Railway magnate

“ If the public only knew the anxiety and care with which its interests are looked after both by night and by day by our excellent passenger and goods-managers they would perhaps present each of these gentlemen with a testimonial piece of plate, and would for evermore lay aside that wicked and ungrateful idea that railway companies are ‘fair game,’ to be plundered by every one who receives, or fancies he has received, the slightest possible amount of damage to limb or property. Railway companies are not perfect any more than other companies. ”

“ Who passed all the railway bills, and encouraged the nation in the undertakings which are now held forth as so entirely disproportioned to its strength? Who took credit to themselves for the prosperity which the construction of railways at first occasioned, and dwelt with peculiar complacency, in the opening of the Session of 1846, on the increased produce of the excise, and diminution of crime, as indicating at once the augmented enjoyments and diminished disorders of the poor? ”

“ From Marseilles to Nice, from the land of the olive to that of the palm, is a long and wearisome journey. That tyrannical monopoly, the Paris-Lyon-Méditerranée Railway Company, gives only slow trains, except to travellers provided with through tickets; and these so inconveniently arranged, that travellers unprovided with refreshments, have no opportunity of procuring any on the way. Whenever we travel by railway in France we are reminded of the crying need for competition. ”

“ And all public services are performed by the railways for the Government, at a moderate cost. But it is not entitled—it can establish no claim—to use the property of railway proprietors, without toll, or to have its work done, without paying a fair rate of profit to those who perform it. When the Post Office Report tells you, that railways are monopolies which have destroyed competition, I ask you to consider, on the other hand, whether railways are not in fact too much subject, at the present time, to Government control. This very mail service is performed by the railways under compulsion. ”

“ The trader, the passenger and the railway servant have all been the subject of much legislative effort for the protection or the furtherance of their own interests, whereas the railway shareholder has been too often regarded with an absolute lack of sympathy, and treated as a person who must be severely restrained from becoming unduly wealthy at the expense of these other interests, and should be thankful that he is not deprived of his property altogether. ”

“ It must now be clear that the railway is essentially a monopoly, not, be it noted, because of any especial wickedness of its managers or owners, but because competition is impossible as regards the greater part of its business, and because wherever competition is possible, its effect, as the managers well know, would be to annihilate all profits from the operation of the road. ”

“ Forthwith, private capital acquired these highways, and because of the inelasticity of the old law, treated them as ordinary chattels, to be administered for the profit of the owner exclusively. It is true that railway companies posed as public agents when demanding the power to take private property ”

“ We have not yet reached the state of perfection, politically or socially, where government ownership and bureaucratic management of the large, complicated, and delicately adjusted railway system of the country will be a success. Putting a government uniform on a railway employee does not at once endow him with a new kind of intelligence and supernatural powers, and it will reduce his feeling of responsibility. ”

“ These railway kings are among the greatest men, perhaps I may say are the greatest men, in America. They have wealth, else they could not hold the position. They have fame, for every one has heard of their achievements; every newspaper chronicles their movements. They have power, more power—that is, more opportunity of making their personal will prevail—than perhaps any one in political life, except the President and the Speaker, who, after all, hold theirs only for four years and two years, while the railroad monarch may keep his for life. ”

“ The men who know railroading have not been allowed to manage railroads.
In a previous chapter on finance were set forth the dangers attendant upon the indiscriminate borrowing of money. It is inevitable that any one who can borrow freely to cover errors of management will borrow rather than correct the errors. Our railway managers have been practically forced to borrow, for since the very inception of the railways they have not been free agents. The guiding hand of the railway has been, not the railroad man, but the banker. ”

“ As for the colossal fortunes of railway kings, it is well known how thousands of small ones go to make them; how the rich man's palace is too often built with the stones of hundreds of ruined homes.
There is no other name than king used in speaking of the few rich financiers who hold the bulk of the railway stock in America. But they are not the only ones. There are oil kings, copper kings, silver kings, and I know not what other majesties in America ”

“ To any one who will carefully observe the practical working of a railway, it is not only alarming, but appalling, to reflect on the accidents which sooner or later must befall the public if the master-mind which directs the whole concern, but which cannot possibly illuminate the darkness of every one of its details, were suddenly to be deprived of the talisman by which alone he can govern a lineal territory four or five hundred miles in length—namely, an abundant supply of MONEY. Parliament may thunder—Government may threaten—juries may punish—the public may rave ”

“ And if railway property is a good and wise investment of capital, the public need not shrink from taking the whole off their hands. Let the public take it. (I, for one, who never held a rag of railroad scrip in my life, nor ever willingly travelled behind an engine where a horse could pull me, will most gladly subscribe my proper share for such purchase according to my income.) ”

“ Governments sought to control and to tax rather than to assist them; and then, when the railways had proved that they were less objectionable than prejudiced critics had assumed, and were likely even to be a source of profitable investment, they were boomed by speculators into a popularity that led both to successive "railway manias" and to the whole railway system being still further burdened with an excessive capital expenditure which has been more or less to its prejudice ever since. ”

“ A prince of the new dynasty, whose dominion extends wherever civilization is fostered by the Rail, and whose coronet is of iron. He commenced life as a surveyor at Birkenhead, and his first connexion with a railway was a contract to supply the stone for a viaduct of the “Manchester and Liverpool.” Since that time his labours have been incessant and extraordinary, both in his own country and out of it. Since 1846, he has, upon his own responsibility and credit, constructed upwards of 500 miles of railway, representing an aggregate of £9,250,000 of contract money. ”

“ The extension of railways had, up to the year 1844, been mainly effected by men of the commercial classes, and the shareholders in them principally belonged to the manufacturing districts,—the capitalists of the metropolis as yet p. 289holding aloof, and prophesying disaster to all concerned in railway projects. But when the lugubrious anticipations of the City men were found to be so entirely falsified by the results—when, after the lapse of years, it was ascertained that railway traffic rapidly increased and dividends steadily improved—a change came over the spirit of the London capitalists. ”

“ Among the more frequent abuses of their official power, we find railroad officers personally buying lands in new territory or mining lands, and then building at the expense of the corporation branch lines to reach these properties and enhance their value; the establishment of manufacturing or business enterprises, in which the railway men are often secret partners, and securing for these enterprises favorable terms, and then contracting with the railroad to do business for less than cost ”

“ It must be for the public to determine whether, for the sake of a small saving in their fares, which after all are moderate as compared with other travelling charges, they desire not only to forego the accommodation and convenience to which they have lately become accustomed, but to arrest the development of the railway system to its utmost extent, and with its development its profits. ”

“ 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? ”

“ There are two evils of our present railway system, however, which are not chargeable to monopoly, but to the attempt to defeat monopoly, and which are important to our discussion. The first is the waste of competition in railway traffic; the second, the waste of competition by the construction and threatened construction of competing lines where present facilities are ample for the traffic. Of the first it need only be said that in advertising, "drumming," and soliciting patronage the railways spend many millions of dollars every year, which comes out of the pockets of the public. ”

“ All roads, including railroads and tramways, are, and must be, in the nature of a monopoly, but the manufacture of materials and rolling stock, the catering of hotels, forming part of the railway undertakings, or in the trains themselves, or in railway steamers, are all the subject of effective competition and should, therefore, be put up for competition with special supervision and restrictions against abuse of the privileges obtained by competition on Government property. ”

“ Why may the railway exercise the sovereign power of government and invade other private property rights? Because the railway is peculiarly "affected with a public interest." The primary object is not to favor the railroads, but to benefit [Pg 535] the community. These charters and franchises are granted sparingly in most European countries. In this country they have been granted recklessly, often in general laws, by states keen in their rivalry for railroad extension. ”

“ This address well expresses the spirit of the railway managers and employees toward all forms of investigation, and the complete lack of understanding, on the part of these managers, of the legal and moral relations which they bear to the communities which they serve. It is extremely unfortunate that railway and corporation people have not taken the public fully into their confidence, and fully and freely given out correct information as to the operation and depreciation of their properties ”

“ In the matter of travel and transportation, these free highways, will annually, save millions of dollars to citizens of the Republic, by enabling them to escape from the clutches of the largest and most powerful of all monopolies; the railway monopoly. A monopoly, that for many years, has held the public by the throat ”

“ For never before in our splendid profession of railroading has there been greater need for the wisdom of old age, the enthusiasm of youth, and the balanced execution of middle life. We, the railways, we the most scattered and, ergo, the most exposed of property rights, are the first of the outposts to receive and to repel the assaults of anarchy and its smaller sister, socialism. Subtle, sinister, and specious is the reasoning which supports the claims of those who single out the arteries of inland commerce as a thing apart, as something immune to the irresistible laws of cause and effect. ”

“ When a railway is to be built, any man who refuses to sell right of way to the railway company at a reasonable price may have it judicially condemned and taken from him. We have already noted in the chapter on railway monopolies the injustice of permitting a single person or corporation to control and own any especially necessary means of communication, as a mountain pass or a long and expensive bridge, and the same principle is apparent in connection with the railway terminals in our large cities. ”

“ On the other hand the Societies of railway workers, like our own, the R.C.A., and the N.U.R., were adamant against the railways going back to private control, and firmly insisted that the half million men who invest their whole life in the railway interest should have a fuller share in the control of the undertaking and their destiny than was proposed. ”

“ The evils of railway management by which the owners of the stocks and bonds of the company are victimized to enrich stock speculators are much too complex and numerous to be described here. The state of affairs can be briefly summed up, however, with the statement [169] that our present system of conducting corporate enterprises results inevitably in the gravitation of their ownership into the hands of the holders of large fortunes. The railways of the country are an instance in point. Time was when the stocks and bonds of railways were owned by people of small means all over the country. ”

“ Indeed, it is a high compliment to the uprightness and probity of these men that such occurrences are so infrequent, and that the temptation, so constantly presented, of enriching one's self at the expense of the owners of the road and the public is yielded to so seldom. But there have been cases where railway managers have secured excellent train service and low rates of fare to benefit places where they held an interest in real estate, while other and competing places were given poor service and high rates. ”