The Wanganui Chronicle "Nulla Dies Sine Linea." MONDAY, SEPTEMBER 23, 1907. THE LESSON OF THE AMERICAN RAILWAYS.

Wanganui Chronicle, Volume L, Issue 12144, 23 September 1907, Page 4

The Wanganui Chronicle "Nulla Dies Sine Linea." MONDAY, SEPTEMBER 23, 1907. THE LESSON OF THE AMERICAN RAILWAYS.

There is not ivuich for an Australasian colonist to leirn in America in connection with ilu> railways oxcepting negatively. The lesson is to avoid the private company system and stick to State ownership. Under the latter system high freights can be lowered and other reforms effected as required, but under the former, according to the latest. American experience, there is but littfe hope The inordinate greed of the railway corporations affects the producer to a greater extent that it does any other class. Farmers are shippers over long; distances, but they cannot pass t^Rfe vxoessive freights on to somebody else by adding them to the prict of the produce. Without any possibility of evasion, they must pay freight both ways on the stock and grain sold and on cbe

merchandise bought. Whilst in Topeka, Kansas, recently,.- the special correspondent of " The Ag©" discussed this question with the secretary of the State Board of Agriculture; Mr. F. D. Coburn, and other gentlemen, including Mr. Henry Wallace, of Dcs Moines, lowa, well known as the editor of a leading agricultural journal, and an acknowledged champion of the farmers in their railway fights. The loading points in the indictment by the American producers against these corporation owned railroads are discrimination in favour of certain persons and places: false representations as to the costs of the roads or the improvements made on what are morally State and national highways; excessive rates for freight and passenger traffic; interference on the part of the officers of the roads with Stato and national politics; and a failure in larger part to so adjust freight and passenger rates as to develop to the utmost the varied resources of tie country along these great highways, j which are completely under their control, and which are a natural monopoly in the sections of the country through 1 which they pass. These monopolies have enabled a few men closely bound j together to amass an amount of wealth estimated at 1,000,000,000 dol., which, by its own force, largely dominates and controls, not only the railroads, but is a controlling element in many of the great trusts. When called to account by a Congressional investigating committee, they pleaded " the magnitude and extent of the .business, "and claimed, as the roads were their own private property, that they had the right rearrange their tariffs on a discriminating basis, involving the granting of rebates. The-claim as to the roads he-, ing private property is now being disputed, and it is further being argued that the discriminating policy being carried put is against the law, which^ requires- that railway - companies must, be " cjpmmbn carriers." A rebate, whether; on oil, or beef, or grain, it ih found, invariably ends in a, practical monopoly of the railrooad to the party or parties receiving the rebate for that class of freight, and it is only now being, realised how the great meat packing industries of the country, are, with a few small exceptions, all being located at Chicago. Among the questions being asked are, " Why haver lowa cattle to go out of the- State to be slaughtered and brought back to bo eaten? Why has it never been profitable to slaughter cattle in ;>cs Moines. in the centre of the "greatest beef and pork producing country in 'he. world? Why does not the meat packing industry flourish at Witchita, Fort Worth,.Denver, Topeka,\ Indianapolis. Cincinnatti and other cities located i-i beef raising States, as it does at Chicago or on the Missouri River? Some light upon these matters is found in the fact that the, Inter-State Commerce Commission, as the result of a recent investigation, reported to the Department of Justice that the J six largest meat packing concerns, popularly known as the "beef trust," were in combination with each.other and with many great railway lines, whereby they secured large secret concessions in. rates for the transportation of their products, which enabled them to practically monopolise the fresh and cured meat industry of the United States. Acting upon this information, which disclosed definite facts, bills for injunction wereimmediately filed against the principal railroads implicated, to restrain them from giving preference to any shipper in the rates or facilities of transportation. The Government then instituted in the United States circuit court at Chicago six suits in equity against offending railroad companies; and, simultaneously, eight additional suits were begun against other railroads at Kansas City. From the railroad corporation point of view, itis more profitable to do business in a wholesale way, therefore they give low rates to points favourably located, and these' special rates have brought about the concentration of the packing industries. This crushes out industries along the lines, and the. farmer is injured, in many ways. The wiping out of the local butcher, for example, destroys the farmer's market for anything less than train load lots. This, feature is not ?o pronounced in the west as in the east, for in the former States the industry is worked on more extensive lines; but on the small farms of the eastern States -it has been disastrous. The vast accumulation of capital in the hands of receivers of rebates enables them to control other lines of business on railroads, and here again obtain rebates or other discriminations in their, favour. As aiv illustration, the Armours of Chicago, control air, or nearly all, the grain elevators on the Milwaukee lines. There is, in fact, scarcely a' leading line or railroad ■ anywhere on. which the, elevators do, not belong 1o some one individual, through whom, all" others, have to do business, because h.n can ship cheaper'-than they. can*.and the reason he can do so-is because he has a secret' rebate, rate, drawback, or some other method of transportation, thus giving hjm a monopoly of the road for this purpose. At Kansas City the " Age " correspondent ascertained that local dealers had been excluded from participation in the grain trade; that their elevators for the storage and transhipment of grain,,. built at great expense for the demands of an important market, had been deprived of business, and that large numbers cf labourers .had t lost" their employment because of the diversion of business from its natural channels as the result of this monopoly. In the circumstances it is not surprising to find a movement all over ajState like Kansas to establish co-operative elevators, through which the farmers may be able to ship their grain. One of the greatest evils, responsible for these troubles is the practice of railway stock watering. " During the past few years," Mr. Wallace remarked to his Australian inter-: viewer, "I have been with the representatives of the' leading railroads'of the west before the lowa executive council, when the subject of the;justtaxation of railroads was under discussion, and with equal frequency with the Ralroad Committees of the lowa Senate and General Assembly, when

[ legislation was proposed affecting road rates, and I have always iio that when the question of taxation under consideration the railroads 1 worth little—very ■little, indeed, could be built at .anywhere from, to Io,QOO, 0r20,000 3 or perhaps 3 dol. per mile, according to the eh ter of the road. When the questi freight rates was under considers the road which cost 4000 dol.'.'per was worth from 15,000 to 20,000 and the road which cost 20,000 worth 40,000 dol." With regard U aspect of the. matter there is noi slightest secrecy. It is common 1 ledge that the railroads of the We States have been built and equ for the price of the bonds. The s at first are watered, or as the usual term has it, "• the expecti are capitalised." In the United £ a railroad corporation does busine ti rely on borrow capital. It build equips its road entirely on "its I which means that it owes in ad all it is worth. The American fi does not object to a capitalisation to the cost and. equipment of th< road, if honestly built and wisely cd. Nor does he object to capitals representing actual improvement* is willing to pay right of way donations and gifts of public la enable a new company to estab railway through his district, but he does very strongly protest aga being'taxed by way of freight an senger nates to pay intei'est on y?i stock.. The watering of stock do end with the first development ii direction, but some corporations repeated the process time after ti a manner that becomes bewilder one having his first opportunity serving the " frer.zied finance" m of that '■■: country. 'Inasmuch a mortgages of the road and the cs isation, co far as it can be ms earn interest, is a mortgage o iarms tributary thereto, this mov is an additional mortgage on ever along the railroad line.. -Obvious farmers "along the line must pay c freight and passenger rates to the intei'est on the original sto on the ' mortgages that represe Otherwise the road goes into the of the receiver. The questi< freights; and fares is subjected rather sophistical class of -reas When the tariff is relatively sm railway companies argue that th< should be maintained or increas cause of the increased cost of doi business. Then, on the other when the traffic is large, the put forward that the rate must creased because of the increase < fie. " Bearing in mind that th« way is made for the country, a the country for the highway," M lace, intone of his editorial impr " It would seem to be a comnioi proposition that the keepers nation's highway, who also are t riers,"should provide every facil the free and expeditious moven ! traffic. The entire.country, -fr< i Atlantic' .to the Pacific, has bee planing of the deficiency in the of transportation and of the fai both trucks and locomotives, f men complain that they, ca-nr trucks when they want them, men complan That they cann their cattle, pigs and sheep wh< are ready to go; that when ship] trains are delayed, often arriving market after the buyers have their orders, and have to be I great cost, both in money and age, until the next day." The pondent's personal experience c rican . railway travelling, cepeci the _ Western States, is that i little use depending upon time Over long distances to be a fe< late is not an uncommon exp< and late passenger trains throwtrains on to side tracks•»nd deln for many hours. As far as h gather from conversations dur travels with all classes of peoj prevailing sentiment is that t ways are simply preparing" the v educating the people to the n of more complete Government c« if not, in fact, Government ovn The' country is not ready for th change,, but the feeling is ten that direction. . - . .