h the interests of the corporate officials. It is
to enable them to grant special favors to friends; or it is to build
up a business in which they are interested; or it is to earn a bribe
that has been given them.

The evils of personal discrimination are great. It introduces
uncertainty, fear, and danger into all business; it causes business
men to waste, socially viewed, an enormous fund of energy to get good
rates and to guard against surprises; it grants unearned fortunes and
destroys those honestly made; it gives enormous power and presents
strong temptations to railroad officials to injure the interests of
the stockholders on the one hand and of the public on the other.

Sec. 12. #Economic power of railroad managers.# Other evils of
unregulated private management of railroads appeared. When the
railroad was a young industry, it was thought to be simply an
iron-track turnpike to which the old English law of common carriers
would apply. This and similar notions soon, however, proved illusory.
It was seen that the higher railroad officials had, in the granting
of transportation service and the fixing of rates, a great economic
power. They had complex and sometimes conflicting duties to
the stockholders and to the shipping public. They wore their
conscience-burdens lightly, before the days of effective regulation,
and frequently made little attempt to meet the one and no attempt
whatever to meet the other obligation. The opportunities for private
speculation brought to many railroad managers great private fortunes.
There were no precedents, no ripened public opinion, no established
code of ethics, to govern. It was a betrayal of the interests of
the stockholders when directors formed "construction companies" and
granted contracts to themselves at outrageously high prices. It was
an injury not only to shippers, but also to the stockholders, when
special rates were granted to friends and to industries in which the
directors were interested. In general, however, the interests and
rights of the stockholders were more readily recognized than
were those of the public. A railroad manager is engaged by the
stockholders, is responsible to them, and looks to them for his
promotion. Hence their interests are uppermost whenever the welfare
of the public is not in harmony with the earning of liberal dividends.
The managers long felt bound to defend the principle of "charging what
the traffic will bear" in the case of each indivi