The Price of Avoiding Competition
A railroad's attempt to secure a monopoly through bribery backfires on local consumers, offering a cautionary tale about corporate greed.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
It was at first alleged that under the recent agreement the Northern Pacific Railroad was to receive $500,000 per annum for keeping its tentacles from laying hold of the California and Southern trade. More recently it is asserted that instead of a half a million dollars per annum the two other transcontinental lines have agreed to pay for this purpose six per cent of their gross receipts on through business. A bonus is to be paid to prevent competition, and whatever the sum may be, it must be made up by the patrons of the two southern lines, and, as a necessary sequence, eventually paid by the consumer. Such contracts should be made illegal. Several years ago, the officials of the county of Washoe, in Nevada, had the temerity to disagree with the appraisement put upon the property of that company within the county limits. The railroad company refused payment of its taxes, suit was brought, the county was victorious, and the Sheriff stopped the company’s trains till it paid the claim. Meanwhile, however, the Central Pacific 'got even.' It raised the tariff largely on everything delivered in or exported from that county. So great and long-continued was this high tariff that it is variously estimated that the amount paid by Western Nevada was from three to six times the judgment against the company.
“A bonus is to be paid to prevent competition, and whatever the sum may be, it must be made up by the patrons of the two southern lines, and, as a necessary sequence, eventually paid by the consumer.”
This 1883 account of railroad cartels and retaliatory pricing echoes today’s concerns over corporate consolidation and the hidden costs of monopolistic practices in Seattle’s logistics and tech-dominated economy. The 'tax' paid by consumers for a lack of competition remains a persistent feature of regional economic life.
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