Competition between railways differs greatly from that between two firms. If one of two firms cannot afford to compete, the manager may discharge his help, and close doors; he then does not suffer actual loss. But a railway, being a common carrier, cannot do this; the road must keep its trains moving or lose its charter. If it cannot carry goods at a profit it must carry them at cost or at a loss. Even the latter is better than not carrying them at all, for the operating expenses of the road must go on. So between 1870 and 1880 most of the railway managements were busy devising ways to stop a rate-cutting and competition that was ruinous. In many instances great trunk lines would have consolidated had not State laws prevented. They could not maintain rates because one or another of the weaker roads would be compelled to lower their rates in order to meet their operating expenses. Therefore they were compelled to do one of three things, namely, to divide the territory, to divide traffic, or to divide earnings. Either of the two latter plans is called a _pool_. Of these two forms of pooling the division of the traffic is the easier, but it is often unsatisfactory to the patrons of the road. The second plan, the division of the earnings, is a more difficult matter to adjust because each road is usually dissatisfied with its proportion. As a matter of fact, however, the first plan of pooling is very apt to grow into the second. In several instances pools have been declared illegal by the courts, but, in general, railway service has been more satisfactory under the pool system than under any other. They have always aroused popular suspicion, however, from the fact that they increase power of the railway itself. In various instances important trunk lines have formed a general company, each having its separate organization, because they could accomplish under a combined organization what they could not as independent companies. The restrictions against pooling have therefore encouraged combination of competing lines. Because the railway is an absolute necessity, and because it has power given neither to individuals nor to other corporations, it is a settled policy that both the State and general Government should have the power to regulate its rates, and should in every way prevent unjust discrimination. Both problems are very difficult, however, and the unintelligent adjustment of rates has frequently resulted in injustice both to the roads and their patrons.