and rivers assisted in caring for her commerce, which was just beginning to develop at the opening of the railway era. These conditions also explain, in part at least, the greater deliberation with which Germany proceeded, and afforded better opportunities for the state to exercise its prerogatives and reserve rights and privileges which have proved to be valuable. In the United States, on the other hand, the need for transportation facilities was imperative, and the history of internal improvements aided in throwing the task of providing these facilities into private hands. Newspaper articles and public discussions during the thirties and forties bear witness to the fact that the relative merits of public and private ownership were brought before the public fairly well at that time. But the logic of events was against the assumption of such duties by the state. national system of internal improvements1 was inaugurated by Jefferson, in 1806, in the Cumberland Road law. Under the influence of growing nationalism it was vigorously discussed and temporarily checked in the Bonus bill of 1816-17. The constitutional phase of the discussion received a hopeful impulse toward a solution, in the attempt to separate the questions of constitutionality and of expediency, in the long debates of 1818-19. The failure of the Cumberland Road bill of 1822, and President Monroe's scholarly letter, drew into ques

The

1 Meyer, A History of Early Railroad Legislation in Wisconsin. Wisconsin Historical Collection (1898), Vol. XIV, pp. 229–234.

tion with renewed vigor the constitutionality of the system. All the old ground was torn up, and no phase of the question left untouched, in the protracted debates of 1824. During the administration of J. Q. Adams, the idea of a system of internal improvements was once more brought prominently before the public, and in the Maysville Road veto (1830) it received its death-blow at the hands of Jackson. This marks the downfall of a national system of internal improvements. While the national government still continues to make appropriations, all hopes of establishing a system of internal improvements by direct federal agency—and from which the federal government might derive revenue were abandoned in 1830. Jackson's determination to free the nation from debt, and to adhere to principles of strict economy, and his uncompromising hostility to corporate "monsters," were the forces which dealt the fatal blow. The new democracy, whose banner Jackson had hoisted, adopted politics of great geographical dimensions. Expansion was its war-cry. The schemes which were born in this atmosphere bore on them the stamp of the wide plains stretching far beyond the dim horizon, and of the great streams and forests which the new-born "nation" possessed. The geography of the country had become the mainspring of the human mind.

The argument, in brief, was this: Internal improvements are a necessity. The federal government cannot undertake them. Therefore, since

something must be done, the states must impose upon themselves this important duty. The increasing activity of the states in undertaking works of internal improvement was a characteristic of the period from 1830 to 1837. The unparalleled success of the Erie Canal was something which every state thought itself capable of repeating in its own projects. We need but recall Jackson's war on the United States Bank, the pet banks, paper money, land bills, the distribution of the surplus, and the specie circulars, in order to bring vividly before us the sequences of the internal improvements and general speculative mania. We are told that the Michigan legislature had "projected one mile of improvement for every 150 of the inhabitants, which, upon common averages, gives one mile for every thirty votes," and that the state had contracted an indebtedness of $200,000,000 "unsecured by any property adequate to the support of such a burden."1 The atmosphere which had once been the nursery of gigantic projects had now become close and oppressive, not only to citizens of our own country, but to foreigners who had sunk many a fine sovereign in the credit of the states.

The country now entered upon a period of state repudiation, national discredit, and the agitation of federal assumption.2 The state governments had tried to do what was abandoned by the federal

H. C. Adams, Public Debts (N.Y. 1887), p. 336.

2 Scott, Repudiation of State Debts, (N.Y. 1893).

government in 1830, and in the attempt had fallen into disrepute. The pressure for improvements became stronger as the country developed. Their construction had been taken out of the hands of the federal government. The state governments had failed. And now there was but one alternative, not to build them at all, or to leave internal improvements to private corporations. The latter policy was chosen. Jackson's "monster" had now gained the ascendency. The period following 1837 marks the decline of the states as economic agents and the rise of private corporations. Considering the temper of the American people and the prevailing industrial conditions, this issue was probably the best under the circumstances, although the gross disregard of public rights connected with the history of many railway companies will always remain a blot in our industrial evolution. It resulted in a certain drifting apart of public and private interests, while the memory of early abuses seems ever ready to stimulate drastic legislation.

CHAPTER IV

ECONOMIC ADJUSTMENTS 1

IN the opening sentence of the first chapter it was said that the world was born again with the introduction of railways. Many changes in industrial, commercial, social, and political relations followed, and have continued to come, so that every succeeding day brings us a new world with its changed relations, calling for continual readjustment to these new conditions. In this process of readjustment there takes place a conflict of diverse and antagonistic interests, the weaker or less important yielding to the stronger or more important. The assertion that the interests of the railways and of the public are harmonious and identical cannot prevent conflicts, for neither the entire public nor every railway manager will view the situation in this light. There certainly exist elements of harmony in the interests represented by the railways on the one hand and by the public on the other. For instance, a railway company extends its system into new and remote territory, thereby increasing the value of the lands and other

1The contents of this chapter appeared in the Annals of the American Academy of Political and Social Science for January, 1902, under the head of " Advisory Councils in Railway Administration."