The Dominion Government owns and operates four railways, the cost of which up to June 30, 1890, was $52,800,000. It has also granted to railroad companies cash subsidies which to June 30, 1889, amounted to over $46,000,000. The total number of miles of railroad in Canada was 14,004 in 1890. The people of Canada have, since the political union of the colonies, pursued an exceedingly liberal policy toward their railroads, but it appears that the great indulgence of the government only bred license in railroad circles. The evil increased from year to year, until the many complaints on the part of the public against railroad management caused Parliament in 1886 to appoint a commission to examine into the alleged abuses and to report as to the advisability of the adoption of a general railroad law, and the appointment of a Board of Railroad Commissioners. The committee reported to the Governor-General of Canada on the 14th of January, 1888, and, acting upon its recommendation, Parliament passed the Railway Act of May 22, 1888. This act, containing 309 paragraphs, provides for the complete regulation of railroad affairs, and for this purpose creates a Board of Railroad Commissioners, consisting of the Minister for Railroads and Canals, the Minister of Justice and two or more members of the Privy Council. The act also repeals all former railroad laws. Though it has been in force less than five years, its beneficial effects are already extensively felt by the Canadian public.

CHAPTER III.

HISTORY OF RAILROADS IN THE UNITED STATES.

In no country in the world has the growth of railroads been so rapid as in the United States. With a population less than one-fifth as large as that of Europe this country has a larger number of miles of railroad than that continent. While European countries generally opposed the introduction of the new system of transportation, our people extended to it a hearty welcome. This difference of sentiment can easily be accounted for. At the time of the invention of railroads Europe had a system of turnpikes and canals which, at least for the time being, answered every purpose. It became necessary for the railroads to enter into competition with these well-established agencies of transportation, which had the test of time, popular prejudice and governmental sanction in their favor. Moreover, the railroad as a new and unknown quantity caused a feeling of uneasiness in all conservative circles. It seemed to make war against time-honored principles of statecraft and society, and threatened to bring about a revolution the outcome of which no one could foresee.

The condition of things was entirely different in the United States. There were but few good roads and still fewer turnpikes and canals. A vast territory in the interior awaited cultivation. Excepting the coast and a few cities situated on the large navigable rivers, the East and the West and the North and the South were practically without commercial relations, and were only held together by a community of political traditions and the artificial cement of a common constitution. Even had the country had a system of turnpikes and canals, the Mississippi River would still have been a forty days', and the extreme Northwest a three months' journey distant from New York. It seems extremely doubtful whether the different sections of so large a realm, having so little community of commercial interests, could long be kept together under a republican system of government. The settlement of the central portion of the country and the development of its resources seemed to be the task of future centuries. The railroad under these circumstances made its appearance at a most opportune time for America, and the American people were not slow to make the best of the opportunities presented to them.

In the United States, as in England, the railroad was preceded by the tram-road. The first tram-road in this country was opened in 1826. It connected the granite quarries of Quincy with the Neponset River, and was operated by horsepower. The second road of this kind was the Mauch Chunk tramway, in Pennsylvania, opened in 1826, for the transportation of coal. The trains were drawn up an inclined plane by stationary engines and were moved down by their own weight. During the same year the Delaware and Hudson Canal Company opened the Carbondale and Homesdale tramway, connecting their mines with the Delaware and Hudson Canal. It appears that an English locomotive was imported for use on this line in 1828, but that it did not answer its purpose.

During the same year was commenced the construction of the first line of importance in this country, the Baltimore and Ohio. The line was opened for traffic in 1830, having then an extent of fourteen miles. In 1831 it was extended sixty-one miles, and the year following sixty-seven miles. For a year the road was operated by horsepower, but in 1831 the company purchased for its road an American locomotive.

The first road upon which a locomotive engine of American manufacture was used was the South Carolina Railroad, which was commenced in 1830. The engine was manufactured at West Point and was placed upon the road in December of the same year. The line had then an extent of ten miles. In 1832 it had increased to sixty-two miles, and in 1833 to 136 miles. The construction of the Mohawk and Hudson was commenced in August, 1830, and the road was opened in September of the following year. Its first locomotive engine was also imported from England, but, being found too heavy, was soon replaced by an American engine of half its weight. In 1831 two other New York roads were commenced, the Saratoga and the New York and Harlem. A small portion of the latter was opened during the same year, and the former in July, 1832. The Camden and Amboy Railroad in New Jersey was likewise commenced in 1831, but its completion was not reached till 1834. The New Castle and Frenchtown Railroad was completed in 1832, the Philadelphia and Trenton in 1833, and the New Jersey in 1834. In 1835 the Washington branch of the Baltimore and Ohio was opened, and the entire line had at the end of that year attained an extent of 115 miles. During the same year three Massachusetts roads, connecting Boston with Providence, Worcester and Lowell respectively, were opened. In 1836 the New York Central route was opened to Utica. In 1837 the Richmond, Fredericksburg and Potomac Railroad was completed from Richmond to Fredericksburg. In 1838 the Richmond and Petersburg and the Philadelphia, Wilmington and Baltimore railroads were opened. The Wilmington and Weldon Railroad was completed in 1840, and the Petersburg and Roanoke three years later. There was now a continuous line of railway from the Potomac to Wilmington, North Carolina. In 1842 the whole line of the Boston and Albany road was completed, which thus became the first important through route in America.

The construction of railroads in the United States was from the first carried on without a system. Railroads in an early day were purely local affairs. Each locality operated its own road in its own interest and without any supervision from the State which had granted its charter. Acts of incorporation or charters were granted as a matter of course. Railroads were looked upon as the natural feeders of canals, and their future importance was foreseen by very few men. The early roads were a heavy burden on the capital of the country. A number of small roads were built that proved unprofitable and had to be abandoned. After the financial panic of 1837 there was, except in New England, a very perceptible stagnation in railroad enterprise, which lasted until the discovery of gold in California, in 1848. The average number of miles of road constructed per annum during the ten years preceding 1848 was 380, while it was nearly 1,800 per annum during the seven years following.

It may be said that with the discovery of gold in the West ends the first or formative period of railroad construction. From the first opening of the Baltimore and Ohio to the beginning of the year 1848, a period of eighteen years, there were constructed in the United States 5,205 miles of railroad, or an average of 289 miles per annum. The discovery of gold on the Pacific gave a new impetus to railroad construction throughout the country. Railroads now ceased to be local works and became interstate or national thoroughfares. Extensive new lines were built and through routes were formed by the coalition of local roads. It was during this period that railroad companies first became conscious of the importance of their mission and that they commenced to compete with river and canal carriers. In 1848 a through route was completed between Cincinnati and Lake Erie. A more direct line, the Cleveland, Columbus and Cincinnati road, was opened in 1851. During the same year the Erie Railroad reached Lake Erie and connected the lake with the Hudson, and a year later Chicago received railroad connection with the East by the completion of the Michigan Central and Michigan Southern. In 1854 the Chicago and Rock Island reached the Mississippi River, and in 1855 the Chicago and Galena was opened. One year later the Illinois Central reached the Mississippi at Cairo, and the Chicago, Burlington and Quincy Railroad was opened to Quincy. The Ohio and Mississippi, between Cincinnati and St. Louis, was completed at about the same time. The Pittsburgh, Fort Wayne and Chicago, an extension of the Pennsylvania road, was completed to Chicago in 1858. At the beginning of 1859 the Hannibal and St. Joseph Railroad reached the Missouri River, and eight years later the Cedar Rapids and Missouri was completed to the Missouri at Council Bluffs.

To encourage the extension of railroads into new and thinly settled territories, and to thus hasten their settlement and the development of their resources, the people of the United States began at the commencement of this period to favor the policy of land grants. Such grants had repeatedly been made to roads and canals prior to the crisis of 1837. The first railroad that received a land grant was the Illinois Central. The scheme was proposed as early as 1836, but the act making the grant was not passed until September 20, 1850. Other grants followed in 1852 in Missouri, in 1853 in Arkansas, in 1856 in Michigan, Wisconsin, Iowa, Florida and Louisiana. As a rule these lands were granted by the National Government to the States, and by them to the railroads. The land grants made during President Fillmore's administration amounted to eight million, and those made during Pierce's administration to nineteen million acres. The financial crisis of 1857 and the War of the Rebellion again checked railroad building, but this period developed a new phase of railroad enterprise as well as of the land grant policy. In those times of national trial a railroad to the Pacific Coast seemed a political necessity. The project of connecting the Atlantic and Pacific oceans by a line of railroads was first brought prominently before the American people by Asa Whitney of New York. At a meeting held under his auspices in Philadelphia on the 23d day of December, 1846, a movement was inaugurated for the purpose of interesting the people in this enterprise and securing the aid of the government for its accomplishment. Various plans were urged, and earnest discussions followed, in which the ablest minds of the nation participated. The continual agitation of the subject finally led, on the 1st of July, 1862, to the passage by Congress of an act incorporating the Union Pacific Railway Company and the adoption of the central route. The Union and the Central Pacific companies received a virtual money subsidy of $30,000,000 and a land grant aggregating nearly twenty-three million acres, a domain almost equal to the State of Indiana. Other direct grants of territorial lands soon followed. The Northern Pacific received, just before the close of the war, a grant of forty-seven million acres of land. In the Southwest public lands were also freely given to new Pacific lines. The various grants made to railroads comprise no less than 300,000 square miles, equal to four and a half times the area of New England, or six times that of the State of New York, or equal to the total area of Iowa, Wisconsin, Illinois, Indiana, Michigan and Ohio. Where these grants were not deemed sufficient inducement for the construction of roads, counties, cities and towns freely voted subsidies, while private citizens made donations to or subscribed for the securities of the new railroads.

As has already been stated, the consolidation of connecting lines and their transformation into a few large through routes was one of the characteristic features of this period. As through traffic, and particularly through freight, grew in importance, it became more and more apparent that frequent transhipment was an expense to the railroads as well as a burden to the public. The system of railroad ownership and management soon adapted itself to the necessities of business. The change seems to have been inevitable, for it occurred in all parts of the world at about the same time. Sagacious men early recognized the importance of railroads as national lines of communication. This idea no doubt controlled the projectors of the Baltimore and Ohio, of the Erie, and of the Boston and Albany roads. The first consolidation of any importance took place in 1853, when eleven different roads between Albany and Buffalo were united to form the New York Central. Five branch roads were added to the system between 1855 and 1858. In 1864 Cornelius Vanderbilt secured control of the Hudson River road, and in 1867 of the New York Central, which lines he consolidated in 1869. By gaining soon afterward control of the Lake Shore and Michigan Central and Southern Canadian roads, he united under one management over 4,000 miles of railroad between New York and Chicago, and thus created the first through line between the East and the West.

As has already been stated, the Pennsylvania road gained control of the Pittsburgh, Fort Wayne and Chicago in 1858 and thus extended its system as far as Chicago. Through the absorption of other lines it reached an extent of over 7,000 miles. The creation of this through route was chiefly the work of Thomas A. Scott, at that time vice-president, and later president, of the Pennsylvania railroad.

In 1874 the Baltimore and Ohio, under the management of John W. Garrett, extended its system to Chicago, and became a competitor of the two older lines in the transportation of through freight. At about the same time two other parallel trunk lines were developed, the Grand Trunk on the north, and the Erie, between the Lake Shore and Pennsylvania lines. There were, therefore, in 1874 five rival trunk lines competing for the business between the West and the seaboard.

During the same period large rival lines developed west of Chicago and St. Louis. From the former city radiate the St. Paul and Northwestern systems, each with from 6,000 to 8,000 miles; the Atchison, Topeka and Santa Fe with over 9,000 miles; then the Rock Island, the Chicago, Burlington and Quincy, the Illinois Central, the Chicago Great-Western, and the Chicago and Alton, their systems ranging from 1,000 to 6,000 miles in extent. From St. Louis radiate the various branches of the Missouri Pacific and the closely allied Wabash system, controlling together some 10,000 miles of road.

This process of consolidation also went on in the Southern States, though to a less extent. Their systems do not run parallel, like the trunk lines, nor do they radiate from a common center, like the roads of the Northwest, but they radiate from the principal ports of the Atlantic and the Gulf of Mexico toward the interior.

We now enter upon the third period of the history of American railroads, the period of combinations. During the time of great activity in railroad construction following the War of the Rebellion many abuses in railroad management had been developed, which caused general complaint and led to what is known as the Granger movement. Laws were demanded, especially in the agricultural States of the West, which should regulate the rates, methods of operation, and the political relations of the railroads. The friends of this movement were successful in the political contests that followed, and Granger legislatures were elected in the States of Illinois, Wisconsin, Iowa and Minnesota. Laws were passed fixing the rates on different classes of roads and providing penalties for their violation. The companies contested these acts in the courts, but were defeated at every step, until in 1877 the Supreme Court of the United States sustained the constitutionality of the Granger laws. In the meantime railroad managers tried their utmost to render, by shrewd manipulation, these laws obnoxious, and they finally succeeded in having them repealed or so amended as to render them largely ineffectual.

It was the principal object of the Granger movement to do away with the many discriminating tariffs which so injuriously affected local points. It is true, discriminations between individuals were practiced at business centers, but rates upon the whole were low at such points as compared with those which obtained at local stations. While the Granger contest was still going on in the West, a new evil developed in the East, which became characteristic of the period and finally grew into one of the most intolerable abuses of railroad management. Railroad men had gradually learned that it was in their power to maintain high rates at competitive as well as at non-competitive points, provided all the roads centering at such points could be induced to coöperate, or rather to conspire for that purpose. The final solution of the problem was, after some experimentation, found in the device to control the prices of transportation generally known as the pool. It is doubtful whether any contrivance connected with railroad management ever threatened to subvert long-established principles of the common law more completely than this. Within a few years it extended its dominion over the whole country, exacting a heavy tribute from its commerce, until the people's patience finally became exhausted and their determined demand for railroad reform led to the enactment of the Interstate Commerce Act in 1887.

When this act passed, dire results were predicted by nearly every railroad man in the country. Prophecies were freely made that it would ruin half of the roads and seriously cripple and sadly interfere with the usefulness of the other half, that it would derange the business of the country, greatly depreciate all railroad securities and put an end to railroad construction. Nearly seven years have passed since the adoption of the law, but not one of these prophecies has come to pass. There are at present probably less bankrupt roads in the United States than there have been at any time for twenty years, our business interests have been improved, the securities of honestly managed roads are in better repute than they were previous to the passage of the law, and the railroad mileage of the country is increasing at the rate of about 6,000 miles a year. If any branch of business has suffered in consequence of the enactment of the law, it is the branch monopolized by Wall Street. Since 1885, the time when the Interstate Commerce Bill was first seriously agitated, the aggregate of railroad securities has increased nearly $2,500,000,000, or about one-third. This certainly does not look as if capital had been seriously frightened by the Interstate Commerce Act. There are other proofs of railroad prosperity. In 1885 the gross earnings of the railroads of the United States were $772,568,833, or 9.9 per cent. on their reported capital. In 1886 their gross earnings were $829,940,836, or 10.2 per cent. on the reported railroad capital. In 1890 the gross earnings had increased to $1,097,847,428, and equaled 10.8 per cent. on the reported capital. This includes even the capitalization of new lines and others not reporting operations. Mr. Poor gives the reported cost of the lines actually operated as $8,519,670,421, against $10,122,635,900 reported cost of all the railroads built. Omitting from the computation the lines not reporting operations, the gross earnings of the roads actually operated equaled 12.7 per cent. and their net earnings 4 per cent. on the actual cost of the lines which reported. The gross earnings for 1891 were $1,138,024,459, and for the year ending June 30, 1892, $1,222,711,698.

The gross earnings per mile have increased from $6,265 in 1885, and $6,570 in 1886, to $6,946 in 1890, and $7,409 in 1892. In 1885 the capitalization per mile of road was $55,059 and the net earnings per mile were $2,185. In 1890 the capitalization per mile had decreased to $53,783, while the net earnings per mile increased to $2,195. The railroad mileage of the country has grown from 128,361 in 1885 to 166,817 in 1890, to 170,601 in 1891, and to 175,000 in 1892.

The railroad system of the United States has had a phenomenal growth, especially since 1870, since which time nearly 120,000 miles of road, or more than two-thirds of the total mileage, have been constructed. The table below shows the number of miles of railroad constructed and in operation, by quinquennial periods from 1830 to the close of 1890, inclusive:

It will be noticed that in the sixty years covered by the above table there are but two quinquennial periods which show a falling-off in the rate of growth, viz.: 1860-65 and 1875-80. During the former period railroad construction was partially checked by the War of the Rebellion, during the latter by the general financial depression following the panic of 1873.

The length of railroads in the world has grown from 206 miles in 1830 to about 400,000 miles in 1892. The following table shows the growth of railroad mileage by quinquennial periods:

From this table it is seen that the railroad mileage of the world has doubled during the past fifteen years, and that its average annual increase is at present not far from 17,000 miles. There is no doubt that the extent of railroad construction has everywhere exceeded all anticipations. So fast has the railroad system expanded in the most highly civilized countries that it soon outgrew in nearly all of them the laws originally adopted for railroad control. In time an almost universal demand arose for reform, and the most progressive governments were not slow in heeding it. For the past fifteen years there has been a decided drift on the European continent toward state ownership of railroads, or to such strict control of the transportation business as virtually deprives the operating companies of the power to do injustice to the public.

The railroad is assuming more and more the character of an international highway. A movement is on foot to connect the railroad systems of the United States with those of South America by an intercontinental or "Pan-American" railroad. Appropriations have been made by the United States and several of the South American republics for a preliminary survey of the proposed line. Three different surveying parties are in the field, one in Central America and the other two in the United States of Colombia and Ecuador. The progress so far reported by them is encouraging, and there is now some hope that before the close of the nineteenth century one may be able to travel by railroad from New York to Valparaiso without even a change of cars.

It has also been proposed to span Behring Strait and connect North America with Asia and Europe by an international railway. This line, if constructed, would be simply an extension of the proposed Pan-American railroad and would follow the western coast of the United States as far as Behring Strait, then cross over into Asia, traverse Siberia and finally reach London via St. Petersburg, Berlin and Paris. It is very questionable whether such a line is at present feasible either from a technical or financial point of view, but the time will probably come when the railroad track will connect New York and London.

CHAPTER IV.

MONOPOLY IN TRANSPORTATION.

From time immemorial efforts have been made by designing men to control either commerce or its avenues, the highways on the land and on the sea, by a power which law, custom, ingenuity, artifice or some other agency had placed into their hands.

The ancient Phœnicians early aimed at and finally obtained the empire of the sea by making themselves masters of the most commodious harbors of the Mediterranean Sea and the Arabian Gulf. They established a regular intercourse with the countries bordering on the Mediterranean as well as with India and the eastern coast of Africa. From these latter countries they imported many valuable commodities which were not known to the people of other parts of the world, and during a long period they held this lucrative branch of commerce without a rival. The character and the situation of the Phœnicians aided them greatly in acquiring this mastery of commerce. Neither their manners and customs nor their institutions showed any marked national peculiarity; they had no unsocial prejudices and they mingled with the people of other countries without the least scruple or repugnance. As their native country was small and quite barren, they early learned to rely upon commerce as the best source of riches and power. Like the other Semitic tribes, the Phœnicians were noted for their energy and acumen, and while they were not a literary people in the strict sense of the word, ancient civilization received probably a more powerful impetus through their commercial supremacy than through any other agency.

During the reign of King Solomon the Jews made an attempt to wrest from the Phœnicians at least a part of the world's trade. Solomon built ships and imported Phœnician sailors for his fleet. For a time it seemed as if the Israelites might become the rivals of their teachers in the art of navigation and in the mysteries of trade; but their peculiar religious customs in that early day proved a serious impediment to commercial ascendancy, as it rendered them incapable of that unreserved intercourse with strangers so essential in commerce.

The monopoly of the sea, at least of the Mediterranean, passed to the Carthaginians, their descendants. The latter extended their navigation toward the west and north. They planted colonies and opened new harbors, and up to the time of the Punic wars kept almost the entire trade of the countries bordering on the Mediterranean in their hands.

After the downfall of Carthage the control of the commerce of Southern Europe and Northern Africa descended to the Romans. When Rome became the capital of the world, it gathered the wealth and valuable productions of all its provinces. Under the consuls and the earlier emperors the vigilance of the Roman magistrates and the spirit of the Roman government gave every possible security to commerce and prevented for a time the rise of monopoly. Nowhere was national union so complete or commercial intercourse so perfect as in the Roman empire. The intelligence and the power of Rome stimulated and regulated the industry of her people and permitted them to enjoy the fruits of their efforts without public or private restrictions.

We have seen that the intercourse of Rome and her provinces was facilitated by the construction of roads and the establishment of imperial posts. During the decline of the empire the maintenance of these posts led, however, to a grave abuse. We are informed by Gibbon in his "Decline and Fall of the Roman Empire":

"But these beneficial establishments were accidentally connected with a pernicious and intolerable abuse. Two or three hundred agents or messengers were employed, under the jurisdiction of the master of the offices, to announce the names of the annual consuls and the edicts or victories of the emperors. They insensibly assumed the license of reporting whatever they could observe of the conduct either of the magistrates or private citizens, and were soon considered as the eyes of the monarch and the scourge of the people. Under the warm influence of a feeble reign they multiplied to the incredible number of ten thousand, disdained the mild though frequent admonitions of the laws, and exercised in the profitable management of the posts a rapacious and insolent oppression. These official spies, who regularly corresponded with the palace, were encouraged by favor and reward anxiously to watch the progress of every treasonable design, from the faint and latent symptoms of disaffection to the actual preparation of an open revolt. Their careless or criminal violation of truth was covered by the consecrated mask of zeal; and they might securely aim their poisoned arrows at the breast either of the guilty or the innocent, who had provoked their resentment."

After the downfall of the Romans, commerce remained paralyzed during the period of Gothic ignorance and barbarism. The crusades for the recovery of the Holy Land from the Saracens, in the eleventh and following centuries, opened again communication between the east and the west by leading multitudes from every European country into Asia; and though the object of these expeditions was conquest, and not commerce, their commercial effects were both beneficial and permanent. The crusades were especially favorable to the commercial pursuits of the Italian states. The vast armies which marched from all parts of Europe toward Asia gave encouragement to the shipping of Venice, Genoa, and Pisa, which sometimes transported them, and always supplied them with provisions and military stores. Besides the immense sums which these states received on this account, they obtained commercial privileges of great consequence in the settlements which the crusaders made in the East. All the commodities which they imported or exported were exempted from every imposition, the property of entire suburbs in some of the maritime towns, and of large streets in others, was vested in them, and all questions arising among persons residing within their precincts, or who traded under their protection, were decided by their own laws and by judges of their own appointment. When the crusaders took Constantinople, the Venetians did not neglect to secure to themselves many advantages from that event. Nearly all the branches of commerce were in time transferred from Constantinople to their city. At the end of the crusade period Venice had monopolized nearly all the foreign trade of Europe. She supplied the people of Italy, France and Germany with those commodities with which the crusaders by their intercourse with more refined nations had become acquainted. The possession of many Eastern ports and the maintenance of a powerful navy made it possible for the Venetians to retain their monopoly for several centuries.

The growth of commerce in Central Europe was but slow, owing to the dangers to which it was exposed in those days of feudalism. The mountain fastnesses of robber knights, which controlled every road and navigable river, were so many toll-gates at which the wayfaring merchant was stopped to pay tribute. In time this system of plunder grew to such an extent that hundreds of feudal lords relied upon it for their support. Such a tax upon commerce greatly enhanced the value of all commodities, and this deplorable state of things lasted until the cities made their power felt by forming alliances for mutual protection. One of these alliances, the Rhenish League, comprised in time seventy towns, and the ruins of the strong castles destroyed by its forces still exist along the Rhine, picturesque memorials of these lawless times.

Perhaps the most powerful commercial union of the middle ages was the Hanseatic League. To protect their commerce, the cities of Hamburg and Lubeck formed about the middle of the thirteenth century an alliance for mutual defense. The advantages derived from this union attracted other towns to the confederacy. In a short time about eighty of the largest cities lying between the Baltic and the Rhine joined this famous league, which in time became so formidable that its alliance was courted and its enmity was dreaded by the greatest monarchs. The League divided its territory into several districts. Its members, like railway associations of the present day, made their own laws, and met for this purpose at regular intervals in the city of Lubeck. The original object of the League, mutual assistance against outside attacks, was soon lost sight of, and its constantly growing power was used to obtain still greater commercial privileges in the adjoining countries, and even to force their rulers to concede to its members a commercial monopoly. In 1361 a controversy arose between the League and the King of Denmark, which led to a long and bitter war between them. This war was participated in by no less than seventy-seven cities on the part of the League. It terminated in 1370, leaving the Hansa master of the situation. For many years after this the League exerted its power in Denmark, Sweden and Norway, and the rulers of these countries were compelled to respect the wishes and even submit to the orders of these proud merchants. The countries bordering on the Baltic Sea remained the domain of the League for several centuries. They gathered there immense quantities of raw material, which they sold in the various ports of Europe. The influence of the League even reached as far as Novgorod in the east and London in the west. In both cities the League had its quarters, and within them it virtually exercised the right of sovereignty. Its main market was at Bruges in Flanders, which was then a bee-hive of industry and thrift. There the Italian traders came with the products of the east, such as spices, perfumes, oil, sugar, cotton and silk, to exchange them for the raw materials of the north. While taxes and imposts everywhere else harassed merchants, commerce was free in the cities of Flanders, owing to the liberality, or rather shrewdness, of her rulers. In Bruges the members of the Hansa met the merchants of Venice on equal terms, and the exchange of the products of the north for those of the east and south could be effected there to the greatest advantage of both.

While it must be admitted that the Hanseatic League developed the resources of Northern Europe, and that, even at the time of its greatest power, there was always competition among its own members, the fact remains that it abused its power by the suppression of all outside competition, and that it usurped rights which belong only to the state, thus often producing abuses as great as those which it was organized to remedy. Its final downfall was caused by the development of national power in the northern kingdoms and the growth of commerce and navigation in Great Britain. A stubborn assertion of antiquated privileges on the part of the Hansa involved it in a feud with the illustrious and lion-hearted Queen Elizabeth of England. In 1589 the Queen caused sixty of their vessels to be captured on the Tagus, and later even took possession of their hall and wharves in London. After this the League's decline was very rapid, though its organization was kept up till 1669, when its delegates held their last session.

Contemporary with the decline of the Hanseatic commerce in the north was that of the Italian cities, especially Venice, in the south. They had prospered by their commerce with the Levant until Vasco de Gama discovered the sea route to East India in 1497. His countrymen, the Portuguese, soon utilized this discovery. They took possession of the coast of India and of the islands to the south of it. They also succeeded in excluding the Arabs from the commerce with that country, of which up to that time they had had exclusive control. For this purpose they built fortresses and factories on the west coast of Hindostan, took possession of the island of Socotra in the Arabian, and of Ormus in the Persian Gulf, and forced the Indian princes to grant them the exclusive privilege of trading with their subjects. They also captured the city of Malacca, where the trade between China, Japan, the Philippine Islands, the Moluccas and India had concentrated itself. In this way they got in a comparatively short time control of the commerce of India, Arabia, and even Egypt. By forcing the Venetians and their commercial allies out of those markets, they secured for themselves a monopoly of the commerce between Europe and the east. The political ascendancy of the Turks in the islands situated in, and in the countries bordering on, the Eastern Mediterranean, caused the loss of Cyprus, Crete (Candia) and Morea to the Venetians and greatly aided the Portuguese in establishing their commercial supremacy. Less profitable for the latter was the possession of their American colonies. They, as well as the Spaniards, adopted here a policy which ultimately brought commercial and industrial ruin upon both. Entirely neglecting agriculture and relying on the mineral resources of their transatlantic colonies, which were believed to be inexhaustible, they strove to amass riches by reserving for themselves the exclusive privilege of supplying them with the manufactures of Europe in exchange for American gold. Neglecting home industries, they bought their supplies as well as those of their colonies in France, Holland and England. A spirit of speculation and adventure enervated their people, and led in time to commercial bankruptcy and political disaster.

Spain also drained her treasury by her wars with her Dutch dependencies, and the loss of her northern provinces was a serious blow to her commerce. Antwerp, which had become the successor of Bruges as the commercial emporium of the north, began to decline, and Amsterdam, the metropolis of the new Dutch republic, became heir to its glory and its riches. The young republic at once commenced to compete in the carrying trade with Spain and Portugal, and to make inroads into the eastern commerce of the latter.

The Dutch East India Company, which was organized in 1602, sent a fleet of fourteen vessels into the Indian Archipelago to found colonies in Java, Sumatra and the Moluccas. In a short time they had monopolized the entire spice trade, which immediately became a source of great wealth. A cargo of five vessels, which returned to Amsterdam in 1603, consisted of over two million pounds of spices. This cargo was purchased for 588,874 florins and was sold for 2,000,000 florins. It is under these circumstances not surprising that the dividends of the company's stockholders often amounted to 75 per cent., and never went below 12-1/2 per cent. previous to 1720. Holland's colonial trade made Amsterdam the commercial metropolis of Europe. It became the grain market from which Spain, Italy and other countries drew their supplies. All the products of the world found purchasers here, and a well-developed banking system greatly facilitated the exchange. The rapid accumulation of fortunes by the Dutch merchants and bankers was without precedent in Europe. Besides this, the progress which Holland made in ship-building and navigation and the advantages which she derived from her colonial trade placed her in a position to outstrip all other nations in the carrying trade of Europe. During the first half of the seventeenth century the Dutch were justly called the freighters of Europe. But the injury which their policy did to the commercial and manufacturing interests of other European nations led both England and France to adopt measures well calculated to accomplish, in a short time, their commercial emancipation. Louis XIV., in order to build up French shipping, collected a tonnage from every foreign ship which entered a French harbor. England went still further. In 1651 Oliver Cromwell promulgated the Navigation Act, by which foreign ships were prohibited from importing into England any goods except such as were produced or manufactured in their own countries. This was a heavy blow at the Dutch, who were thus deprived of the privilege of effecting the exchange of commercial commodities between England and her colonies as well as the continent. The war which the Dutch Republic waged against England, to force her to revoke this act, resulted in favor of the latter and ended the commercial supremacy of the Dutch in Europe.

England, which before this time had played but a secondary role as a commercial power, rose fast to prominence after her successful struggle with the Dutch. She commenced to strengthen her industries by the adoption of a high tariff policy, and her merchants were encouraged to enter into commercial relations with colonists and foreigners. The privileges which had been given to foreign tradesmen were revoked, while ship-building and navigation were greatly favored by the government. As England gained greater strength as a naval power, her foreign policy became more aggressive.

In 1600 the "Company of Merchants of London Trading to the East Indies" obtained a charter, and, in spite of Dutch and Portuguese opposition, soon gained a foothold on the Moluccas and the coast of Malabar, whence it extended in time its dominion to Surat, Bombay, Madras and Calcutta. Here they built forts and established their commerce. From these places the company pushed into the interior, until finally, after repeated struggles with the natives and European rivals, the whole of Hindostan came under English dominion. As its power increased, the company commenced to abuse shamefully the monopoly which it had been granted, by inaugurating a system of plunder and oppression which is perhaps without its equal in the annals of history. These growing abuses led to frequent revolts and seriously imperiled England's dominion in these territories.

To remedy these evils, Parliament at the close of the seventeenth century annulled the charter of the company and declared the commerce with the East Indies open to all of the King's subjects. A number of small companies were formed, but in 1702 they all combined and organized the East India Company. Monopoly was again established, but the patience of the natives was exhausted, and England's interests in Hindostan were in a critical condition. At this juncture the East India Company adopted a policy of moderation, and this, together with the aid which the government gave to the company, enabled it to strengthen again its weakened commercial relations and to further enlarge its territory. But the temptation to abuse its power was too great for this strong corporation to be long resisted. Abuses again crept into its management and continued to grow until its charter was finally repealed.

The policy adopted by Great Britain for the government of her American colonies during the eighteenth century was less rapacious, but scarcely more just than that pursued in her eastern possessions. To retain those colonies as commercial no less than as political dependencies, Parliament enacted laws compelling their people to trade with the mother country exclusively and laying restraint on their manufactures. But the American pioneers felt that they had brought with them across the ocean the rights of Englishmen; they objected to taxation without representation, and the men who for opinion's sake had left comfortable homes to brave upon a distant shore the dangers of frontier life were prepared, if necessary, to emphasize their objection by armed resistance. England, intent upon maintaining her barbaric system of discriminative duties and commercial monopolies, blindly attempted coercion, but the war which resulted wrested from the English crown its brightest jewel, and the War of 1812 established upon American soil the principle of industrial and commercial liberty.

It must not be supposed, however, that America and the United States in particular have been free from monopolies growing out of the transportation business. Nothing would be farther from the truth. There is no law so stringent but that it will be violated; there is no government so vigilant but that it will at times be imposed upon. It is true, our government sanctions no monopoly, but the very liberty of action which exists here among corporations as well as individuals offers to organized wealth and power a wide field for abuses.

We have seen in the foregoing that almost from time immemorial efforts have been made to monopolize transportation and trade, and that these efforts were successful whenever either from ignorance or weakness the masses fell into political apathy. There is a natural tendency among men to utilize commercial advantages to the detriment of others. In modern times the opportunities for building up large monopolies have greatly increased and have been turned to the most profitable account by designing men. Great and even unbearable abuses have always followed where the greed and ambition of such men have not been checked by governmental agencies. In this respect the people of the United States have had about the same experience as the rest of mankind. Ever since the introduction of railroads into this country there has been a well-marked drift toward monopolizing the transportation business.

As long as the dangers of monopoly remained unknown to the American people, legislation for the control of railroads and other public carriers was both scarce and crude, and shrewd railroad men were not slow in taking advantage of the situation. It is foreign to the design of this treatise to give a complete history of railroad monopoly in the United States. The author will therefore confine himself to showing that transportation companies will, like the great commercial organizations of the past, when left to follow their instincts, invariably use their power to oppress the public by exacting excessive charges for their services, or to discriminate against the many by extending special privileges to the few. Hundreds of cases might be given to illustrate the above rule, but a history of two of these corporations will suffice to show to what extent corporate abuses can be carried, and to serve as a warning against the adoption of any "laissez faire" policy in the railroad legislation of the future. The corporations selected for this purpose are the Camden and Amboy Railroad and the Standard Oil Companies, both typical representatives of the Rob Roy policy which organized wealth has pursued since the dawn of civilization, when not prevented by the wisdom and strength of a good government.