waukee, and other Lake Michigan points are detained until the prospect of passing the straits is practically assured in the spring. From Lake Superior points southward to the lower lakes the season of navigation opens and closes with the opening and closing of the Sault Ste. Marie Canal.

Nearly all the commodities handled on the lakes may be classed under the head of raw materials. The chief articles of traffic from the upper lakes eastward are flour and grain, iron ore, and lumber. Westward the traffic is primarily coal, salt, and general merchandise. Owing largely to the small number of articles which can be handled in bulk rapidly, and of which a large amount enters into trade at a few points, the traffic operations on the lakes have been developed in a manner found in no other part of the world. In the first place, the size of vessels has been greatly enlarged in order to carry a greater bulk at lower cost per unit. Secondly, the terminal facilities for handling these leading articles have all been enlarged and improved by mechanical equipments, making it possible to load and unload rapidly and therefore to increase the number of trips which a vessel may make between ports in a season. To these causes more than any other is to be attributed the rapid development of the shipping on the lakes and the traffic movements that have called the tonnage into existence.

B. Recent Development, 1890-1909 1

1

The development of the lake traffic since 1860 has been due primarily to the large eastbound shipments of ore and grain. To what extent this traffic has grown is shown by the following report:

The principal characteristics of Lake commerce are the preponderance of eastbound over westbound shipments and the fact that the traffic is mainly in a few commodities - iron ore, grain, coal, and lumber. There is a considerable movement of miscellaneous and package freight, both local and through, but it is small compared with the enormous bulk-freight traffic in the crude products of contiguous mines, forests, and grain fields.

Through traffic constitutes the greater part of the total freight movement. The main course of this lies between the western extremity of Lake Superior and the southern shore of Lake Erie.

The Lake traffic was not reported as a whole prior to 1889, when, according to the Census, the domestic traffic amounted to 25,266,974 net tons. The domestic traffic amounted to 45,000,000 tons in 1901,

1

Report of the National Conservation Commission (Washington, 1909), II,

and in 1907 to more than 80,000,000 (shipments 83,507,000 and receipts 81,124,000 net tons).

Iron ore and coal form by far the greater part of the Lake traffic, and furnish together 98 per cent of the total increase from 1905 to 1907. The movement of lumber during these years has declined in importance; other traffic, outside of ore and coal, has remained about stationary.

Since 1890 with the development of the Lake Superior mines, the United States has taken first rank among the world's iron producers. Of the total domestic production of iron ore, approximately 80 per cent was transported by way of the Great Lakes (41,000,000 net tons in 1906 and 45,500,000 net tons in 1907), constituting in some years more than half of the total domestic Lake traffic.

Next in volume to iron ore, and first in the westbound Lake traffic, is the westbound movement of coal. This was over 21,000,000 tons in 1907, representing about a fourth of the domestic Lake traffic.

In the movement of flour and grain (eastbound) there is active competition between the Lake and all-rail routes, and with the decline in export trade the domestic movement on the Lakes has remained practically stationary in recent years, at about 150,000,000 bushels of grain and 1,300,000 tons of flour. There has been an increase of traffic from American ports to Canada and also between Canadian ports.

The traffic in logs and lumber is decreasing in volume and still more in relative importance. Nevertheless, it still constitutes one of the leading items.

Some of the less important forms of traffic are the movement of copper, salt, pig iron, and package and miscellaneous freight. About 100,000 tons of copper ore are annually shipped, mainly from the copper district in the Upper Peninsula of Michigan. Salt is shipped by Lake in considerable quantities from Manistee and Ludington, Mich., and in smaller quantities from Buffalo and other points. Pig iron moves in small lots between a considerable number of ports. Package and miscellaneous freight forms about a tenth of the total traffic.

Lake Superior shows the largest volume of shipments of any of the Great Lakes, domestic shipments aggregating over 40,000,000 tons in 1906. About 65 per cent of the total traffic of the Lakes passes in or out of Lake Superior through St. Marys Falls canals. Lake Erie has the largest receipts (43,600,000 tons in 1906 and 47,000,000 in 1907 in the domestic traffic), is second in volume of shipments

(18,450,000 tons in 1906), and has the largest proportion of the total traffic. Lake Michigan ranks third, but has the largest amount of local traffic.

Notwithstanding the large number of Lake ports, about a dozen ship and receive 80 per cent of the water-borne traffic. DuluthSuperior is the most important port for shipments and has the largest water-borne traffic of any of the Lake ports, aggregating over 29,000,000 tons in 1906, mainly ore, grain, and coal. Chicago and Milwaukee are among the leading ports, both for shipments and receipts. The Lake commerce of Chicago amounts to about 10,000,000 tons annually, and that of Milwaukee to 6,000,000 tons. Buffalo and Cleveland are also ports of first importance, both in the volume and in the variety of their commerce, and Buffalo has the largest receipts of any of the Lake ports. The Lake commerce of Buffalo for 1906 exceeded 15,500,000 tons (domestic traffic 14,345,000 tons), and, including canal traffic, the total water-borne commerce of Buffalo was over 17,320,000 tons. The Lake commerce of Cleveland for 1906 was 12,247,000 tons (domestic traffic 11,670,000 tons). Other important but more specialized ports include Two Harbors, Ashland, and Marquette, on Lake Superior, and Escanaba, on Lake Michigan, for shipments of ore; Toledo, Ashtabula, Lorain, Conneaut, and Erie, on Lake Erie, for receipts of ore and shipments of coal, and Tonawanda for receipts of lumber.

IV. RAIL AND RIVER TRAFFIC

A. Growth of Railroad Systems to 19001

The most important railroad development during the past generation has been in the direction of consolidation. Before the Civil War American railroads were short and disconnected, and continued to be so until as late as 1880. This was the period of railroad extension. Many miles were laid down by numerous independent builders, with little regard for those lines already built. The next stage was one of consolidation, in which the guiding hand was that of the capitalist and not that of the builder or promoter. The extent of this consolidation down to the year 1900 is given by the Industrial Commission as follows:

The development of American railroad systems down to 1898, as judged by magnitude alone, may be roughly divided into three periods. In the first that is, down to 1870- a few hundred miles in length

1 Final Report of the Industrial Commission (Washington, 1902), Volume XIX of the Commission's Report, 304-6.

constituted the maximum for efficient operations. The Illinois Central, with 700 miles of line, was long considered one of the greatest railroads in the world. Until after the civil war there was only one road with a length aggregating more than 1,000 miles. This growth began early in the fifties, at which time the Pennsylvania system first surpassed 500 miles in length, and in 1853 to 1858, when the New York Central nucleus was formed by the consolidation of some sixteen independent corporations. In the territory west of Chicago the Chicago and Northwestern road operated but 119 miles in 1859, a figure which rose to upward of 500 in 1866. The inconvenience, both for freight and passenger traffic, incident to these small systems is of course obvious. It is stated that, for instance, a journey from New York to the Mississippi in the fifties involved not less than seven bodily transfers from one car to another.

The second period in the growth of consolidation extended to about 1890, at which time 5,000 miles represented about the maximum length of a single railroad in the United States. The Pennsylvania road had grown to about 4,000 miles in length by 1880. The absorption of the Nickel Plate road by the Lake Shore and Michigan Southern in 1882, followed by absorption of the West Shore road by the New York Central in 1885, very considerably increased the length of systems under common control. In the West the Chicago and Northwestern road had grown by 1886 to about 3,500 miles, to which was added some 1,500 miles by the control of the Chicago, St. Paul, Minneapolis and Omaha, and the Fremont and Elkhorn roads. By 1889 the Union Pacific road owned 2,000 miles of line, but controlled nearly 4,000 more. It is difficult to determine whether the enactment of the act to regulate commerce produced any effect upon this growth of large systems. Upon the one hand it appears, from investigation by the Interstate Commerce Commission itself, that consolidation was rather lessened after 1887 as compared with preceding years. Thus, from their data it appears that an average of twenty-seven companies per year were consolidated in 1886, 1887, and 1888, as compared with eighty-six companies annually consolidated in 1880, 1881, and 1882. On the other hand, judged by mileage, 1880 witnessed a consolidation of about 4,000 miles, followed in 1889 by 6,600 miles, and in 1890 by about 3,000 miles of line. It does not appear from this evidence that any specific influence was immediately traceable. Judgment should be based upon a considerable term

of years, in order to eliminate the direct effect of prosperity or depression in any case.

The decade after 1890 for the first time witnessed the growth of systems aggregating as high as 10,000 miles under single control. The Pennsylvania road rapidly increased its mileage to upward of 7,000, for example. The interchange of business at Chicago between trunk lines and the Western system had already begun to foreshadow alliances covering both territories. Typical of these were the close working agreements between the Vanderbilt system and the Chicago and Northwestern and the Union Pacific in the Far West. The growth in size of the roads, for purposes of operation at least, although not all of them were necessarily consolidated, is shown by the following statement: In 1867, one road alone exceeded 1,000 miles, constituting about 7 per cent of the total mileage of the country. Ten years later, in 1877, 11 roads exceeded this figure, constituting 20 per cent of the mileage. In 1887, 28 companies, with 44 per cent of the mileage of the United States, were over 1,000 miles in length; and in 1896, 44 companies, or 56.9 per cent of the mileage, exceeded this size. In 1900 over 60 per cent of the mileage of the United States was included in systems larger than 1,000 miles. This statement illustrates the rapid development which took place after 1890. A comparison of 1880 with 1900 shows that in the former year there were 2,085 railroad companies in existence, either operated independently or under lease, aggregating 93,000 miles in length. In June, 1900, the mileage had more than doubled, with a total number of 2,023 corporations; but of these only 847 were independently operated, the rest being either leased or subsidiary.

It is significant as bearing upon the growth of railroad systems that the period of depression of 1893-1897 retarded for some years the progress of its development. More than this, several important systems were dismembered as a result of the reorganizations effected during that period. Thus, for instance, the Atchison road lost the St. Louis and San Francisco; and the Union Pacific system lost the Oregon Short Line. In fact, the latter road was entirely dismembered. The Erie Railroad alone, among the important ones which were subject to reorganization, was able to resist the disrupting tendency of financial readjustments. The low-water mark in consolidation occurred in 1898, when only 174 miles were actually consolidated, though others were merged or leased. The entire reorganization of such