“ If one examines the complaints made against the existing railway system, it is obvious that many of these must exist under any system, whilst some are the necessary accompaniments of every system into which competition enters. But if competition is discarded in favor of monopoly it does not need argument to show that this merely means a change from the evils of competition to the evils of monopoly. No one would deny that each system contains inherent and characteristic evils. The evil of competition is waste; the evils of monopoly are stagnation and the restriction of freedom. ”

“ On the other hand, the American railroad situation in its political and governmental relations is a bundle of contradictions. If you were to engage your money in merchandising or manufacturing, you would no doubt be appalled if you should discover that some one entirely outside of your line of business could fix the prices at which you must sell your product, and that the burden of proof that the prices so fixed are confiscatory, is upon you,—and that you could not abandon your operations. Yet this is precisely what may happen if you invest your money in a railroad. ”

“ I recognize that it is now to some extent, by adding to the timidity of investors, retarding our ability to secure funds necessary to make extensions and buy equipment required for the ever-increasing traffic of the country, and if continued will make it impossible, yet I am firmly of the opinion that the good sense of the people will prevail and the unjust attacks cease. Confidence of investors both here and abroad is needed to furnish funds, and, if this is seriously shaken, the prosperity of the railroads, which are the keystone of the arch of business, will be destroyed. ”

“ It is left for belated annual reports to record the public service of this great industry upon whose progressive efficiency every other industry in the United States depends.
It is not upon what the railways earn, but upon what they DO that the whole industrial fabric of the republic rests. It is not upon the dividends they pay but upon the traffic they carry, the net income withheld from dividends and put into improvements, that their success as carriers depends. ”

“ The truth is that the interest of the railroads is the interest of the people. The railroad company is dependent upon the people for its life and its sustenance, and the people are no less dependent upon the railway company, and between the two there should be even-handed justice. They should be dealt with calmly, and legislation should only follow deliberation and investigation, and a law once enacted should be impersonally enforced, not enforced against some and left to fall into innocuous desuetude as to others. ”

“ If a railway company is unable to settle differences with its men the ultimate resort of the men is the withdrawal of their labor, whilst the company are free to employ other men who are willing to accept their conditions of employment. Any railway strike on a large scale is a dire calamity to trade and to the public, but if one were compelled to consider the possibility of a general strike on a national railway system, even the deplorable results which accompany strikes on privately-owned railways would seem comparatively insignificant. ”

“ No one today questions the right of the properly constituted authorities to supervise the railroads. No one defends the rebate, or discrimination of any kind, but, as the Supreme Court of the United States has recently well said, "It must be remembered that railroads [76] are the private property of their owners; that, while from the public character of the work in which they are engaged, the public has the power to prescribe rules for securing faithful and efficient service and equality between shippers and communities, yet in no proper sense is the public a general manager." ”

“ What does the public owe to the railway companies? Precisely, as I view it, the same thing, just and fair treatment. Only that and nothing more. Everybody knows that the railway companies of the United States—I won't put it that way—that the railway system of the United States never could have been created without the utilization of corporate entities. Partnerships never could have concentrated the capital necessary to that end. Only corporations could have achieved it. ”

“ The great over-shadowing problem of reconciling private capital and the users of railroads, and the contradictions which I have mentioned, are the inheritance of this generation of railroad men; and I have no doubt that this generation, like all previous ones, will be equal to the task put upon it. Out of the painful processes of the last four years, we have emerged with some gains. In the first place, the country now realizes that the one million, five hundred thousand employes and officers of American railroads are not surpassed in integrity by any other similar number of business men. ”

“ But how much happier and how much more prosperous we might be if there were not so much untrained meddling—if there were not so many brakes upon the wheels of our progress! A brake, we all admit, is a good thing in its place, but it has no propulsive power, and the efforts of the time to combine in one man or in any one body of men the four functions of prosecuting attorney, judge, jury and executioner, must sooner or later give way. First, because it is un-American, and where such a condition exists, as Alexander Hamilton pointed out to the people of New York, "There is no liberty." ”

“ Do you think wages are too high? If not, perhaps you do not agree with one of your congressmen in Washington, who has just recently, on the floor of the house, urged that the Interstate Commerce Commission be given more power over rates, which means power to reduce them still more, because they have never, so far as I have heard, exercised their power over rates in any other way. Personally, I am glad I can claim to be a railroad man, and not only glad, but proud of it as well. I think the American railway is the one great institution above all others that Americans should be proud of. ”

“ The nature of railway business lays it open, to an exceptional extent, to the unpopularity which unavoidably gathers round every institution on which there is universal dependence. Providence itself does not wholly escape unpopularity. No other industry is comparable with the railway industry in the close dependence upon it of the vast majority of the people. The necessity for transport services penetrates more frequently and more deeply into the lives and habits of the people than any of the other prime necessities of civilization. ”

“ But would it be possible for State railways to reduce the amount included in railway rates for interest and dividends? It cannot be denied that our present system does involve the needless duplication of railway accommodation—the inevitable waste of competition. There is the constant endeavor to divert traffic, the corresponding effort to keep it. Capital is wasted, but public facilities are increased. The public could certainly secure by monopoly the saving of waste, but only at the cost of losing the advantages, such as they are, of getting more than they pay for. ”

“ I might talk to you for hours about the evil and unfairness of legislative enactments to retard and make unproductive railway investments; of the injustice of any body of men attempting by legislation, without giving the railroad corporations proper hearing, to arbitrarily adjust their rates of toll for either passenger or freight simply because politicians consider it a popular thing to do. ”

“ True, the public is often fooled; true, it "gets on the wrong feet," as often perhaps as on the right; true, it has to be guided, controlled, and at times abruptly stopped by those authorities which it has selected for that purpose; yet the fact remains that the government of the people, that Congress, the legislatures and even the courts are keenly alive to public sentiment and anxious not to stray far from the line of public opinion. ”

“ I know that if the ships of the United States had the same care and the same opportunity that the ships of other nations have they would do it, and until then no subsidy, no ship subsidy, will ever enable them to compete with other business, because in principle it is wrong to tax all the business of the country—to put your hand into the public treasury and hand out to one particular business a cash subsidy in order that it may live. ”

“ From a few miles of crude tramways the world has in a century built 500,000 miles of steam operated and 100,000 miles of electrically operated roads; instead of spragging the wheels we rely on the automatic high-speed brake; the coupling of cars has become an imitation of the action of human hands instead of risking their destruction; each train finds the condition of road ahead and protects itself by the agency of electric circuits and semaphores, the sequence of whose operation discloses on behalf of safety any obstruction of the route ”

“ The certainty which we now possess that the action of any railway company, whether it be wise or foolish in itself, is wholly commercial in its motives and its aims, is a valuable safeguard. But if railway policy were to become the medium for the promotion of social or even economic theories under the guidance of politicians, would not this be a most alarming peril to trading and industrial interests? ”

“ In view of these circumstances, can a reasonable doubt be entertained by any one as to the profitableness of the stock of the Pennsylvania Railroad Company? Its natural position must give to it more than sufficient business to make it yield large profits. Indeed, I confidently advance the opinion that when the Road shall have been completed that it will not be a question "whether it will pay an interest on its cost," but to what point the rates of freight and passage shall be reduced to give the Company ample revenues and at the same time make the work most extensively useful to the public. ”

“ But railways require money only to remunerate the highly skilled labor they employ, to purchase necessary materials and supplies, to pay taxes and to compensate the capital they use. Consequently money is worth to the railway corporation, as to the wage-earner, only what it will buy for the satisfaction of wants. A dollar which will pay for less labor or buy less fuel for locomotives is worth less to [193] the railway just as a dollar that will buy less bread or clothing is worth less to the man who works for wages or receives it as interest on his savings. ”

“ People turn in despair from ideas of regulation and control to ideas of ownership.
The third cause is the prevalence of that feeling which, for want of a better name, I will call district jealousy. The competition of privately-owned railways undoubtedly does create inequalities. It would be mere affectation to pretend that the railway accommodation and facilities afforded to all places and all districts are equal in merit and value. The less favored districts see other districts enjoying superior facilities. ”

“ Probably some extreme Socialists would like to transfer railways to the State without giving what, in our judgment, would be adequate compensation to existing owners. Their aim is the substitution of a new social polity for that which exists, in which antiquated ideas of private property would have no place. But that is only a phase of their creed which condemns it to sterility. It is not the small band of Socialist zealots, but the majority of the nation that we have to consider in estimating the risk of anything being done in the nature of confiscation. ”

“ We would be only too glad to adopt the American system of fixing the lowest rates proper, and making up the loss of profit on each shipment out of the increased volume of business they make the railways available to, which is the only economically and commercially right and sensible way of doing. We would be glad to build up our territory as the American railways do, by encouraging its industries, by opening its markets, by enabling it to compete with other territory contributing to the same markets. ”

“ The railway companies must obey the law. The people ought to see to it that the law which the railway corporations are obliged to obey is a just law, and that is to be ascertained only on painstaking inquiry, and not through the speeches of enthusiastic orators or on the floors of Congress. It has got to be at times that where there was no other issue upon which a political contest could be fought out, the easy, obvious and last resort was "let us go for the railroads," or, as a Governor of Minnesota once expressed it, "Let's shake the railroads over hell." ”

“ In the main we have relied on the force of competition to secure for us reasonable service at not unreasonable rates; and as I still cherish a long-formed belief that English railroads are on the whole among the best, if not actually the best, in the world, I am far from saying that competition has not done its work well. But competition is an instrument that is at this moment breaking in our hands. Within quite a few years the South Eastern Railway was united with the Chatham; the Great Southern has obtained a monopoly over a large part of Ireland ”

“ I do not believe myself that questions of business ever ought to find their way into the political platform of the party, any more than I believe that the relations of the employer to the employe, whatever the business may be, ought to become the football of party politics. ”

“ That is not philanthropy, but commercial sense, to help the man who creates business for you, when he is hard pressed, and to increase the volume of traffic that is falling because people have not the money to pay the price they have been accustomed to pay easily. But if we should once lower our rates—possibly to the point of loss, as American railways have done frequently in crises—we would not be allowed to restore them later, when they could be fairly restored. ”

“ I believe that for the American railroad the time has gone by when illiterate men will be put in charge of millions of dollars' worth of machinery and other property. We are in a new era. Railroading is rapidly coming to be a profession. We are necessarily in all things doing more and more specializing. Why not insist that the regulation also shall be in accordance with ethical principles and not determined by political expediency? ”

“ Leroy Beaulieu, a distinguished French economist, who visited this country in 1905 and made a careful examination of American economic conditions, wrote as follows upon his return to his native country: "All in all, the prosperity of the American railway system as well as the excellence of service it renders, is undeniable. If, therefore, one were in search of model railway methods, it would be wise to turn to those practiced under the free American system, not to those illustrated by a system operated under the debilitating control of the state." ”