respect have been observed in this country, and those railroad companies which have published full statements as to their transactions have thereby gained public confidence and favor.

The directors of the Pennsylvania Railroad Company, appreciating the fact that the credit of that great enterprise (the most extensive railroad organization in the world) depended upon a thorough understanding of the policy pursued by its management, and that an attempt to pursue the policy of concealment would be liable to create suspicion and to injure its credit, the stockholders, at a meeting held March 10, 1874, appointed an investigating committee of their own number, who were directed to make an appraisement of all its roads, shops, machinery, real estate, depots, bonds, stock, &c., &c., and to inquire into the conduct of every part of its management. The report of that committee embraces much valuable information in regard to the operations of railroad companies in their relations to stockholders and to the public.

The following extract in relation to the sources of the existing distrust in the value of railway stock and securities is of interest:

The meager and incomplete reports of the directors of railroads made to the stockholders. Railway directors in their reports seem guided by the old adage "that the least said is soonest mended." There is a tendency to limit their reports to the general results of a year's work, giving financial results and the economic workings, while the stockholders are left in great ignorance of the value of their own property. There should be in every report the fullest detail of these items, enabling each stockholder, at the end of a year, to make his own estimate of the value of his stock. But these reports should go further, and give the most ample information as to the position of the road in its relations with other roads, and state fully all the facts that might influence its policy, its plans for the future, or its finances.

The railroad commissioners of the State of Wisconsin, having made a thorough investigation of all the causes of distrust and of hostility which led to the popular opposition to railroad management throughout the West, have very fully and with great ability discussed the evils of the policy of concealment. Their conclusions upon this subject are expressed as follows:

Regarding the possibility of secrecy as affording encouragement to fraud and mismanagement on the one hand and on the other as being a frequent occasion for unwarrantable suspicion on the part of the public, we are strong in the conviction that it is of great importance to both railway companies and people that the reports made by such companies should be very much more full and thorough than they have been heretofore. There may be cases in which an honest corporation, struggling through financial straits, would prefer that its exact condition should not be known to the world; and yet, even in such cases, the policy of concealment is one of very doubtful propriety or advantage, while the amount of injury that may be done to the public and to the credit of the State by encouraging less honorable corporations in the practice of secret frauds may be very great. The fact must not be lost sight of that the State, to the extent of its power to prevent the practice of wrongs upon the public by the corporations of its own creation, is bound to regard the general welfare, future as well as present, rather than the tottering credit of one or more unfortunate corporations.

The railroad commissioners of Massachusetts have, in their annual report for the year 1875, emphasized the importance of the policy of

publicity, and pointed to the natural effect of this policy as a means of preventing abuses. After exposing the unreliable character of the railroad-returns made to the State the commissioners say:

There is but one remedy for such a condition of affairs; that, however, is a very obvious one. It will be found in an increased publicity and more perfect uniformity. The last vestige of the old idea that the accounts of railroad corporations are matters of private concernment only, and as such can best be managed in secret, must be gotten rid of. To bring about this result, a bill was prepared a year ago and submitted by this board to the joint legislative committee on railways. It was meant to be radical in its character, having been prepared in the full light of the many and notorious railroad scandals of the last ten years, and with the financial revelations which followed the crisis of 1873 still fresh in mind. It subjected the books of the railroad corporations to a constant and regular public supervision, with a view to securing accuracy and uniformity in the method of keeping them. The results set forth in future returns were to be not only plausible but they were actually to represent the exact condition of the affairs of each company, not only in themselves but as compared with those of every other company. Where charges had to be apportioned under arbitrary rules, those rules were in all cases to be approximately the same. Where, under exceptional circumstances, deviations from those rules became necessary, attention was to be called to them as such.

This bill subsequently became a law.

If similar measures shall be adopted in other States, the great railroad corporations of the country will come to realize the fact that their true interests lie in the direction of the fullest and most complete publicity, and the commercial interests of the country will thereby be advanced.

INFORMATION FURNISHED BY EXPERTS.

In compliance with the terms of the law requiring the preparation of this report, the services of several gentlemen, well informed in regard to the commercial and transportation interests of the country, have been secured, for the purpose of furnishing statistical and other necessary information.

A large part of the contributions of these gentlemen may be found in the appendix to this report. Attention is especially called to the interesting and valuable statements prepared by the following persons:

Mr. Albert Fink, of Louisville, Ky., a well-known civil engineer and railroad manager; Mr. J. D. Hayes, of Detroit, Mich., a gentleman who has been largely engaged in the management of railroads, and of traffic upon them; Mr. Theodore F. Lees, general agent of the New York Cheap Transportation Association, a gentleman who has devoted much attention to the study of the railroad question; Mr. Charles Ran dolph, secretary of the Board of Trade of Chicago, and secretary of the National Board of Trade of the United States; Col. Milo Smith, of Clinton, Iowa, a gentleman who has been extensively engaged in the construction and management of railroads in the Western States; Mr. Hamilton A. Hill, formerly secretary of the Board of Trade of Boston, and of the National Board of Trade; Mr. George U. Porter, secretary of the Baltimore Board of Trade; Mr. Sidney D. Maxwell,

superintendent of the Cincinnati Chamber of Commerce; Mr. William Melhinch, of Cleveland, Ohio, a gentleman well informed as to the commerce of that city; Mr. C. F. Wales, secretary of the Toledo Board of Trade; Mr. Curtis Guild, of Boston, a gentleman well in formed as to the commercial interests of Boston and of the State of Massachusetts; Mr. William Thurston, secretary of the Board of Trade of Buffalo, N. Y.; Mr. George H. Morgan, secretary of the Merchants' Exchange of Saint Louis, Mo.; Mr. Henry G. Hester, secretary of the New Orleans Cotton Exchange, and formerly secretary of the National Cotton Exchange; Mr. C. F. Solberg, formerly commissioner of statistics of the State of Minnesota; and Mr. C. H. Pope, of Louisville, Ky., a gentleman well informed as to the commerce of that city. Each one of these sixteen gentlemen has had a large business experience, and the names of all are well known, a fact which lends great value to their respective statements.

It is proposed in the preparation of the next report to secure the services, as experts, of several persons well-informed in regard to the agricultural and manufacturing interests of the country in their relations to commerce. This is a measure which naturally follows the line of effort pursued during the past year.

The main object to be attained is that of presenting such information as will convey to Congress, in a concise and perspicuous manner, the more important facts in regard to the movements of commerce and the conditions governing those movements. The importance of the collection and publication of such information has been several times asserted by the National Board of Trade and by several of the principal commercial bodies of the country.

The adoption of measures for the purpose of meeting this requirement will tend to bring the National Government into closer sympathy with the commercial interests of the country.

CONCLUSION.

Until recently circumstances have been quite unfavorable to the attainment of a knowledge of the movements of commerce on railroads A long period elapsed before the modes and habits of commerce could be adapted to the new method of transportation and before railroad managers were able to supply the requisite facilities, and to shape the administration of the affairs of the roads so as to meet the varied requirements of trade. As the rival trunk roads were extended from the Atlantic seaboard toward the West their interests soon began to clash. A period of wild railroad expansion followed, during which fierce antag. onisms prevailed and all the economies of railroad management were subordinated to the policy of gaining "strategic advantages."

The period of the extension and consolidation of lines was characterized by bold exploits, reckless management, and glaring abuses; almost absolute power being concentrated in the hands of so-called "railroad

kings," men of strong wills and ambitious purposes. But at last the conflict of rival railroad interests and the overruling influence of commercial forces rendered it impracticable to parcel out the commerce of this country among four or five great railroad corporations. The reali zation of this fact marked the beginning of a conservative period. Railroad managers then began to attend more closely to the conditions surrounding them, and to seek new expedients for protecting the vast interests which had fallen into their hands. From the force of neces sity, they were compelled to study the course of trade and the conditions and circumstances governing its movements. The knowledge thus gained has been derived from stern experience.

The depressed condition of the business of the country during the last four years has, more than anything else, forced railroad managers to such economies as have made the roads in a higher degree than ever before avenues of commerce. The opening up of new lines of commerce, the establishment of direct traffic between distant points, the diversion of important branches of commerce from certain trade-centers, and the concentration of other branches of trade and industry at other points have also led to great changes in the commercial habits of the country. The increasing competition of product with product in the various markets, or, in other words, "the struggle of all commodities to reach a parity in value," is a direct result of the influence of railroad transporta tion toward the equalization of values, a circumstance which has been slowly but surely working a revolution in commercial affairs.

The greatly changed condition of the transportation interests of the country has led to a marked change of sentiment regarding the relations of the railroads to the public. During those years of expansion and of contest for a prize which became more and more intangible with the extension of the lines which were to grasp it, the policy of concealment was rigidly adhered to; but, since more practical and business-like methods have been adopted, the wisdom of the policy of publicity is becoming apparent. When great expectations were succeeded by disappointment, stockholders began to demand information in regard to the management of their properties. At the same time trade-organizations began very carefully to take note of the movements of commerce by rail, and the legislatures of the different States inaugurated measures for the collection of statistical and other facts in regard to railroad operations, the tendency being constantly toward accuracy and perspicuity in the returns.

The moral effect of a better understanding of the whole question has tended to wear off asperities, and a spirit of accommodation in the minds of railroad managers has taken the place of a tendency toward an isola. tion of their interests. The present is therefore believed to be a most auspicious time for the inauguration of concerted measures for the development of a knowledge of the internal commerce of the country. Railroad managers, State railroad commissions, voluntary associations,

and individuals in an official or private capacity are all lending their efforts in this direction, and the importance of a knowledge of facts tending to throw light upon the subject is generally appreciated.

In adjusting itself to the conditions of the varied interests of society, the railroad system has been and is still passing through the processes of an evolution, but it is an evolution the course of which has always been and always will be hidden. Special efforts at adjustment have failed, and disappointment has overwhelmed many a supposed solution of the whole question. But the general tendency has always been in the direction of progress. The railroad has not only moved toward the commercial, the industrial, and the social habits of the people, but the interests of the people have shaped themselves to the exigencies of railroad transportation.

In the efforts which are now being put forth to settle the various questions touching the relations of the railroads to commerce, to the state, and to each other, men may plan and they may execute; but unless they build wiser than they know, they will build in vain. Concession and comity must grow into custom, and custom must develop into law. This is the natural course of adjustment; this the way in which every forceful agency becomes a factor in human activities.

The most effective instrumentality in bringing about this desired end will be found to be the diffusion of a knowledge of all the conditions governing the internal commerce of the country.