produced in this country, it is probably a fair
estimate to say that ten per cent. is paid for transportation of the raw
material and finished goods in their various journeys between producers,
dealers, and consumers, and for transportation of passengers whose
journeys directly or indirectly contribute to the nation's industry.
That is to say, the gross yearly earnings of all the railroads and
transportation lines of the country is about one tenth of the total
value of all the year's products. The average is brought down by the
amount of sustenance still consumed in the locality where it is
produced, and by the amount of valuable merchandise. But of the bulky
products like coal and grain, the greater part of the cost to the remote
consumer is due to the cost of carriage.

It is also necessary to a proper appreciation of the problem, that we
understand that railway transportation is now as absolutely necessary as
is the production of food and clothing. Annihilate the railway
communications of any of our great cities, and thousands would perish by
starvation before they could scatter to agricultural regions. There was
great suffering in many small communities in Minnesota and Dakota in
the severe winter of 1887-8, because the heavy storms blockaded the
railroads and prevented them from bringing in a supply of coal and
provisions. But it is not taking the question in its broadest sense to
consider whether we could eke out an existence without railway
communication. The fact is that under modern conditions every man
obtains all the things which he desires, not by producing them himself,
but by producing some one thing which others desire. The interchange
between each producer and each consumer must, broadly speaking, be all
made by means of the railway; and without that, stores, factories,
mills, mines, and farms, would have to cease operation.

Remembering now the importance and necessity of transportation, let us
inquire how the price at which it is sold to the public, the rate of
fare and freight, is fixed. Is it or can it be generally fixed by
competition?

There are now in the United States about 37,000 railway stations where
freight and passengers are received for transportation. Now, from the
nature of the case, not more than ten per cent. of these are or can be
at the junction of two or more lines of railway. (By actual count, on
January 1, 1887, eight per cent. of existing stations were junction
points.) Theref