& Maine to the system of which Mr. Mellen is president. The real owners of the securities of the railroad companies concerned are better protected when a merger is carried out, as in this case, openly and under the honest regulation of the public authorities, than when it means stock-watering and financial manipulation, as under methods that have until lately been prevalent.

Rates and Just

Whether Governor Hughes was nearer right or nearer wrong in Regulation. his reasons for vetoing the 2-centfare bill, it is to be remembered that the Public Utilities bill, which became a law early in June, and goes into effect on July 1, provides an efficient method by which rates may be made equitable in case they are too. high. Many States have now passed 2-centfare bills; and railroad men are declaring these measures to be confiscatory in their principle. For certain small railroads, separately owned and operated, such a rate is obviously unjust. On large systems the 2cent rate is not too low for main lines. There are several different theories as to passenger rate-making, for all of which strong arguments can be presented. The great desideratum is moderation and fairness all around. (President of the New York, New Haven & Hartford Railroads as public servants should give the public a service of efficiency and should treat all comers on the same terms. But when good service and fair treatment are secured, it should be remembered that railroads are private business enterprises; that capital so engaged has to assume peculiar risks, and that the railroad business ought to be profitable in good times.

Capital Must Be

Much more necessary than an attack upon average rates charged Encouraged. to the public is a movement in the interest of the moderate investor in railroad bonds and stocks, in order to break the absolutism of the so-called "magnates," whose high-handed methods of manipulation have given them vast fortunes, while the position of the real owners of the railroad properties has been precarious. It is not uniform 2-cent rates for passengers, or an average reduction of rates for freight, that the users of railroads chiefly need at present. What they principally need is better service. The railroads have fallen far behind the general progress of the country. They must be rebuilt and improved at great expense. This will require new capital in large quantities. European as well as American invest

Railroad.)

ors must be willing to put their money into
railroads. They will be chary about doing
this if public regulation is construed as
meaning a forcing down of average rates.
The best way to help the railroads is to stop
the methods which have brought American
railroad financiering into distrust every-
where in the world. The great struggle for
public control and regulation of railroads
now bids fair to bring us into an era of com-
mon sense and good understanding under
the leadership of public men like President
Roosevelt and Governor Hughes, who stand
for justice and fair play all around. As we
have remarked before, the transgressions of
the railroad companies have been so egregious
that the only wonder is that the American
people have not, in their reaction against
railroad politics and other abuses, proceeded
in a much more drastic way than the work
of the recent legislatures exhibits.
storm is now nearly past. Anti-corporation
wrath has subsided; the strength of law and
of government in America has been vindi-
cated, and the time has come for scientific
adjustment and the settlement of each par-
ticular question as it arises, upon its actual
merits. There may be some further legisla-

The

GOVERNOR HUCHES THOUGHT THERE WERE TOO MANY DANGEROUS EXPLOSIVES AROUND.
(Apropos of his veto of the 2-cent-fare bill.)-From the Herald (New York).

tion at Washington, and indeed there ought to be. But it will not be brought about in any spirit of hostility to railroads, nor will it endanger anybody's actual investments. Property in railroads has the same right of public protection as property in any other form. The outcome of the great agitation will be beneficial in all directions.

A Sound
Business
Outlook.

tion. The spring and early summer have been cold and wet, and the peculiar weather conditions will have had unfavorable effects upon the products of farm and garden as well as upon the trade of merchants. But crops will be large, even if considerably less than those of one or two preceding years; and the country will go forward hopefully and busily, in a less speculative mood, but with full conThe reaction that has made Wall fidence and with everything to be thankful Street a dull and gloomy place for. Prosperity was so great that legitimate will prove to have been an ex- success was leading to unwise speculation. cellent precursor of a new and more whole- Real-estate booms of the dangerous sort were some activity in financial affairs. The sober- to be noted in various parts of the country. ing influence has been felt in the entire The craze for shares of stock in copper mines business life of the country. There is not and gold mines was making it easy for unquite so much haste to become rich suddenly, scrupulous promoters to fleece myriads of inand the disposition to spend recklessly is vestors who were greedy to share in the abating. In a general way the economic "get-rich-quick" opportunities of the day. progress of the American people since the The slump in Wall Street has served as a year 1900 has been without precedent. warning to the country, and the speculative There will be some slackening of the wheels, craze has subsided, not soon enough, inbut present indications do not justify the deed, for hundreds of thousands of unlucky prophets of disaster. The demand for labor dupes, but soon enough at least to save the in various directions will probably suffice to country from dire disaster. There are no signs absorb whatever the railroads may dispense of serious trouble in the general business situwith in their curtailment of new construc- ation. The farmers are so much ahead from

where this kind of legislation was enacted there was no effort made to distinguish between the weak and the mighty among railroad corporations, nor between the just and the unjust. These maximum-fare laws were adopted by Alabama, Arkansas, North Carolina, and West Virginia among Southern States; by Indiana, Illinois, Michigan, Iowa, Nebraska, Missouri, and the Dakotas in the Middle West, and by Pennsylvania and New York in the East.

a decade of great prosperity that they can long are exempted from the requirement of a easily bear one year of late harvests and 24-cent fare; but in most of the States diminished yields. Our article on that subject, to be found on page 79, covers the crop situation in detail. The railroads can bear some reduction in the volume of freight traffic, in view of their total inability last year to handle the business that was urged upon them. The great industrial organizations, like the United States Steel Corporation, are fully occupied. The less feverish conditions of trade, furthermore, are avantageous when viewed from the standpoint of labor conditions. When some slackening appears or is looked for, it is usually easier to settle disputes by amicable agreement or by arbitration. The quieter times in business make men conservative; and labor is more ready to see the value of a steady job at good pay, and less willing to plunge into so uncertain an experiment as a strike.

Rate Fixing by

A Sane and
Brave
Position.

It impressed the country as significant that the only gubernatorial veto of 2-cent-fare legislation in any of the States should come from Governor Hughes, of New York, the one State executive who during the present year had succeeded against powerful opposition in wresting from an unwilling Legislature a law that During the past half-year in foreshadowed a new era in the State regulaabout one-third of the States of tion of public-service corporations. This acStates. the Union laws have been passed tion of Governor Hughes was based on a which attempt to fix a maximum passenger sound proposition in government,-that the fare to be charged by railroads. In some in- rates charged for public service should not be stances the rate so established is 22 cents a arbitrarily disturbed, nor the earnings of pubmile, in one or two it is 24 cents, but in a lic-service corporations arbitrarily reduced, majority of cases it is 2 cents flat." Illi- unless it be shown as the result of a full and nois, Iowa, and Michigan conceded a higher impartial investigation that existing rate rate to roads that were shown to be earning schedules are clearly, unreasonable and unjust. less than a certain sum per mile, and in In the case of the New York railroads there North Carolina roads less than sixty miles had been no legislative investigation what

66

GOVERNOR HUCHES THOUGHT THERE WERE TOO MANY DANGEROUS EXPLOSIVES AROUND.
(Apropos of his veto of the 2-cent-fare bill.)-From the Herald (New York).

tion at Washington, and indeed there ought to be. But it will not be brought about in any spirit of hostility to railroads, nor will it endanger anybody's actual investments. Property in railroads has the same right of public protection as property in any other form. The outcome of the great agitation will be beneficial in all directions.

A Sound
Business
Outlook.

tion. The spring and early summer have been cold and wet, and the peculiar weather conditions will have had unfavorable effects. upon the products of farm and garden as well as upon the trade of merchants. But crops will be large, even if considerably less than those of one or two preceding years; and the country will go forward hopefully and busily, in a less speculative mood, but with full conThe reaction that has made Wall fidence and with everything to be thankful Street a dull and gloomy place for. Prosperity was so great that legitimate will prove to have been an ex- success was leading to unwise speculation. cellent precursor of a new and more whole- Real-estate booms of the dangerous sort were some activity in financial affairs. The sober- to be noted in various parts of the country. ing influence has been felt in the entire The craze for shares of stock in copper mines business life of the country. There is not and gold mines was making it easy for unquite so much haste to become rich suddenly, scrupulous promoters to fleece myriads of inand the disposition to spend recklessly is vestors who were greedy to share in the abating. In a general way the economic "get-rich-quick" opportunities of the day. progress of the American people since the The slump in Wall Street has served as a year 1900 has been without precedent. warning to the country, and the speculative There will be some slackening of the wheels, craze has subsided, not soon enough, inbut present indications do not justify the deed, for hundreds of thousands of unlucky prophets of disaster. The demand for labor dupes, but soon enough at least to save the in various directions will probably suffice to country from dire disaster. There are no signs absorb whatever the railroads may dispense of serious trouble in the general business situwith in their curtailment of new construc- ation. The farmers are so much ahead from

a decade of great prosperity that they can long are exempted from the requirement of a
easily bear one year of late harvests and 24-cent fare; but in most of the States
diminished yields. Our article on that sub- where this kind of legislation was enacted
ject, to be found on page 79, covers the there was no effort made to distinguish be-
crop situation in detail. The railroads can tween the weak and the mighty among rail-
bear some reduction in the volume of freight road corporations, nor between the just and
traffic, in view of their total inability last the unjust. These maximum-fare laws were
year to handle the business that was urged adopted by Alabama, Arkansas, North Caro-
upon them. The great industrial organiza- lina, and West Virginia among Southern
tions, like the United States Steel Corpora-
tion, are fully occupied. The less feverish
conditions of trade, furthermore, are advan-
tageous when viewed from the standpoint of
labor conditions. When some slackening ap-
pears or is looked for, it is usually easier
to settle disputes by amicable agreement or
by arbitration. The quieter times in business
make men conservative; and labor is more
ready to see the value of a steady job at good
pay, and less willing to plunge into so un-
certain an experiment as a strike.

Rate Fixing by States.

During the past half-year in about one-third of the States of the Union laws have been passed which attempt to fix a maximum passenger fare to be charged by railroads. In some instances the rate so established is 22 cents a mile, in one or two it is 24 cents, but in a majority of cases it is 2 cents "flat." Illinois, Iowa, and Michigan conceded a higher rate to roads that were shown to be earning less than a certain sum per mile, and in North Carolina roads less than sixty miles

States; by Indiana, Illinois, Michigan, Iowa,
Nebraska, Missouri, and the Dakotas in the
Middle West, and by Pennsylvania and New
York in the East.

A Sane and
Brave
Position.

It impressed the country as significant that the only gubernatorial veto of 2-cent-fare legislation in any of the States should come from Governor Hughes, of New York, the one State executive who during the present year had succeeded against powerful opposition in wresting from an unwilling Legislature a law that foreshadowed a new era in the State regulation of public-service corporations. This action of Governor Hughes was based on a sound proposition in government,-that the rates charged for public service should not be arbitrarily disturbed, nor the earnings of public-service corporations arbitrarily reduced, unless it be shown as the result of a full and impartial investigation that existing rate schedules are clearly, unreasonable and unjust. In the case of the New York railroads there had been no legislative investigation what