the Supreme Court of the United States decided that no state had such authority, the constitution having granted to Congress the power "To regulate commerce with foreign nations, and among the several states, and with the Indian tribes." It then became necessary for the federal government to act, which resulted in the creation of the Interstate Commerce Commission under the "Act to regulate commerce," passed in 1887.

The act of 1887 forbade the railroads from pooling freight. This took away what had become perhaps the chief incentive to the building of new railroads, and more than any other thing has tended to concentrate the control of the railroads of the United States in the hands of a few. Down to 1870, and a little later, commerce by land "among the several states" had been absolutely free from governmental control, and, so far as the federal government is concerned, remained absolutely free until 1887. However we may differ about a tariff on imports from abroad, no one will question that free trade among ourselves has resulted in upbuilding

In 1850 the United States already possessed more miles of railroad than England and France put together, and since about 1860 it has at all times had more than the whole of Europe. The granger legislation does not seem to have checked the building of new railroads. For while to the 30,626 miles in operation in 1860. there had been added in the next ten years (before the passage of the granger laws) 22,296 miles, or 72.8 per cent, there were added in the next ten years to the 52,922 miles in operation in 1870, 40,345 miles, or 76.23 per cent; and to the 93,267 miles in operation in 1880 there were in the next ten years added 73,436 miles, or 78.74 per cent. While I would not have you believe that it is wholly due to the efforts of Congress to regulate commerce, I do want to impress upon you the fact that in the next ten years there were only added to the 166,703 miles in operation in 1890, 27,559 miles, or 16.53 per cent. It may be that in 1890 the country already had enough railroads, but you will find difficulty in persuading citizens of localities not served by railroads to agree to that proposition. It seems to me that the legislation by Congress was not so much addressed to regulating commerce by rail, as to curtailing the profits of the business. However this may be, it certainly deterred the investment of fresh money in such enterprises, and thereby restricted the building of new railroads to those directly or indirectly controlled by the existing systems. With the single exception of a railroad from Kansas City to Sabine Pass, on the Gulf of Mexico, which has in the meanwhile been sold under foreclosure of mortgage, I can recall no considerable railroad which has been completed as a new and independent venture since the passage of the interstate commerce law in 1887.

Let us now see how the nation fared in the forty years from the first census taken in 1790 to the introduction of railroads in 1830, and later contrast its growth without railroads during that period with its growth after their introduction. In that period steam had been widely introduced as an efficient force in manufactures and in the propulsion of vessels. In the latter respect the United States already led every other country in the world. in 1830. And yet in those years, or rather from 1800 to 1830, our imports of merchandise had fallen steadily at each decennial period from $91,252,768 in 1800 to $62,720,956 in 1830, and our exports of merchandise had not grown appreciably, having been

$70,971,780 in 1800 and only $71,670,735 in 1830. Concurrently the tonnage of American vessels built had fallen off nearly onehalf, from 106,261 tons in 1800 to 58,560 tons in 1830. So also of the tonnage of American vessels in domestic and foreign trade, which, while increasing from 971,840 tons in 1800 to 1,190,983 tons in 1830, showed in the latter year a marked diminution as compared with 1820, alike as to domestic and foreign trade.

We may fairly say that at the genesis of our railroads, in 1830, neither the wealth nor, the commerce of the United States was increasing normally. The census reports give no figures as to wealth for the years prior to 1850, but Mulhall estimates that in 1790 the wealth per capita in the United States was $157.56, and that in 1830 it had risen to $205.94, showing an increase in forty years of 30.71 per cent. This without railroads.

In 1870 the wealth per capita had grown to $779.83, an increase in the forty years from 1830 of 278.67 per cent. Twenty years later, in 1890, under restrictions on railroads by state commissions, but still under absolute free trade between the states, the wealth per capita rose to $1,038.57, showing an increase of 33.18 per cent. In the next ten years, from 1890 to 1900, under the added restriction of legislation by Congress as to railroads, the wealth per capita grew to $1,164.79, but the ratio of increase in those ten years was only 12.15 per cent. We here see that the greatest ratio of increase in wealth per capita took place coincidently with the greatest ratio of increase in railroad mileage under absolute free trade among the states; that the ratio of increase in wealth slackened somewhat in the period of the granger legislation, and more decidedly after Congress began to regulate

commerce.

In saying this do not understand me as opposed to governmental regulation of railroads, but only as opposed to the form which it has taken in the United States. In so far as regulation by state commissions is concerned their action has, in the West at least, been hostile and generally narrow and selfish.

The regulation by Congress is to be criticised on other grounds. First, in that it has taken a direction which has resulted in repressing instead of stimulating the building of new railroads. Second, in that Congress, instead of regulating the whole business, has