The history of railway construction and combination throughout the world seems to in dicate first, that the consolidation of competing lines is inevitable; second, that efforts by legis lation or litigation to prevent it always fail; and third, that such consolidations benefit both the public and the railways. The facts and figures concerning these consolidations in the United States are detailed elsewhere in this work, but the economic questions involved are' still open ones with us. Elsewhere throughout the world these questions seem to be settled.. Thus in England, where the railway problem has in many of its features been strikingly like our own, the question is now quite at rest. In' France the question never really arose, and else where in Europe it has been decided everywhere' in favor of amalgamation and against the con-• tinuation of competition between lines serving the same territory. (The writer's argument in the Supreme Court of the United States, Oc tober Term, 1903, upon the appeal of The Northern Securities Company et al. v. the United, States).
England.— In February 1872 a Select Joint COMmittee on Railway Companies' Amalgama tion was appointed by the two houses of the English Parliament to investigate and report back the condition of the railways' of Great Britain, particularly in respect of the' consolida tion of lines and the division of territory among the greater companies. Mr. Chichester Vor tescue, in moving the appointment of the Select Committee in the House of Commons, on Feb. 1872, said that no years ago a commit tee had reported against the system of amal gamation, but since that committee reported amalgamation had gone on as merrily as before — the fact being that 5,000 miles of railway had been added to the greater railways since that time? This committee called a great number of witnesses and went fully into the details of the matter throughout the British Islands, and on 2 Aug. 1872, presented a voluminous report, from which it appeared that by the end of the year' 1843, 71 separate and independent lines had been constructed, averaging about 30 miles each in length. During the following year the aver age mileage per independent line was reduced one-half, so that by the end of the year 1844 the average was 'only about 15 miles. Bettveen 1844 and 1847, 637 separate companies had been. chartered, with a total authorized length of about 9,400 miles of line. Eleven proposals, for example, were made to Parliament for lines of railway through a single narrow valley, where hut one line was possible. This called so loudly' for relief that consolidation began about 1847, and so proceeded, by the gradual absorption of the smaller lines by the larger systems, and by a consequent division of territory between the consolidated companies, that by 1872 it had come to pass that the railway business of the kingdom was substantially performed by no more than about six of these great amalga mated companies. The first English railway charters contained provisions intended to pre vent competition both between the lines them selves and between them and the canalc, ec pecially in freight traffic. George Stephenson, the father of English railways, seems to have appreciated clearly the mischief to be avoided in the matter of competition, even at that early day, and he, therefore, set himself to the task of getting the railway system in that country started right in this particular. His view on
this subject was summed up in his much-quoted that °where combination is possible, competition is impossible .b In 1836, a Mr. Morrison, M.P. from Inver ness, made a remarkable speech in Parliament, in the course of a discussion. of the then Eng lish railway situation, in which he pointed out with uttermost 'clearness that a railway must in the nature of things be a monopoly; that com peting roads will inevitably combine; that par elle! lines are sheer waste of capital and that fixed maximum rates are useless. This utter ance is the more remarkable because it stated clearly at the outset of railway building and before there was any basis of fact and experi ence upon which to found such generalization, the ultimate principles which' long experience has since demonstrated to be sound.
Thus it is seen that .the English railways started right but that they soon got wrong, and for the first 30 years and more, blunders in plenty were made in futile endeavors to con struct and operate railways on the principle of imer-competitum. Uncounted treasure was wasted in these attempts, and absolutely nothing but experience was gained by it. By 1872 com petition had been substantially eliminated through the operation of natural laws and in spite of hostile legislation and litigation. It was said in Parliament, in the de bates over the appointment of the Select Committee in 1872, that there was not at that time a single competitive rate exist ing in the kingdom. With the legislation of 1873 the general railway situation in England was fixed and determined, and the agitation for competition ended. The railways ceased to be bugbears, and fears of mischief to the public from the growth of railway and power gave place to intelligent criticism of railway methods and to a public-spirited determination to get good service at fair rates while giving the companies a free hand to manage•their finances in their own way. Thus, after nearly 40 years of experiment, agitation and disturhances, the. English people came back about 1872 to their point of cpmmencement. Mr. Adams, in his Railroads and Questions,' says that thin England down on the doctrine of lassses fairep ; and President Hadley, in his 'Railroad Transportation,' says: might bet ter be said that it has settled down on the policy of specific laws for specific troubles? By about 1872, as we thus the problem was solved by the operation of immutable economic laws, and the decision against competition between lines made beyond all possibility of reversion, To make a summary statement it appears that in 1847 there were about 5,000 miles of railway in England, owned and operated by several hun dred independent and competing companies; 25 years later there were 13,000 miles of railway, owned and operated by 12 partly competing companies; in 1917 there were about 24,000 miles, owned and operated by about six non competing companies.