he roads
leading directly to New York and Philadelphia upon equal terms, since
this would divert its legitimate share of the through business to those
ports. The Grand Trunk, on the other hand, refused to enter the
combination because, not having any direct Chicago connection, it feared
that the enforcement of pool rates would materially diminish the volume
of its business. As yet the railroad wiseacres did not seem to be equal
to the emergency, and matters drifted along in the old channel. The rate
war of 1876 gradually brought about an understanding among the
belligerents. The competing roads accepted the terms offered, and with
this a new principle entered into the science of pooling. Rates between
Chicago and Baltimore were fixed somewhat lower than those between
Chicago and Philadelphia, and in turn Philadelphia was allowed a small
advantage over New York. This concession was made to equalize the
difference in the ocean rates of the competing ports. These equalizing
or--to use railroad nomenclature--differential rates were subsequently
granted by pools to such roads as, on account of some disadvantage,
could not compete with other members of the pool on equal terms. Thus
the longest route was usually permitted to charge the lowest, and the
shortest route the highest rate. This practice is in conformity with the
principle of charging whatever the traffic will bear, but it is
certainly devoid of every consideration of justice and equity. If the
longer line can afford to carry freight at rates lower than schedule
prices, no further proof is needed under ordinary circumstances that the
regular schedule rates of the shorter line are exorbitant.

The concession of differential rates settled, at least temporarily, the
difficulties that had arisen out of the east-bound traffic of the trunk
lines. This arrangement did not, however, in any way affect the traffic
moving in the opposite direction. The volume of west-bound freight is
very much larger at New York than at any other of the Atlantic ports. In
order to get its share of the business, each trunk line maintained an
office in New York. These offices eagerly solicited business for their
respective roads, and the freights which they received for
transportation to the West would be forwarded either directly or by a
circuitous route; but, the longer the route, the lower as a rule was the
compensation asked for the service. Under these circumstances
competition was brisk, an