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practicable to submit a system of railway regulations for the empire. The commission is now in the midst of its labors, having adopted as general principles that the system shall be uniform for all Germany, and that the tariffs they are authorized to prepare, shall be general maximum tariffs, the railroads being given a perfectly free movement, both in increasing and decreasing their rates, within the maximum. In order to secure proper stability to these tariffs, and to guarantee the practical execution of the principles adopted, the inspection of all the tariffs by a central officer, with assistance from railroad experts, and the absolute publicity of the tariffs, is declared to be necessary.*
a step in the advance has been taken by the creation, at Vienna, of a Railroad Tribunal, for the hearing and adjusting of complaints, whether from companies or from individuals. It consists of twentyfour members, one-half appointed by the Chamber of Commerce and one-half by the railroad companies, and is to decide cases arising in freight transportation where the sum involved does not exceed $250, though cases involving larger sums may be submitted to it by mutual consent. Cases pending in a circuit court may be transferred to this tribunal only by mutual consent, and and vice versa. Five members form a court for the hearing and determination of causes. This court is bound by the requirements of the civil law and the working railroad regulations at the time in force, but not by legal forms and rules of evidence.
In foreign countries other than those named,
there have been no recent changes in the relations of the state to railway transportation, so far as we have been able to learn.
Enough has appeared from the foregoing account to establish the correctness of the statement with which we set out, namely, that the present tendency almost everywhere is to conservative action -to the enactment of laws "broad and general in character, compelling observance of established principles, rather than imposing regulations for all the details of practical operations."+
*Railway Gazette, p. 501.
+First Report of this Commission, p. 137.
THE ACTION OF RAILROAD MANAGERS AFFORDS ENCOURAGEMENT.
However injurious the first effects of the extreme legislation upon railroad matters in this and in other States, it is now begining to be apparent that much ultimate good will come of it in the way of increased interest in the general subject, on the part of the public, and of an awakening on the part of railway managers everywhere to the importance of close economy in the construction and operation of their roads, as well as to the growing necessity for such scrupulousness of conduct in all their transactions as will bear he test of both private and official scrutiny.
RAILWAY COMPANY ASSOCIATIONS.
Many of the evils of railway management have grown out of the conflict of interests, real or imaginary, between railroad companies. Where the traffic naturally falling to a company is unequal to its full capacity such company will of course seek to monopolize as much as possible of what as naturally belongs to others. The com petition thus engendered, up to a certain point, is beneficial both to competing companies and to the public. For while the former are stimulated to extraordinary activity and to the adoption of measures of greater economy, the public, as a consequence, will have better facilities and accommodations, as well as lower rates.
But when the spirit of honorable rivalry degenerates, as it often does, into a reckless greed of business, regardless of whether it involves profit or loss, and especially when it cngenders those bitter animosities which lead one company to seek the destruction of another at the peril of its own continued existence, then it is that competition becomes most injurious to all parties concerned. The public may reap a temporary advantage, but only at the sacrifice of a corresponding loss at another time, and the general disadvantage growing out of unnatural excitements and frequent fluctuations in the prices of transportation; while the railways which are parties to the contest suffer, first, the pecuniary loss consequent on doing business at less than a fair price, perhaps at rates far below cost; secondly, the great disadvantage of a demoralization of their own officers and employees; and, thirdly, that loss of confidence, on the part of owners and holders of their securities which must result from the frequent occurrence of struggles of this sort.
In view of these considerations, it is a hopeful fact that railway corporations, both in this country and in some of the countries of continental Europe, following the English example in establishing a "railway clearing system," are moving in the formation of associations, more or less comprehensive in the field of their influence, with this very object, among others, of bringing their several corporate members into relations of common accountability and harmonious co-operation.
Southern Railway and Steamship Association.
It is perhaps too early to speak with safety of this new organization. It is a fact, however, that it originated in a felt necessity on the part of crippled southern railroad companies to save themselves from a condition of things like that above described; that its declared object is to bring about an amicable settlement of differences between the various railroad companies which may become members of the association, more especially in so far as such differences relate to competitive traffic; and that the leadership of the movement and the practical management of the affairs of the association have been entrusted to a gentleman whose knowledge, ability and uprightness are not likely to be questioned.
The Union of German Railroad Managements
is a kindred, yet different organization; its main object being, first, to facilitate business arrangements between the companies included in its membership; and, secondly, to advance the science and art of railway construction and management. It embraces nearly all the managements in Germany and Austria, and in some other countries adjoining, with authority to demand answers to any questions it may put to any of its corporate members, and with a "Technical Commission" of eighteen men distinguished for their scientific attainments as well as for their practical mastery of railway affairs, to conduct the investigations of the Union, and to publish the result of its combined labors. It cannot fail of rendering immense service in the solution of the numerous railway problems too long neglected by the great body of railroad corporations in all countries. Associations of engineers, master-mechanics, car-builders, and others.
It is also deserving of notice in this connection that associa
tions of professional engineers, skilled mechanics, and masters of transportation in every department of railroad construction and management are forming organizations in all parts of the world, with the two-fold object of protecting the interests of their several professions or crafts, and of contributing to the progress of those very arts on which economical transportation must of necessity be based. The present agitation of the question of cheap transportation, and of state interference with transportation companies to that end, has had the effect to quicken all such associations to unwonted activity.
Individual experts and investigators
are also at work as never before; seeking for the means of cheapening the cost of transportation, as well as for reliable data for framing tariffs of rates at once just to the public and reasonably profitable to railroad companies. Of such are Mr. Albert Fink, Vice President and General Superintendent of the Louisville, Nashville, and Great Southern Railroad; Mr. O. Chanute, Consulting Engineer to the Erie Railway Company, and doubtless many others less well known to this commission.
The conscientious pains-taking labors of such men are of incalculable value. They have already done something to reduce railway management to a scientific system, as well as to satisfy a clamorous public of its own almost total ignorance of the extremely complex and difficult subject of railroad transportation. They have also discovered the important fact that the pretentions often made by practical railway managers to exact knowledge of the justice and equality of their tariffs are without proper foundation; that even the most thorough railway expert, after using his utmost skill is obliged, in the settlement of some questions, to resort to a carefully devised system of averages; and that tariff-making is but seldom done in a very accurate and scientific manner.
THE FINAL RESULT OF ALL THESE INVESTIGATIONS
of railway commissioners, associations, and individual experts, will be the establishment of principles having universal acceptance, and the formulation of such definite rules as will wholly supplant the system of guessing at present in use even among some of the ablest railroad men of this and other countries.
THE RESULT OF FURTHER INVESTIGATIONS BY THE COMMISSION,
carried on in like manner-and including extensive travels by one of the Commissioners in thirty-one of the States, with numerous interviews with eminent engineers and skillful railway managers in all parts of the country-has been, in general terms, the fullest confirmation of the opinions announced in their report for 1874.
We then declared against legislative interference with details relating to tariffs for the reason that, in the present state of general knowledge on this subject, such legislation must of necessity be clumsy, inaccurate and more or less unjust; that there are too many elements, intricacies and modifying circumstances belonging to the business of railway transportation to admit, at least for the present, of direct legislative regulation of rates. We believed that to be a task for experts, one that could not now be safely undertaken by any legislative body, and were not surprised to find such to be the judgment of nearly or quite every commission of inquiry that has ever examined the subject.
EVEN WHERE BUT A SINGLE RAILROAD IS CONCERNED,
the problem of rates is so difficult that even the most experienced masters of transportation often confess to being in doubt as to the equality and fairness of the rates they have adopted.
Cost is a basis in all cases.
We must first know, in any given case, what what will be the actual cost as near as may be of doing the business before we can determine what rates will pay a fair profit on the average amount of business. But just there lies the difficulty. The cost is in the very nature of things variable, as will be manifest upon a little reflection. For example,
Cost varies with the climate and soil.
The cost of operating a railroad in a mild and dry climate, where damage seldom comes from sudden extremes of heat and cold or from violent storms of rain, would not compare, of course, other things being equal, with the cost of operating one under the opposite condition of things-where extremes follow each other in quick succession, where frost and flood are often at their destructive work.