universal cry was "Go West." Prophets of this doctrine took little pains to determine how far west the energetic fortune-seeker should go, or under what conditions as to personal aptitude and accumulated savings he might fairly count on a successful career. As the wave of emigration crept steadily westward, and many pioneers attained substantial success, it seems to have been taken for granted that the farther west a man went the better results would he obtain, and the shorter would be his route to fortune. In the case of the miner, this forecast was often justified. But in the case of the agriculturist serious disappointment was in store. In early days there was an old-fashioned idea that it would not pay to raise agricultural produce beyond a certain distance from a market. This wellfounded notion was apparently discredited by a period of reckless activity in railroad construction. Intending farmers settled in districts notoriously deficient in facilities of transportation, apparently forgetful of the obvious certainty that no future railroad would permanently consent to carry their produce to market at a loss. It gradually became apparent that, if the farmer could not obtain transportation at an extraordinarily low rate, his produce would not be worth the cost of transportation, and he would eventually go to ruin. But the construction and operation of a railroad postulates fixed charges. An existing railroad could not honestly be required to carry his produce to market at a loss; and, in face of extraordinarily low rates, railroads in the future would not be built in his district. Under such conditions, it was natural that grave issues should arise between the farmers. who desired to get a living, and the railroads which were built for the purpose of making money. The latter had a right to urge that their charters were in fact contracts;

that they had locked up vast sums of money as a consideration for being permitted to run their business in their own way, subject to the fair interpretation of the law of the land; that their charters formed part of that law, and that it would be a monstrous injustice to deprive them of a large and permanent investment by ex post facto confiscatory legislation.

The farmers on the other hand contended, roughly and in effect, that the regulative power inherent in a State entitled its Executive not merely to prohibit abuse or to redress established grievances, but practically to assume the administrative functions of railroad management, such as the framing of rates, adjustment of the difficult problems of competition, and in some instances even limitation of dividends on stock. Every producer, they contended, should be placed on precisely the same footing as regards facilities and cost of transportation, whether he lived far from or near to competitive points, and whether the freight which he shipped was large in quantity and certain in point of delivery, or whether it was small in quantity and so irregular in point of delivery as to greatly multiply the expense and trouble of the transporting company.

The truth would seem to be that it is no part of the proper functions of a railroad to review and correct, at its own expense, the errors in judgment committed by those settlers who selected for themselves spheres of industrial activity ill-adapted to accomplish the purposes of their selectors. Let us suppose that A. has located his farm, flour mill, or lumber mill with genuine insight into the physical conditions which, in the natural growth of the country, tend to ensure success-(e. g.), his enterprise is located within measurable distance of water transporta

tion. It is also near a railroad junction, which promises to become a competitive point of substantial importance. He is plainly entitled to the credit of his forecast-that the conditions of transportation will be permanently favourable to his enterprise, and to the benefits derivable therefrom. Let us suppose that B. has selected a site for his farm or mill very remote from water carriage and from a competitive railroad point. It is possible that a branch railroad may be built sufficiently near to give him a modest chance of limited railroad facilities. But to induce a constructing company to build such a branch line is by no means easy. Perhaps the free grant of the right of way, and of a block of land amply sufficient for depôt accommodation wherever a depôt may be required, a subsidy or subscription from villages or small towns on the route, and, lastly, a high rate for passengers and freight, may induce a speculative or sanguine company to build the branch or extension under consideration. It is probably constructed with reluctance, and its operation is attended with loss. After it is built, but emphatically not before, B. discovers that A., with the advantages of proximity to water carriage and a competitive point, can reach a market on better terms than he (B.) can; and he taxes railroads generally with unjust discrimination. In other words, he would like the railroad to shoulder the unfortunate results of his defective judgment. It is impossible to convince him that A. is well placed, because he correctly interpreted the situation, and that he (B.) is ill placed, simply because he failed to do so. Why should a railroad company be expected to compensate out of its own pocket any difference in point of business capacity that may exist between A. and B.? If a railroad be not bound to do so, it follows, as a logical consequence, that it is no part

of the functions of a State to compel it to do so. The obligation of the State to compel a railroad to undertake gratuitous and costly experiments necessarily falls to the ground, if the duty of the railroad in that behalf be disproved. But the champions of the "Granger" movement could not be convinced of the absolute necessity, not to say expediency, imposed on railroad administrators of charging such rates as traffic would bear.

One school contended earnestly for the theory that all freight should be charged on an absolute basis of mileage, ignoring the certainty that, under such conditions, a railroad could not efficiently conduct its "way" and "through" business, without incurring the penalty of starvation. If its competitive rates were raised to the level of its local rates, it would of course lose its competitive business. If, on the other hand, it reduced its local rates to the level of its competitive rates, it could earn no income sufficient to keep it from insolvency. Another school contended for rates based on cost of service, overlooking the consideration ably pointed out by Prof. Hadley in his excellent work on transportation, that such a course could not permanently tend to the steady and systematic reduction of rates. All freight moved on the basis of the cost of service must bear its pro rata of fixed charges. Suppose the fixed charges are honestly and inevitably heavy. The result is obvious: If in America, where fixed charges are often unduly burdensome, this basis had been universally adopted, rates would have ranged much higher than is the case to-day. A third school thought the true remedy lay in the definition by Railroad Commissioners of reasonable rates. But experience only repeated itself, and plainly showed that technical problems, which have for years defied solu

tion at the hands of the ablest experts, could not so lightly be disposed of by less adequately trained Government officials.

From the poverty of the agriculturists who settled too far from their market arose, to a great extent, the embarrassment of numerous Western railroads with which the foreign investor has a painful familiarity. As time went on, many of these smaller roads recognized that their sole chance of salvation must be sought in combination; and, in isolated instances, arrangements favourable to the investors in the absorbed lines were eventually made. But, while the consolidation of isolated lines into large organizations was probably beneficial to the country, it tended to define and sharpen the lines of competition between the larger systems. To state the result shortly, several East and West lines, fairly compact in external form, but varying greatly in prospective value and organic symmetry, became very keen competitors for East and West trade. To include them all in one gigantic combination was obviously impracticable, their financial history, intrinsic merits, future prospects, and modes of administration being not sufficiently homogeneous. To fight out the competitive battle to its logical conclusion could only result in starving them all. So the pool was devised, as a modus vivendi, by which business which could not give a profit to all should still be so distributed as to give something to each. The basis of distribution differed from time to time, and as a matter of course there were always to be found dissatisfied parties. But, as between the railroads and the public, the result was on the whole beneficial. Stability of rates is, from the point of view of the trading public, second only in importance to lowness of rates. And, if this result could be consistently main