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5. General carload class B, in shipments of at least 10,000 kilograms. 6. Special tariff A2, in shipments of at least 5,000 kilograms.
7. Special tariff I, II, and III, in shipments of at least 10,000 kilograms. The rates and what pertains to them are officially published in volumes not unlike our monthly magazines. This tariff scheme was first introduced in 1877, and through the influence mainly of the general conference it has become gradually more unified. It is obvious that the price of transportation of goods becomes less as they fall into a class farther down the list. The general carload classes include goods of higher value not enumerated in any of the special tariffs, while the special tariffs I, II, and III embrace less valuable goods-their value falling by degrees-so that, generally speaking
Special tariff I includes manufactured goods.
Special tariff II includes intermediate products.
Special tariff III includes raw materials and bulky goods of small value, such as certain waste products of gas factories, tanneries, paper factories, slaughterhouses, etc.
Special tariff A2 is for goods belonging to special tariffs I and II in consignments below 10,000 and above 5,000 kilograms. Goods belonging to special tariff III, but weighing less than 10,000, though at least 5,000 kilograms, are transported at the rates of special tariff II. Then there are special rules and rates for such things as explosives, precious metals, vehicles, timber, fish, bees, meat, carrier doves, etc. Questions as to classification and the transference of goods from one class to another often arise. Here is a typical case:
The Chamber of Commerce of Lennep, a Rhenish city, petitioned the general conference to transfer manufactured horseshoes-" raw hoof irons," the Germans say, but which will here be designated simply as "horseshoes"-from special tariff I to special tariff II. A prominent business firm brought the question before one of the railway directories, and from there it was carried before the minister of public works. The minister consulted the permanent tariff commission and the committee of shippers, and finally the question was brought before the advisory councils.
The petitioners asserted that the manufacture of horseshoes was a new industry which, after many costly experiments, had only recently gained a firm foothold; that the trade had been gradually growing, especially with the East, and that consignments had been sent to Russia, Italy, Austria, and other countries. In domestic trade the use of these horseshoes had been promoted by military authorities and street-car companies, because it lessened cost and relieved the blacksmith of much purely mechanical work. It enabled him to do better work more cheaply and with greater uniformity. The charge that it hindered the education of skillful blacksmiths was untrue.
Extensive statistical tables were introduced to show that the life of the industry depended upon the desired change in rates. Horseshoes were subjected to the same rates as fine iron and steel goods, while they properly belonged to interme diate products in special tariff II. Many of the factories were unfavorably located, and it was one of the highest duties of the State to promote industrial activity in regions which lie away from the great channels of trade, if it could be done without too great a sacrifice on part of the public. The desired concessions on part of the railroads would do this. It was unjust for the representatives of the Saxon State railways to assert, as they had done in the tariff commission, that the change in the classification of horseshoes would benefit the Rhenish industry only. Particularistic designs should not be suspected in a movement which was deeply rooted in economic recessities. The representatives of the Bavarian railways had considered fiscal reasons only, but these alone could not be decisive. It would not be businesslike for the State, in order to gain a temporary advantage, to sacrifice the very source of this gain. The railways would fare worse with high rates and a stagnant industry than with lower rates and a prosperous industry, and it was safe to assert that the desired change would, through an increased output, ultimately yield a greater income to the railways. The established system of rates would not be prejudiced; besides. when the question of system is balanced against that of the welfare of an industry the latter should prevail. The nationalization of railways was undertaken not for fiscal, but for economic
These were the main features of the petition. The petition, together with the records of previous deliberations on the question, was brought before the standing committee of one of the circuit councils, by which the arguments were reviewed and new evidence introduced. Can these horseshoes be classed with rod iron? Are they an intermediate product? Could not plowshares and other articles
demand a like change? What is the relation of the proposed change to the competition of Swedish iron? Is it true that the manufacture of horseshoes injures the craft of blacksmiths? Will it lead to a wider use of horseshoes and consequently to an improvement of agriculture? Such were the questions which the committee considered, and in response to which evidence of individuals and of societies was presented and subjected to the most rigid examination by specialists of various classes. From the committee the question went, as all questions considered by the committee do, before the full council, by which the report of the committee was reviewed and the horseshoe problem finally disposed of.
In a similar manner both the committee and council deliberated upon a petition of the Agricultural Society of Rhenish Prussia to place street sweepings in the special class with fertilizers and to reduce rates for shorter distances, because sweepings are used only within from 10 to 20 kilometers of the cities. The sweepings, it was asserted, had considerable value for agriculture, but that the difficulty of disposing of them had led some cities, notably Hamburg, to destroy them, thus depriving agriculture of a valuable agent. The composition and value of sweepings were examined and compared with other fertilizers now available, and the probable effect on the use of these considered. At the same session of the committee the change in time-tables for the summer period was regularly considered. Twenty-eight items were presented by the 14 different members, involving the time and frequency of passenger trains. All propositions which received a majority vote in the committee were brought, of course, before the full council.
In speaking of the composition of circuit councils reference was made to the question of rates on coal and coke. One of the railway directories brought before the standing committee of the circuit council a question first submitted in a petition of the chamber of commerce of Bielefeld and subsequently indorsed, either in part or entire, by other organizations. The petition sought a temporary suspension of rates applicable to coke and coal sent from the Rhenish mining districts to the German seashore and to foreign countries. The suspension was to remain in effect until the prices in the coal market should return to a normal level.
In the consideration of this question the railway directory asked the committee and council to deliver an opinion on each of the following points: (1) Is the level of prices of coke and coal in the Rhenish-Westphalian district an abnormal one? (2) How must the prices of coke and coal be constituted in order that their level may be characterized as normal? (3) Should a permanent or temporary suspension of existing freight rates on coke and coal be recommended in order to effect a reduction of prices within the country? (4) What markets and what rates come into consideration in case of the temporary or permanent suspension of the rates in question? Shall the rates to foreign countries or also the rates to the seashore be changed? (5) What will be the probable effect of the proposed suspension of rates with reference to the sale and the price of coal and coke within the country?
In both the committee and in the council this problem was thoroughly dissected. Naturally there were differences. Abnormal prices were thought to be prices which include an element of profit out of proportion to the other constituents of price. On the one hand, a profit of 40 per cent was shown to exist, which, however, the experts present at once proved to be confined to two specially favored mines. In computations to ascertain the average selling price of coal there was a difference of several marks, which called forth the most rigid examination of the statistics and other evidence upon which the figures were based. The railway authorities showed that in 5 years the outlay for coal for locomotives had risen from 4 to 7 per cent of their total expenses, while coal was still rising, and the coal men showed that their cost of production had risen because of advances in wages and expenses connected with insurance. It was said that the present low rates for the transportation of coal had been introduced at a time when the coal industry had lain prostrate, and that now all other industries were suffering from the high price of coal, and that this advance in freight rates on coal and coke would check exportation and force down prices at home. A decrease in exportation was deplored by representatives of the German marine. In conclusion, among both the advocates and the opponents of the change, the opinion was expressed that there was reason for rejoicing in the thorough airing which this question had received; that it would lead to a better understanding of actual conditions, and that the coal industry would hereafter be more inclined to give due consideration to the condition of other German industries.
We come now to the consideration of a question which, perhaps even more forcibly than what has just been related, illustrates the comprehensiveness and fair-mindedness with which the railway authorities investigate the problems which affect wide economic interests. It is a petition submitted by the minister
of public works to the national council for an expression of opinion. The printed evidence sent to the council alone covers about 500 folio pages. The problem submitted by the minister to the national council was this: Giving due consideration to the financial condition and the financial interests of the State, is it conducive to the general economic interests of the country (1) to introduce special reduced rates for all kinds of manures and fertilizers, irrespective of their nature, and, if so, what rates? (2) to introduce special reductions, and to what extent, for the transportation of (a) potassium salts-without discrimination or only "raw salts"-and phosphate; and (b) lime, in pieces or powdered, used for fertilization?
This was submitted in October, 1893. During March of that year the Herrenhaus had passed a resolution requesting the Government to introduce reduced special rates for fertilizers, a number of which were specified in the resolution. As stated in support of the resolution, the necessity for it lay in a cheapening of elementary utilities in order to maintain and promote agriculture and to increase the receipts of the railway from the traffic with the interior. The same resolution had previously been adopted by the budget commission of the Landtag.
In response to this resolution the minister of public works sought information from the minister of agriculture, domains, and forests, and all the different agricultural experiment stations as to the occurrence and production of natural and artificial manures in different parts of the country, their price and value in use, and the nature of their application. Various commissions reported on the prices at which different fertilizers could be profitably used on different soils. The agricultural authorities showed where and to what extent these soils existed, and elaborate statistics of the railways and manufacturers told how much had actually been consumed. In this lay the vital issue the capacity of the land to absorb profitably artificial manures, and the adaptability of the farmer to secure them. The national council said that a simple expression of its appreciation of the great economic significance of the use of both natural and artificial manures was not sufficient, but that an exact and conscientious examination of the effect of existing rates on the widest and most effective use of these was necessary. The deliberations of the committee of shippers, the tariff commission, the general conference, and the evidence submitted through the minister of public work were all thoroughly sifted by the standing committee of the national council before the case went before the full council for its final verdict.
Marbles, slates, and pencils even have been the object of the most serious deliberations of bodies so large and so dignified as the general conference and the national council. A memorial was addressed to one of the railway directories by the marbles, slate, and pencil industry of Thuringia, praying for a detariffization of these articles. The memorial gives a detailed account of the manufacture of marbles, slates, and pencils in Thuringia, and points out the places where it meets competition. It gives the cost of production, output, markets, prices, and the rates of transportation. The conditions of the laboring population are described, and the probable effect of a change in rates on their welfare is analyzed. (One may be pardoned for turning aside to state that the laborers there engaged in the manufacture of slates, although exposed to the danger of completely undermining their health, receive often no more than 12 cents for a day's work of 18 hours.) The railway directory to which the memorial was sent addressed a letter of inquiry to the manufacturer of slates and pencils in Westphalia, whose business would be affected by the competition of Thuringia, calling for information on various points relating to this industry. This reply, together with the memorial and supplementary material, was submitted, through the minister of public works, to the national council.
One can not read these documents without being impressed with the sincere desire of the railway authorities to do justice to all competitors and at the same time to make such changes as will better the conditions of people like these laborers in Thuringia. Whether or not the benefits arising from a change in rates would really accrue to these people was most carefully considered. The material submitted for consideration in deciding this question, as in case of the preceding questions, furnished evidence on every point which was raised. The moderation with which the petitions are drafted, the high plane upon which the debates are carried on, the thorough conscientious and judicial mindedness with which the arguments are balanced in reaching a decision, all manifest a tone not unlike that of the decisions of our best courts of justice.
Summary and remarks.-Prussia began with a general law. In this respect her history is the direct opposite of that of our States. Treating this general law as a nucleus, legislation, royal and ministerial orders and rescripts, and custom have developed two distinct groups of railway administrative organs, each representing distinct sets of interests, yet both working cooperatively. On the one hand
we have a group of organs which represents railway interests in particular and ́ which takes the railway point of view. The minister of public works, the railway directories, the general conference and tariff commission, and the Society of German Railways fall into this group, although the two latter stand in a measure on the border line, and of them are none confined exclusively to railway interests. Legal responsibility is fixed in the first two. On the other hand, we have the national and circuit councils with their standing committees and the committee of shippers. These primarily take the social and economic point of view. They are not legally responsible for the conduct of the railways, but act as advisory bodies. They represent all the different interests of the nation, and through them every citizen has not only an opportunity but a right to make his wants known.
The marble and slate industry of Thuringen is relatively insignificant, yet of vital importance to the inhabitants of that section of the country. We have seen how complete an examination the petition of these people received at the hands of the highest authorities of the land. A fair and prompt hearing can be denied to no man, rich or poor. The railways are made real servants. All the administrative, legal, and advisory bodies are organically connected with one another and with the Parliament. The lines may be drawn taut from above as well as from below. The elaborate system of local offices makes the system democratic, and the cabinet office and the directories give it the necessary centralization. The system presents that unity which a great business requires, on the one hand; and, on the other, that ramification and elasticity which the diverse and manifold interests of a great nation need for their growth and expansion.
In the formation of the councils the elective and the appointive elements are so well proportioned that it is impossible to "pack" any one of them. In this respect each body is a check on the other. It is easy to reproach the system with "bureaucracy," but to give adequate support to such a stigma would be an impossible task. We need only recall the analysis of the membership of one of the councils. Farmers, dairymen, fishermen, foresters, traders, miners, manufacturers-the long array of human professions have here their representatives. One representative may shape his views according to some particular philosophy of the State. Another will at once restore the balance by presenting the opposite. One member may make extreme statements about some branch of trade or industry. Another will furnish exact information for its refutation. I doubt whether we can find anywhere in the world deliberative or administrative bodies in which the tone and the many sidedness of the proceedings, the amount and variety of special knowledge displayed, and the logic of the debates present more points of excellence than in these councils and other bodies.
If from the point of view of the railways nothing should come of these proceedings-a most violent assumption-the information brought together would alone make them invaluable. No investigating committee of Congress or legislature ever had a better array of talent in every field at its disposal and under its control as is found in one of these councils or commissions.
It is not my purpose here to present new schemes, or to suggest ways and means by which existing institutions of our own country might be modified to perform similar functions. But let me ask whether, if our coal and iron industry, or fruit and cattle raising, or any other industry, were to receive an examination like that given to the Rhenish coal and coke industry, many things might not be different from what they now are? Imagine a well-organized assembly whose members could speak for the railways, for wheat and cattle, for fruit and steel, for forests and for mines, and is it not probable that the effects anticipated in the circular letter of 1875 would make themselves felt also in the United States? Both our railways and the public have repeatedly gone to extremes because neither understood the other. A system like the Prussian reveals the railways to the public and the public to the railways. It tends to remove blind prejudice and violent measures on both sides. By reflecting accurately the existing conditions, these conferences lead to tolerance, forbearance, and mutual concessions. The conclusions reached often have as salutary an effect on industrial situations as suspended judgments of our courts on defendants. It would be difficult to find in Prussia to-day, among the representatives of any class or interest, objections to the entire railway system which are not relatively insignificant. Both the public and the railways have gained more and more as the system has developed.
It will doubtless have been noticed that in the discussion of the council proceedings the decisions and their effect were not stated. It was my purpose simply to show the nature of the councils, and either a negative or an affirmative vote would throw no additional light on the problem. Without a full presentation of local details it could mean little to state that the council voted to place sweepings into the special tariff with fertilizers.
Among the questions contained in letters sent out to railway presidents and other officers were the following:
"What, in your judgment, are the elements of strength and of weakness in American railway charters?"
"What provisions should a model railway charter of the future contain?” In most instances these letters were answered by the officers addressed. In a number of cases they were referred for reply to counsellors or other officers.
The extracts given below are representative of the replies received. As a class the railways represented belong to the important systems of the continent. It is probable that nothing of vital importance touched upon in any letter received is not reflected in the expressions quoted below.
PART VII. VIEWS AND OPINIONS OF RAILWAY MEN.
"In a general way, I should say that an important point would be gained if all railroad charters were issued under general laws instead of specific legislation for each charter, and uniformity between laws of the States be brought out as far as practicable. This would avoid the creeping in of many faults which get out under special legislation."
"In my judgment, there should be some provision in each State that would make it impossible for speculative roads to be built. By speculative I mean that class of roads that are organized for the purpose of crippling an already existing road in the hope of so annoying the property already in the field that in self-defense they pay a good round price in order to get rid of a competitor when the original line is serving the public well and a paralel line would probably wreck the stronger line. I think it is the history of railroads that the weaker can pull down the stronger."
W. G. RAOUL, President The Mexican Nat. R. R. Co.
W. J. CARPENTER,
President Chicago and Eastern Illinois Railroad Company.
Personally, I believe that the time has come when future railroads should be built under the supervision and control of some State board, and that the laws should be such that they could not be overcapitalized and no roads should be built to parallel another road already in existence, unless it could be proven that the business in the territory through which the new road was to run was sufficient to justify and make a paying investment on a legitimate amount of capital invested.
"The general incorporation laws of this State seem to be fairly well adapted to our condition and situation, and, while affording ample protection to the interests of the State, they are sufficiently liberal to encourage the organization and successful operation of railway companies.
Under the constitutions of this State railway companies are subject to legislative control."
R. S. KAYLOR, Commissioner of Railroads and Telegraphs, Ohio.
Counsellor, Seattle, Wash.
"All railroads in the State are operated and controlled under the provisions of a general railroad law. No special charters have been granted railroad companies