But the most amusing error remains to be noticed. Running powers or "working arrangements" when voluntary are just the opposite of what they are supposed to be. In lieu of being a form of competition, they are a form of combination—the forerunner of pools and frequently their concomitant. The railways agree to forward traffic over each other's lines, or to divide the traffic in cases where they use the same line, not in order to maintain competition but in order to avoid competition. And if enforceable running powers were universal, they would simply result again in private agreements. It would not be an advance of competition but a check to competition. Even if it were practicable, it would simply accelerate the process which it was designed to arrest. Compulsory competition is an absurdity. Fortunately the Interstate Commerce law expressly disclaims all intention of enforcing such working arrangements,1 although it may well be doubted whether the legislators were actuated by the reasons just recounted. The prohibition of pools militates against the acceptance of any such flattering imputation.

There remains finally the subject of water competition. In so far as we have to deal with artificial waterways the same unmistakable tendency to combination is apparent. The competition of canals is virtually of no importance as the regulator of railway charges. In the first quarter of this century the charges on the English canals were so extortionate and the abuses so extravagant that great hopes were staked on the competition of the railways. The railways indeed did compete with the canals, but so effectually as to silence all competition. They bought up the canals or amalgamated with them, and before long the condition of affairs was reversed. New canals were now built to compete with the railways in place of new railways being built to compete with the canals. The conditions had shifted. But all was in vain. Already at an early period the rivalry of the canals had been overcome; 2 by 1872 the influence of the art. 61, in Picard, Chemins de fer français, t. iv, p. 71. As to the difficulties to which even this has given rise, see Aucoc, Droit administratif, t. iii, pp. 779 et seq.

1 Cf. sec. 3.

2 In 1865, of the four thousand miles of water and river communication in England and Scotland, about one-third had been amalgamated with the railways. Royal Commission (1867), Rep. App. qu. 9899 et seq.

canals as competing factors was infinitesimal.1 The railways were the victors; competition had again failed.

On the continent the condition is the same. Everywhere the canals have been losing their traffic. Even when owned by the state, their efficacy is a thing of the past, although in such cases there can naturally be no consolidation with the private railways.2 Isolated efforts are yet made to further the construction of new canals, but the better opinion now recognizes the ultimate uselessness of such attempts.

Although the movement has not progressed quite so far in the United States, the tendency is the same. From 1830 to 1850 the canals were formidable competitors of the railways, but from that time on the private canals were gradually bought up, while the state canals were either abandoned, sold, or reduced to a state of utter decrepitude. The efforts of the Clinton league in New York were unable to arrest the movement. In 1886 an expert witness stated to the Senate committee: "I do not think that there is a canal in the United States, except the Erie, that is not more or less controlled by the railroads." 8 The competition of artificial waterways can no longer be relied on.

In respect to natural waterways the matter is slightly different. The sea and navigable rivers cannot be subjected to a monopoly. In such cases the competition is real and active, although only spasmodic in the case of internal navigation. The importance of the Erie canal, and the extent to which it really regulates the charges by rail, is due solely to the fact that

1 Select Committee (1872), Rep., p. xxix. Also pp. xx-xxiv, with full references to the evidence. Cf. in general the admirable work of Freiherr von Weber, Die Wasserstrassen Nord-Europas (1881), S. 92-111. Also de Franqueville, Du régime des travaux publics en Angleterre, 2me éd. (1875), t. ii, pp. 274–306.

2 Cf. Nördling, Die Wasserstrassenfrage in Frankreich, Preussen und Oesterreich (1885), esp. S. 28, 128, 158, 171–176. A French translation of this work has just been published.

3 Cullom Committee Report, Test. (Wistar) 507. For a careful investigation of the whole question, cf. Mosler, Die Wasserstrassen in den Vereinigten Staaten (1877). Much valuable material may be found in Kupka, Die Verkehrsmittel in den Vereinigten Staaten (1883), S. 41-126.

4 Yet in England there are instances even of this. Cf. Select Committee (1872), Rep., pp. xix, xx. Select Committee (1881), Evid. qu. 8133.

it is a link in the chain of natural waterways. But the influence of internal navigation is apt to be seriously exaggerated, and the exuberantly enthusiastic expressions of the Cullom report savor, it must be confessed, slightly of rhodomontade.1

Finally, it must not be overlooked that water competition, in so far as it is an important factor in internal transportation, is precisely the chief cause of local discriminations. Differential

rates are due in great part, as we have seen, to the existence of competing centres. As long as the competition exists the discriminations must continue. Hence those who clamor for the construction of new waterways or the improvement of the old may indeed succeed in effecting a reduction of charges, but forget that they are only strengthening the causes of whose results they complain. To maintain competition and avoid discrimina- | tion is impossible.

The chief provisions of the federal law have now been discussed. There remains to be considered only the machinery to enforce the law, i.e., the Interstate Commerce commission.

The commission idea is essentially a product of the AngloSaxon mind. On the continent of Europe direct administrative control has always been comparatively stringent, and the extent of state interference has been conditioned only by considerations of a political nature. Almost every possible system has been tried; and if entire immunity from abuses has not been attaineđ, it is not for lack of serious endeavors on the part of the govern

1 "The manifest destiny of our country points unerringly to this emancipation of the waters as its next great work, a fitting sequel to the emancipation of the slave, a a destiny not of war, but of beneficence and peace, to which the heart of the nation turns as spontaneously and resistlessly as the waters of its great river flow to the Gulf." Report, p. 175. Cf. with this "manifest destiny" the figures as to the decadence of the Erie canal in Statistics regarding the Movement of Eastbound and Westbound Traffic over the Trunk Lines, etc. (1885), pp. 16, 17; also Report on the Internal Commerce of the United States (1885), pp. 408-414. The Windom Committee likewise favored government canals. But the value of their suggestions may be inferred from the fact that they also recommended one or two government railways to regulate the private lines. Senate Select Committee on Transportation Routes to the Seaboard, Report (1874), pp. 187-242.

2 Weber, Nationalität und Eisenbahnpolitik (1876). Audiganne, Les Chemins de fer d'aujourd'hui et dans cent ans (1858-1862).

ments. In no country was the public nature of the railway business lost sight of. Even where financial reasons led to the construction of railroads by private companies, the fostering and restraining action of the public authorities was never absent. The corporations were not able to dictate terms to the state.

In England the history was quite different. The railways, indeed, started out as humble suppliants for favors, but governmental action confined itself to seemingly guarded restrictions in the charters, such as maximum clauses and limitations of dividends, all of which were soon shown to be utterly powerless to prevent abuses. The railways increased so rapidly that their position soon became that of dictators, in place of suppliants. Warnings of able men like Morrison went unheeded.1 Praiseworthy attempts were still made by far-sighted statesmen, but the railway opposition was sufficiently powerful to crush all interference. Lord Seymour's bill of 1840 provided for the appointment, by the Board of Trade, of railway inspectors, who should have the right to "remonstrate" with the companies.2 But the law remained a dead letter, and in 1842 Gladstone brought in another bill giving the Board of Trade inspectors certain compulsory powers. This law was not more successful than its predecessor, and finally, as the outcome of the great investigation of 1844, a commission was appointed within the Board of Trade and put in activity in 1845. It was known as Lord Dalhousie's Railway board, and was invested with extensive duties of examining all new projects. But although it worked hard, it discountenanced parallel roads and thus incurred the hostility of the railways and ultimately the jealousy of Parliament itself. As a facetious member said, it attempted to do what five angels could not accomplish; and public opinion not coming to its rescue, it was abolished ingloriously the same year. Nothing daunted, however, the government brought in

1 Cf. James Morrison, Speech in House of Commons, May 17, 1836; id., The Influence of English Railway Legislation on Trade and Industry (1848), p. 86, and App., pp. 107, 158.

2

3 and

4 Vict. c. 97, An act for regulating railways.

8 3 5 and 6 Vict. c. 55, An act for the better regulation of railways, etc.

4 Cf. Report on Railway Companies' Amalgamation (1872), p. vii.

79

a new bill constituting the Board of Railway Commissioners,
in 1846, with moderately extensive powers.1 But the railway
interest again succeeded in robbing the bill of all its vitality, so
that the only function left to the new commission was “inquiry
and publicity." It vegetated for five years, accomplishing prac-
tically nothing, and was quietly abolished in 1851, while all its
"extensive powers
were re-transferred to the Board of Trade.
For over twenty years the commission idea slumbered. Card-
well's act of 1854, the only serious attempt at governmental
regulation during the interim, left the enforcement of its pro-
visions to the common courts, and with the customary results.
It was not until 1873 that the present railway commission was
finally constituted. But although its activity has been inces-
sant and the number of cases disposed of far greater than those
previously adjudged by the purely legal tribunals, it has by no
means achieved an unqualified success. The manifold com-
plaints in the late investigation of 1881-82 and the proposals
now pending to reconstitute and strengthen the commission
bear ample testimony to this fact. The commission is practi-
cally a court for railway cases,2 but its efficiency has been
checked in three ways. Its jurisdiction is limited, its procedure
is cumbrous and expensive, and its powers of enforcing judg-
ment are restricted. Its jurisdiction is limited, with a few
unimportant exceptions, to cases arising under Cardwell's act
of 1854, which forbids undue preferences and requires proper
facilities. The commission has endeavored to widen its powers
by interpretation, as, e.g., in the case of transgression of the

1 Accounts and Papers, 1846, vol. iii, p. 277; and the bill as passed May 21, in Accounts and Papers, 1847, vol. iii.

2 Of the three members and two assistants, one must be a jurist. In questions of fact their decision is nominally final; if they think it a question of law, then they are to "state a case" in writing, and the matter goes up to the higher court, who are either to decide it, or to give their opinion as to the law and send the case back to the commission. But as the appellate court can issue a writ of mandamus compelling the commission to "state a case," the decisive power does not rest with the commissioners. Cf. Seventh Report Railway Commission, p. 3.

3 Such as reasonableness of terminals, enforcement of through rates, agreements with canals, etc. 36 and 37 Vict. c. 48, §§ 8-11, 14-17. For list of cases decided up to 1882, cf. Select Committee (1881), Rep., App. no. 17, pp. 68–79.