rican business men was, of
course, to obtain some advantage over their competitors in producing
such an article or in supplying such a service. The best result of this
condition was a constant improvement in the mechanism of production.
Cheapness was found to depend largely upon the efficient use of
machinery, and the efficient use of machinery was found to depend upon
constant wear and quick replacement by a better machine. But while the
economic advantage of the exhausting use and the constant improvement of
machinery was the most important economic discovery of the American
business man, he was also encouraged by his surroundings to seek
economies in other and less legitimate ways. It was all very well to
multiply machines and make them more efficient, but similar improvements
were open to competitors. The great object was to obtain some advantage
which was denied to your competitors. Then the business man could not
only secure his own position, but utterly rout and annihilate his
adversaries.

At this point the railroads came to the assistance of the aggressive and
unscrupulous business man. They gave such men an advantage over their
competitors by granting them special rates; and inasmuch as this
practice has played a decisive part in American business development,
its effect and its meaning, frequently as they have been pointed out,
must be carefully traced.

The railroads themselves are, perhaps, the most perfect illustration of
the profits which accrue in a rapidly growing country from the
possession of certain advantages in supplying to the public an
indispensable service. They were not built, as in most European states,
under national supervision and regulation, or according to a general
plan which prevented unnecessary competition. Their routes and their
methods were due almost entirely to private enterprise and to local
economic necessities. They originated in local lines radiating from
large cities; and only very slowly did their organization come to
correspond with the great national routes of trade. The process of
building up the leading systems was in the beginning a process of
combining the local roads into important trunk lines. Such combinations
were enormously profitable, because the business of the consolidated
roads increased in a much larger proportion than did the cost of
financing end operating the larger mileage; and after the combinations
were made the owners of the consolidated road were pr