and Ohio Railroads had reached the Ohio River. Then the adjustment of through rates was simply a question of detail in the discharge of the executive duties of general freight agents; but it has now become a great question of administration, affecting the entire internal and foreign commerce of the United States. The increased magnitude of the interests affected has rendered it necessary to adopt new methods in the management of competitive traffic, and has called for the employment of men endowed with the intellectual grasp and vigor requisite for comprehending and administering the affairs of a great railroad organization. Men capable of adjusting the freight-tariffs of a railroad so long as its traffic was practically a monopoly, and the only question as to rates was "how much each commodity would bear," have been su perseded by a class of men of broader views, competent to understand and to grapple with the difficulties incident to the management of the transportation and commercial interests of the present day.

The internal commerce of the country is year by year becoming more complex as the interests of transportation and of trade increase in magnitude and importance. No one foresaw the results already reached by the railroad system. Certain customs with respect to traffic and travel on railroads, have been established and have become authoritative under decisions of the State and Federal courts. Other customs touching the relations of the railroads to each other and to the public will undoubtedly in time acquire the force of law. Thus we may expect that by the slow, but sure process of adjustment the rights of the railroads and of the public, with respect to all the new issues of transportation, will in time become firmly established and that competition will remain the stimulus and the vital force of commercial enterprise.

TERMINAL FACILITIES.

There is another subject touching the interests of the great trunk lines and of the several seaport cities, which is worthy of special notice, and that is the question of terminal facilities. The direct convey. ance of merchandise without breaking bulk, from the point of shipment to the point of destination, and the most approved facilities for the transfer of freights from one vehicle of commerce to another, where such transfers must necessarily be made, constitute very im portant commercial requirements of the present day. To effect the former object, "through freight-lines" have been formed and expensive bridges have been constructed across navigable streams. Railroad companies have also provided union depots in many of the large cities for the economical transfer of both freights and passengers. Elevat ors and warehouses have been constructed at ports on the coast, on the lakes, and on the western rivers, in order that freights might be cheaply and expeditiously transferred from one vehicle to another, and that advantage might thus be taken of the different markets. Very much, however, remains to be done in this direction. It is stated that in cer

tain cities the cost of transferring freights from one railroad to another through warehouses exceeds the charges for transporting the same freights six or seven hundred miles. It is also stated that in one of the large seaboard cities the cost of handling and carting freight, exclusive of the losses from damage and theft, so frequent under the present disjointed system, is, on the average, about $2 per ton, or 25 per cent. of the cost of hauling grain from Chicago to New York.

One of the most important economies of the present day with respect to trade between the West and the seaboard is the transportation and storage of grain in bulk. This important economy has not only rendered it necessary to supply suitable cars and elevators at terminal points, but also to establish a system of grading under which the railroad companies are enabled to avoid the inconvenience and expense of keeping separate each particular shipment, and to deal with grain it in great masses. Experience has proved the necessity of extending railroad tracks into the business portion of commercial cities for the purpose of effecting the receipt and delivery of goods of all kinds with the least possible expense of handling and cartage. This is a requirement which has only been properly appreciated during the last five or six years. Formerly a railroad depot within the limits of a city was regarded as in some sense a nuisance, to be tolerated only at the very outskirts.

The necessity of providing the amplest means for the flow of commerce has led to the establishment of excellent terminal facilities at Boston, Philadelphia, and Baltimore. The city of New York has not yet fully come up to the new order of commercial requirements in this regard, and the fact has already operated prejudicially to the interests of that city. There are several reasons for this tardiness at the chief commercial center of the western continent. Extensive and very costly facilities were provided many years ago, especially adapted to the requirements of commerce on the Erie Canal and the Hudson River in connection with ocean commerce, the harbor of New York being the great distributing depot of that commerce. But in addition to these facilities the success of commercial enterprises now requires a line of adaptations embracing the ship, the railroad car, and the modern warehouse, with its appropriate spaces and mechanical improvements. The commercial habits of the great city of New York were formed during the period in which she attained her commercial ascendency, and while the Erie Canal remained almost the sole avenue of commerce between the West and the seaboard. It appears to be necessary in advancing to the new order of things to overcome the force of a conservatism fortified by the habits of half a century and involving millions of capital. A difference of views as to the plans which should be adopted has led to delay at New York, but it may be confidently predicted that the merchants and capitalists of that city will not in the end fail to make the best possible use of all the means which nature and art have placed within their power.

A plan has been proposed by the New York Cheap Transportation Association and endorsed by several of the commercial bodies of that city. This plan embraces railroad tracks around the entire city, with warehouses upon or adjacent to the wharves, such warehouses being provided with ample facilities for the loading and unloading of all classes of freights. Terminal facilities of this character have been adopted at Portland, Me., at Boston, at Philadelphia, and at Baltimore. The plan proposed or some other practical one will undoubtedly be adopted at New York. Venice was reclaimed from the sea, and her canals, wharfage and warehouse facilities were adapted to the peculiar exigencies of her commerce. Vast docks have been constructed at London and Liv. erpool at enormous expense, in order to meet the demands of commerce, and to provide against the difficulties incident to the rise and fall of the tides, and those cities have in their turn become the centers of European commerce. New York City cannot long delay providing a system of terminal facilities adapted to the requirements of the present day and commensurate with the magnitude of her enormous commerce. CONCLUDING REMARKS IN REGARD TO COMPETITION IN THE COM

MERCE BETWEEN THE WEST AND THE SEABOARD.

The practical difficulties which have arisen as the result of competi tion between railroads and between rival markets embrace the more salient features of what is commonly known as "the railroad problem of the day." During the last three years there has been much speculation as to the tendency of our railroad system, and as to the remedies which should be provided against existing or anticipated evils. For many years it was apprehended that the railroads might become abso. lute monopolies, and that competition in the carrying trade might be utterly broken down, but within the last two years it has been urged that competition has failed to secure the ends of justice and stability, and therefore that it is no longer to be relied upon. It is asserted that competition is an irresponsible force, that its essence is instability, and that so long as it continues, systematic justice cannot be done. This conclusion appears to be based upon the assumption that, in the commerce between the West and the seaboard, the struggle is confined to four or five great railway organizations. It has, however, been herein. before shown that the struggle embraces the competition of many lines and of many commercial forces, which overshadow the power exercised by the managers of the great trunk lines. This is clearly understood, and in practice fully recognized by men engaged in extensive mercantile operations, and by the managers of great railroad interests. The evils incident to competition are sharply defined and incisive, but the benefits which it affords are substantial and pervading. The beneficent law of supply and demand where it operates most freely may not secure systematic justice, and yet the whole world concedes that, so far as it is operative, it secures substantial justice. This is all that can be expected in the present condition of human affairs. Competition may not

make all things even, but it affords a nearer approach to equitable dealing among men than any substitute which has yet been proposed for the natural laws of trade. The very instability of competition is the surest safeguard of the public interests. When competition ceases to be irre sponsible, monopoly will step in, unless it be substituted by the autocratic rule of a combination sufficiently powerful to control all the transportation-lines of the country. Any arbitrary rule in whatever manner formulated, or by whatever agency exercised, would prove to be an impotent substitute for the great beneficent law of competition in the irresponsibility and instability of which is embraced that conservatism which inberes in the untrammeled operations of natural forces.

So intimately are the interests of transportation and of trade connected that it is impossible to eliminate competition between the railroads without doing violence to commercial interests, and thereby working greater evils than those sought to be removed. It is well known. that within the restraints imposed by the various forces of competition, a comparatively narrow range of discretionary power is left to the railroad companies in regard to their "through traffic." The rates which have at times prevailed especially for the transportation of grain on the east and west trunk lines during the last two years are said to have involved an actual loss to the companies. Earnest efforts have been made by the managers of the great trunk lines to advance freight charges, but the competition has been so strong that they have been unable to effect that object. The public have thus secured the benefits of cheap transportation.

But the practical results of competition between railroads and between trade forces are before us, and we may learn the effects of these forces upon the adjustment of freight-tariffs. The following table presents the average charges per ton per mile during the last eight years on several important trunk lines of the United States largely engaged in transportation between the West and the seaboard.

Statement showing the gradual reduction in freight-charges per ton per mile on several transportation-lines engaged in commerce between the Western States and the Atlantic sea · board, from 1868 to 1876 inclusive.

N. B.-In this table the calendar year nearest the several fiscal years is taken.

It appears that the average rates on the New York Central Railroad fell from 2.59 cents per ton per mile in 1868 to 1.05 cents per ton per mile in 1876, a fall of 59 per cent.; the rates on the Pennsylvania Railroad fell from 1.90 cents in 1868 to .89 of a cent in 1876, a fall of 53 per cent.; the rates on the Erie Railway fell from 1.92 cents in 1868 to 1.07 cents in 1876, a fall of 44 per cent.; and that the rates on the New York State canals fell from .SS of a cent in 1868 to .68 of a cent in 1876, a fall of 23 per cent.

It appears that the annual average of the rates stated in the foregoing table fell from 2.26 cents per ton per mile in 1868 to 1.21 cents per ton per mile in 1875, a fall of nearly 50 per cent. in eight years. This decrease has not resulted from voluntary concessions by the great trunk lines over which passes a very large proportion of the internal commerce of the country, but from causes beyond their control, and against which they have striven earnestly but in vain. Another most significant fact is the fall of all-rail grain-rates from Chicago to New York from 45 cents per 100 pounds in 1869, to 16 cents per 100 pounds during a part of the year 1876, the rates during the latter year being little more than onethird of those which prevailed but seven years before.

These facts carry with them their own argument. The reductions in freight-charges are the result of competition, and they have been of incalculable advantage to the commercial and the agricultural interests of the country.

Attention is called to the fact that the foregoing table illustrates the average reduction of rates on both "through" and "local" traffic, the local traffic of all the roads being the chief source of revenue. The reduction of local rates has resulted mainly from competition between the various markets of the country, a result in conformity with the general reduction of prices during the last four years.

Local rates are still remunerative, and it is believed that "competitive rates" may, within the limits of clearly-defined mutual interests, be so adjusted through co-operation as not to entail losses upon the companies. No scheme of adjustment, however, can override the forces of competition, and all attempts of the kind must result in disaster.

It has been supposed that in the contests between the trunk lines the strongest company or combination of companies invariably remains master of the field. It has, however, come to be almost an aphorism among railroad managers that the weakest line determines the rates. It has been seen at Boston that in the struggles between the Grand Trunk Railroad on the one side, and the New York Central, the Erie, and the Pennsylvania Railroads on the other, the Grand Trunk Road, the weakest of them all, has remained master of the field. The causes of this appar ently paradoxical result have already been explained.

It has also been supposed that the combination between the railroads of the country is yearly becoming closer and more powerful. The facts which have been hereinbefore adduced seem to indicate, however, that