goes to the establishment of such relations among the managers of roads as will lead to the extension of their traffic arrangements with mutual responsibility just as far as may be possible, so that the public may have in the service performed all the benefits and conveniences that might be expected to follow from general federation. There is nothing in the existence of such arrangements which is at all inconsistent with earnest competition. They are of general convenience to the carriers, as well as to the public, and their voluntary extension may be looked for until in the strife between the roads the limits of competition are passed and warfare is entered upon. But in order to form them great mutual concessions are often indispensable, and such concessions are likely to be made when relations are friendly, but are not to be looked for when hostile relations have been inaugurated.

It is not uncommon that railroad managers protest with great earnestness that gross injustice is done when all managers are classed together in public censure, so that the one who most scrupulously per forms his duty is made to suffer for the misconduct of others. The hardship of such a case is very obvious. Nevertheless in dealing with any subject it is necessary to look the actual condition in the face: to take facts as they are, not as they ought to be. Injustice no doubt results in many cases under existing conditions, and the question demanding practical solution is, how the evils of which the injustice is a consequence may in the future be prevented, or at least be reduced in number and in damaging effect. With this question confronting him, it seems a dictate of obvious prudence that every person occupying a responsible position in railroad service, and who desires so to perform his duty as to render his service on the one hand profitable to the owners of the road and on the other hand as useful as may be to the public, should have in mind at all times, not merely what his legal obligations are, but also in what light he and all others in the same service are regarded by the public. If they are looked upon as a class having among themselves mutual responsibilities and duties, but charged also as a class with responsibilities to the public, and if this condition of things is so far favored by circumstances that it is likely to continue, he can hardly, as a reasonable man, doubt that he will best subserve the interests he directly represents when in all his action he keeps steadily in view the importance of securing and maintaining, as far as possible, the most friendly relations between the whole class and the general public, and of preventing or removing all causes of annoyance or friction in the performance of public service by any member of the class. To this end it becomes important that while making his own service as valuable as may be, he shall also contribute, so far as proper accommodations may go, to the value of the service rendered to the public by others, even though the others may be competitors and rivals.

The purpose of the act to regulate commerce may be summed up in a single phrase: it is to bring the railroads of the country under the control of law representing an enlightened public opinion. The practical instruction upon which this opinion is to be formed will come largely from the management of the roads. If that management is conspicuously just and accommodating, the opinion based upon it will not only be properly enlightened, but it will be such as to insure to the roads a treatment from the public and from all official authority that will directly tend to the advancement of their best interests.

While the Commission is not at this time prepared to recommend general legislation towards the establishment and promotion of relations between the carriers that shall better subserve the public interest

than those which are now common, it must, nevertheless, look forward to the possibility of something of that nature becoming at some time imperative, unless a great improvement in the existing condition of things is voluntarily inaugurated.

THE LAW IN ITS EFFECT UPON CITIES.

A leading purpose of the act to regulate commerce was to restrain carriers in the service performed by them for the public from giving preferences, through favoritism or otherwise, whereby those least able to protect themselves, whether persons or localities or interests, would be placed at disadvantage unjustly. This general purpose was conceded to be wise as well as just, but some of the consequences necessarily flowing from the enforcement of provisions to that end were probably not anticipated by some parties who not only favored the law but concurred in the principle of relative equality.

Population under the influence of modern civilization tends to rapid aggregation in cities. This tendency is particularly noticeable in new countries. At first the population is mainly rural and agricultural, but as business becomes diversified and the people by manufactures come to supply their own needs, the convenience of aggregation for the purposes not only of production but for the exchange of commodities becomes manifest, and centers of trade spring up at which all kinds of business, except the purely agricultural, can be more profitably conducted by being brought together. The advantages of these centers are likely to bear some relation to size, and as in animal life the weaker are seen to become the prey of the stronger, so in the industrial and social, the weaker towns if not destroyed as centers of trade, are at least greatly weakened through the superior power which the stronger possess to command the sources of healthy and vigorous commercial action.

The tendency to the increase in urban population has been greatly accelerated by the modern improvements in means of locomotion. Railroads in a certain sense may be said to annihilate time and space. They diminish the need for local markets by rendering the better markets that may be more distant easily and cheaply accessible. Their own largest interests are in the largest towns, and in various ways they favor concentration by increasing its advantages and diminishing the considerations that operate against it. The same consequences follow to some extent from improvement in locomotive facilities by other modes.. How rapid the tendency has been in our own country may be seen from a comparison of the population of cities at various periods.

When the census of 1790 was taken the population of towns having 8,000 inhabitants or more aggregated but three and three-tenths of the whole population of the country; in 1800 it had increased to three and nine-tenths; in 1810 to four and nine-tenths, at which it remained stationary for a decade; in 1830 it was six and seven-tenths; in 1840, eight and five-tenths; in 1850, twelve and five-tenths; in 1860, sixteen and one-tenth; in 1870, twenty and nine-tenths; in 1880, twenty-two and five-tenths. At the present time one-fourth of all the population of the United States is gathered in towns of 8,000 people and upwards. The increase in percentage is a very striking fact, and if it is to reach a maximum at any time, it has very certainly not reached it as yet.

What was the natural and inevitable tendency has been greatly emphasized by the fact that the carriers of the country, in making up their rate sheets to regulate the charges for the transportation of persons

and property, have given to the cities special and very important advantages over the country stations. Some of these advantages have been given to large dealers, found principally in the cities, and given because of the extent of their patronage. But the large towns, as a whole, have been specially favored in rates over the country places, for the reason that the competition was felt mainly at such towns, and under the stress of competition the carriers have felt compelled to make rates which, except upon compulsion, they would not consent to make anywhere.

Pressure of competition has been most severe upon the carriers by rail whose lines touched the great rivers or other navigable waters of the country. Cheaper carriage is possible by water than by land, and a railroad directly competing with a steam-boat line must make low rates or abandon the traffic to the boats. But the exceptionally low rates were by no means restricted to such towns as were possessed of navigable facilities; the interior cities were also favored, though the com. petition they enjoyed was exclusively between the carriers by rail. Nor could it always be said that low rates were forced upon the roads by the stress of competition; they were very often determined by agreement between the carriers controlling the business, and who possessed the same power to exact reasonable rates from the large towns as from the small. Always, however, in the large towns there were influences which were powerful in producing low rates, and the carriers even when they wished to so did not find it easy to resist them. But very often the interest of a carrier was so far identified with that of a town as to make the giving to it of exceptionally low rates a matter of choice.

While this state of things continued it was almost impossible that in any section of the country possessing already a number of established centers of trade, any smaller town, not yet of sufficient strength to command like favors, should escape a condition of subordination and dependence. Towns must either depend for their growth upon some very special and exceptional natural advantages, or they must have manufactures, or they must contrive to become the centers of a large jobbing trade. But for the success of his business either the merchant or the manufacturer must have the like favorable rates for the transportation of that which he buys and sells as are given to his competitor; this is indispensable. Any attempt of a small town to grow into rivalry with a large town, beginning with considerable differences in railroad rates against it, must be necessarily unsuccessful.

The specially favorable rates which in one form or another were given to large dealers were not always given as matter of personal favoritism; perhaps they were quite as often given to enable proprietors to protect their business as against the rivalry of like business located on other roads and supposed to be obtaining similar concessions. Every town thought it must have its leading enterprises protected against the inroads which competitors might make through railroad favors, and there grew up a feeling in the large towns that the trade of the territory which they had customarily supplied belonged to them of right, and that any re-adjustment of freight rates should not fail to preserve their dominion over it.

It was not at first clearly perceived by every one that the provisions of the act to regulate commerce which prescribed rules of impartial accommodation as between persons, occupations, and localities were really intended to go so far as to place in respect to such accommodations the smallest and most obscure hamlet in the country in the scale of right against the largest and most powerful city, entitling each to the same

favorable regard from the carriers which served them. The large towns not unnaturally accepted the provision against discrimination as between localities as one that protected them against their competitors; they did not readily appreciate the fact that it also protected as against them a single patron of a road at a local station, and entitled him to favorable consideration irrespective of any question of competition; that the purpose was that there should be no unreasonable discrimi nation as between country and city, any more than between large towns. Indeed, under all the circumstances, the prohibition, so far as it applied to localities, was likely to be specially beneficial to country places; and the prohibition of the greater charge upon the shorter haul on the same line in the same direction, except when the circumstances and conditions were dissimilar, was also calculated to be chiefly beneficial to the smaller towns, since the large towns almost always received such benefit as resulted from the making of the lesser charge. How great the differences were, and how depressing they must necessarily have been upon small towns, some idea may be had from an examination of tariff sheets which showed that a carrier sometimes charged for the transportation of property from one terminus of its line to stations short of the other fully three times as much as it charged by the same tariff sheets for the carriage of like property from the same starting point past the same stations to the other terminus.

It may be assumed that the railroad managers who made these ratesheets did not in general do so under the influence of any desire to favor the considerable town at the expense of all others, provided they could, with proper regard to the interests of their roads, establish relatively equal rates as between all stations. When they made rates which thus violated the princples of relative justice, their action was always defended as being a necessary result of the logic of the situation which they would have been glad to escape from had any means of escape been open to them. But whether willingly done, or, on the other hand, done under stress of compulsion by those who would have preferred to do otherwise, the consequences were unmistakable. The small towns bore the heaviest proportionate burdens, and unless on general grounds it was desirable that the cities be specially fostered and favored, the effect must from a social point of view be undesirable for the country. It was impossible that it should be made to seem right to the common mind that such distinctions should exist; the sense of justice received a shock when one was told that the small dealer in the country town was made to pay three times as much for the carriage of his goods as the city merchant paid upon the like quantity, for even a greater distance; and a well-founded feeling of discontent arises among any people when it can see things done under the protection of its laws which seem to be plainly and unmistakably unjust.

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It will probably not be claimed by any one that it is desirable to give by law or through the use of public conveniences an artificial stimulus to the building up of cities at the expense of the country. In great cities great social and political evils always concentrate, grow and strengthen, and the larger the cities are the more difficult it is to bring these evils under legal or moral restraints. This fact is so generally recognized that the feeling may be said to be practically universal that the interest of any country is best consulted when public measures and the employment of public conveniences favor the diffusion of population and the profitable employment of industrial energy every where, rather than the concentration of population in few localities.

When in consequence of the carriers establishing such rates as the

principles of the act to regulate commerce requires, some of the towns of the country found that, to some extent, business they had formerly enjoyed was slipping away from them, their commercial or other business organizations called upon the Commission for protection under circumstances that made their cases present grounds of strong apparent equity. For it was found that while the law which requires rates to be made relatively just and fair was in its application to localities intended specially for the benefit of the small towns which were formerly discriminated against, yet when it came to be given effect it had the result that some one or more large towns in any particular section of the country would apparently receive the principal benefits while other large towns, competitors to it, would to some extent be injured. This result would follow from the fact that the making of more favorable rates to small towns would enable them to have a choice of markets not possessed before, and perhaps invite them to pass by one trading town which had formerly monopolized their trade to a more distant and larger town where the opportunity for choice in buying and to obtain customers in selling would be greater. Whenever this was the case the larger market seemed to be reaping the principal benefit of the favorable rates to the smaller towns; and the complaint was then made by the towns which suffered from the loss of business, that the rates instead of operating justly, discriminated unfairly in favor of the larger town to the prejudice of those which had the right to compete with it.

The first complaint presenting this view was made by merchants of Danville, Va., who claimed that the rates of the Richmond and Danville Railroad Company discriminated against their town and in favor of Richmond. The rates, as expressed on the rate-sheets, did not appear to be unequal or unfair; they seemed to be made with due regard to relative distances, but they allowed no controlling force to the fact that Danville was an important center of trade for a considerable surrounding country. and were so made as to be as favorable to the small stations on the line of the road as they were to the cities. The consequence was that a merchant in a small town on the far side of Danville from Richmond, desiring to procure supplies which Danville merchants were accustomed to procure from Richmond and then resell along the line of the road, found himself able, instead of purchasing in Danville, to buy in Richmond, and by shipping the goods to his place of business direct and without unloading at the intermediate city to put them in stock at less cost for transportation than he could have procured them for had they been first sent to Danville and then to the final destination as a second shipment. He would also, by thus dealing, save the profits which the dealer in Danville had formerly received from his business.

It was inevitable that this advantage should, to some extent, be availed of, and the consequent loss of business to Danville was thought by the complaining party to amount to demonstration that the rates which occasioned the loss gave to Richmond an unfair advantage. The proper remedy was supposed to be for the Commission to hold that the aggregate rates from Richmond to Danville and from thence to the final destination should not exceed the rate which was made from Richmond to the same point as a through rate. No other rule, it was said, could possibly operate with justice.

A similar claim was afterwards advanced on behalf of a commercial organization in Omaha, which claimed protection against rates which operated prejudicially to the dealers in their city, and in favor of dealers in Chicago. The same idea has been at the basis of complaints made on behalf of dealers in Detroit and in other localities; but in every 12366 I C C- -3