Note 27 — SECTION VII. DIFFERENTIAL RATES ON THE CONTINENT.

Note—The Montreal Gazette, 1st April, 1886, writes thus on the subject of the Railway Commission Bill:—“These rates are fixed and determined by the Great American Trunk Lines, in competition with which the Tariff of the Canadian roads is necessarily regulated; to interfere with these rates would be to take away from the Canadian Companies a large amount of the gross earnings derived from a source which increases the volume of business in Canada.... The discrimination which is complained of in particular localities arises wholly out of an established competition between lines reaching a favoured point. Destroy the natural consequences and natural advantages of competition—lower rates—and you remove all inducement to the provision of rival routes; put an end to competition, and at once an increase in rates all round will be established. The Railway Act prohibits interference by the Government in the regulation of rates until a Company is proved to earn 15 per cent. upon its invested capital. What Railway Company in the Dominion to-day is earning that profit?... If competition is to be made a positive disadvantage, if every inducement to particular localities to promote rival enterprises is to be swept away, the rates of existing lines will be run up in all directions to the injury not only of every locality now favoured by competition, but of those localities which consider themselves aggrieved by reason of the absence of the low rates which competition enforces.”

It may be mentioned that one of the fiercest enemies of differential rates, in a work recently published, declares that the only remedy is to “restore the character of public highways to the railways by securing to all persons the right to run trains over their tracks under proper regulation!” “The Railways and the Republic” (1886), p. 372, by James T. Hudson.