the full rate to Los Angeles plus the high local rate from Los Angeles to San Pedro. Big Los Angeles picked and ate the fruit from San Pedro's tree, and little San Pedro, unable to shin up, had to be satisfied with a windfall now and then. Not until San Pedro gave up its individuality and became a part of the larger city did Los Angeles step aside, and allow San Pedro to taste of its own fruit and obtain terminal rates.

"Unto everyone which hath, shall be given; from him that hath not shall be taken even that which he hath." Were these words aimed at Vested Rights, at the fate of the small towns and their freight rates? Surely, they fit the condition. Throughout the country the largest centers of trade and manufacturing, made large by natural advantages of location and artificially stimulated in their growth by arbitrary concessions in the toll levied upon freight going to or coming from them, are preying incessantly upon the freight rates of their smaller rivals. These secondary centers, in turn, prey upon the still smaller ones, the greatest gain accruing to those communities which have equipped themselves with traffic bureaus, with the weapons necessary to defend and enlarge the freight-rate advantages which lie at the bottom of their prosperity.

Take the case of Los Angeles. When

the place ceased to be a border cow town twentyfive years ago and attracted the hordes of climate-seekers, jobbing houses started up, but when they attempted to make connection with the trade in the Southwest, they ran full tilt into the ancient and honorable rate advantages enjoyed by San Francisco. Though Yuma, Phoenix, Tucson and other places were 500 miles nearer Los Angeles, San Francisco wholesalers paid no more freight than the firms of the smaller city and in some cases even less, despite a longer haul.

It is useless and of no purpose to blame the railroads for all the ills the human body, physical and social, is heir of. Like the shippers and the consumers, the railroads are the victims of the radically individualistic, fiercely competitive method by which the freight-rate structure of the country was built years ago. Always the railroads tried to get as much and the shippers to pay as little as possible. Naturally the shipper with the biggest tonnage, taking advantage of competition among the carriers, was able to get his particular rate down to rock bottom and often below. Nowhere else in the world do railroads undertake to move bulk freight, coal, iron ore, pig iron, cotton, lumber, as cheaply as do the American lines. In fact, abroad it is considered economic waste to move ore, coal and other bulk freight by rail when water will carry the burden at one-third the cost. But the Trusts had the big tonnage the railroads wanted, and to get it the carriers had to pare the freight rates down to the bone.

Like the big corporations, so the big cities, having much freight to offer competing lines, obtained for themselves rate concessions that were denied the smaller towns. The law of competition ordained that always the big shipper and the big center should get the first reduction, that the small shipper and the small town, being the least able to resist,

should be the first to see their rates go up. For many years the big Trusts and the traffic associations of the big cities have been employing "rate-sharks," freight rate experts, to see that the railroads came through with all the reductions lying around loose in the general offices, but it is only within the last year or two that the smaller towns have begun to fight the devil of high freight rates with the fire of expert advice. How important this self-help is in the development of any community was shown by the long fight of the Los Angeles jobbers through their traffic bureau for a share of the San Joaquin Valley wholesale trade, practically monopolized in San Francisco's hands through lower freight

rates.

The San Joaquin Valley lies between San Francisco and Los Angeles, the latter city maintaining that, on account of

On a

a shorter haul, it was entitled to lower rates than San Francisco into the valley's southern end. But San Francisco claimed the trade of the entire valley for its own -and made good through lower freight rates. From Los Angeles to Tulare, for instance, the distance is 231 miles; from San Francisco it is 240 miles. ton of sugar to Tulare, Los Angeles had to pay $12.80; San Francisco, with a slightly longer haul, got off with a charge of $11. Therefore it could underbid Los Angeles nearly two dollars a ton. The same handicap against Los Angeles prevailed right through the list, from hats, shoes and clothing to hardware and groceries, thus insuring San Francisco's control of the valley's trade.

For ten years the traffic bureau of the Los Angeles jobbers fought for an equalization. In 1907 victory at last was in sight. Like Barkis, the railroads were

willin'. They made the changes, lowered the rates out of Los Angeles and had the new tariffs printed when the watchful traffic men of the San Francisco wholesalers got wind of the action. Immediately they sounded the tocsin, the shippers put the screws on the railroads, protested vociferously, threatened reprisals and presto, the railroads yielded to the pressure and suspended the proposed new tariffs. San Francisco remained master of the situation.

In 1910 the traffic bureau of the Los Angeles jobbers brought suit before the State Railroad Commission to force the carriers to grant the desired reduction. Despite San Francisco's desperate resistance Los Angeles won out. Freight rates into the valley were readjusted on a mileage basis, giving Los Angeles an advantage of forty cents on a ton of sugar into Tulare, midway between the warring cities, similar reductions applying to all other classes of freight to points south of Tulare. Though the reductions amounted to only a few cents per hundred pounds, they were of sufficient influence upon jobbers' profits to make Los Angeles firms paramount in a territory with a trade estimated at fifteen millions a year.

In the great rate game Los Angeles, like every up-start center eager for business, had to fight its older and larger rival for every inch of territory. In turn, Los Angeles did its best to absorb the wholesale trade of the smaller towns in its vicinity by unobtrusive rate juggling. One instance will be sufficient to show the method of benevolently assimilating smaller towns' trade, a method in favor among large cities the country

over.

Since the days when the town was a station on the overland stage line, San Bernardino, sixty miles inland from Los Angeles, had been doing a modest wholesale business with the irrigated and mining districts surrounding it. San Bernardino had no terminal rates. It had to pay the full transcontinental rate to Los Angeles plus the local rate from Los Angeles to San Bernardino. On iron pipe, for example, Los Angeles paid 65 cents a hundred from Eastern mills. San Bernardino, sixty miles nearer to the mills but eighty miles from tidewater,

paid 85 cents, the Los Angeles rate plus the local rate of 20 cents for the `imaginary back-haul. Nevertheless, within narrow limits San Bernardino could compete with Los Angeles because it had a local rate to nearby points 20 cents. cheaper than the rate out of Los Angeles to these points.

A few years ago a fuel dealer who had built up a nice little wholesale business in blacksmith's coal with the mining towns on the desert fifty to a hundred and fifty miles east, suddenly saw the trade slip from his fingers. No matter how close to actual cost he offered his coal, Los Angeles dealers always underbid him. Hunting for the cause of this fierce and successful competition, the dealer stumbled upon a new tariff issued by the railroads, and this tariff furnished the reason.

To Daggett, ninety miles from San Bernardino, the dealer had been paying 57 cents a hundred pounds on blacksmith's coal; under the old tariff Los Angeles had been paying 80 cents for a haul sixty miles longer. The new tariff "equalized" the two rivals by raising San Bernardino's rate to the Los Angeles charge, 80 cents. Outbound local rates being equal, the San Bernardino dealer was frozen out of the field by the inbound through-rate from the East, having to pay $4.60 per ton more than his Los Angeles competitors. Los Angeles, its freight rate expert smiling contentedly, fell heir to the small town's jobbing trade, the “equalization" having been general all along the line.

Like

The sudden withdrawal of anything, be it a baby's rattle, a chair about to be occupied or a favorable freight rate, has an irritating effect upon the temper of the loser. Though it seems barely believable, the railroad men who make the freight rates are almost human. the general run of humanity, they resent cussing and roasting if they can afford resentment, and the harder the little fellow's kicks, the less they feel inclined to accede to the demands of the kicker. The hotter the protests of the individual San Bernardino merchants, the less satisfaction they received. Finally they turned to the State Railroad Commission for relief, but the Commission, finding state and interstate matters mixed in

an experienced traffic man of long railroad service and set him to work. The maintenance of the traffic bureau cost about $4,000 a year. Did it pay? In less than a year the expert, without costly law suits or expensive hearings before the Commission, without threats or bluster, had checkmated the aggression of Los Angeles, had regained and in a few cases increased San Bernardino's advantage over the larger city in out-bound local class rates on all three railroads, had obtained favorable readjustment of a score of commodity rates affecting the budding industries of the town and had saved the fuel users of the city $25,000 a year by bringing about a

them, like St. Louis, consider traffic bureaus of such advantage that they maintain two full-fledged ones. A traffic bureau pays, in increased trade as well as in increased harmony between the railroads and the shippers. Having had experience on both sides of the fence, the rate expert acts as a buffer between the contending parties, moderating and deflecting the shocks coming from either side. And if expert knowledge in traffic matters is of value to the favored large center, it is of still greater benefit to the aspiring small city. Being continually on the defensive against the aggression of its grown-up, greedy rivals, the small city needs all the technical rate knowl

edge it can get to hold its own, to make the most of its resources and opportunities.

It was a strong and active traffic bureau that enabled Stockton, a city of 30,000 inhabitants seventy miles inland of San Francisco on the San Joaquin river, to take advantage of the opening left by San Francisco and Los Angeles in their squabble over the San Joaquin Valley trade. Stockton was nearer to the valley than either of the contending parties. On the broad and deep San Joaquin there was water competition, but without a traffic bureau to play the trumps in the hand of Stockton it would have been left out in the cold while the two big cities divided the spoils. By intervening in the quarrel, by making its voice heard and by cleverly leading its high cards, Stockton pulled out an advantage, a differential over San Francisco that it could not have obtained had it relied upon the individual jobbers to take expensive action. In the meantime the fight of the big cities-and the success of the small ones in gaining rate advantages-stimulated Fresno and Bakersfield, the two largest towns in the valley, into action. Both of them have organized traffic bureaus and are preparing

to use the new weapon in carving out a slice of the trade for themselves.

The railroad world is deeply troubled these stirring days. Great, radical changes are impending in the complicated structure of the eighty billions of separate rates that clutter the tariffs of the carriers. the carriers. During the past twenty years the primary object of governmental supervision has been the prevention of discrimination between shippers, an attempt to protect the small shipper against deviations from the published rates in favor of his more powerful competitor. In a measure, this object has been attained, at least so far as it is possible of accomplishment under present conditions. Just now a second era of regulation is beginning, an attempt to remedy some of the most glaring examples of discrimination between communities rather than between individual shippers.

This new problem in regulation presents ten times the difficulties of the old rebate question, but it must be solved. Already the uprising of the communities discriminated against is beginning, especially in the West, from the Canadian line to Mexico. The traffic bureaus, all of them organized but recently, of half a