n any assertion that has often been reiterated. Most people
are prone to believe that an assertion made by a thousand hearsay
witnesses is true, overlooking the possibility of their drawing from a
common false source. But it is surprising that an author like Prof.
Arthur T. Hadley should fall into such an error. In his otherwise
excellent work, "Railroad Transportation, Its History and Its Laws," Mr.
Hadley bases a number of his deductions upon false premises advanced by
railroad managers, and arrives at conclusions which appear strange when
their source is considered. In the chapter on railroad legislation
Professor Hadley says: "But a more powerful force than the authority of
the courts was working against the Granger system of regulation. The
laws of trade could not be violated with impunity. The effects were most
sharply felt in Wisconsin. The law reducing railroad rates to the basis
which competitive points enjoyed left nothing to pay fixed charges. In
the second year of its operation, no Wisconsin road paid a dividend;
only four paid interest on their bonds. Railroad construction had come
to a standstill. Even the facilities of existing roads could not be kept
up. Foreign capital refused to invest in Wisconsin; the development of
the State was sharply checked; the very men who had most favored the law
found themselves heavy losers.... By the time the Supreme Court
published the Granger decisions, the fight had been settled, not by
constitutional limitations, but by industrial ones."

These statements are either utterly untrue or greatly misleading. Mr.
Hadley ought to know that the railroad companies in the Granger States
never complied with the letter, much less with the spirit of the law.
Whenever they made an apparent effort to live up to it they only did so
to make it odious. Rates were never reduced by the legislature to the
basis previously enjoyed by competitive points, but merely to the
average charge which had obtained before the passage of the law. As a
rule the railroad revenues increased. If any companies failed to earn
enough to pay fixed charges it was simply because they were determined
not to do so. A non-payment of dividends did not injure the managers,
but simply other stockholders of the road. A permanent establishment of
the principle of non-discrimination, on the other hand, would have
benefited stockholders, while prejudicing the speculative interest which
managers had in the roads. Railroad c