after the plan of the federal reserve banking system. These regions should in size and shape conform to traffic conditions. Such regions would, therefore, ignore state lines. It would then be logical to establish commissions for these regions. State commissions would not necessarily be discontinued but could give their time to public utilities within the state; possibly they could be of value in an advisory capacity to regional commissions. It may be contended that such a proposed decentralization of regulation indicates clearly that the present decentralized plan should not be disturbed. But the present plan of arbitrary state lines, in no sense coincides with traffic needs, and regulation of railway service by the various states seriously interferes with interstate traffic. The proposed plan would be sufficiently elastic to take advantage of the knowledge of local conditions and at the same time it would be possible to work out more equitable rules and regulations affecting railway service, among railroads themselves, and between railroads and shippers. If we assume that as a result of our experience during the war, government ownership should be adopted in the United States or that some form of government operation be continued, much of the conflict between the states and the federal government and between the states themselves would presumably be eliminated; but there would nevertheless be need of more control of railway service. It must not be forgotten that government ownership is not an aim. It is a means. Standards of service, therefore, and the machinery for carrying them out are as necessary under one system as under another, altho it is probably true that the absence of any necessity on the part of separate railroads to earn dividends might make enforcement of some of the regulations of railway service easier. If the railroads were owned by the government or operated by it as at present it would make little difference if Great Northern cars were used to haul ice from Maine to Boston, so far as the Great Northern itself would be concerned; but there would remain the inequalities of service between the shippers of the Northwest and those of New England. A little consideration will show, too, that government ownership or government operation would not change the situation as it affects different classes of shippers within the same state. Reference is made here especially to the one-way and two-way shippers. What this means in actual practice may be shown by a concrete case which came before the Ohio Public Utilities Commission during its two-weeks hearings on coal shortage in February, 1917.1 A Mr. Mobley, agent for the Baltimore and Ohio Railroad at Cincinnati, was asked to testify how many cars had been ordered by a long list of industrial concerns and what proportion of those ordered had been assigned to them. To take a typical case he replied that for the month of January, 1917, a certain steel and iron company ordered 89 cars and was furnished with 372. When asked to explain why more cars were supplied than were actually ordered, he pointed out that "furnished" in his records meant the number of loaded cars sent out by that mill over his line; that the discrepancy was due to the fact that that concern received large inbound shipments daily and that they were therefore able to provide themselves with most of the empties they needed and hence they did not need to ask the railroad for many in addition. The same result is seen in many of our agricultural states where there are many important grain shipping points that get very few cars in under load yet these are the very places that need large numbers of cars for outbound grain shipments. Other places in these states more populous and more These hearings were not printed. diversified in their activities receive more inbound freight, and hence at times there is a very unequal distribution of railway equipment between different places in these states. Finally, the same situation presents itself on a still larger scale in the unequal distribution of equipment between different sections of the country. Government ownership would not change the essential characteristics of the one-way and two-way shippers or eliminate the fundamental features of our producing and consuming areas. But in any case justice and efficiency demand that control over railway service be taken out of the hands of the railroads, the shippers and the states and given to federal authorities, so organized that they can have a knowledge of local conditions and at the same time a view of transportation problems that extends beyond the boundaries of any state or traffic area. If it be contended that such control is placing railway management in the hands of government authorities who know nothing about it, the reply is that the railroads have confessed their inability to enforce their rules either against each other or against shippers; hence the public profits little by the fact that the railroads know what ought to be done. Railroad men and shippers of long experience should, however, be utilized by the government in its control of railway service. These men should be able to make equitable rulings which can be backed by the force of law, if necessary. With proper federal control shippers in our large and congested terminals might look forward to some plan of immediate delivery of less than car load shipments and more rigid rules for disposition of car load freight. Shippers in rural districts might realize that some storage room for grain plus improved highways would not only net them a better margin of profit but lessen the difficulties for themselves and the public generally which are annually experienced because of their attempt to market their crops within a comparatively short period of time. Railroads now admit that regulations which have been forced upon them have increased their revenue, protected them against each other, and benefited the public. It is time shippers learned the same lesson. To summarize, there is a danger that the war will be accepted as the cause of our unsatisfactory railway service. Furthermore, the popular idea that the trouble is mainly due to car shortage is a narrow view of the question. Evidence indicates that traffic has outgrown the transportation plant; and that for more than a decade whenever business has been brisk, railway service has been inadequate and inefficient. Assuming that under a system of private ownership sufficient revenue will be allowed to carriers to enable them to provide adequate facilities or that under government ownership they would be provided by the government itself, there would remain the question of the proper use of these facilities to prevent unfairness in the one case among railway systems and under either plan to prevent injustice among different classes of shippers and among various sections of the country. In other words government operation or government ownership will not eliminate the defects of railway service which are due in some cases to the strategic advantages which some groups of shippers enjoy, or in other instances to the size of our country and its geographical division of labor. These fundamental characteristics being the same under private or government ownership, there is a need in any case of more comprehensive regulation of railway service. C. O. RUGGLES. OHIO STATE UNIVERSITY. |