TRANSPORTATION CHARGE AND PRICES

"Fundamentally, there is at present no inter-dependence of capitalization and rate—the latter is not in law, nor in railroad policy, the child of the former—though railroad men have sometimes expediently urged the claim, and courts have sometimes too kindly given it their nod of sanction."

Also,

"The most potent kind of regulation is that which casts the burden upon the individual to do the regulating himself and makes him responsible tothe law for dereliction; and the plan for the regulation of capitalization here presented is founded upon that theory—to require the directors of the railroad companies to make public announcement of their security issues, to publish the objects for which such issues are made, and be responsible for the use of the proceeds in the precise and limited manner announced. This is far too modest a program to please those who delight in elaborate methods of procedure involving much filing of forms and petitions and many hearings, appraisements, viseings, and solemn givings of consent; and without question it is not nearly as thoroughgoing a plan as others which have been devised. But the simpler the plan is, the better, if it may effect its purpose."

He further says that his program

"does not guarantee the prospective purchaser of the stock that the stock certificate which bears a printed par value upon its face does in fact represent property of the full value so designated;but this is not a duty which the Government for any reason is bound to assume, and I know of no motive arising out of national policy which compels the assumption of such responsibility—certainly not at present."

If our complex government shall control all future issues of railroad capitalization, we may rely upon it that most of the new railroad construction in this country, instead of being independent, will be fathered by existing railroad systems, because their established credit, whatever it may be, will be required.

RECONCILIATION.

Is it not evident that these contradictions never can be reconciled by untrained men? I believe that for the American railroad the time has gone by when illiterate men will be put in charge of millions of dollars' worth of machinery and other property. We are in a new era. Railroading is rapidly coming to be a profession. We are necessarily in all things doing more and more specializing. Why not insist that the regulation also shall be in accordance with ethical principles and not determined by political expediency?

The great over-shadowing problem of reconciling private capital and the users of railroads, and the contradictions which I have mentioned, are the inheritance of this generation of railroad men; and I have no doubt that this generation, like all previous ones, will be equal to the task put upon it. Out of the painful processes of the last four years, we have emerged with some gains. In the first place, the country now realizes that the one million, five hundred thousand employes and officers of American railroads are not surpassed in integrity by any other similar number of business men. During the four years hardly a voice has been lifted to say this, and so I am glad to have this opportunity to raise my own in their commendation. In the second place, it is easier for shippers and railroadtraffic men to be honest than it ever was before. The stoppage of rebates is a distinct gain, morally as well as financially. In the third place, it has been demonstrated, I think, that our Governmentoughtalways to be bigger than any corporation, or any man, or any set of men, and this is a good thing for us never to forget.

Already publicity has brought about a friendlier feeling between the people and the railroads, and along certain paths I have no doubt we shall find our way out of our difficulties, for the American people arenotunfair when they understand a situation.

Upon one occasion I was making a trip over a division of road where there was no competition and where we therefore enjoyed one hundred per cent of the business. There was an unexpected stop for something and a brakeman went to the rear to protect the train. Presently a wagon-load of girls came in sight. The brakeman took out his handkerchief and initiated a flirtation. Then discovering that I had seen the performance and evidently desiring to square himself, he said without hesitation, "If we make friends of these people they ride on our road." One could hardly convey better than that brakeman did to me, an idea which we should never abandon, namely, that one of the best assets a road can have is friends, and I suggest that probably our first duty is to keep in good humor and be considerate one for another. That involves and includes good service to the public, and nothing will help more to keep the public in good humor. The people of this country already have the lowest rates and the highest wages in the world. They are the best people in the world and are entitled to the best service in everything. I believe they should insist upon having the best railroads, and when they so insist, and realize that our population has thus far doubled every thirty years and will soon be one hundred million, and not very long after that one hundred and twenty-five million, and that our transportation necessities double faster than our population does, they will set about finding out what is necessary to obtain adequate railroads, and then we shall probably hear less about rates and more about efficiency and safety. When the people do this they will soon discover that it is no more disgraceful to make money in building railroads than in selling land or in merchandising or in manufacturing or in mining. They will also discover that although the courts have said railroad investors are entitled to a reasonable return upon a fair value, no court—not even that great tribunal, the Supreme Court of the United States—canfinally say what is a reasonable return. This question would still be unsettled because we have not yet gotten away from our dependence upon private capital. What is a reasonable return must be answered by the investor as well as by the commissions or the courts, because it always takes two to make a bargain, and money, like its human owners, will go where it has the best prospective reward and the greatest liberty. The people will find that what we need in this country is not more bureaucratic government by untrained officials with brief tenures of political office, or more power to commissions, but more responsibility upon boards of directors. If statutes are necessary to insure this, well and good; but if regulation is general in character and national in scope, is directed against oppression and discrimination, and designed to promote safety and efficiency and faithful accounting, the people will get better results from intelligent and honest directors than they will from the best governmental management which can be devised; and so long as the railroads are owned by private investors, those investors will doubtless insist upon their directors having more and more to do.

I am aware that there is a socialistic trend all over the world. There is more and more disposition to prescribe medicine for other people to take, but no amount of legislation will change the fundamental laws of the universe. The fact is,—notwithstanding our Declaration of Independence,—men are not created equal. It is a fine thing for all of us that they are not. There is a diversity of gifts; money-making is one of them, but a man may have the talent for making money and be totally unable to build a bridge or paint a portrait or lead an orchestra or an army, and if fortunes are acquired under the laws which we ourselves have made, why should we be envious? Unless a rich man hoards money like a miser, it is—if not alarmed—continuously at work for all of us, through the banks or otherwise, in spite of anything he can do, and the cheaper it can be had, the greater the economy to society as a whole. It is impossible to reduce everybody to a dead level, and how monotonous it would be if we could! We don't satisfy everybody even in our form of government, which we are prone to think is the best in the world. For example, at the last election six and a half million people did not get what they voted for. Part of them got what they really wanted, but on the face of the returns, six and a half million were disappointed, and yet the country goes happily on, apparently to greater prosperity than ever.

But how much happier and how much more prosperous we might be if there were not so much untrained meddling—if there were not so many brakes upon the wheels of our progress! A brake, we all admit, is a good thing in its place, but it has nopropulsivepower, and the efforts of the time to combine in one man or in any one body of men the four functions of prosecuting attorney, judge, jury and executioner, must sooner or later give way. First, because it is un-American, and where such a condition exists, as Alexander Hamilton pointed out to the people of New York, "There is no liberty." Second, because it will not work practically.

Reconciliation of private capital and the users of railroads might, of course, be brought about by government ownership, because if there were a deficit the people could pay it in their taxes. Even then railroad rates could not be made mathematically consistent, for government is never mathematically consistent. For example, if I mail a letter to San Francisco or London, I pay two cents, and if you mail a letter to Evanston you pay two cents. But nobody seems to want government ownership, although many people contend that that would be much fairer and more honest than governmental control of railroads without financial responsibility. Perhaps a middle ground may sometime be worked out by a profit-sharing arrangement, as in Chicago between the city and the street railway companies. That would have its advantages. Among the advantages would be cheaper money for railroads, if the government would guarantee a minimum return on agreed valuations. But of course this would be much more complex than to work out an arrangement with corporations like street railways, which do a single kind of business at one rate, instead of a business affecting every commodity of human consumption and stretching through forty-six states and two territories. However, I think there is food for thought for all of us in what has been accomplished here in Chicago, and the professional intellect present tonight may well think it over.

Finally,—while a man has as good a right to increase his fortune by investing in railroads as in any other manner, no matter what it may be, I believe we shall find a solution for some of the puzzles that beset us,—not through the gospel of tyranny on the one hand, nor the gospel of equality on the other hand, but through a gospel of stewardship. Let us all feel that although the acquisitive faculty is undoubtedly planted in the human breast for some wise purpose, we are not here primarily for personal aggrandizement. We arehere for service, and the greater our talents or our wealth or our opportunities the greater our responsibility. We are trustees—for the users of our railroads, for our employees, and for investors; and let us welcome all the additional responsibility which may be put upon us as directors or salaried officials. I am sure this sentiment will commend itself to all of you, because there is no body of men in the world which has a higher code of ethics and which has demonstrated personal fidelity in a higher degree than the Engineers of America.

FOOTNOTE:[D]In the United States in 1908 the average contents of loaded freight cars was 19.6 tons and the average of a freight train was 351.80. On some of the mineral roads the averages were much greater.—S. T.

[D]In the United States in 1908 the average contents of loaded freight cars was 19.6 tons and the average of a freight train was 351.80. On some of the mineral roads the averages were much greater.—S. T.

By Logan G. McPherson,

Lecturer on Transportation, Johns Hopkins University. Author of "The Working of the Railroads."

CHAPTER VI.

Vastly the greater proportion of the commodities moved by the railroads are in the processes of commerce; that is, the conveyance from the place of consignment to place of receipt in the majority of cases is sequent to a transfer of ownership. The seller cannot continue in business unless he obtain a market for his material, or his merchandise, and the purchaser can not continue in business unless he secure the material, or the merchandise, which he needs. The margin within which the added charge for transportation may be adjusted is therefore limited in one direction by the amount which the seller of a commodity will accept and the purchaser will pay and continue in business. If the seller or the purchaser cannot make a profit at least approximately as great as from other operations in which it might be feasible for him to engage he will, other things equal, change his business, and the railroad will no longer have the traffic that flowed from his operations. A railroad, therefore, must adjust its transportation charges that production may continue. This includes the adjustment of rates that products may be sent to markets, that the products of the region tributary to one railroad may reach markets in competition with similar products of other regions, and in competition with other products that will answer the same purpose.

The wider the markets that the producers can reach, the greater is the encouragement to production. The more numerous and varied the sources of supply of which the purchaser has choice, the more likely that his requirements will be met to his satisfaction. This is the case whether the sale or purchase be of food,whether it be of raw material to feed the processes of mill or factory, whether it be of wares for wholesale distribution, or whether the purchase be of merchandise by the retail dealer, or the final consumer.

It has long been claimed by the railroads of the United States that their rates of freight are lower than those of any other country, and that the nation's progress in industry and commerce has in large measure been due to the cheapness and the efficiency of its transportation service. By way of proof has been instanced the proportion that the transportation charge bears to the selling price of the staple commodities. It is said that the rate charged for the transportation of food products does not affect their selling price in any market of the United States—that price being fixed by the processes of supply and demand which the amount of the freight rate does not influence. In the spring of 1907 inquiry was made upon this point among the produce dealers of the city of New York, who gave the information contained in the following paragraphs.

The price paid by the housekeeper per dozen for eggs during the season of shipment seldom exceeds by more than five cents the price received by the Western farmer who takes them to the country store. That is, the railroads bring eggs a thousand miles to New York for a cent or a cent and a half a dozen, and two thousand miles or so for about two cents and a half a dozen, the dealers taking the remainder of the five cents as payment for handling. The net difference between the price paid per pound for butter at the creamery, whether in New York City or in the Mississippi Valley, and that paid by the New York retail dealer averages about one and one-half cents for commission and one cent for freight.

In December, January and February turkeys are taken from the Texas ranches to marketing centers, the transportation charge on ten birds weighing one hundred and twenty pounds being about 25 cents. After these ten birds have been dressed and packed they weigh about one hundred and two pounds, and the freight rate from Texas to New York is $1.50 for 100 pounds. That is, a Texas turkey that retails in the New York market for 20 cents a pound will have paid one and three-fourths cents per pound to the railroads that took it from the ranch to the concentration point and thence to the market. The farmer in Texas received about nine cents per pound, leaving a trifle over nine cents to be divided between the packing house, the produce merchant and the retail dealer.Chickens and other dressed poultry that come from Chicago pay a freight rate of about three-fourths of a cent a pound, the railroad company supplying a refrigerator car, and keeping them iced while in transit.

The rail rate from Chicago to New York on grain and grain products for domestic consumption has been about 17½ cents per 100 pounds; that is, a bushel of oats or corn or wheat, that may bring in New York anywhere from 40 cents to $1, has been brought from the Western farm for from eight to fifteen cents. Hay that has yielded the farmer $18 or $19 a ton and sells in New York at about $24 has paid the railroads somewhere from $3 to $5 per ton, according to whether it came from the meadows of the Ohio or the Mississippi Valleys.

A bullock that weighs 1,200 pounds will, at Chicago, bring on an average $5.50 per 100 pounds, which includes an average of five cents per 100 pounds for freight from the grazing grounds. Its total value at the stock yards, therefore, is $66. When it has passed through the packing house its weight will have been reduced to 700 pounds. From Chicago to New York it will pay 45 cents per 100 pounds freight or, in other words, the 700-pound carcass, which, if retailed at an average of 15 cents a pound would bring $105, has paid the railroads between $3.50 and $4 from the far West to the metropolis.

On potatoes the freight rate per barrel containing about two and a half bushels is $1.05 from Florida, 65 cents from South Carolina, 45 cents from North Carolina, 30 cents from Virginia, and from this 12 cents per bushel the rate scales down to five or six cents per bushel from nearby regions. The freight rate on tomatoes from Florida is 25 cents per package of six baskets, from Texas 15 cents for twelve quarts, from Mississippi 76 cents per 100 pounds, and from the nearby farms eight cents per bushel of twenty-eight quarts. The freight rate on cantaloups to New York ranges from less than a cent for a melon from the Carolinas to about two and a half cents for that from California. Oranges from Florida to New York pay the railroads from four to nine cents a dozen, and those from California six to twelve cents a dozen, as they may be large or small. A three-pound can of tomatoes from Maryland pays the railroad about one-half cent per can.

The freight rates to New York on foodstuffs have been selected as typical of the transportation charges applying on such commodities in the main channels of traffic from the West to the East; and, in so far as fruits and vegetables are concerned, from the South to the East. The transportation charge per consumer's unit on these foodstuffs is a trifle less to Philadelphia and adjacent Delaware and New Jersey; another fraction lower to the great Pittsburg district, and still lower to the cities of the West and South that are nearer the places of production. As prices of food products fluctuate within a fairly wide range and freight rates also fluctuate, though within but a very narrow range, the rates and prices specified in the foregoing, as well as in the succeeding paragraphs of this chapter, cannot be considered as of specific application at any given time in the future. They were exact at the time they were collated and will very closely approximate accuracy at any period.

As New York may be considered representative of the places to which edible products of the West and South are consigned, so also may St. Louis be considered a typical center of reception of the manufactured products of the East. The information given in the immediately following paragraphs was obtained from merchants and manufacturers of that city.

The transportation charge on the material entering into a pair of shoes made in a St. Louis factory averages one and one-quarter cents. The transportation charge required to place that pair of shoes in the hands of a consumer in any part of the United States averages between two and three cents. The material entering into an ordinary bedstead, such as retails in St. Louis for $8, will have paid the railroad about 40 cents. From ten pounds of nails made in Pittsburg and retailed in St. Louis the railroad will have obtained a trifle over two cents, and from ten pounds of wire two and one-half cents. An axe made in the Pittsburg district that retails in St. Louis for $1 will have paid the railroads one and one-fourth cents. At Kansas City that same axe will have paid freight of a fraction over four cents and at Denver, where the retail price will have advanced to $1.30, it will have paid 14 cents freight. A padlock retailing in St. Louis at 50 cents will have paid the railroads a little more than one-half cent; at Kansas City it will have paid one cent, and at Denver, where the retail price advances to 75 cents, it will have paid two cents to the railroads. An eighteen-gallon galvanized iron tub that retails in St. Louis at 80 cents will have paid the railroad from place of manufacture two and three-tenths cents; to Kansas City the freight rate will have been six and one-fourthcents, and to Denver 15 cents, but here the retail price of that tub is $1. A stove that weighs two hundred pounds and retails in St. Louis for $18 will, in carload lots, pay 44 cents to Kansas City or Omaha, and retail there for $22; $1.48 to Denver, and retail there for $25; $2.50 to Seattle, and retail there for $30. When a housewife of St. Louis buys a dozen clothespins she has paid the railroad five ten thousandths of a cent. If she buys a washboard at 50 cents she has paid the railroad forty-two one-hundredths of a cent. In Denver she would pay for that washboard 60 cents, of which the railroad would have received two cents. The higher rates and prices that have been specified as applying in Kansas City and Denver may also be taken as applicable to cities in the interior South and Southwest, such as Oklahoma, Fort Worth and San Antonio.

In response to inquiries made concerning certain staple articles of daily and general use in various of the smaller cities and towns extending from Massachusetts to Georgia and Illinois, and from Michigan to Mississippi, it has been ascertained that throughout this region the transportation charge on such articles ranges as follows: On a man's suit of clothes, from two to eight cents; on calicos and ginghams, from one-fiftieth of a cent to one-fifth of a cent a yard; the freight charge paid on the entire apparel of a fully dressed man or woman in this section would range perhaps from six or seven to 16 or 18 cents. The rate on an ordinary dining room suite consisting of table, sideboard, six chairs and a china closet would average from 75 cents to $5, on a parlor suite of sofa and four chairs from 50 cents to $4, on a bedstead and its equipment from 75 cents to $1.50, in each case from the factory to the home. The lumber used in the ordinary eight-room house will have paid the railroads from $35 to $150, and the brick from $6 or $8 to $50 or $60, as the kiln may be near or remote. A fifty-pound sack of flour from the mill, even at Minneapolis, in but a few cases has paid a freight rate of over eight or nine cents to the consumer. Products of the beef or the hog are carried from the western packing houses throughout this territory at rates that vary from a fifth of a cent to not exceeding a cent per pound.

It has not been difficult to secure such information as applies in the main to the transportation charge borne by a manufactured article from the place of making to the final market, or on foodstuff from the place of growth to the place of sale to the consumer. Data as to the amount of transportation charge carried by the variouskinds of raw material entering into a manufactured product has not in many cases been so easy of ascertainment. A principal reason has been that the manufacturers in numbers of instances do not know what it is themselves. Many kinds of material are bought at a price which includes delivery at the factory, the freight rate not coming under the cognizance of the purchaser. The different materials used in a product may have come from such diverse sources, and paid such varying rates of freight, that the ascertainment of the total freight charge in any given unit of manufacture would be too difficult to be worth while. In numerous other cases the freight charge is confessedly so small an item that no attempt is made to apportion it as an item of expenditure per unit of product, the total simply being grouped in the aggregate of expense.

The statement that the transportation charge borne by the material entering into an ordinary pair of men's shoes averages one and a quarter cents is the result of a definite calculation made by one of the largest shoe manufacturers of the country. A leading woolen manufacturer estimates that the price of wool at Boston will average perhaps 30 cents a pound "in the grease," including a transportation charge that will average one cent a pound. The loss in cleaning and scouring is about forty-five per cent., and the price of a pound of scoured wool will average about 63 cents at the mill. Of this about two cents is chargeable to transportation. One hundred pounds of wool will make about seventy pounds of straight woolen cloth, on which the transportation charge has therefore been a fraction less than three cents a pound. On cloth that is mixed with cotton the transportation charge is less. The rates on woolen goods from any of the New England mills are so low that a yard of cloth which will sell from $1.50 upwards in any of the western markets will not have paid the railroads more than five cents from the sheep's back in Colorado to Massachusetts and back again to the Mississippi River.

The following information as to the extent of the transportation charge borne by divers materials of various industries has been obtained in each instance from an authority in that industry.

The transportation charge on raw cotton to the mills in Massachusetts will average from one-half to two-thirds of a cent a pound, not exceeding one cent per pound even from plantations so remote as those of Texas. Cotton loses from fifteen to twenty per cent. in the cleaning, one hundred pounds of cotton making from eightyto eighty-five pounds of cotton goods. As ordinary calico will run about six yards to the pound and sell for about five cents, the cotton that has paid a freight rate of from 50 cents to $1 is woven into $24 worth of calico.

The transportation charge on a pair of rubber overshoes, including the rubber from South America, the cotton stock, and the shipment to the western markets, averages about two and one-half per cent. of the cost of those markets. That is, a pair of rubber overshoes retailing for 75 cents will have paid for transportation, all told, less than one and nine-tenths cents.

In no one of these examples, which, perhaps, are typical of the entire clothing industries in so far as the use of leather, wool and cotton are concerned, is the transportation charge an appreciable factor in the price either of the material to the manufacturer or of the finished article to the consumer.

A barrel of flour made in Minneapolis and transported to Boston is sold at the time of this writing by the milling company to a dealer of that city, or any other place in New England, for $6. Of that $6 accrues to the transportation agencies, for carrying the wheat of which that flour was made from the Western farm to the Minneapolis mill, and for carrying the flour from the mill to Boston, an amount that averages 85 cents. The proportion of the transportation charge to price at different markets varies with the freight rate. At New York the milling company would sell that barrel for $5.95, which would include a total transportation charge of 80 cents; at Philadelphia the selling price would be $5.90, the transportation charge 75 cents; at Buffalo or Pittsburg the selling price $5.80, and the total transportation charge 65 cents; at Atlanta the price $6.20, the transportation charge $1.05; at New Orleans the price $6.10, the transportation charge 95 cents.

Typical rates on leaf tobacco, averaging in value $13 per 100 pounds from plantation to warehouse in Virginia and the Carolinas, are from 15 cents to 21 cents per 100 pounds; on the smoking tobacco into which this leaf is converted, and which sells at $48 per 100 pounds, from Richmond, Virginia, to New York City 30 cents, to Chicago 59 cents, to Kansas City $1.16. Rates from the plantation to the warehouse on the leaf tobacco of the Kentucky and Tennessee region, which also brings an average of $13 per 100 pounds, are from 5 cents for short to 20 cents for longer distances. The plug tobacco into which this leaf is converted is sold at $28per 100 pounds, being distributed on such rates as these: St. Louis to Louisville, 25½ cents; to New York City, 58½ cents; to Kansas City, 35 cents; to Seattle, $2.20. Manufactured tobacco in all cases is sold at a price which includes delivery from the factory to the place of consignment, wherever it may be, in the United Stales.

The freight rate on cane sugar from the "central" in the Louisiana district to the final refinery ranges from 5 to 10 cents per 100 pounds, the refinery paying from $3.50 to $4.50 for the sugar. Sugar that is sold by the refining company at 4½ to 5½ cents a pound retails at 6 cents, the dealer making little or no profit. As a town of five to ten thousand people at the average per capita consumption of seventy-five pounds a year will consume a carload of sugar in about a week, the jobbing of sugar is greatly decentralized. Contrasting with this retail price of $6 per hundred pounds typical distributive rates are, from New York to Chicago 25 cents, to St. Paul 30 cents, to Kansas City 42 cents; from New Orleans to Chicago 25 cents, to Atlanta 24 cents, to Kansas City 34 cents.

The freight charge on sugar beets raised in Colorado and Utah from the farm to the refinery is always paid by the sugar company. It averages from 30 to 40 cents per ton, or for a distance of fifty miles is as much as 50 cents. A ton of beets contains about three hundred pounds of sugar, which, allowing for an average loss during extraction, would produce two hundred and forty pounds of refined sugar. This is sent from the factories to the principal places of storage—Kansas City,Omahaand St. Louis. The aggregate freight charge from the farm to St. Louis on these two hundred and forty pounds is about $1.70, and the aggregate revenue to the refinery at five cents a pound, $12.

While the price of bananas is subject to great fluctuation, a fair average at New York, Philadelphia, Baltimore, Charleston, Mobile and New Orleans, the ports of import, is $1.75 per 100 pounds. The average rail charge for carload lots from port to market is from 30 to 50 cents per 100 pounds. About one-third of the bananas consumed in this country are received at the North Atlantic ports, whence they are distributed throughout the Eastern and Middle States. Theremainingtwo-thirds, which supply the South and West, are received at the Southern ports. Immediately upon receipt at New Orleans, for example, shipments are made to the North in train loads that they may be taken out of the warm climate before they spoil, and cars are re-consigned en route at the instanceof the company which has very thoroughly organized the banana business, an allied company having about sixty agencies with men who devote their entire time to extending the sale of the fruit.

For hides that pay a freight rate from the packing houses at Chicago to New York of 30 cents per 100 pounds, the butcher receives, according to quality, from $6 or $7 to $11 or $12 per 100 pounds. The butchers remote from market have the freight rate deducted from the price paid them for hides, but it is a trifle, seldom exceeding five cents per 100 pounds. The hide loses from twenty-five to thirty-five per cent. in the process of tanning; the price of leather is fixed by measure and not by weight. The rate on tanned leather, however, between Chicago and Boston is 39 cents per 100 pounds.

The railroads make low rates on fertilizer to encourage its use by the farmers, it being, of course, to the interest of a railroad to encourage the production of larger crops that its traffic may be augmented. Fertilizer of different grades brings from $18 and $20 to $55 and $60 a ton. Typical rail rates from the places of manufacture are from Jersey City to Trenton, New Jersey, $1.10 per ton, and from Boston to Portland $1.20 per ton—both rates applying in carload lots. In the South, where fertilizer is extensively utilized, representative rates are from Atlanta to Thomasville $2.50, from Charleston to Columbia $2.00 per ton.

When allowance is made for the elimination of water from pulp and the shrinkage in its manufacture into paper, the average freight rate borne by the material entering into paper at the northern New England mill is about 13½ cents per 100 pounds. The manufacturers consider 17 cents per 100 pounds to be the average freight rate on the paper from the mill to places north of the Ohio and east of the Mississippi Rivers. The aggregate freight charge borne on the average by the 100 pounds of paper which sells at the factory for $2.50 is therefore 30 cents.

As with all things else, the rates on the ores of the far western region have been adjusted under the necessity of the transportation agencies to so serve the mines that their products may be marketed. The rate upon the ore from the mine to the smelter, upon the metal from the smelter to the refinery, and upon the refined lead or refined copper from Chicago to the seaboard market, are all determined by this prime factor. The freight charges, for example, from the Coeur d'Alene district in northern Idaho on theores from which the extraneous material has been roughly separated, to the Puget Sound refineries, reach a maximum of $6 per ton for a distance of four or five hundred miles, and the rate from Puget Sound to New York is $14.50, the average transportation charge, therefore, being about $20 per ton. The value of a ton of copper at 12 cents a pound is $240, and a ton of lead at four cents a pound is $80. Copper passes through manifold and expensive processes and its extensive consumption has followed the development of electricity. Lead does not require so many or so expensive workings, and it has long been a great staple of general use. The mine farther from a smelter naturally has to pay a higher rate of freight than a mine nearer to it, receiving, therefore, a lesser net price for its product,but the railroads are obliged to so adjust rates that practically every mine can reach a market.

The rate on refined petroleum between New York and Chicago is 27½ cents per 100 pounds, the average rate paid north of the Ohio and east of the Mississippi Rivers being from eight to ten cents per 100 pounds. From Toledo to Atlanta the rate is 48 cents, from Whiting 46½ cents, from New Orleans 35 cents. The rate from Chicago to the Missouri River is 22 cents, to St. Louis 10 cents; while the rate from the Kansas field to St. Louis is 17 cents. One hundred pounds of refined oil contain approximately sixteen gallons which, at an average price of 12½ cents a gallon at the refinery, would aggregate $2. The price per gallon to the consumer is increased one cent with each increment of seven cents in the freight charge.

The principal biscuit company receives from $8 to $16 per 100 pounds for its crackers and cakes, averaging $10 per 100 pounds for its leading brand. From its New York plant to Boston the freight rates are 19 cents per 100 pounds, to Atlanta 62 cents. The rate from Chicago to Montgomery is 69 cents, to Houston 81 cents, to Denver 97 cents. From either New York or Chicago to the Pacific Coast the rate is $1.60. These rates apply to carload lots, all goods being sold delivered, the company absorbing the freight. The retail price is the same all over the United States as it is with shoes, cigars, soap, proprietary medicines and dozens of other familiar articles.

On cotton, the great staple product of the South, the freight rate structure has been in process of development even a longer time than that affecting the movement of grain from the West. From theplantation into Memphis, the largest inland cotton center of the United States, a typical rate is 30 cents per 100 pounds for one hundred and fifty miles. From Memphis to Boston the rate is 57½ cents, and from Memphis to the Gulf 30 cents per 100 pounds. From Augusta, Ga., a central market of the Eastern cotton growing district, the rate to Charleston and Savannah is 21 cents, to Brunswick 23 cents and to Norfolk 26 cents per 100 pounds. A bale of cotton contains five hundred pounds and is therefore worth, at 11 cents a pound, $55. The aggregate transportation charge on this bale from the plantation, one hundred and fifty miles from Memphis, to Boston, is $4.27.

Mainly because of the rapid shifting of the sources of supply, there has not yet been developed a stable structure of rates for the movement of lumber in all parts of the United States. By way of illustration, however, it may be said that a fair average rate on lumber into Memphis from the forests of Arkansas is six cents per 100 pounds, or $2.40 per 1,000 feet. Lumber going from Memphis to New Orleans for export will pay $4.80, or a total transportation charge from the forest of $7.20 per 1,000 feet. A fair average rate to the markets in Ohio and Indiana is $8 per 1,000 feet, a total transportation charge from the forest of $10.40. This is on the kind of lumber that in 1905 and 1906 sold at about $40. The rate on yellow pine from New Orleans to Chicago is 24 cents per 100 pounds.

There is an equalization of rates on the iron ore from the upper lakes in that the rates of the boat lines from the ore mines are the same to each of the Lake Erie ports. From thence to the furnaces they are adjusted under the policy of the railroads to make the transportation charge on the raw material required to make a ton of pig iron approximate the same amount at each of the competing furnaces of southern Ohio, Pittsburg, Wheeling, in the Mahoning and Shenango Valleys, and even as far as the Schuylkill Valley. How closely this equalization is effected is shown by the fact that the transportation charge on the ore, coke and limestone required to produce one ton of pig-iron is as follows in these respective districts: At the furnaces on the Monongahela River in the Pittsburg district, $5.82; at the furnaces of the Mahoning and Shenango Valleys, $5.57; at the furnaces of the Wheeling district, $5.78. These charges compare favorably with those at the furnaces on the Lake Shore in the Chicago district, which aggregate $5.63 per tonof pig-iron, but are higher than at the furnaces on the Lake Shore in the Cleveland district, where they aggregate but $4.72. The rates on coal, which gives return loads to the cars that take the ore south front the Lake Erie ports, are maintained at established differences between the coal fields of Ohio, Pittsburg and West Virginia. The rates in effect in the spring of 1908 were $1 per ton from southern Ohio, 90 cents from southeastern Ohio, $1 per ton from the Pittsburg field and $1.15 a ton from West Virginia.

The claim of the railroads that the rates on foodstuffs are not high enough to enter as a factor in fixing the selling price is fully substantiated by the statements of the dealers in such products. That is, the conditions are, with negligible exceptions, such that if the price obtainable in the markets be sufficient to encourage the growing of livestock, grains, dairy products, fruits or vegetables, the rate of freight, from whatever locality to whatever market, is sufficiently low to allow the producer to enter that market. His profits are, however, as a matter of course, diminished by the amount of freight which he pays, and, as a rule, the farther the place of production from the markets the greater is the freight charge. The differences in the net return to the producer are almost invariably reflected in the value of the land, which is lower as the distance from the markets is greater. Largely because of the defective system of mercantile distribution the grower of foodstuffs obtains a smaller proportion of the price paid by the consumer than accrues to the grower of any other agricultural product. Where, as in this country, the opportunity for the extension of cultivation is practically unlimited, a good market one season leads the farmers of any district to increase their production up to the point of minimum profit and the railroads are then besought for lower rates; when unfavorable weather or other conditions reduce their output they are also disgruntled. It therefore rarely happens that the grower, especially of the quickly perishable foodstuffs, is entirely satisfied with the freight rates.

A controversy, that it is scarcely an exaggeration to designate as typical, occurred several years ago between the growers of watermelons in a Southwestern State and the railroads conveying the melons to the primary markets. In comparatively a few years that region had become so productive that the shipments of watermelons over one road alone ranged from 1,400 to 1,800 cars during a watermelon season, deliveries being made all over Ohio andIndiana through dealers from those States who came down and bought the melons at the farms. The contention for lower rates had waxed so warm that a reduction in the watermelon rate became the issue upon which a legislative campaign was fought. The candidate pledged to secure a reduction in the rate was elected, and introduced a bill, which was enacted by the legislature, making the rate to the nearest primary market 7½ cents per 100 pounds. The railroad companies put this rate in effect and used it as a basis for the lowering of rates to the territory beyond. During the year of this rate reduction the traffic department of the railroad company referred to sent word to the farmers that the company had handled 1,500 cars of melons that season, the prompt shipment of which had been highly satisfactory to the growers. It furthermore said that the movement of these melons from that territory was a one-way traffic entirely, it being necessary to send special cars empty for the crop. These were necessarily stock cars that there might be ample ventilation, but they had to be supplied with extra slats in order that the melons might not fall out. It was necessary for them to be switched in requisite number on side tracks especially built adjoining the farms where the fruit was grown; that switching engines be kept at work, putting cars in and taking cars out all night and all day. The cars of melons, moreover, had to be hauled on special trains at a high rate of speed to get them to the markets before they spoiled. This reduced the tonnage per train fifteen or twenty per cent below the maximum that could be hauled at the normal freight train speed. A car with the average allowable load of 1,100 watermelons would contain but about twelve tons, although its capacity would be eighteen or twenty tons; the weight of the car exceeded the weight of the load. The switching and other special movements necessitated the employment of night telegraph operators and other extra help at the melon fields.

All of these conditions led the assistant to the general manager of the company to make an analysis of the expenditure as compared with the earnings. Waybills were abstracted and the receipts listed. A tabulation was made of the revenue tonnage, the gross tonnage, the tare weight, and the expenses incurred in behalf of the traffic. He found that the handling of the 1,500 cars of watermelons involved a loss to the company of $12,000 if the expenses of operation alone were considered.

The results of this investigation were brought to the attention of the traffic department and the next spring it sent a circular to the farmers in the truck region urging that the watermelon acreage be reduced, as the rates on that business were not remunerative, and stating that the railroad would not undertake to handle it except in the regular cars that were brought into the territory in the ordinary course of traffic; that there would be no special trains, nor special service of any character. The melon growers at once notified the State Railroad Commission, which, in turn, requested the railroad company and the melon growers to attend a meeting to discuss the whole subject. When the meeting convened the chairman called upon the railroads to say why they had caused so much trouble. The railroad representative, who was the aforesaid assistant to the general manager, stated that as he had been invited to attend the meeting it might be proper for whomsoever instigated it to open the discussion. Several shippers made statements of their complaints, all admitting, however, that the melon business had become very profitable,—one grower saying that $300 to $500 per car was being made out of a crop. The railroad representative then made a reply, showing the loss to the company from handling the business for the previous year, and stated that unless cost for the handling and something by way of profit could be obtained, the company would prefer to move other crops. He showed that it had been necessary to park 350 to 400 especially prepared stock cars in the melon territory; that it had taken a month or six weeks to gather these cars, which had to be hauled empty to the melon fields. He then pointed out that the rate per melon was less than a cent and a quarter, whereas it had cost the farmer four or five cents per melon to bring it by wagon the one or two or three miles to the railroad track. The chairman objected to some of the analyses, especially to the contrast of four or five cents per melon for the wagon haul from the farm with the cent or a cent and a half per melon for the railroad haul of two hundred miles. When the railroad man had finished, farmers from all over the room began to ask questions directly of him. They wanted to know how much they should pay to afford the railroad some slight profit. They were told 12 or 12½, cents. The chairman said: "The rate cannot be changed. It has been fixed by law at 7½ cents and that is the rate. I am here to protect the people of these counties." The railroad man suggested that his company might be willing in addition to affix the necessary slats to the stock cars and perform the switching for $5 to $6 per car. The farmers were willing to accept this, but the chairman insisted that it was contrary to law, and finally said in his wrath, "If you men here are going to deal with the railroad company you can do it without me. This meeting is adjourned."

With one exception the farmers remained in the hall and expressed a willingness to pay a rate of 12 cents per 100 pounds.

Returning to the main discussion, we have found that the rates on raw materials are so adjusted as to permit the manufacture of any staple article at any logical place of manufacture. On the raw material of wearing apparel the freight rate is entirely unimportant. On the lumber that enters into building material, on the ore, coke, and limestone used in the manufacture of iron and steel the freight rate is sufficient to become an appreciable factor in the cost of manufacture. On brick, coal and cement the selling price is the higher by the amount of the freight charge, which for distances sometimes not considerable exceeds the value of the commodity at the place of production. The freight charge, even on those heavier commodities, however, is far less in proportion to the wage of the day laborer as well as to the incomes and salaries received in the United States than in any other country. This is obviously a better test of comparison than that based upon rates of freight as expressed in money. To say that a specific rate is twenty cents in the United States, a shilling in Great Britain, a franc in France, or a mark in Germany, conveys an inadequate idea. When it is ascertained that the average wage of the day laborer in the United States is higher in comparison with the average rate of transportation than in any other country, the comparison is significant. In this country a continually increasing amount of railroad transportation can be purchased with the wage of the day laborer. With the sum of money representing the value of a given unit of any of the staple commodities of commerce, also can a continually increasing amount of railroad transportation be purchased.

That which makes possible the low freight rate of the American railroads is the magnitude of the scale upon which the transportation is conducted. The large cars, with a capacity of from thirty to fifty tons, and the powerful locomotives that draw a score or more of these loaded cars in one train, permit an almost infinitesimal freight charge per pound or per yard that, however, yields by the carloador by the trainload no inconsiderable revenue. For example, the average weight of the carload of food products is about 30,000 pounds. If the freight on such a carload be $300 the rate per pound would be only one cent, and there is scarcely a commodity upon which a freight rate of one cent per pound makes any difference in the retail price. As a matter of fact a carload of food products does not bring to the railroad so much revenue as $300 unless it has been moved from a far region; for instance, from the Dakotas or Texas to New York. Specific complaint in regard to the freight rates of the United States for many years has not, except in a small minority of cases, been based on the ground that they have prevented foodstuffs from finding a market, raw material from reaching places of manufacture, or finished products from distribution. While the difference of a cent or two in the rate of freight may not in the least interfere with the conduct of industry or commerce in the aggregate, such a slight difference, may perhaps determine whether a manufacturer obtain his raw material from this or that source of supply, whether a wholesale dealer obtain his stock from the manufacturer in one, or the manufacturer in another city, whether a retail dealer make his purchases from the wholesale dealer in this city or in that city. That is, for example, the prices of the products at the sources of supply being equal, a difference in the rate of freight may determine whether Cleveland, Ohio, obtain potatoes from Michigan or from upper New York; whether a factory in Louisville obtain coal from the fields of southern Indiana or central Kentucky. A carpenter in Des Moines may perhaps pay a dollar for twenty pounds of nails without knowing or caring what the freight rate may have been, or where they may have come from. A difference, however, of a few cents a hundred pounds in the rate of freight may have led the hardware dealer to have purchased the nails in Chicago or St. Louis or even directly from Pittsburg.

As the purchase of raw material tends toward the prosperity of the region where it is produced, as the operation of a factory tends to the increase of population, to appreciation in the value of real estate and the augmentation of business at the place of its location, so also does the growth of a wholesale business or of a retail business aid in the development of its surroundings. Producers, manufacturers, wholesalers and retailers naturally all desire to extend their sales, to reach further markets in competition with their rivals, and are supported in this desire by the communities to whose welfarethey contribute. Any difference in freight rates that gives a producer of raw material, a manufacturer, a wholesale distributer, or a retail merchant an advantage over a competitor of another locality is therefore promptly made the subject of complaint.

The pressure brought upon the railroads by such competing producers, manufacturers and dealers has been a very important factor in the development of certain arrangements of freight rates, which we shall term the Regional Rate Structures, each of which has grown out of the various characteristics of a traffic region and has become adapted to those characteristics.

Other arrangements of freight rates which have grown out of the needs entailed by the production and marketing of certain of the principal articles entering into commerce we shall designate as the Commodity Rate Structures.

(End of Chapter VI.)

Adapted from the Illustrated Pamphlet, So Entitled.

Issued by the New York Central and Hudson River Railroad Company.

The A. B. C. of the Matter.

"There has been much wild talk as to the extent of the over-capitalization of our railroads. The census reports on the commercial value of the railroads of the country, together with the reports made to the Interstate Commerce Commission by the railroads on their cost of construction, tend to show that, as a whole, the railroad property of the country is worth as much as the securities representing it, and that, in the consensus of opinion of investors, the total value of stock and bonds is greater than their total face value, notwithstanding the 'water' that has been injected in particular places. The huge value of terminals, the immense expenditures in recent years in double-tracking and improving grades, roadbeds and structures, have brought the total investments to a point where the opinion that the real value is greater than the face value is probably true."

(From President Roosevelt's Decoration-Day address at Indianapolis, May 30, 1907.)

The X. Y. Z. of the Situation.

"An army of more than 1,500,000 men is employed directly in the operation and maintenance of the railroads in the United States, and millions of other men are furnished employment indirectly in the mines, the forests and the factories, supplying the railroads with approximately one and one-quarter billions of dollars' worth of material and equipment annually consumed.

"These are wonderfully interesting and impressive facts; but the fact of greater interest and worthy of the most careful thought of every citizen of this country is that this vast army of men engaged in producing the commodity of transportation at an average cost more than40 per cent lowerthan is shown by any other country is paid an average wage more than50 per cent higherthan is paid in any other country where railroads exist."

(W. C. Brown, before the Michigan Manufacturers' Association, June 22, 1908.)

LESSON I.

Freight Rates and the Clothes We Wear.

Whom have we here?

Eleven different types of American citizens, standing in a row, clad in the varied uniforms or togs of their several occupations or leisure from hod-carrier to the dude in dress suit and opera hat.

These men all live in the Mississippi Valley.

Their clothes were made in New England.

They paid the railroadsnine centsapiece for transporting their clothes, including shoes and hats, from the point of manufacture to the Mississippi Valley.

The combined freight charges onallthe clothes worn by the eleven men in the group, including shoes and hats, wasless than one dollar.

If freight rates were advanced 10 per cent the increased price to these men on their entire wearing apparel would beless than one cent each.

If they have to pay more than that per cent it will not be because freight rates are advanced.

LESSON II.

Freight Rates and Agricultural Implements.

Consider the McCormick harvester. It mows, gathers, binds and stacks the bearded grain, while its proud possessor cracks his whip above the backs of his three-horse team. It has banished the nightmare of farm mortgages from the great prairies of the West.

This particular harvester we are considering is cutting grain one hundred miles west of the Mississippi River. It was built in Chicago and sold for $130.

The farmer paid $1.76 to have it brought to him from Chicago, three hundred miles away.

If freight rates were advanced 10 per cent the cost of the harvester would be increasedseventeen and one-half cents.

LESSON III.

Freight Rates and Cooking Utensils.

Next to the harvester the modern kitchen cooking range has added more joys and years to the farmer's life than anything in the cornucopia of modern civilization.

Here is a standard range. It is a thing of beauty as well as a means for cooking everything your mother used to cook and much more.

The freight on a steel range, weighing from 400 to 500 pounds, from Detroit to points in the Mississippi Valley, approximates from $2 to $2.50 per stove on stoves which retail at from $55 to $60 each.

An increase of 10 per cent would add from twenty totwenty-five centsto the cost of the stove, which, divided by the life of the stove, taking the low average of ten years, would add one and one-half totwo centsper year to the cost.

On heating stoves the increase would be aboutone-third less.

LESSON IV.

Freight Rates and Refrigerators.

What are the cold facts about refrigerators?

What cold storage is to the whole people, the modern refrigerator is to the individual family.

It preserves all things sweet and clean and wholesome.

Now the freight on a refrigerator, such as is used by the ordinary family, from Belding, Mich., where they are manufactured in large quantities, to New York is approximately seventy-five cents.

An increase of 10 per cent would addseven and one-half centsto the cost of the refrigerator, delivered in New York City.

LESSON V.

Freight Rates and Household Furniture.

Ever since Grand Rapids became the furniture hub of the Union there has been no excuse for any American family being without its antique or modern dining room set.

Look at this suite consisting of a solid table, six chairs, sideboard and china closet, etc. It could be bought F. O. B. at Grand Rapids for from $55 to $75, according to the wood and finish.

It weighs approximately 750 pounds and the freight from the factory to Chicago would be $1.60.

An increase of 10 per cent would addsixteen centsto the cost of all this furniture.

LESSON VI.

Freight Rates and a Business Suit.

Behold this business suit which no one would be ashamed to wear.

It might cost anywhere from $10 up to $35, according to the reputation of the tailor or the rent and advertising rates he pays.

The freight rate on such a suit of clothes, including hat and shoes, for a distance of 300 miles from any of our large jobbing or distributing centers is approximatelythree and one-half cents.

A 10 per cent increase would add a little more thanone-third of one centto the cost of this suit, and it would add no more if it cost $50 or $100.

LESSON VII.

Freight Rates and "King Cotton."

"Befo' de wah" cotton was king. Of our exports it still leads all our domestic products, having no second in sight.

If the entire cotton crop of the United States was compressed into one bale its value would be about $750,000,000.

Of this bale in 1908 the railways got a little "jag" worth according to the Interstate Commerce Commission $12,394,000, or less than 2 per cent.

An advance of 10 per cent in rates on cotton could not add more than one-fiftieth of a cent per pound to the price of cotton.

LESSON VIII.

Freight Rates and a Sack of Flour.

Minneapolis, as all good little school children know, is the seat of the flour industry of the United States.

If they do not learn this at school it is impressed upon their receptive minds by every illuminated billboard and painted rock that meets their gaze from Eastport to California.

There are half a dozen brands of flour ground at Minneapolis and every one is better than all others.

The rate on this incomparable product in carloads from Minneapolis to New York is 25 cents per hundred pounds.

That is 12½ cents per fifty-pound sack.

This flour is sold to the consumer in New York at approximately $1.85 per fifty-pound sack (or it was when this was written).

An increase of 10 per cent in freight rates would add but one and one-quarter cents to the price of a fifty-pound sack, or a little less than two one-hundredths of one cent per pound.

The freight rate on a fifty-pound sack of flour from Minneapolis to Chicago is five cents per sack. An increase of 10 per cent in rates would add only five mills per sack between these points, orone one-hundredth of one cent per pound.

LESSON IX.

Freight Rates and Dressed Beef.

The reason cattle are butchered and carried to the consumer as dressed beef rather than driven to market on foot or hauled as live stock, is that the freight charge is less and the beef arrives in better condition.

Little children in New York and Boston appreciate this, if the wise grown-ups of the West sometimes seem to doubt it.

The rate on dressed beef from Chicago to New York is forty-five cents per hundred pounds. The average price of this beef to the consumer in New York is (or was) approximately twenty-five cents per pound. A 10 per cent increase in freight rates would addless than five one-hundredths of one cent per pound.

If freight rates were advanced 10 per cent, the increased cost in New York City of a two-rib roast of the best quality, weighing eight pounds, retailing for $1.92, would beless than one-half cent.

Surely this is not an excessive price to pay forNational prosperity and industrial peace.

LESSON X.

Freight on Eggs, Butter and Poultry.

Eggs were cheaper when Columbus experimented with them than they are now, but it cost more to carry a dozen eggs or a firkin of butter ten miles in 1492 than it would to carry them 100 miles now.

The rate on butter and eggs from points in Eastern Iowa to New York—a distance of approximately 1,200 miles—is eighty-four cents per hundred pounds. On dressed poultry from the same points to New York the rate is ninety-six and one-half cents.

The eggs are sold to the consumer by the dozen and the other commodities by the pound;and the consumer pays every farthingof freight that has accrued from the time the egg is laid, which he buys in the "original package," or as dressed poultry, or from the time the cow is milked, from which the butter is made.

An increase of 10 per cent would add eight one-hundredths of one cent per pound to the price the consumer pays for butter and eggs, and it would add nine and one-half one-hundredths of one per cent per pound to the cost of dressed poultry, for which he pays from twenty to thirty cents per pound.

LESSON XI.

Freight Rates and Leather Belting.

Some little children and many of their mothers do not know that a great deal of the power that makes the wheels go round in this industrial beehive is transmitted by belting.

The shops of the Lake Shore & Michigan Southern Railway at Elkhart, Indiana, are equipped with 13,288 running feet, orpractically two and one-half miles, of leather belting. This belting cost the railroad company $6,235, or an average of 46.9 cents per running foot. The belting was shipped from Boston to Elkhart, a distance of 937 miles. The total freight charges amounted to $18.37, or fourteen one-hundredths of one cent per running foot. An increase of 10 per cent would add $1.83 to this cost, orfourteen one-thousandths of one cent per running foot.

This belting, moreover, cost the railroad company $1,082 more than it would have cost at the prices prevailing in 1899, representing an increase of 21 per cent. During this same period there was no change whatever in the freight rate.

LESSON XII.

The Railways and National Development.

Now listen to the sober words of the one man who has perhaps given more official attention to the subject than any other citizen of the republic:

"Without regard to the personnel of railroad officials, without regard primarily to the interest of stockholders, but in the interest of public welfare and national prosperity, we must permit railway earnings to be adequate for railroad improvement at advantage and profit.

"To my mind it is a most impressive fact, so great as to elude the grasp of imagination, that the railway traffic of the country fullydoubled in the first seven years of this twentieth century. This enormous addition to the volume of transportable goods overtaxed, as you know, the existing facilities, and the resulting condition perhaps accounts for much of the hostility which has been manifested in various quarters. For the man who has raised something by hard labor or made something with painstaking skill, which he could sell at a handsome profit in an eager market, and finds that he cannot get it carried to destination, and so sees his anticipated gains turned into a positive loss, is naturally exasperated and unthinkingly 'blames it' on the railroads, and is ready to hit them with anything he can lay his hands to; and as the state legislature seemed to be the most convenient weapon he wielded it for all it was worth.

"I dwell upon this a moment further, because it seems plain to me that the prosperity of the country is measured and will be measured by the ability of its railroads and waterways to transport its increasing commerce. With a country of such vast extent and limitless resources, with all the means of production developed to a wonderful state of efficiency, the continued advancement of this great people depends primarily upon such an increase of transportation facilities as will provide prompt and safe movement everywhere from producer to consumer; and that we shall not secure unless the men who are relied upon to manage these great highways of commerce have fitting opportunity, and the capital which is required for their needful expansion is permitted to realize fairly liberal returns."

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