Reasonable Rates Defined

The editor of The Omaha Bee quotes economist Richard T. Ely and explores the idea of the strikes as a "necessary evil," one that reveals the broken nature of the industrial, railroad political economy. Rates and the proper valuation of railroad properties were a crucial public issue.

Another letter form Mr. Pullman in reply to Governor Altgeld's arraignment of his company as a tax shirker may be expected.

REASONABLE RATES DEFINED

Explanation of the Meaning of the Phrase by an Iowa Commissioner.

JUSTICE PRECLUDES DISCRIMNATION

Commissioner Spencer Smith Writes on the Maximum Rate Question for the Benefit of Nebraska Readers—Legal Opinions Quoted

Iowa shippers and Iowa producers are not parsimonious; they are willing to pay reasonable and just rates; they are willing to pay their fair proportion of the amount necessary to keep the Iowa lines in first class working condition. They want proper facilities and good shipping accommodations and are willing that rates should be so adjusted as to afford these conditions, but they do not want to be forced to pay to make up the shortcomings of the other fellow. Above all things the Iowa shipper and producer wants stable rates and that rates may be maintained they protest against an advance of the present rates, as high rates always lead up to cut rates and discriminations.

Certainly no carrier has just grounds for complaint if rates are fixed for it by public authority at the standard of the average it receives. The Iowa producer, manufacturer and wholesale dealer, in order to transact business and sell his goods, must meet his competition, and in order to do this he must be placed, so far as freight rates are concerned, upon substantially what Iowa has now and she simply asks that there may be no change of these conditions. It is the right of the public to have fair treatment in matters of such public concern as railroad rates.

STRIKES A NECESSARY EVIL.

"When we come to review industrial history," writes Prof. Richard T. Ely of the University of Wisconsin in explanation of the fundamental beliefs of his social philosophy in the current Forum, "it is scarcely possible to avoid the conclusion that strikes have been a necessary evil." Strikes are regarded by this thoughtful economist as a species of warfare to be viewed somewhat in the same light in which we look at war in general. War has frequently been preferable to other evils, and likewise strikes, with all their train of hardship, misery and want, may often be preferable to the industrial situation against which they constitute a rebellion. The analogy is capable of considerable expansion. The unsuccessful belligerent may, in particular instances, in the long run derive just as much benefit from the contest as the victorious opponent, who reaps the more immediate advantages that fall to the victor's lot. Then, too, the parties directly convened in a strike, as in a war, are not the only ones who have to bear the brunt of the conflict, nor are they the only ones who secure permanent results from it.

One point of resemblance between strikes and wars is too commonly overlooked. It is that the strength of both lies rather in their potentiality than in the actual force exerted by them. Every one remembers seeing at various times computations purporting to furnish data for a comparison of gains and losses resulting from a strike. On the one side we have the amount of money which has been dissipated in idleness, the wages which would have been earned, the profits which might have been made, the interest on the dead capital invested in the industry that has been clogged. Against this is set off the additional wages which the strikers would obtain if they succeeded in gaining their point at the end of the contest. The balance, it need hardly be stated, is generally overwhelmingly on the loss side. The accuracy of such comparisons, however, may, with some reason, be questioned. Not all strikes are failures, nor are all concessions won by labor organizations won by a resort to strikes. One successful strike may be the means of frustrating a dozen reductions of wages. The apprehension of a strike may prevent an employer from taking advantage of his control of the situation or even secure concessions that a strike could not possibly bring. The very knowledge that laborers have it in their power to inaugurate strikes is a restraining influence the strength of which is not to be underestimated.

Sufficient weight is not given to this consideration. Prof. Ely himself, in the article to which we have alluded, thinks that conditions have so changed in the past few years that the very foundation on which the old-fashioned striking trades unions rested has given way and that henceforth labor organizations must make more of other features than heretofore and else of strikes. This may be their true policy, but we are by no means warranted in expecting the extinction of the strike on such short notice. The success of the recent tailors' strikes in New York and Boston is evidence that this necessary evil is still in a limited sphere necessary. War, we are all convinced, will remain with us until some less costly machinery for attaining the same object is introduced. The same is true of strikes. Strikes will continue until a more economical method of adjusting labor difficulties is devised and tested by experience.

RAILROAD'S SECRECY DENOUNCED

Thus it will be seen that the law never contemplated and does not now contemplate that the one party in interest shall alone possess the information as to the value of the service rendered to the public by the public's agent, and the refusal of the Iowa lines to furnish the public, through the Iowa commission, information required as to their Iowa business places them where they have no moral right to challenge the reasonableness of any rate fixed by legally constituted authority. A theory of rate making based upon the appraised present cash value of the property, cost of maintenance of way and structural, operating and general expenses might be correct in theory in the absence of competition and with full and accurate returns to the railroad commissioners of the honor bright facts entering into the same. But before any amount is actually named for "fixed charges" the evaporation process should have a full day in court, that water may not have a prominent place in transportation by land. When railroad managers in a few years are able to amass colossal fortunes it is difficult to persuade the average citizen that the laws looking in the direction of railroad control have been unduly oppressive and the freight rates there under too low to be remunerative. It is difficult to persuade the common man whose lands have been taken by process of law, who furnishes the traffic and provides the revenue that he should have no voice in determining the justness of the rates charged and the manner and process by which the same is reached. It is a plain proposition for plain people and has no economic mysteries surrounding it which the common mind may not grasp. It is a question of right and justice and admits of but one answer. These rates are challenged on the broad ground that they do not afford a profitable return on the bonds and stock representing this property. The question is. What is the actual value of the property, and not what mortgages does it float, and what stocks on top of the mortgages.