gressed, the rates have been raised, so that "there is not a producer that does not pay heavier tribute than conquered people ever paid their conquerors."[1] This is the common expectation and belief. I think there are many who will be disappointed to find that it is not true.
The Central Pacific charged, on its freight traffic in 1872, the average rate of 2·96 cents;[2] in 1881 this had been reduced to 2·16 cents;[3] an average decrease in the past ten years of eight tenths of a cent on each ton hauled one mile. This is a reduction upon that local traffic which is commonly supposed to be beyond the control of any competition, as well as upon through traffic. This is shown by the fact that the increase of local tonnage for the period was 216 per cent, while the increase of receipts from the same source was but 162 per cent.[4] Had the average rate of 1872 been maintained by the company on its freight traffic for 1881, the receipts would have been $5,866,287[5] more in the latter year than they actually were. During this period of ten years, in which there has been a continuous reduction of rates, the competition by water has remained without change, and competition by rail has not existed; yet, under the control of the natural laws of trade there has been such a reduction in the rates on frieght that it now amounts to the annual sum of over five and three quarter million dollars. This additional amount of earnings would have enabled the railroad company to pay a dividend, in 1881, of sixteen per cent, instead of the six per cent which was paid.
It should be observed, also, that the miles of road operated during the period under consideration have been increased from 1,158 in 1872 to 2,707 in 1881,[6] a greater portion of which increase has been upon roads built through places almost entirely without inhabitants, and which, as a consequence, for the first few years could furnish but a limited traffic. It will at once be seen that the rates necessary, under such conditions, to pay the cost of service, must have been much higher than in districts where a population and trade already existed. The traffic on these newer portions of the road having been carried at rates which were justly, because necessarily, higher than over the older portion of the line, has had the effect of making the average rate of the whole, in 1881, much higher than it would have been had no new roads been built.
A fair consideration of these facts must, it seems to me, lead to the conclusion that there has been as great a reduction in the rates of this Western system of roads as has taken place in the same time upon any of the Eastern lines.
It is difficult to make any comparison between the operations of
