The transportation facilities of West Australia are still far behind those of her sister colonies. The first line was opened in 1873, and the total number of miles of road operated in the colony in 1889 was only 496. The government controls nearly all the railroads of the colony.

Of the islands of Australasia, Tasmania and New Zealand are as yet the only ones that have railroad communication. The former built its first road in 1870 and had at the end of the year 1890 about 1,900 miles in operation. New Zealand opened its first railroad between Christchurch and Lyttleton on December 1, 1863. The development of the system was slow at first, there being but 25 miles of road in operation in 1870. In 1891 the number of miles of road had increased to 1,916, all but 92 miles being operated by the colonial government. The total amount expended by the government for railroads is $55,000,000. The net revenue in 1887 was about 2-1/2 per cent of the amount invested.

In South America railroad building is of comparatively recent date. The first road was built in 1851, but the line was short and remained the only one for several years. With thirty million people the South American states have at present but little more than 16,000 miles of railroad, a condition which must at least in part be ascribed to the peculiar conservatism of the Latin race.

The United States of Colombia possesses less than 250 miles of road. Its first line was the Panama Railroad, from Colon to Aspinwall. It connects the Pacific with the Atlantic ocean, is 48 miles long and was constructed in 1855. This, as well as the several other roads of Colombia, is the property of private companies. A number of new roads have recently been surveyed.

Venezuela opened in 1866 a road, 56 miles long, from Puerto Caballo to Palito, which in 1870 was extended to Aroa. A number of other short roads, aggregating about 350 miles, have since been constructed. The total extent of railroad in Venezuela was 432 miles in 1889, of which the greater part was operated by private companies. Several important lines are in the process of construction, and will connect Caracas with Carabobo, San Carlos and the port of La Guayra.

The Republic of Ecuador constructed in 1876 a road from Jaguachi to Puente de Chimbo, a distance of 43 miles. This line was recently extended to Siambe, and has now a total length of 94 miles. In 1886 a charter was granted to a North American company, authorizing the construction of a road from San Lorenzo to Esmeraldas and guaranteeing certain dividends on the investment. At the close of the year 1889 Ecuador had 167 miles of road.

The first railroad in Peru was built in 1851, connecting the seaport Callao with the capital, Lima. After this but little was done for more than twenty years. At the beginning of the seventies an extensive railroad system was projected at the instigation of President Don Manuel Pardo, and the construction of the principal road of the system from Mollendo on the Pacific Ocean to Santa Rosa was at once entered upon. This road ascends the Western Cordillera, crosses a number of prodigious mountain passes, reaches Lake Titicaca, and then proceeds in a northwesterly direction to Santa Rosa. It is over 300 miles long, and reaches near Puna an altitude of 14,700 feet. An extension of this line from Santa Rosa to the old Inca city Cuzco was opened in 1875, but was subsequently destroyed in the war with Chile, and has not been reopened. Another road, extending from Callao to San Mateo, was opened in 1876. It is eighty-seven miles long, and reaches with its enormous grades a height of over 13,000 feet. It belongs, with the Santa Rosa road, to the boldest creations of railroad engineering. Since the war with Chile railroad enterprise has been checked. The number of miles of road in operation rose from 962 in 1875 to 1,615 in 1880, but was, owing to the abandonment of certain lines, diminished to 813 in 1884. Since that time about 400 miles of new road have been opened.

In the Republic of Bolivia the first railroad was built about twenty years ago from Antofogasta to Solar. After the cession of the province of Antofogasta to Chile there remained but thirty-five miles of road in Bolivia. More than 200 miles have since been added by the construction of several short roads, chiefly the property of mining companies.

The Republic of Chile was the first of the South American states to initiate the construction of railways. The building of a line from the seaport Caldera to Copiapo was commenced in May, 1850, and was completed on January 2, 1852. This line was constructed and operated by a private company. The first state road, extending from Valparaiso to Santiago, was opened on the 15th of September, 1865. To this road has since been added an extension to Talcahuana, as well as several branch lines. The total amount that has been expended by the Chilean government for the construction of railroads is $43,000,000. The total number of miles of road operated in Chile in 1887 was 1,674, of which 992 were the property of private companies and 682 miles were owned by the state. Two hundred and fifty miles of road have since been constructed, and the construction of 700 additional miles of railroad has been authorized by the government.

The Argentine Republic opened its first road, extending from Buenos Ayres to Belgrano, in December, 1862. Several other lines soon followed, and in 1870 over 600 miles of road had been constructed. This number had increased to 1,440 in 1880 and to 5,100 in 1889. Since then several new lines have been completed, aggregating over 600 miles. Among the principal lines of the Argentine Republic is the transcontinental road which connects the Atlantic with the Pacific Ocean. The whole line is 880 miles long, of which 665 miles are in the Argentine Republic and the remaining 115 miles in Chile. Of the 3,705 miles of road which were in operation at the beginning of the year 1887 the republic owned 1,148, the province of Buenos Ayres 572, the province of Santa Fe 102, and private companies 1,888 miles. The total amount invested in railroads was $154,000,000 in 1887, which yielded an average dividend of 3.9 per cent.

The oldest railroad in Brazil is the Petropolis road. It was built by a private company and opened on December 16, 1856. In 1881 the total number of miles in operation was 2,422, and in 1889 it had increased to 5,766. Furthermore charters had been granted for the additional construction of 2,271 miles of road. Of the lines in operation about 1,200 miles are the property of the state, yielding a revenue of nearly 3 per cent. on the capital invested. The state gives aid, besides, to several private roads. The most important road of Brazil is the state road Dom Pedro I., which connects the three richest provinces of the country, Rio de Janeiro, Minas Gerals and Sao Paolo, with the national capital. It was opened in 1883, and has a total extent of 544 miles.

The principal roads of Uruguay were built between 1865 and 1875. In the latter year the total number of miles in operation in Uruguay was 190, which in 1880 had increased to 230, and in 1889 to 469 miles.

In the remaining political divisions of South America the railroad extended its dominion still more slowly. Paraguay opened as early as 1863 a line 45 miles long from Asuncion to Itangua, and in 1892 her railroad system had increased to 159 miles in extent. British Guiana completed in 1866 a line from Georgetown to New Amsterdam, but not one mile of railroad has been built in that colony since. Of the islands of South America Trinidad is the only one into which the railroad has been introduced. The island has at present 50 miles of road, to 16 in 1878.

Central America has less than 600 miles of railway. The causes which have retarded the development of the railroad system in South America are also operative here. Of the five republics of Central America Costa Rica has the largest number of miles of railroad, viz.: 161. It has three different lines, of which the Limon and Carillo line, seventy miles long, is the most important. This road, which connects with a New York line of steamers at Limon, has greatly furthered the cultivation of bananas in the Santa Clara valley.

Nicaragua completed its first road in 1880 between Corinto and Chinandega, and has at present about 100 miles of railway in operation. The Nicaragua Canal Company is constructing a road from Juan del Norte to Ochoa, a distance of thirty-two miles, to be used in the construction of the canal.

Honduras opened in 1871 its only line, thirty-seven miles long, between Puerto Caballo and San Jago. In recent years an extension of nine miles has been added to it.

San Salvador has, besides a street-car line between the cities of San Salvador and Santa Tecla, only one line of railroad between Acajutla and Armea, which was constructed with public funds and opened for traffic on July 15, 1882.

Guatemala was the last of the Central American States to introduce the railroad. Its first road, seventy-four miles long, and extending from San Jose on the Pacific Ocean to the capital, Guatemala, was built by a San Francisco company and opened on August 20, 1884. The state has at the present time about 100 miles of road, with several short but quite important lines under construction.

The West Indies have between 1,200 and 1,400 miles of railway, of which more than 1,000 are in Cuba. The first road upon this island, 179 miles long and extending from Habana to Guanajay, was opened as early as 1837. The next ten years developed almost the whole of the railroad system of the western half of Cuba. A number of important roads have since been opened in the central and eastern portions of the island, whose railroad mileage is at present larger per capita than that of any other political division of the Western Hemisphere save that of Canada and the United States. The second of the West India islands to construct a railroad was Jamaica. A line connecting Kingston and Spanishtown was opened on the 21st of November, 1845. Two branch lines have since been added, making the total number of miles of road on this island seventy-six at the present time. About twenty-five miles more are now in the process of construction. San Domingo and Hayti have also recently commenced to build railroads. In the former republic a line from Sanchez to LaVega, sixty-two and one-half miles long, is now open to traffic, and Hayti is constructing a line from Gonaives, on the western coast, to Porte de Paix, on the eastern coast of the island. The Spanish government in 1888 also granted a charter for the construction of a railroad on the island of Porto Rica.

Of our neighbors on the North American continent, Mexico and Canada, the former has been by far the slower to avail herself of the advantages of railroad communication. The slow growth of the railroad system of Mexico must be ascribed chiefly to the frequent political disturbances of the country as well as to the many topographical obstacles which presented themselves to the railroad engineer. The first Mexican railway, excepting tramways, was the one which connects the capital with the city of Vera Cruz. It was constructed by an English company and was opened on the first day of January, 1873. In 1875 the total number of miles of road in Mexico was 327, and five years later somewhat less than 700. Since then the development of the system has been much more rapid. In 1880 several companies were formed for the purpose of building a system of roads which would connect the Mexican capital with the United States as well as with the most important harbors of the gulfs of Mexico and California. The projectors of these lines, who were citizens of the United States, received the hearty cooperation of the Mexican government, and the work was at once pushed very vigorously. At the end of the year 1885 more than 2,500 miles of new road were open for traffic, and a thousand miles more at the end of the following year. In 1889 Mexico had 5,332 miles of road. The principal one of the newly constructed roads is the Mexican Central, which connects Paso del Norte with the City of Mexico. This line will also, when its branches are completed, form a through route between the Gulf of Mexico and the Pacific Ocean. Another scarcely less important through line north and south is the National Mexican Railway, which is 722 miles long and connects Laredo, on the Rio Grande, with the capital and the southern states. Another line has recently been opened from Torreon to Durango. The number of miles of road at present in operation in the Republic of Mexico is about 6,800, with a number of new lines rapidly nearing completion. The development of Mexico's resources has, during the past decade, kept pace with the rapid expansion of its railroad system.

In the Dominion of Canada about fifteen miles of railroad line were built as early as 1837, but only forty-three miles was added during the next ten years. In 1852 there was still only 212 miles of railroad in all of the British possessions in North America. At that time the construction of the Grand Trunk system was commenced, the first section of the system, Portland-Montreal, being opened in 1853. After this railroads increased very rapidly in Canada, reaching an extent of 2,087 miles in 1860, 4,826 miles in 1875, 6,891 miles in 1880, and 10,150 miles in 1890. The majority of Canadian railroads are in the hands of private companies, some of which have been very materially aided by the government. One of the conditions upon which the union of the several British provinces, except Newfoundland and Prince Edward Island, was effected in 1867, was the construction of a railroad by the Dominion government connecting the provinces of Ontario, Quebec, Nova Scotia and New Brunswick. This road, the main line of which extends from Point Levis, opposite Quebec, to Halifax, was accordingly built, and is still operated by the Canadian government. Its cost was about 46,000,000.

But the most important enterprise in which the government is interested is the Canadian Pacific Railway. Like the intercolonial railway, this line was a result of the political union of the colonies. Its construction was commenced by the government, but was subsequently assigned to a private corporation, the Canadian Pacific Railway Company, all that had been done by the government being turned over to the company as a gift. It is estimated that the direct gifts of money, the land grant and other privileges conferred by the Dominion government upon the Pacific Railway Company exceed $100,000,000 in value, and that, with the amount of bonds and stock guaranteed by the government, the par value of its various aids amounts to $215,000,000, or $48,000,000 more than the cost of the road, as will be shown by the following table, taken from the report of the Interstate Commerce Committee of the Senate of the Fifty-first Congress:

Subsidy granted by the act of Parliament of February 13, 1881 $25,000,000 Seven hundred and fourteen miles of railroad constructed by the Dominion Government, original cost and interest 36,760,785 Capital stock guaranteed 65,000,000 Loan to the company authorized by Parliament of 1884, in part 29,880,912 Balance of above loan 15,000 000 Bonds, interest guaranteed by the Dominion for 50 years at 3-1/2 per cent 15,000,000 Land grant bonds 25,000,000 Subsidy of $186,000 a year, for 20 years 3,720,000 —————— Total $215,361,697

Total cost of road, according to the company's balance sheet of December, 1888 $131,350,019

The Dominion Government owns and operates four railways, the cost of which up to June 30, 1890, was $52,800,000. It has also granted to railroad companies cash subsidies which to June 30, 1889, amounted to over $46,000,000. The total number of miles of railroad in Canada was 14,004 in 1890. The people of Canada have, since the political union of the colonies, pursued an exceedingly liberal policy toward their railroads, but it appears that the great indulgence of the government only bred license in railroad circles. The evil increased from year to year, until the many complaints on the part of the public against railroad management caused Parliament in 1886 to appoint a commission to examine into the alleged abuses and to report as to the advisability of the adoption of a general railroad law, and the appointment of a Board of Railroad Commissioners. The committee reported to the Governor-General of Canada on the 14th of January, 1888, and, acting upon its recommendation, Parliament passed the Railway Act of May 22, 1888. This act, containing 309 paragraphs, provides for the complete regulation of railroad affairs, and for this purpose creates a Board of Railroad Commissioners, consisting of the Minister for Railroads and Canals, the Minister of Justice and two or more members of the Privy Council. The act also repeals all former railroad laws. Though it has been in force less than five years, its beneficial effects are already extensively felt by the Canadian public.



CHAPTER III.

HISTORY OF RAILROADS IN THE UNITED STATES.

In no country in the world has the growth of railroads been so rapid as in the United States. With a population less than one-fifth as large as that of Europe this country has a larger number of miles of railroad than that continent. While European countries generally opposed the introduction of the new system of transportation, our people extended to it a hearty welcome. This difference of sentiment can easily be accounted for. At the time of the invention of railroads Europe had a system of turnpikes and canals which, at least for the time being, answered every purpose. It became necessary for the railroads to enter into competition with these well-established agencies of transportation, which had the test of time, popular prejudice and governmental sanction in their favor. Moreover, the railroad as a new and unknown quantity caused a feeling of uneasiness in all conservative circles. It seemed to make war against time-honored principles of statecraft and society, and threatened to bring about a revolution the outcome of which no one could foresee.

The condition of things was entirely different in the United States. There were but few good roads and still fewer turnpikes and canals. A vast territory in the interior awaited cultivation. Excepting the coast and a few cities situated on the large navigable rivers, the East and the West and the North and the South were practically without commercial relations, and were only held together by a community of political traditions and the artificial cement of a common constitution. Even had the country had a system of turnpikes and canals, the Mississippi River would still have been a forty days', and the extreme Northwest a three months' journey distant from New York. It seems extremely doubtful whether the different sections of so large a realm, having so little community of commercial interests, could long be kept together under a republican system of government. The settlement of the central portion of the country and the development of its resources seemed to be the task of future centuries. The railroad under these circumstances made its appearance at a most opportune time for America, and the American people were not slow to make the best of the opportunities presented to them.

In the United States, as in England, the railroad was preceded by the tram-road. The first tram-road in this country was opened in 1826. It connected the granite quarries of Quincy with the Neponset River, and was operated by horsepower. The second road of this kind was the Mauch Chunk tramway, in Pennsylvania, opened in 1826, for the transportation of coal. The trains were drawn up an inclined plane by stationary engines and were moved down by their own weight. During the same year the Delaware and Hudson Canal Company opened the Carbondale and Homesdale tramway, connecting their mines with the Delaware and Hudson Canal. It appears that an English locomotive was imported for use on this line in 1828, but that it did not answer its purpose.

During the same year was commenced the construction of the first line of importance in this country, the Baltimore and Ohio. The line was opened for traffic in 1830, having then an extent of fourteen miles. In 1831 it was extended sixty-one miles, and the year following sixty-seven miles. For a year the road was operated by horsepower, but in 1831 the company purchased for its road an American locomotive.

The first road upon which a locomotive engine of American manufacture was used was the South Carolina Railroad, which was commenced in 1830. The engine was manufactured at West Point and was placed upon the road in December of the same year. The line had then an extent of ten miles. In 1832 it had increased to sixty-two miles, and in 1833 to 136 miles. The construction of the Mohawk and Hudson was commenced in August, 1830, and the road was opened in September of the following year. Its first locomotive engine was also imported from England, but, being found too heavy, was soon replaced by an American engine of half its weight. In 1831 two other New York roads were commenced, the Saratoga and the New York and Harlem. A small portion of the latter was opened during the same year, and the former in July, 1832. The Camden and Amboy Railroad in New Jersey was likewise commenced in 1831, but its completion was not reached till 1834. The New Castle and Frenchtown Railroad was completed in 1832, the Philadelphia and Trenton in 1833, and the New Jersey in 1834. In 1835 the Washington branch of the Baltimore and Ohio was opened, and the entire line had at the end of that year attained an extent of 115 miles. During the same year three Massachusetts roads, connecting Boston with Providence, Worcester and Lowell respectively, were opened. In 1836 the New York Central route was opened to Utica. In 1837 the Richmond, Fredericksburg and Potomac Railroad was completed from Richmond to Fredericksburg. In 1838 the Richmond and Petersburg and the Philadelphia, Wilmington and Baltimore railroads were opened. The Wilmington and Weldon Railroad was completed in 1840, and the Petersburg and Roanoke three years later. There was now a continuous line of railway from the Potomac to Wilmington, North Carolina. In 1842 the whole line of the Boston and Albany road was completed, which thus became the first important through route in America.

The construction of railroads in the United States was from the first carried on without a system. Railroads in an early day were purely local affairs. Each locality operated its own road in its own interest and without any supervision from the State which had granted its charter. Acts of incorporation or charters were granted as a matter of course. Railroads were looked upon as the natural feeders of canals, and their future importance was foreseen by very few men. The early roads were a heavy burden on the capital of the country. A number of small roads were built that proved unprofitable and had to be abandoned. After the financial panic of 1837 there was, except in New England, a very perceptible stagnation in railroad enterprise, which lasted until the discovery of gold in California, in 1848. The average number of miles of road constructed per annum during the ten years preceding 1848 was 380, while it was nearly 1,800 per annum during the seven years following.

It may be said that with the discovery of gold in the West ends the first or formative period of railroad construction. From the first opening of the Baltimore and Ohio to the beginning of the year 1848, a period of eighteen years, there were constructed in the United States 5,205 miles of railroad, or an average of 289 miles per annum. The discovery of gold on the Pacific gave a new impetus to railroad construction throughout the country. Railroads now ceased to be local works and became interstate or national thoroughfares. Extensive new lines were built and through routes were formed by the coalition of local roads. It was during this period that railroad companies first became conscious of the importance of their mission and that they commenced to compete with river and canal carriers. In 1848 a through route was completed between Cincinnati and Lake Erie. A more direct line, the Cleveland, Columbus and Cincinnati road, was opened in 1851. During the same year the Erie Railroad reached Lake Erie and connected the lake with the Hudson, and a year later Chicago received railroad connection with the East by the completion of the Michigan Central and Michigan Southern. In 1854 the Chicago and Rock Island reached the Mississippi River, and in 1855 the Chicago and Galena was opened. One year later the Illinois Central reached the Mississippi at Cairo, and the Chicago, Burlington and Quincy Railroad was opened to Quincy. The Ohio and Mississippi, between Cincinnati and St. Louis, was completed at about the same time. The Pittsburgh, Fort Wayne and Chicago, an extension of the Pennsylvania road, was completed to Chicago in 1858. At the beginning of 1859 the Hannibal and St. Joseph Railroad reached the Missouri River, and eight years later the Cedar Rapids and Missouri was completed to the Missouri at Council Bluffs.

To encourage the extension of railroads into new and thinly settled territories, and to thus hasten their settlement and the development of their resources, the people of the United States began at the commencement of this period to favor the policy of land grants. Such grants had repeatedly been made to roads and canals prior to the crisis of 1837. The first railroad that received a land grant was the Illinois Central. The scheme was proposed as early as 1836, but the act making the grant was not passed until September 20, 1850. Other grants followed in 1852 in Missouri, in 1853 in Arkansas, in 1856 in Michigan, Wisconsin, Iowa, Florida and Louisiana. As a rule these lands were granted by the National Government to the States, and by them to the railroads. The land grants made during President Fillmore's administration amounted to eight million, and those made during Pierce's administration to nineteen million acres. The financial crisis of 1857 and the War of the Rebellion again checked railroad building, but this period developed a new phase of railroad enterprise as well as of the land grant policy. In those times of national trial a railroad to the Pacific Coast seemed a political necessity. The project of connecting the Atlantic and Pacific oceans by a line of railroads was first brought prominently before the American people by Asa Whitney of New York. At a meeting held under his auspices in Philadelphia on the 23d day of December, 1846, a movement was inaugurated for the purpose of interesting the people in this enterprise and securing the aid of the government for its accomplishment. Various plans were urged, and earnest discussions followed, in which the ablest minds of the nation participated. The continual agitation of the subject finally led, on the 1st of July, 1862, to the passage by Congress of an act incorporating the Union Pacific Railway Company and the adoption of the central route. The Union and the Central Pacific companies received a virtual money subsidy of $30,000,000 and a land grant aggregating nearly twenty-three million acres, a domain almost equal to the State of Indiana. Other direct grants of territorial lands soon followed. The Northern Pacific received, just before the close of the war, a grant of forty-seven million acres of land. In the Southwest public lands were also freely given to new Pacific lines. The various grants made to railroads comprise no less than 300,000 square miles, equal to four and a half times the area of New England, or six times that of the State of New York, or equal to the total area of Iowa, Wisconsin, Illinois, Indiana, Michigan and Ohio. Where these grants were not deemed sufficient inducement for the construction of roads, counties, cities and towns freely voted subsidies, while private citizens made donations to or subscribed for the securities of the new railroads.

As has already been stated, the consolidation of connecting lines and their transformation into a few large through routes was one of the characteristic features of this period. As through traffic, and particularly through freight, grew in importance, it became more and more apparent that frequent transhipment was an expense to the railroads as well as a burden to the public. The system of railroad ownership and management soon adapted itself to the necessities of business. The change seems to have been inevitable, for it occurred in all parts of the world at about the same time. Sagacious men early recognized the importance of railroads as national lines of communication. This idea no doubt controlled the projectors of the Baltimore and Ohio, of the Erie, and of the Boston and Albany roads. The first consolidation of any importance took place in 1853, when eleven different roads between Albany and Buffalo were united to form the New York Central. Five branch roads were added to the system between 1855 and 1858. In 1864 Cornelius Vanderbilt secured control of the Hudson River road, and in 1867 of the New York Central, which lines he consolidated in 1869. By gaining soon afterward control of the Lake Shore and Michigan Central and Southern Canadian roads, he united under one management over 4,000 miles of railroad between New York and Chicago, and thus created the first through line between the East and the West.

As has already been stated, the Pennsylvania road gained control of the Pittsburgh, Fort Wayne and Chicago in 1858 and thus extended its system as far as Chicago. Through the absorption of other lines it reached an extent of over 7,000 miles. The creation of this through route was chiefly the work of Thomas A. Scott, at that time vice-president, and later president, of the Pennsylvania railroad.

In 1874 the Baltimore and Ohio, under the management of John W. Garrett, extended its system to Chicago, and became a competitor of the two older lines in the transportation of through freight. At about the same time two other parallel trunk lines were developed, the Grand Trunk on the north, and the Erie, between the Lake Shore and Pennsylvania lines. There were, therefore, in 1874 five rival trunk lines competing for the business between the West and the seaboard.

During the same period large rival lines developed west of Chicago and St. Louis. From the former city radiate the St. Paul and Northwestern systems, each with from 6,000 to 8,000 miles; the Atchison, Topeka and Santa Fe with over 9,000 miles; then the Rock Island, the Chicago, Burlington and Quincy, the Illinois Central, the Chicago Great-Western, and the Chicago and Alton, their systems ranging from 1,000 to 6,000 miles in extent. From St. Louis radiate the various branches of the Missouri Pacific and the closely allied Wabash system, controlling together some 10,000 miles of road.

This process of consolidation also went on in the Southern States, though to a less extent. Their systems do not run parallel, like the trunk lines, nor do they radiate from a common center, like the roads of the Northwest, but they radiate from the principal ports of the Atlantic and the Gulf of Mexico toward the interior.

We now enter upon the third period of the history of American railroads, the period of combinations. During the time of great activity in railroad construction following the War of the Rebellion many abuses in railroad management had been developed, which caused general complaint and led to what is known as the Granger movement. Laws were demanded, especially in the agricultural States of the West, which should regulate the rates, methods of operation, and the political relations of the railroads. The friends of this movement were successful in the political contests that followed, and Granger legislatures were elected in the States of Illinois, Wisconsin, Iowa and Minnesota. Laws were passed fixing the rates on different classes of roads and providing penalties for their violation. The companies contested these acts in the courts, but were defeated at every step, until in 1877 the Supreme Court of the United States sustained the constitutionality of the Granger laws. In the meantime railroad managers tried their utmost to render, by shrewd manipulation, these laws obnoxious, and they finally succeeded in having them repealed or so amended as to render them largely ineffectual.

It was the principal object of the Granger movement to do away with the many discriminating tariffs which so injuriously affected local points. It is true, discriminations between individuals were practiced at business centers, but rates upon the whole were low at such points as compared with those which obtained at local stations. While the Granger contest was still going on in the West, a new evil developed in the East, which became characteristic of the period and finally grew into one of the most intolerable abuses of railroad management. Railroad men had gradually learned that it was in their power to maintain high rates at competitive as well as at non-competitive points, provided all the roads centering at such points could be induced to cooperate, or rather to conspire for that purpose. The final solution of the problem was, after some experimentation, found in the device to control the prices of transportation generally known as the pool. It is doubtful whether any contrivance connected with railroad management ever threatened to subvert long-established principles of the common law more completely than this. Within a few years it extended its dominion over the whole country, exacting a heavy tribute from its commerce, until the people's patience finally became exhausted and their determined demand for railroad reform led to the enactment of the Interstate Commerce Act in 1887.

When this act passed, dire results were predicted by nearly every railroad man in the country. Prophecies were freely made that it would ruin half of the roads and seriously cripple and sadly interfere with the usefulness of the other half, that it would derange the business of the country, greatly depreciate all railroad securities and put an end to railroad construction. Nearly seven years have passed since the adoption of the law, but not one of these prophecies has come to pass. There are at present probably less bankrupt roads in the United States than there have been at any time for twenty years, our business interests have been improved, the securities of honestly managed roads are in better repute than they were previous to the passage of the law, and the railroad mileage of the country is increasing at the rate of about 6,000 miles a year. If any branch of business has suffered in consequence of the enactment of the law, it is the branch monopolized by Wall Street. Since 1885, the time when the Interstate Commerce Bill was first seriously agitated, the aggregate of railroad securities has increased nearly $2,500,000,000, or about one-third. This certainly does not look as if capital had been seriously frightened by the Interstate Commerce Act. There are other proofs of railroad prosperity. In 1885 the gross earnings of the railroads of the United States were $772,568,833, or 9.9 per cent. on their reported capital. In 1886 their gross earnings were $829,940,836, or 10.2 per cent. on the reported railroad capital. In 1890 the gross earnings had increased to $1,097,847,428, and equaled 10.8 per cent. on the reported capital. This includes even the capitalization of new lines and others not reporting operations. Mr. Poor gives the reported cost of the lines actually operated as $8,519,670,421, against $10,122,635,900 reported cost of all the railroads built. Omitting from the computation the lines not reporting operations, the gross earnings of the roads actually operated equaled 12.7 per cent. and their net earnings 4 per cent. on the actual cost of the lines which reported. The gross earnings for 1891 were $1,138,024,459, and for the year ending June 30, 1892, $1,222,711,698.

The gross earnings per mile have increased from $6,265 in 1885, and $6,570 in 1886, to $6,946 in 1890, and $7,409 in 1892. In 1885 the capitalization per mile of road was $55,059 and the net earnings per mile were $2,185. In 1890 the capitalization per mile had decreased to $53,783, while the net earnings per mile increased to $2,195. The railroad mileage of the country has grown from 128,361 in 1885 to 166,817 in 1890, to 170,601 in 1891, and to 175,000 in 1892.

The railroad system of the United States has had a phenomenal growth, especially since 1870, since which time nearly 120,000 miles of road, or more than two-thirds of the total mileage, have been constructed. The table below shows the number of miles of railroad constructed and in operation, by quinquennial periods from 1830 to the close of 1890, inclusive:

YEAR. MILES IN OPERATION. INCREASE.

1830 23 1835 1,098 1,075 1840 2,818 1,720 1845 4,633 1,815 1850 9,021 4,388 1855 18,374 9,353 1860 30,626 12,252 1865 35,085 4,459 1870 52,922 17,837 1875 74,096 21,174 1880 93,296 19,200 1885 128,361 35,065 1890 166,817 38,456

It will be noticed that in the sixty years covered by the above table there are but two quinquennial periods which show a falling-off in the rate of growth, viz.: 1860-65 and 1875-80. During the former period railroad construction was partially checked by the War of the Rebellion, during the latter by the general financial depression following the panic of 1873.

The length of railroads in the world has grown from 206 miles in 1830 to about 400,000 miles in 1892. The following table shows the growth of railroad mileage by quinquennial periods:

YEAR. MILES.

1830 206 1835 1,502 1840 5,335 1845 10,825 1850 23,625 1855 42,340 1860 66,413 1865 90,280 1870 131,638 1875 182,927 1880 231,190 1885 303,172 1890 385,000

From this table it is seen that the railroad mileage of the world has doubled during the past fifteen years, and that its average annual increase is at present not far from 17,000 miles. There is no doubt that the extent of railroad construction has everywhere exceeded all anticipations. So fast has the railroad system expanded in the most highly civilized countries that it soon outgrew in nearly all of them the laws originally adopted for railroad control. In time an almost universal demand arose for reform, and the most progressive governments were not slow in heeding it. For the past fifteen years there has been a decided drift on the European continent toward state ownership of railroads, or to such strict control of the transportation business as virtually deprives the operating companies of the power to do injustice to the public.

The railroad is assuming more and more the character of an international highway. A movement is on foot to connect the railroad systems of the United States with those of South America by an intercontinental or "Pan-American" railroad. Appropriations have been made by the United States and several of the South American republics for a preliminary survey of the proposed line. Three different surveying parties are in the field, one in Central America and the other two in the United States of Colombia and Ecuador. The progress so far reported by them is encouraging, and there is now some hope that before the close of the nineteenth century one may be able to travel by railroad from New York to Valparaiso without even a change of cars.

It has also been proposed to span Behring Strait and connect North America with Asia and Europe by an international railway. This line, if constructed, would be simply an extension of the proposed Pan-American railroad and would follow the western coast of the United States as far as Behring Strait, then cross over into Asia, traverse Siberia and finally reach London via St. Petersburg, Berlin and Paris. It is very questionable whether such a line is at present feasible either from a technical or financial point of view, but the time will probably come when the railroad track will connect New York and London.



CHAPTER IV.

MONOPOLY IN TRANSPORTATION.

From time immemorial efforts have been made by designing men to control either commerce or its avenues, the highways on the land and on the sea, by a power which law, custom, ingenuity, artifice or some other agency had placed into their hands.

The ancient Phoenicians early aimed at and finally obtained the empire of the sea by making themselves masters of the most commodious harbors of the Mediterranean Sea and the Arabian Gulf. They established a regular intercourse with the countries bordering on the Mediterranean as well as with India and the eastern coast of Africa. From these latter countries they imported many valuable commodities which were not known to the people of other parts of the world, and during a long period they held this lucrative branch of commerce without a rival. The character and the situation of the Phoenicians aided them greatly in acquiring this mastery of commerce. Neither their manners and customs nor their institutions showed any marked national peculiarity; they had no unsocial prejudices and they mingled with the people of other countries without the least scruple or repugnance. As their native country was small and quite barren, they early learned to rely upon commerce as the best source of riches and power. Like the other Semitic tribes, the Phoenicians were noted for their energy and acumen, and while they were not a literary people in the strict sense of the word, ancient civilization received probably a more powerful impetus through their commercial supremacy than through any other agency.

During the reign of King Solomon the Jews made an attempt to wrest from the Phoenicians at least a part of the world's trade. Solomon built ships and imported Phoenician sailors for his fleet. For a time it seemed as if the Israelites might become the rivals of their teachers in the art of navigation and in the mysteries of trade; but their peculiar religious customs in that early day proved a serious impediment to commercial ascendancy, as it rendered them incapable of that unreserved intercourse with strangers so essential in commerce.

The monopoly of the sea, at least of the Mediterranean, passed to the Carthaginians, their descendants. The latter extended their navigation toward the west and north. They planted colonies and opened new harbors, and up to the time of the Punic wars kept almost the entire trade of the countries bordering on the Mediterranean in their hands.

After the downfall of Carthage the control of the commerce of Southern Europe and Northern Africa descended to the Romans. When Rome became the capital of the world, it gathered the wealth and valuable productions of all its provinces. Under the consuls and the earlier emperors the vigilance of the Roman magistrates and the spirit of the Roman government gave every possible security to commerce and prevented for a time the rise of monopoly. Nowhere was national union so complete or commercial intercourse so perfect as in the Roman empire. The intelligence and the power of Rome stimulated and regulated the industry of her people and permitted them to enjoy the fruits of their efforts without public or private restrictions.

We have seen that the intercourse of Rome and her provinces was facilitated by the construction of roads and the establishment of imperial posts. During the decline of the empire the maintenance of these posts led, however, to a grave abuse. We are informed by Gibbon in his "Decline and Fall of the Roman Empire":

"But these beneficial establishments were accidentally connected with a pernicious and intolerable abuse. Two or three hundred agents or messengers were employed, under the jurisdiction of the master of the offices, to announce the names of the annual consuls and the edicts or victories of the emperors. They insensibly assumed the license of reporting whatever they could observe of the conduct either of the magistrates or private citizens, and were soon considered as the eyes of the monarch and the scourge of the people. Under the warm influence of a feeble reign they multiplied to the incredible number of ten thousand, disdained the mild though frequent admonitions of the laws, and exercised in the profitable management of the posts a rapacious and insolent oppression. These official spies, who regularly corresponded with the palace, were encouraged by favor and reward anxiously to watch the progress of every treasonable design, from the faint and latent symptoms of disaffection to the actual preparation of an open revolt. Their careless or criminal violation of truth was covered by the consecrated mask of zeal; and they might securely aim their poisoned arrows at the breast either of the guilty or the innocent, who had provoked their resentment."

After the downfall of the Romans, commerce remained paralyzed during the period of Gothic ignorance and barbarism. The crusades for the recovery of the Holy Land from the Saracens, in the eleventh and following centuries, opened again communication between the east and the west by leading multitudes from every European country into Asia; and though the object of these expeditions was conquest, and not commerce, their commercial effects were both beneficial and permanent. The crusades were especially favorable to the commercial pursuits of the Italian states. The vast armies which marched from all parts of Europe toward Asia gave encouragement to the shipping of Venice, Genoa, and Pisa, which sometimes transported them, and always supplied them with provisions and military stores. Besides the immense sums which these states received on this account, they obtained commercial privileges of great consequence in the settlements which the crusaders made in the East. All the commodities which they imported or exported were exempted from every imposition, the property of entire suburbs in some of the maritime towns, and of large streets in others, was vested in them, and all questions arising among persons residing within their precincts, or who traded under their protection, were decided by their own laws and by judges of their own appointment. When the crusaders took Constantinople, the Venetians did not neglect to secure to themselves many advantages from that event. Nearly all the branches of commerce were in time transferred from Constantinople to their city. At the end of the crusade period Venice had monopolized nearly all the foreign trade of Europe. She supplied the people of Italy, France and Germany with those commodities with which the crusaders by their intercourse with more refined nations had become acquainted. The possession of many Eastern ports and the maintenance of a powerful navy made it possible for the Venetians to retain their monopoly for several centuries.

The growth of commerce in Central Europe was but slow, owing to the dangers to which it was exposed in those days of feudalism. The mountain fastnesses of robber knights, which controlled every road and navigable river, were so many toll-gates at which the wayfaring merchant was stopped to pay tribute. In time this system of plunder grew to such an extent that hundreds of feudal lords relied upon it for their support. Such a tax upon commerce greatly enhanced the value of all commodities, and this deplorable state of things lasted until the cities made their power felt by forming alliances for mutual protection. One of these alliances, the Rhenish League, comprised in time seventy towns, and the ruins of the strong castles destroyed by its forces still exist along the Rhine, picturesque memorials of these lawless times.

Perhaps the most powerful commercial union of the middle ages was the Hanseatic League. To protect their commerce, the cities of Hamburg and Lubeck formed about the middle of the thirteenth century an alliance for mutual defense. The advantages derived from this union attracted other towns to the confederacy. In a short time about eighty of the largest cities lying between the Baltic and the Rhine joined this famous league, which in time became so formidable that its alliance was courted and its enmity was dreaded by the greatest monarchs. The League divided its territory into several districts. Its members, like railway associations of the present day, made their own laws, and met for this purpose at regular intervals in the city of Lubeck. The original object of the League, mutual assistance against outside attacks, was soon lost sight of, and its constantly growing power was used to obtain still greater commercial privileges in the adjoining countries, and even to force their rulers to concede to its members a commercial monopoly. In 1361 a controversy arose between the League and the King of Denmark, which led to a long and bitter war between them. This war was participated in by no less than seventy-seven cities on the part of the League. It terminated in 1370, leaving the Hansa master of the situation. For many years after this the League exerted its power in Denmark, Sweden and Norway, and the rulers of these countries were compelled to respect the wishes and even submit to the orders of these proud merchants. The countries bordering on the Baltic Sea remained the domain of the League for several centuries. They gathered there immense quantities of raw material, which they sold in the various ports of Europe. The influence of the League even reached as far as Novgorod in the east and London in the west. In both cities the League had its quarters, and within them it virtually exercised the right of sovereignty. Its main market was at Bruges in Flanders, which was then a bee-hive of industry and thrift. There the Italian traders came with the products of the east, such as spices, perfumes, oil, sugar, cotton and silk, to exchange them for the raw materials of the north. While taxes and imposts everywhere else harassed merchants, commerce was free in the cities of Flanders, owing to the liberality, or rather shrewdness, of her rulers. In Bruges the members of the Hansa met the merchants of Venice on equal terms, and the exchange of the products of the north for those of the east and south could be effected there to the greatest advantage of both.

While it must be admitted that the Hanseatic League developed the resources of Northern Europe, and that, even at the time of its greatest power, there was always competition among its own members, the fact remains that it abused its power by the suppression of all outside competition, and that it usurped rights which belong only to the state, thus often producing abuses as great as those which it was organized to remedy. Its final downfall was caused by the development of national power in the northern kingdoms and the growth of commerce and navigation in Great Britain. A stubborn assertion of antiquated privileges on the part of the Hansa involved it in a feud with the illustrious and lion-hearted Queen Elizabeth of England. In 1589 the Queen caused sixty of their vessels to be captured on the Tagus, and later even took possession of their hall and wharves in London. After this the League's decline was very rapid, though its organization was kept up till 1669, when its delegates held their last session.

Contemporary with the decline of the Hanseatic commerce in the north was that of the Italian cities, especially Venice, in the south. They had prospered by their commerce with the Levant until Vasco de Gama discovered the sea route to East India in 1497. His countrymen, the Portuguese, soon utilized this discovery. They took possession of the coast of India and of the islands to the south of it. They also succeeded in excluding the Arabs from the commerce with that country, of which up to that time they had had exclusive control. For this purpose they built fortresses and factories on the west coast of Hindostan, took possession of the island of Socotra in the Arabian, and of Ormus in the Persian Gulf, and forced the Indian princes to grant them the exclusive privilege of trading with their subjects. They also captured the city of Malacca, where the trade between China, Japan, the Philippine Islands, the Moluccas and India had concentrated itself. In this way they got in a comparatively short time control of the commerce of India, Arabia, and even Egypt. By forcing the Venetians and their commercial allies out of those markets, they secured for themselves a monopoly of the commerce between Europe and the east. The political ascendancy of the Turks in the islands situated in, and in the countries bordering on, the Eastern Mediterranean, caused the loss of Cyprus, Crete (Candia) and Morea to the Venetians and greatly aided the Portuguese in establishing their commercial supremacy. Less profitable for the latter was the possession of their American colonies. They, as well as the Spaniards, adopted here a policy which ultimately brought commercial and industrial ruin upon both. Entirely neglecting agriculture and relying on the mineral resources of their transatlantic colonies, which were believed to be inexhaustible, they strove to amass riches by reserving for themselves the exclusive privilege of supplying them with the manufactures of Europe in exchange for American gold. Neglecting home industries, they bought their supplies as well as those of their colonies in France, Holland and England. A spirit of speculation and adventure enervated their people, and led in time to commercial bankruptcy and political disaster.

Spain also drained her treasury by her wars with her Dutch dependencies, and the loss of her northern provinces was a serious blow to her commerce. Antwerp, which had become the successor of Bruges as the commercial emporium of the north, began to decline, and Amsterdam, the metropolis of the new Dutch republic, became heir to its glory and its riches. The young republic at once commenced to compete in the carrying trade with Spain and Portugal, and to make inroads into the eastern commerce of the latter.

The Dutch East India Company, which was organized in 1602, sent a fleet of fourteen vessels into the Indian Archipelago to found colonies in Java, Sumatra and the Moluccas. In a short time they had monopolized the entire spice trade, which immediately became a source of great wealth. A cargo of five vessels, which returned to Amsterdam in 1603, consisted of over two million pounds of spices. This cargo was purchased for 588,874 florins and was sold for 2,000,000 florins. It is under these circumstances not surprising that the dividends of the company's stockholders often amounted to 75 per cent., and never went below 12-1/2 per cent. previous to 1720. Holland's colonial trade made Amsterdam the commercial metropolis of Europe. It became the grain market from which Spain, Italy and other countries drew their supplies. All the products of the world found purchasers here, and a well-developed banking system greatly facilitated the exchange. The rapid accumulation of fortunes by the Dutch merchants and bankers was without precedent in Europe. Besides this, the progress which Holland made in ship-building and navigation and the advantages which she derived from her colonial trade placed her in a position to outstrip all other nations in the carrying trade of Europe. During the first half of the seventeenth century the Dutch were justly called the freighters of Europe. But the injury which their policy did to the commercial and manufacturing interests of other European nations led both England and France to adopt measures well calculated to accomplish, in a short time, their commercial emancipation. Louis XIV., in order to build up French shipping, collected a tonnage from every foreign ship which entered a French harbor. England went still further. In 1651 Oliver Cromwell promulgated the Navigation Act, by which foreign ships were prohibited from importing into England any goods except such as were produced or manufactured in their own countries. This was a heavy blow at the Dutch, who were thus deprived of the privilege of effecting the exchange of commercial commodities between England and her colonies as well as the continent. The war which the Dutch Republic waged against England, to force her to revoke this act, resulted in favor of the latter and ended the commercial supremacy of the Dutch in Europe.

England, which before this time had played but a secondary role as a commercial power, rose fast to prominence after her successful struggle with the Dutch. She commenced to strengthen her industries by the adoption of a high tariff policy, and her merchants were encouraged to enter into commercial relations with colonists and foreigners. The privileges which had been given to foreign tradesmen were revoked, while ship-building and navigation were greatly favored by the government. As England gained greater strength as a naval power, her foreign policy became more aggressive.

In 1600 the "Company of Merchants of London Trading to the East Indies" obtained a charter, and, in spite of Dutch and Portuguese opposition, soon gained a foothold on the Moluccas and the coast of Malabar, whence it extended in time its dominion to Surat, Bombay, Madras and Calcutta. Here they built forts and established their commerce. From these places the company pushed into the interior, until finally, after repeated struggles with the natives and European rivals, the whole of Hindostan came under English dominion. As its power increased, the company commenced to abuse shamefully the monopoly which it had been granted, by inaugurating a system of plunder and oppression which is perhaps without its equal in the annals of history. These growing abuses led to frequent revolts and seriously imperiled England's dominion in these territories.

To remedy these evils, Parliament at the close of the seventeenth century annulled the charter of the company and declared the commerce with the East Indies open to all of the King's subjects. A number of small companies were formed, but in 1702 they all combined and organized the East India Company. Monopoly was again established, but the patience of the natives was exhausted, and England's interests in Hindostan were in a critical condition. At this juncture the East India Company adopted a policy of moderation, and this, together with the aid which the government gave to the company, enabled it to strengthen again its weakened commercial relations and to further enlarge its territory. But the temptation to abuse its power was too great for this strong corporation to be long resisted. Abuses again crept into its management and continued to grow until its charter was finally repealed.

The policy adopted by Great Britain for the government of her American colonies during the eighteenth century was less rapacious, but scarcely more just than that pursued in her eastern possessions. To retain those colonies as commercial no less than as political dependencies, Parliament enacted laws compelling their people to trade with the mother country exclusively and laying restraint on their manufactures. But the American pioneers felt that they had brought with them across the ocean the rights of Englishmen; they objected to taxation without representation, and the men who for opinion's sake had left comfortable homes to brave upon a distant shore the dangers of frontier life were prepared, if necessary, to emphasize their objection by armed resistance. England, intent upon maintaining her barbaric system of discriminative duties and commercial monopolies, blindly attempted coercion, but the war which resulted wrested from the English crown its brightest jewel, and the War of 1812 established upon American soil the principle of industrial and commercial liberty.

It must not be supposed, however, that America and the United States in particular have been free from monopolies growing out of the transportation business. Nothing would be farther from the truth. There is no law so stringent but that it will be violated; there is no government so vigilant but that it will at times be imposed upon. It is true, our government sanctions no monopoly, but the very liberty of action which exists here among corporations as well as individuals offers to organized wealth and power a wide field for abuses.

We have seen in the foregoing that almost from time immemorial efforts have been made to monopolize transportation and trade, and that these efforts were successful whenever either from ignorance or weakness the masses fell into political apathy. There is a natural tendency among men to utilize commercial advantages to the detriment of others. In modern times the opportunities for building up large monopolies have greatly increased and have been turned to the most profitable account by designing men. Great and even unbearable abuses have always followed where the greed and ambition of such men have not been checked by governmental agencies. In this respect the people of the United States have had about the same experience as the rest of mankind. Ever since the introduction of railroads into this country there has been a well-marked drift toward monopolizing the transportation business.

As long as the dangers of monopoly remained unknown to the American people, legislation for the control of railroads and other public carriers was both scarce and crude, and shrewd railroad men were not slow in taking advantage of the situation. It is foreign to the design of this treatise to give a complete history of railroad monopoly in the United States. The author will therefore confine himself to showing that transportation companies will, like the great commercial organizations of the past, when left to follow their instincts, invariably use their power to oppress the public by exacting excessive charges for their services, or to discriminate against the many by extending special privileges to the few. Hundreds of cases might be given to illustrate the above rule, but a history of two of these corporations will suffice to show to what extent corporate abuses can be carried, and to serve as a warning against the adoption of any "laissez faire" policy in the railroad legislation of the future. The corporations selected for this purpose are the Camden and Amboy Railroad and the Standard Oil Companies, both typical representatives of the Rob Roy policy which organized wealth has pursued since the dawn of civilization, when not prevented by the wisdom and strength of a good government.

THE CAMDEN AND AMBOY RAILROAD COMPANY.

For almost forty years the Camden and Amboy Railroad was the only direct route between the cities of New York and Philadelphia. It is doubtful whether previous to the war a more important or a more remunerative road existed in the United States, for, besides connecting the two largest cities in the Union, it formed part of the direct land route from the East to the South.

The efforts to open a direct through route between New York and Philadelphia date back to the year 1812, when the construction of a canal between the Hudson and the Delaware was proposed, but an ill-advised jealousy of the State of Pennsylvania delayed for many years the realization of the project. When this obstacle was finally overcome, a change of sentiment had taken place in New Jersey. Railroads had just made their appearance in the United States, and a large number of the people of New Jersey preferred a railroad to a canal.

The matter was finally compromised in the legislature of New Jersey, which on the 4th of February, 1830, simultaneously granted charters to the Delaware and Raritan Canal Company and the Camden and Amboy Transportation Company, fixing the capital stock of each company at $1,000,000, with the right to increase it to $1,500,000. The charter further stipulated what taxes should be paid to the State, and also contained the provision that within five miles of the starting-point and within three miles of the terminus of each line no other railroad or canal should be built. It was believed the existence of both a water and a land route would be sufficient to maintain competition on this important thoroughfare of interstate traffic. The construction of the railroad, which had been surveyed in almost a straight line between its termini, was at once commenced. A number of well-to-do and practical men took hold of the enterprise, among them one John Stevens, who together with his three sons took one-half of the capital stock. The canal project did not do so well at first. At the middle of the year 1830 only about one-twelfth of its capital stock had been sold, and there was great danger that the company might forfeit its charter, as the time allowed for the subscription of its stock was nearing its end. At this juncture Robert Field Stockton, a young man of ability, enthusiasm and wealth, came to the rescue of the canal company. He not only bought for himself a goodly share of the canal stock, but also prevailed on his rich father-in-law, Mr. John Porter, to invest $400,000 in the enterprise. The financial difficulties of the company were thus removed. At the next session of the legislature Mr. Stockton secured an amendment to their charter which apparently only authorized the enlargement of the canal, but in reality empowered the canal company to construct a second railway.

It was from the beginning Mr. Stockton's object to share with the railroad company the advantages which their line promised to give them. The enlargement of his company's franchise placed him in a position to dictate terms to the Camden and Amboy Transportation Company. The latter was given the choice, to prepare for competition with a rival railroad line, or to consolidate with the Delaware and Raritan Canal Company. It chose the latter alternative, and on the 15th day of February, 1831, the two companies became one. The consolidation still required the sanction of the legislature. This was obtained in consideration of the transfer of 2,000 shares of the capital stock of the company to the State. It was further stipulated that the new company should pay to the State a tax of 10 cents for each passenger and of 15 cents for each ton of freight carried over its line through the State, as well as an annual tax of $30,000, and that the State in return should protect the company against any and all competition in the direct passenger and freight traffic between the cities of New York and Philadelphia. Serious doubts were at the time entertained by many, whether the State of New Jersey under the Federal Constitution possessed the right to thus create a monopoly in transportation facilities, and to regulate arbitrarily the commerce between sister States.

Five days after it had granted this charter to the Camden and Amboy Company, the legislature granted another charter authorizing the construction of a railroad from Jersey City to New Brunswick on the Raritan River. On the 23d of February of the same year a charter had been granted by the legislature of the State of Pennsylvania to a company which had been formed for the purpose of constructing a railroad from Philadelphia to Trenton. This company had likewise been authorized by its charter to buy the right of way for a railroad from Trenton to New York, which it proceeded at once to do. It was evident that as soon as the two new roads would meet at New Brunswick, an understanding would be reached between them, by which another through line would be created between New York and Philadelphia, which would have the advantage over the Camden and Amboy road that it touched the capital of New Jersey and could thus make itself serviceable to members of the legislature, officers of State and influential politicians.

The Camden and Amboy Freight Company soon arrived at the conclusion that it could not permit such rivalry. It appealed to the legislature for protection. Resolutions were passed in its favor, but the Philadelphia and Trenton Railroad Company paid no attention to those resolutions, but quietly continued to lay its track. Mr. Stockton and his friends did not dare to invoke the aid of the courts, because a judicial investigation might have resulted in the destruction of their own charter. The situation was critical, but Mr. Stockton was equal to the occasion. He bought quietly a sufficient number of shares to control the management of the Philadelphia and Trenton road, and, in April, 1836, secured the consolidation of the Philadelphia and Trenton and the Camden and Amboy railroad companies.

The canal of the company was not completed until 1838. It had consumed a sum of money largely in excess of the original estimate. To connect the two lines of the consolidated company, a branch road was constructed from Trenton to Bordentown. Later the road from Trenton to Brunswick was completed and an agreement entered into with the Jersey City company for a division of the traffic of the two roads. The large cost of these improvements suggested to the company the advisability of increasing its revenues and of decreasing its expenditures. Its charter provided for a payment to the State of 10 cents for each through passenger. By an artifice the company avoided the payment of this tax. It compelled its through passengers to walk over the bridge at Trenton and then continue their journey by rail via Bordentown to Jersey City.

The company's charter also stipulated, that the fare between New York and Philadelphia should not exceed $3 per passenger. Its officers interpreted this stipulation to apply only to the intermediate traffic and proceeded to collect $2.50 for the trip from New York to Trenton, and $1.50 from there to Philadelphia, thus increasing the fare for the entire journey to $4.00, one dollar above the maximum allowed by law. One Jacob Ridgway, who was the owner of a ferry-boat at Camden, saw here an opportunity for starting a lucrative business. He bought a steamer and carried passengers from Philadelphia to Trenton for one-third of the fare demanded by the railroad. After the Camden and Amboy Company had made several unsuccessful attempts to intimidate Mr. Ridgway and his force, one of which even brought Mr. Stockton in contact with the criminal courts, it purchased the boat with all terminal facilities at Philadelphia and Trenton. The attention of the legislature of New Jersey was repeatedly called to the company's failure to comply with the provisions of its charter, but these appeals were on the whole of no avail. In 1842, after a long discussion, a resolution was carried declaring the charge of $4 for the through journey illegal, but the company entirely ignored this legislative reminder and continued its old tariff.

The company's charter also reserved for the State the right to acquire the Camden and Amboy road under certain conditions upon the payment of a reasonable compensation. In 1844, through Mr. Stockton's engineering, the constitution of New Jersey was so amended as to practically deprive the State of the power to acquire the company's property.

During the first few years of the existence of the Camden and Amboy Transportation Company its business was managed in the interest of its owners, but soon a few of its leading stockholders managed to turn its enormous profits into their own pockets. The Stevens and Stockton families, together with two other directors of the Camden and Amboy Company, had come into possession of a line of steamers that plied on the Raritan, between New Brunswick and New York. The enterprise, in spite of its largely watered capital, had been made to pay dividends ranging from 30 to 40 per cent. Its owners saw an opportunity for a larger field of usefulness and larger dividends. In 1834 a majority of the board of directors of the Camden and Amboy Company proposed that the company rid itself of the responsibility connected with the transportation business and lease its railroad and canal. Mr. Stevens, as representative of the Camden and Amboy Company, then negotiated with Mr. Stevens, the representative of the Napoleon Steamer Company, and the negotiations soon resulted in an agreement between the two companies by which the latter leased the railroad and canal lines of the former and agreed to pay it a fixed toll of $7.64 per ton upon all freights carried by rail, and one-quarter of all its revenues derived from the canal. Soon afterward the Napoleon Company entered into a similar contract with the Camden Ferry Company and now had a complete monopoly of the transportation business between New York and Philadelphia. It at once commenced to develop a system of organized plunder. Instead of the maximum charter tariff of 8 cents per ton per mile, it charged 10, 12, and even 15 cents. The through rates charged were several times as high as those fixed by the charter. Canal rates were raised to such an extent as to make them prohibitory and to compel the public to ship by rail. It is difficult even to estimate the total annual profits of the directorial syndicate. Their accounts, if any were kept, were not accessible, and surmises can only be based upon such data as occasionally found their way to the public. In 1845 the share of the canal tolls paid to the company's stockholders was $359,000. The directors' share under the terms of their lease is thus found not to have been less than $1,077,000. Another item of $170,000, tolls collected for the transportation of 27,000 tons of freight, was so divided that the Camden Ferry Company, or its other self, the directorial syndicate, received $32,000 for one mile, while the Camden and Amboy Railroad Company received $63,000, or less than twice as much, for ninety-two miles. The directors under their lease were entitled to the remaining $75,000.

The service of the company was as bad as it was expensive; its trains were slow and irregular, and its employes arrogant. The syndicate which controlled the company defied its stockholders, the public and the courts alike. When one of the stockholders, a Trenton merchant by the name of Hagar, applied to the courts for an order to compel the directors to produce their books and render an account, the syndicate bought Mr. Hagar's shares, for which he had paid $125 a share, at the price of $1,456 a share. The suit was then withdrawn and the matter hushed up.

In 1848 a number of articles appeared in a paper published at Burlington, Pa., which were signed by "A Citizen of Burlington" and contained much surprising information concerning the Camden and Amboy Transportation Company. It was charged that the directors had defrauded both the State and the company's stockholders of large sums of money, that they had grossly violated their charter by charging illegal and extortionate rates, oppressive to both commerce and travel. It was shown that while the average rate per ton per mile of thirty-five neighboring roads was 2.85 cents, that of the Camden and Amboy Company was 4.54 cents. It was also shown that neither the stockholders nor the State had received the share of the company's revenues to which they were entitled. These articles were extensively reprinted and caused a great commotion wherever they appeared. After the first storm had subsided the directors issued an address to the people of New Jersey, in which they bitterly complained of the people's loss of confidence in their integrity, and declared that the charges preferred against them were founded on falsehoods.

The "Citizen of Burlington" replied by accusing the directors of defalcation and falsifying their books. He charged that from 1840 to 1847 no account had been rendered of the receipt of no less than $5,266,431, on which $493,066 was due to the State. As soon as the legislature convened, a resolution was introduced that a commission be appointed to investigate the charges preferred against the Camden and Amboy Transportation Company. The resolution was adopted, but it was virtually left to the accused to select the members of the commission. That the directors had a guilty conscience appeared from the fact that the last annual report of the company, which had just been printed, was withdrawn and destroyed. To silence their unknown accuser, they threatened him with criminal prosecution. He now gave his name. It was Henry C. Carey, the noted writer and authority on political economy. Mr. Carey did not give up the contest. He proceeded to show how the policy of the managers of the Camden and Amboy Transportation Company depressed commerce, manufactures and agriculture alike. He showed how the company as a public carrier discriminated in favor of industries which they carried on as private individuals. He claimed that the company had forfeited its charter, and that it was the duty of the State to authorize the construction of another road. In the meantime, early in 1849, the legislative investigation committee submitted its report. It was perhaps as shameless a document as was ever placed before a legislative assembly. It lauded the directors, to whose influence the members of the commission owed their selection, and whitewashed their past management of the company's affairs.

But the people of New Jersey were far from being satisfied with this report and demanded the appointment of another committee. Another investigation was ordered, and this time the company, or rather its directors, found it impossible to control the selection of its members. Soon after their appointment the committee asked Mr. Carey to lend them his assistance in their labors, and he readily consented. During the summer of 1849 the members of the committee had occasion to go to Bordentown, to inspect the company's books. From that time on a wonderful change seemed to have come over the committee. They found they could dispense with Mr. Carey's further services. What had previously appeared to them a ring of rapacious monopolists seemed now an association of worthy philanthropical gentlemen. In their report to the legislature they completely exonerated the company's managers. They admitted that the State had not been paid all that was due to it, but they asserted that this difference in the company's accounts was due solely to clerical errors, for which the management were in no wise responsible. The report was accepted, although not even the annexed testimony supported it, and thus the matter was dropped.

This was a great victory for Mr. Stockton and his friends. It demonstrated the success of their methods of dealing with public servants. Mr. Carey repeated his charges, but the directors failed to prosecute him for libel as they had threatened. He asked that he be permitted to inspect the company's books, but was met with a peremptory refusal. Public opinion was defied, and the old methods were continued.

The extortionate and discriminating tariff of the only through route of New Jersey affected seriously the agricultural as well as the commercial interests of that State. The Camden and Amboy monopoly kept the State of New Jersey for many years far behind the New England States in railroad facilities. In 1860 New Jersey had only one mile of railroad for every 17.6 square miles of territory, while the proportion of miles of railroad to square miles of territory for the same year was 1 to 7.9 in Connecticut, 1 to 7.6 in Rhode Island, and 1 to 6 in Massachusetts. At present New Jersey has one mile of railroad to every 3.79 square miles, and therefore leads all the States in the Union in density of railroad track.

The question may be asked how the Camden and Amboy Transportation Company, or rather the syndicate which controlled it, contrived to maintain its power for so many years, to the great detriment of industry and commerce. The only answer that can be given is that the men for whom the maintenance of the monopoly was a source of great wealth were constantly using a part of this wealth for the corruption of those who were in a position to influence public opinion or to direct the policy of the State. Prominent politicians were favored with passes, attorneys were retained by the company as local solicitors, corrupt and servile legislators were bribed by money or the promise of lucrative positions, and newspapers were given large subsidies. In addition to this public men were constantly made to realize the political power of the company, whose many employes had always been trained to do the bidding of their masters. If the opposition, in spite of this, was ever successful at legislative elections, the company's managers found it less expensive to gain the good will of a few members of the legislature after election than it would have been to gain the good will of their constituents before election. Dissatisfied stockholders who threatened with judicial investigation were quietly bought out or impressed with the danger of inviting public discussion in regard to the validity of the company's charter, as it might lead to its annihilation. The good people of New Jersey made several attempts to rid the State of the despotism of the company by making the question a political issue, but they were each time defeated through the lavish and scandalous expenditure of the company's money.

The original charter of the Camden and Amboy Railroad Company was granted for a period of twenty years, and should have expired in 1853, but its managers succeeded in having it extended to January 1, 1859. In 1854 another extension was asked for, and after a long and bitter debate the company was again triumphant. An act was passed on the 16th of March, 1854, making it illegal to build previous to the first day of January, 1869, without the consent of the Camden and Amboy Transportation Company, a railroad in the State of New Jersey for the transportation of passengers and freight between New York and Philadelphia. At the end of this period even a third extension was granted, and the company, though after January 1, 1867, under a new name, maintained its monopoly until it consolidated, in 1871, with the Pennsylvania Railroad Company.

That the spirit of the past is still at work was shown by the recent act of the legislature of New Jersey legalizing the consolidation of the coal roads. The coal barons found the legislature as servile as the managers of the Camden and Amboy Railroad Company had found them of yore, and their well-planned scheme would probably have been successful had it not been for Governor Abbot's courageous veto of the disgraceful act, and it is more than probable that they will yet succeed. They have, in fact, during the last year advanced the price of coal about one dollar per ton.

THE STANDARD OIL MONOPOLY.

The Standard Oil monopoly may be said to be the crowning monument of corporation conspiracy. It is, indeed, doubtful whether the combined brotherhoods of mediaeval knights ever were guilty of such acts of plunder and oppression as the Standard Oil Company and its railroad allies stand convicted of before the American people. The facts that have been unearthed by official investigations show a frightful prevalence of corporate lawlessness and official corruption, and there can be no doubt that, could certain high railroad dignitaries have been compelled to testify, and could the truth have been fathomed, it would have been found that not only the public, but railroad stockholders as well, were victimized by those transactions.

The founder of the Standard Oil monopoly was some twenty years ago part owner of a petroleum refinery at Cleveland, Ohio. His fertile brain conceived the thought that with the cooperation of the railroad companies a few men of means could control the petroleum business of the United States. With this end in view he approached the managers of the New York Central, the Erie and the Pennsylvania Central railroad companies, and on January 18, 1872, entered with them into a secret compact by which they agreed to cooperate with the South Improvement Company (an organization formed by that gentleman to aid in the accomplishment of his designs) to grant to said companies certain rebates and to secure it against loss or injury by competition. The South Improvement Company, in consideration of these favors, guaranteed to the railroad companies a fair division of its freights. The existence of this contract soon became known and caused a violent protest among the oil-producers. An indignation meeting was held and a committee was appointed to wait on the railroad managers and demand fair treatment for all.

The railroad companies yielded and promised to give equal rates to all shippers and to grant to no person either rebates or any other advantage whatever. New rates were fixed for the transportation of both crude and refined oil, and it was agreed on the part of the railroad companies that at least ninety days' notice should be given of any change that might be made in the rates. Steps were also taken to have the charter of the South Improvement Company canceled because it had been found that it was neither the owner of a refinery nor of an oil well, and could therefore not comply with the legal requirements concerning the organization of stock companies. While the South Improvement Company thus came to a sudden and rather inglorious end, its founders soon contrived other means to carry out their ingenious plans. They bought a refinery, reorganized by taking the prepossessing title of Standard Oil Company, and were now prepared to resume their operations under the guise of legal authority.

The railroad companies seemed to have relished their novel business connections, for, without paying the least attention to the agreement into which they had entered with the other producers and refiners of oil, they extended the privileges of the defunct South Improvement Company to its successors. The new company received secret rebates ranging from 50 cents to $1.32 per barrel. The agreement also contained the stipulation that if lower rates should ever be granted to their competitors, an additional rebate should be given to the Standard Oil Company. Endowed with these privileges, the favored company proceeded to unite under its banner, by consolidation, purchase or lease, the leading refineries of Cleveland.

The effect of the discriminations practiced against independent refineries soon became apparent. In less than two years there were closed in Pittsburgh twenty-one refineries, that represented an aggregate capital of $2,000,000 and had given employment to over 3,000 people. A large number of the remaining refineries were forced to consolidate with the Standard Oil Company.

The next step toward the entire suppression of competition was an attack planned against the independent pipe lines. The Standard had early secured control of the United Pipe Line. To exterminate competing lines, they again appealed to the railroad companies, and on the 9th day of September, 1874, J. H. Rutter, general freight agent of the New York Central, issued a new oil tariff which discriminated greatly in favor of the oil brought by the United Pipe Line to the refineries. Up to that time this company had done from 25 to 30 per cent. of the total business of the various pipe lines. Within one year after the adoption of the new tariff it did fully 80 per cent. of the entire business. This forced the independent lines either to sell out to the Standard or to suspend business, for the latter's rebate was larger than their toll. The oil tariff of the Pennsylvania Central compelled the independent Pittsburgh refiners to ship their refined oil over that company's line, if they would avail themselves of the rebate which it granted on the rates for the transportation of crude oil to Pittsburgh. The evident purpose and the effect of such a tariff was to prohibit oil shipments over the Baltimore and Ohio. Had this road made ever so reasonable a tariff, the combined charges for the transportation of the crude petroleum from the oil regions to Pittsburgh by the Pennsylvania Central, and for that of the refined oil to the sea coast by the Baltimore and Ohio, would still have been prohibitive in competition with the special transit rates granted to the Standard Oil Company. As a remedy it was proposed to organize a new pipe line, it being believed that the crude oil could be brought to Pittsburgh by that line, refined there, shipped to the seaboard by the Baltimore and Ohio, and sold there at as good or even a better profit than the product of the Standard, notwithstanding the favors received by the latter from the allied trunk lines. This movement resulted in the creation of the Columbia Conduit Company, which at once proceeded to lay its pipes from the oil wells to Pittsburgh. Under the laws of the State of Pennsylvania it became necessary for this company to obtain the permission of property-holders to lay the pipes through their lands. Consent was everywhere readily given, and the pipes were laid without hindrance until the track of the Pennsylvania Railroad was reached, within a few miles of the Pittsburgh refineries. This company peremptorily refused to let the pipes be laid under its track. The pipe line company after some delay contrived a way to obviate the difficulty. It laid its pipes on each side of the road as close to the track as it could without trespassing against the legal rights of the Pennsylvania Central, and then conveyed the oil from one side of the track to the other by means of large oil tanks on wheels, which could not be prevented from passing over the railroad track at the public crossing. After several months the railroad company allowed the pipes to be laid under its track, but it soon appeared that another combination had been effected to destroy the value of this concession. A railroad war had given the three trunk lines an opportunity to force the Baltimore and Ohio into the pool. A uniform rate of $1.15 was established for shipments of refined petroleum from any point to the seaboard. While this was in itself an unjust discrimination against Pittsburgh, which is 250 miles nearer tidewater than Cleveland, the railroads in addition granted the Standard secret rebates which enabled it to sell its oil on the coast for less than the sum of its first cost at the refineries and the open rate of transportation to the points of export. The independent refiners of Pittsburgh found themselves again cut off from the market, but necessity soon made them discover another outlet. Shipping their oil down the Ohio River to Huntington, W. Va., they had it taken by the Chesapeake and Ohio Railroad to Richmond. In spite of the fact that this route was more than twice as long as the direct line from Pittsburgh to the seaboard, and in spite of the further fact that it necessitated an expensive transfer, a rate equal to about two-thirds of the trunk line rate for the direct shipment proved remunerative to the Chesapeake and Ohio. The independent refiners kept up their competition for some time, but the great disadvantage of river travel and the insufficient export facilities of Richmond finally forced them to give up the contest.

Until the year 1877 the Standard Oil Company had worked hand in hand with the railroads. It had obtained all its privileges by asking for them and by holding out inducements to railroad managers to grant them. It now commenced to dictate terms to refractory railroad companies.

The Pennsylvania road ventured to carry oil not the property of the Standard on terms which that company did not approve. The latter ordered the road to refuse to carry the product of their competitors. This the railroad company declined to do, and the Standard at once withdrew its custom. The Pennsylvania retaliated by carrying the oil of the independent refineries at merely nominal rates and even went so far as to make its rates dependent upon the profits realized by the shippers. A fierce freight war was thus precipitated, in which the Erie and New York Central supported the Standard Company. The Pennsylvania road was soon forced to surrender and sign an ignominious treaty.

The Baltimore and Ohio, which had again commenced to carry the product of those Pittsburgh refineries which received their crude oil through the Columbia Conduit Company, was in a similar manner forced to reject their freights. The pipe line, whose value was thus almost entirely destroyed, was soon after sold to the Standard Oil Company. This company had now an almost complete monopoly of the oil business of the United States, and still it was not satisfied. It appears that some of the producers of crude oil had been in the habit of shipping a part of their product in spite of the advantages which the Standard had through its rebates. To prevent even these shipments, or rather to exact another tribute from railroad stockholders, the American Transfer Company, one of the auxiliaries of the Standard Oil Trust, in 1878, demanded and received from the Pennsylvania road a "commission" of 20 cents a barrel on all shipments of petroleum made by any shipper. It had been shown to the satisfaction of the Pennsylvania Railroad Company that similar commissions, ranging from 20 to 35 cents a barrel, were being paid by the New York Central and Erie roads.

When, in 1879, an effort was made to establish a pipe line from the oil regions to the seaboard, nothing was left undone by the trunk lines to thwart the enterprise. The new company finally succeeded in making connection with a railway which had no part in the pool, and there was some hope that under this arrangement competition might at least be maintained at some points. The Standard Company again appealed to the trunk lines to protect it against injury by competition and obtained from them a special rate of 20 cents per barrel, which rate was even reduced to 15 cents per barrel two months later. Against such a rate it was impossible to compete, and after a short struggle the new line found itself compelled to sell its works to the Standard.