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SOME DESIRABLE GOVERNMENTAL POLICIES FOR

RIVER IMPROVEMENT

WM. W. HARTS

There are probably few students of economics who will not readily concede that the prosperity of mankind and the progress of civilization depend in no small degree on the facility of communication. The products of the mine, of the farm, and of the factory all require markets; and practically everything used by the average city dweller pays its tribute to this form of industry. The wonderful commercial development in all parts of the world during the past hundred years, probably exceeding in this particular the progress of all previous recorded time, may be said to date from the application of steam as a propelling power, and the use of the electric telegraph. These two agencies alone, in their various methods of application, have increased the facilities of communication beyond the most liberal belief of a century ago, and have contributed enormously to this unprecedented commercial growth.

Many nations have recognized the public importance of this principle, and have accepted as part of their governmental policies some provision for aiding the freer communication between their parts. As an instance, the importance of the Suez Canal as a connecting link in the communication between England and India was seen to be such that England could not safely leave it to the control of any other nation. Its management, therefore, was secured by the British nation as a public policy. Other instances abound. The subsidies to the merchant marine of Japan and England, the state-owned and state-aided railways of France and Germany, the development of the canals and waterways of Holland and Germany, and the public highways of Switzerland and Italy, all show how widely the principle of aiding transportation at public expense has been admitted to be desirable, if not necessary, as a governmental policy.

In the United States the development of our natural resources, unparalleled elsewhere in the world, has been largely stimulated by an enormous railway expansion. With us, as with other nations, the principle of governmental aid to transportation lines was early recognized as a means of accelerating commercial

growth. Almost from the time of the formation of the federal government large sums were spent for national post roads; but about 1832, when the first locomotive was successfully operated, the expenditures in this direction became fewer and finally ceased. Later, the government's helping hand was similarly extended to the railroads, and their construction was fostered in various ways. The transcontinental railways were thereby enabled to build their lines connecting the interior of the country with the Pacific Coast. They were financially assisted by a guaranty of their bonds, and extensive grants of public lands were made to them by the government. So important were these steps that it seems safe to say that but for aids so conferred the growth of the Pacific Coast region would still be more than a generation behind.

Among the early instances of governmental aid in this country were the river improvements, the need for which was forced upon the attention of the public through the impetus given river commerce by the successful operation of boats propelled by steam. In the period of time that has since intervened, our interior rivers, as means of communication, have passed through many vicissitudes. Since the days before the railways, when they were important lines of transportation and were filled with vessels and freight, their fortunes have gradually changed. Their importance has often dwindled, and their usefulness has been reduced, until now the longest river in the world, the one having in its present condition perhaps a greater transporting power than any other, is flowing almost idly into the Gulf of Mexico. And this has occurred, notwithstanding the fact that this river passes through a country not excelled anywhere for the fertility of its soil and the industry and energy of its people.

As early as 1830 the government took steps toward the improvement of some of our inland streams. Under President Jackson a board of army engineers designed works for increasing the depths and lessening the dangers on the Tennessee and Cumberland rivers. Grants of public land were made to various states to aid the works of this kind, and surveys for new projects were occasionally made at public expense. Some of these projected works were later completed by the states of Tennessee and Alabama, but were badly hampered by the financial panic of 1837, and were finally abandoned on the approach of the Civil War. For a few years thereafter the work done was desultory in character, but about 1870 the present practice of appropriating

federal funds for river betterment began to be recognized as a public policy. This met with great objection at first at the hands of those advocates of "States' Rights" who insisted on leaving such work to the states and localities directly benefited; but little by little the practice of federal improvement became more settled, growing up by gradual steps from very modest beginnings to its present extensive scale.

The occasional urgency of some improvement at an isolated place where a small expenditure would result in a comparatively large benefit was the usual reason put forward in the early years for appropriations for local necessities. Small local projects were thus often undertaken without any regard to the effect at other places or the relative importance of the locality. This method was soon firmly established as an adopted rule of prac tice, and in this way a lack of coördination in river work arose. The political opportunities afforded in this connection soon became apparent, and a new and powerful reason was perceived for the continuance of the system. The activity of the representatives of the people in certain sections was actually thought at one time to be measured by their success in securing new work for their districts; but the prevalence of this idea has been largely reduced in late years. There seems to be still some degree of personal triumph in obtaining appropriations for their localities, although the relative necessity therefor may be clear. Even with these disadvantages, however, works of enormous value have been accomplished, in spite of their local and independent nature. Instances are numerous. The Louisville and Portland Canal around the falls of the Ohio River, the canal and locks around the rapids of the St. Mary's River, the pools created on the Ohio River near Pittsburg, and the locks in the Monongahela, have all justified their cost many times over by the public benefit derived.

But notwithstanding the large amounts expended on many of our streams and the excellent facilities frequently afforded, there are few that do not show a decline of commerce in recent years; although for a time the improvements made seemed to cause a promising growth. Various reasons are given for this decline, such as the increased efficiency of railways, the aggressiveness of labor combinations that hamper river navigation at inopportune times, the lack of experienced river pilots (owing to the greater attractions of other vocations), and the absence of sufficient and

suitable terminal facilities. Before discussing any desirable governmental policies for river betterment, the main causes leading to this diminution of commerce should be definitely presented.

A casual observation of the various methods of communication shows at once that the decline of river traffic has kept pace, to a marked degree, with the growing development of railways. This coincidence ought therefore to be scrutinized. It may even appear on first examination that the function of rivers is to be entirely supplanted in time by rail transportation, and that further steps to aid river traffic will be rendered useless. This has been frequently asserted by enthusiastic railroad advocates, and is worthy of careful attention. They state that in the economic race the railways, by their many advantages, have so far distanced the rivers that no hope remains of ever making the latter sufficiently useful to warrant the cost of their improvement for navigation.

It is stated that since 1837 freight rates have fallen from 73 cents per ton mile to 712 mills per ton mile, or to about one tenth of the early cost. This rapid reduction gave a great advantage to the rail lines, and the possibility of the transshipment of cars from one line to another and the ease of making extensions and sidings were additional favorable features that tended to cause freight to seek this means of reaching its destination.

It seems clear that if the influence of rail transportation on river traffic could be always defended solely on an economic basis, the usefulness of most of our rivers would soon diminish to insignificance. But a closer examination of the relationship discloses methods that have been adopted by the railroads which seem unfair to river navigation, and strongly indicate a fear of successful competition. These doubtful methods have often been alluded to, and include the reduction of railroad rates between competing points to a figure below the cost of either river or rail transportation, so that boats cannot run at a profit and are then abandoned. In such cases railroads have been allowed under the law to recoup their losses by increased charges to non-competitive points—a measure not equally possible to river boats.

On some rivers, also, lines of steamboats have been temporarily established by the railroads themselves, operated at ruinous rates for a time, and then withdrawn after the competition of independent boat lines had been silenced. The possibility of such action, it is said, has at times been held up as a threat by rail

road interests in order to suppress incipient competition. It is reported that even now on the lower Tennessee River no cotton may be carried by a boat beyond the first railway crossing it encounters, without danger of retaliation. Railroads are also known to have purchased stock in boat companies, presumably to control their activities; and in many other ways they have unintentionally admitted the formidableness of their river rivals. All these devious means of putting an end to water competition are encouraging, in a way, to those who are interested in the de velopment of our waterways; for they show to what lengths the railroads will be willing to go to prevent encroachments on their business. They are, after all, silent witnesses to the effectiveness of river competition.

In some foreign countries the rail rates are maintained by their laws at a point somewhere above the river rates, in order to er courage river traffic. Probably no rule could ever be applied here such as is adopted in Germany, where rail rates are said to be kept purposely about 20 per cent above river rates; but in all fairness the least that one could expect in this country is such governmental control of the practice of the railways as will prevent unjust discrimination in rates against the river, whereby a powerful company may crush its weaker but often effective competitor.

In order that capital may invest in any enterprise, there must be reasonable security and a fair chance of profit. Until the river transportation business can be protected against unfair competition, so that investors may not thereby be forced out of their projects, there will be little hope of rebuilding the river traffic.

For these reasons the first governmental policy I would suggest would be closer railroad regulation. Whether this would be sufficient to enable a rejuvenation to take place in river affairs is still a matter of uncertainty, but as a preliminary step it seems indispensable. Certainly nothing of much importance can be ac complished without it. There are indications that the cost of railroad transportation is nearing its minimum, and that the facilities for rail haul are growing less and less able to meet the growing requirements of the country. It seems only reasonable, therefore, to expect that certain classes of bulky freight will turn more and more to the rivers in the future, and that the necessities of the country will require greater service from them.

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