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expended in the construction of railroads, are matters of public interest. It appears that from the time of the adoption of the Federal Constitution until the close of the fiscal year ending June 30, 1873, the Government had appropriated in aid of public improvement the following soms : For improvement of rivers and harbors
$32, 680, 310 For light-houses, beacons, fog-sigoals, marine hospitals, and other aids to navigation and commerce on navigable waters ...
16,937, 115 For construction of railroads, canals, and wagon-roads, including bonds issued to Pacific railroads.
104,705, 103 Estimated value of public lands granted in aid of the construction of railroads ....
52, 575, 150
Total aid extended to close of fiscal year ending June 30, 1873. ..., 206, 897, 768 The total expenditures of the Government in aid of the construction of railroads, canals, and wagon roads, and for the improvement of rivers and harbors and securing the safety of navigation, were, however, but fire per cent. of the amount of the private capital expendell in this country for the construction of railroads.
The total amount contributed by the Government in aid of railroads alone, in comparison with the total cost of the railroads of the United States, as estimated by H. V. Poor, esq., of New York, was as follows: Total amount of the contributions of the Government..
$144,213, 078 Estimated cost of the railroads in the United States
4,658, 208, 630 It appears, therefore, that the National Government had at the end of the year 1876 contributed only three per cent. of the entire cost of the rast railroad system of the United States, all the rest being the contribution of private enterprise.
Assuming, however, that the Government had been reimbursed for the lands granted to railroad companies by the increased value of the alternate sections retained, it appears that the net contribution of the Government to the entire railroad system of the country was. less than tico per cent. of its cost.
9. THE RAILROAD QUESTION IN FOREIGN COUNTRIES.
It has been impracticable since the organization of this office to enter upon any extended investigations of the railroad question in foreign countries. The facts embraced in the following statements relative to the railroad systems of the principal countries of Europe have been obtained from various sources, the principal one being a report to the British parliamentary committee of 1872, on Railway Companies Amalgamation, by Mr. W. R. Malcolm, Assistant Secretary of the Board of Trade. In certain cases the language of that report and of other publications is adopted without special reference to the authority. Many of the difficulties and abuses which have characterized the development of the railroad system of the United States have been encountered in other countries. In the various countries of continental Europe, the re. lations of the railroads to the state differ widely from those which exist in this country. These differences arise from peculiarities of social and political institutions, and from the geographical features and commercial characteristics of the several countries.
The railroad system of Great Britain resembles that of the United States, in certain important particulars. In both countries the railroads bave been constructed under the principle of independent corporate ownership, and this feature of their existence has in both countries given rise to the building of competing roads, to combinations and consolidations, discriminations, exorbitant charges, exploits in railway finan. ciering, abuses in railway management, and mistakes in railway legislation.
Notwithstanding the errors and abuses of railway construction in England and in the United States, the development of the railroad system in both countries has been more rapid than in any other country on the globe.
From the very beginning of railway construction, the English people, like the people of the United States, have entertained an apprehension of the possible evils of monopoly, resulting from a system of transportation in which the safeguard of free competition among common car. riers is eliminated. But the evident possibilities of railway transportation begat an enthusiastic approval of almost every project for the extension of the system, and this sentiment has led to a patient endur: ance of many apparent abuses. The British people did not, howerer, like the American people, allow their railway system to run alone from the beginning. Instead of waiting until a great public danger had aroused their indignation against the errors of corporate management, they began at a very early day to investigate the relations of the rail. ways to the state, the nature, extent, and probable result of abuses, the limitations which considerations of public policy should place upon the exercise of corporate rights, and the various economic and commercial questions involved in the new mode of transportation. Parliamentary committees and commissions were appointed for the purpose of inquiring into the whole subject, and officers of the government were required to lend the aid of their observations and study. Many well-informed persons have also in a private capacity aided in throwing light upon the subject.
In the year 1814 a parliamentary coinmittee was appointed, of which Mr. Gladstone was chairman. That committee reported that “the effect of monopoly, both on the public directly, and indirectly on the railway companies, was to be dreaded and guarded against; and that with re.
gard to new lines, at any rate, the government and parliament ought to reserve certain powers to be exercised after a given time.”
In pursuance of this recommendation, at the instance of the committee, the following statutory provision was enacted during the same year:
After fifteen years the treasury may buy any new railway for twenty-fire years' purchase of the average annual profits for the preceding three years; but if the profits are less than ten per cent. the amount to be settled by arbitration.
The opinion was for a lovg time entertained by many that unless the state controlled the railroads the railroads would eventually rule the state. But the conclusions and recommendations of the parliamentary commission of 1872, in connection with the improved character of rail. road management, touching publicity and accountability to the public and to stockholders, have tended to dispel many of the fears at first eutertained. A better feeling has grown up, based upon a better understanding of the mutual interests of tbe railroads and the public, and the people of England seem to have arrived at the conclusion that, so long as the railroads refrain from practices obviously detrimental to the pub. lic interests, the government should interfere in railroad affairs only so far as relates to questions of the public safety and convenience and to matters purely of a police nature.
Some of the conclusions and recommendations of the parliamentary commission of 1872 are of especial interest in connection with questions of present interest in this country. The views of the commission in regard to the consolidation of lines [i amalgamations," as they are termed in England) are expressed as follows :
Few cases have been adduced in which amalgamations already effected bave led to increased fares or reduced facilities; while, on the other hand, there is evidence that the most complete amalgamation which has hitherto taken place, viz, that of the Northeastern, has been followed by a lowering of fares and rates and an increase of facilities, as well as by increased dividends. Nor can it be doubted that some of the grievances complained of, especially in outlying districts, such as the want of system and power in the Welsh railways, and the failure to develop traffic on some of the Irish railways, would find their best remedy in amalgamation. What the case might be if amalgamations even more extensive than those now proposed should be allowed to take effect and if the United Kingdom should be districted between two or three companies, it is difficult to anticipate.
The “lowering of fares and rates” referred to was, in a great degree, brought about by the competition of water-lines, especially the transportation of goods coastwise, and by the competition of rival markets. The effects of the competition of markets, induced by the extension of trunk-lines and the consolidation of railroad interests, have perhaps been more striking in the United States than in England.
Almost from the beginning of railroad construction in France the government has in a manner sustained a partnership relation to the railway corporations, and it has extended to them very largely the aid of its credit. Every passenger time table and every freight-tariff is submitted to the government for its approval. The government maintains a complete system of surveillance, having agents at every principal station in the country. The accounts of every company are open to the inspection of government officers, who make a yearly examination of them.
The concessions to railway companies are generally for ninety-nine years, at the end of which time the roads are to revert to the state. The government also reserves the power to purchase any of the lines after the expiration of fifteen years from the date of the original concession, upon certain prescribed conditions.
Until recently the construction of competing lines has not only been discouraged but absolutely prohibited, upon political and economic con: siderations. In the year 1859 the government partitioned out the coun try among six great companies, each of which undertook to construct a number of lines deemed necessary for the proper development of the railroad system. The companies being unable to carry out this plan of construction fast enough to meet the public demand for railway facilities, they applied to the state for assistance. A new classification was then adopted. The existing roads were classed as the ancien réseau, and the new lines were denominated the nouveau réseau, the government entering into new financial arrangements with the new lines.
The entire management of the railroads of France is under very close governmental supervision, the government being the arbitrator in all cases of dispute between the companies.
The government prescribes maxima rates, within which the companies exercise the right of making special tariffs" and "through-rate tariffs," recognizing the justice of differential or discriminating rates upon the conditions of quantity of freight and distance, transported.
In the year 1865 a law was passed which has introduced some very marked changes into the French railway system. Many of the departments and communes being unable to induce the companies to construct all the lateral or branch lines which were desired, the gorernment allowed them to undertake the construction of railways themselves or to sanction their construction by private companies, subject to the approval of the government. The provisions of this law have resulted in a very considerable extension of the railway system of France. Under private corporate ownership these brauch lines have, in certain cases, combined and formed through lines, competing both with the lines of the ancien réseau and of the nourcau réseau.
A spirit of wild railway construction has prevailed during the last six years, and it appears likely to culminate in a railway financial crisis, such as las marked the history of railroad progress in England and in the United States. The extension of the private or lateral lines seems likely to give rise to all those difficulties which constitute " the railroad problem” in England and in the United States.
Since the construction of railroads begaa in Belgium, the government has adopted two different lines of policy. The first roads were undertaken by the government. After having constructed some of the most important lines, the government allowed private companies to undertake the construction of branch lines and the general development of the system. In 1850 it was found that the State had constructed 64 per cent. of the railroad inileage and that the companies had constructed 36 per cent. In 1860, 67 per cent. of the total mileage of the railroads of the kingdom had been built by private companies and only 33 per cent. by the State. The government did not, as in France, follow any particular line of districting. Since 1860 another change has taken place. Competing lines have been constructed and a struggle for traffic between rival lines has been going on. The government bas in some cases entered into agreements with the private lines for the maintenance of " competitive rates," and it has eren gone so far as to pool earnings from competitive traffic. Some of these combined private lines have become formidable competitors of the government lines.
Thus far the regulation of rates has been effected chietly through the competition of the government lines, and also, it is believed, in a very great measure, through competition between the private lines them. selves.
Every company is requured to give fifteen days' notice of any change in its tariff's. The question of rates and fares seeins to have finally set. tled down upon commercial principles.
The government has from the beginning sustained a thorough investigation of the various economic and commercial questions involved in its railroad system.
The system of canals in Hollaud which permeates almost every part of the country affords very great advantages for cheap trarsportation, and in consequence the construction of railroads has not progressed very rapidly. The principal lines of the country have been constructed by the government, but these lines are now operated by private companies.
GERMANY. The powers of the government in railway matters have been greatly modified under the constitution of the German Empire. The construc tion of railroads and the general determination of questions in regard to commerce on railroads are now considered to be matters of imperial jurisdiction. It is maintained that such governmental supervision and control is not only desirable for the prevention of abuses which naturally arise under unrestricted railroad construction and management, but from political and military considerations.
At the commencement of the railroad system in North Germany, the