April 01, 2006
Uncommon sense c. 1906

The NYT from 100 years ago was a very different paper from today's. Consider these two paragraphs from an interview with an unnamed industrialist in the April 1, 1906 NYT:

"Take this foolish proposal that the Government shall fix railway rates. The New York Central Railroad, let us say, without undertaking to give exact figures, is able to haul a train of 2,500 tons of freight on its lines from New York to Chicago, as against the Pennsylvania, by reason of its more difficult route, being able to haul a train of only 1,000 tons. Shall the Government fix the freight rate to Chicago at the Central's figure, based on its lower cost, or at the Pennsylvania's higher cost? I say, better leave it to the practical railroad men to settle by natural competition."

Unfortunately, we see how government intervention in the market has evolved over the past 100 years - from offering half-price train tickets to Congressmen (back then) to Jack Abramoff (today).

However, the industrialist quickly recasts the question in terms that both the reporter and the average reader should be able to understand. It is one thing to talk about fixing railway rates for freight customers, it is another thing to talk about fixing the prices of consumer goods:

"Or, if you are going to adopt this principle, why not apply it to the newspapers. There are 3-cent newspapers in this city. THE TIMES, I understand, aims to supply the same news for one cent. Some people prefer THE TIMES'S news at one cent to the other fellow's at 3 cents. I don't see why can't regard newspapers as a public necessity. Now, is a benevolent Government, at the request of THE TIMES'S competitor, to step in and make you sell your newspaper at 3 cents or make the other man, at your paper's request, sell his paper at 1 cent to equalize matters? Better leave it to the buyer - that is, the customer. If he prefers the other fellow's news at 3 cents, he surely has the right to buy it, and if he likes your news at 1 cent, he surely has the right to his choice."

Such clear explanations are all too lacking in today's public discussions.

Posted by Craig Depken at 12:39 PM in Economics  ·  TrackBack (0)

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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