After the counsel given them yesterday by Mr. A. B. Forwood, of Ormskirk, it may be expected that the Liverpool District Farmers Club will be on the watch for tangible evidence of their grievances against the railway companies. Under certain circumstances competition operates to the advantage of the public, and rival carriers are constrained to convey goods from place to place at moderate charges; but where a company is not held in check, the tendency is for rates to advance. In many cases, too, special interests of the companies are promoted at the expense of localities, and even individuals are subjected to the wrong of preferential charges. (There are no complaints in Britain that these discriminations are practised for the purpose of enriching the officials.) Hence the necessity for the Railway Commission to regulate the magnates of the iron road, who when left without restraint pay little regard to interests other than those of their shareholders.
Although Mr. Acworth fails to mention this phase of English railway administration, it would appear that the evils of discrimination are common under corporate management in Great Britain, and that they are inherent to and inseparable from such management; and that the questions of rates, discriminations, and free traffic in fuel can be satisfactorily adjusted only by national ownership, and if for no other reasons such ownership is greatly to be desired.
The failure to furnish equipment to do the business of the tributary country promptly is one of the greater evils of corporate administration, enabling officials to practise most injurious and oppressive forms of discrimination, and is one that neither federal nor State commission pays much attention to. With national ownership a sufficiency of cars would be provided. On many roads the funds that should have been devoted to furnishing the needed equipment, and which the corporations contracted to provide when they accepted their charters, have been divided as construction profits or, as in the case of the Santa Fe, Union Pacific, and many others, diverted to the payment of unearned dividends, while the public suffers from this failure to comply with charter obligations; yet Mr. Dillon informs us that the citizen commits an impertinence when he inquires why contract obligations, which are the express consideration for the exceptional powers granted, are not performed.
Another great advantage which would result from national ownership would be such an adjustment of rates that traffic would take the natural short route, and not, as under corporate management, be sent around by the way of Robin Hoods barn, when it might reach destination by a route but two thirds as long, and thus saving the unnecessary tax to which the industries of the country are subjected. That traffic can be sent by these round-about routes at the same or less rates than is charged by the shorter ones is prima facie evidence that rates are too high. If it costs a given sum to transport a specific amount of merchandise a thousand miles, it is clear that it will cost a greater sum to transport it fifteen hundred; and yet traffic is daily diverted from the thousand mile route to the fifteen hundred one, and carried at the same or lower rates than is charged by the shorter line. It is evident, that if the long route can afford to do the business for the rates charged, that the rates charged by the shorter are excessive in a high degree.
Under government management, traffic would take the direct route, as mail matter now does, and the industries of the country be relieved of the onerous tax imposed by needless hauls. Only those somewhat familiar with the extent of the diversions from direct routes can form any conception of the aggregate saving that would be effected by such change as would result from national ownership, and which may safely be estimated as equal to two and a half per cent. of the entire cost of the railway service, or $25,000,000 per annum.
With the government operating the railways there would be a great reduction in the number of men employed in towns entered by more than one line. For instance, take a town where there are three or more railways, and we find three (or more) full-fledged staffs, three (or more) expensive up-town freight and ticket offices, three (or more) separate sets of all kinds of officials and employees, and three (or more) separate depots and yards to be maintained. Under government control these staffsexcept in very large citieswould be reduced to one, and all trains would run into one centrally located depot; freight and passengers be transferred without present cost, annoyance, and friction, and public convenience and comfort subserved, and added to in manner and degree almost inconceivable.
Economies which would be affected by such staff reductions, would more than offset any additions to the force likely to be made at the instance of politicians, thus eliminating that objection; such saving may be estimated at $20,000,000 per annum.
With the nation owning the railways the great number of expensive attorneys now employed, with all the attendant corruption of the fountains of justice, could be dispensed with; and there would be no corporations to take from the bench the best legal minds, by offering three or four times the federal salary; nor would there be occasion for a justice of the Supreme Court of Kansas to render a decision that a corporation chartered by Kansas for the sole purpose of building a railway in that State has the right and power under such charter to guarantee the bonds of corporations building railways in Old or New Mexico, and shortly after writing such decision be carted all over the seaboard States in one of the luxurious private cars of such corporation. Under national ownership such judges would pay their travelling expenses in some other way, and be transported in the ordinary manner, and not half as many judges would travel on passes. There are many judges whose decisions any number of passes would not affect; but if passes are not to have any effect upon legislation and litigation, why are congressmen, legislators, judges, and other court officials singled out for this kind of martyrdom? If the men who attain these positions remained private citizens, would passes be thrust upon them?
Although the reports of the Victorian Commissioners show, in detail, all the expenditures of railway administration, yet not one dollar is set down for attorneys salaries or for legal expenses, and it is presumed that the ordinary law officers of the government attend to the little legal business arising, and yet judging from reports made by Kansas roads, the expenditures of the corporate owned railways of the United States for attorneys salaries and other legal expenses, are at least two per cent. of the entire cost of operating the roads, and yearly aggregate some $14,000,000, all of which is taken directly from railway users, and is a tax which would be saved under national ownership, as United States district attorneys could attend to such legal business as might arise. This expenditure is incurred in endless controversies between the corporations, in wrecking railways, in plundering the shareholders, in contending against State and federal regulation, in manipulating elections and legislation, and in wearing out such citizens as seek legal redress for some of the many outrageous acts of oppression practised by the corporations. Once the government was in control, these lawyers would be relegated to some employment where they would do less harm, even if not engaged in a more honorable vocation than that of trying to defeat justice by the use of such questionable means as the control of the vast revenues of the corporations place in their hands.
Is it possible that the railway companies can legitimately use anything like $14,000,000 yearly in protecting their rights in the courts?
Is it possible that the railway companies can legitimately use anything like $14,000,000 yearly in protecting their rights in the courts?
The president of the Union Pacific tells us that: The courts are open to redress all real grievances of the citizen.
There is probably no man in the United States better aware than is Sidney Dillon that no citizen, unless he has as much wealth as the president of the Union Pacific, can successfully contest a case of any importance in the courts with one of these corporations which make a business, as a warning to other possible plaintiffs, of wearing out the unfortunate plaintiff with the laws costly delays; and failing this do not hesitate to spirit away the plaintiffs witnesses, and to pack and buy juriesretaining a special class of attorneys for this workthe command of great corporate revenues enabling them to accomplish their ends, and to utterly ruin nearly every man having the hardihood to seek Mr. Dillons lauded legal redress, and when they have accomplished such nefarious object, the entire cost is charged back to the public, and collected in the form of tolls upon traffic. Laws are utterly powerless to restrain the corporations, and Mr. Dillon tells us how easy it is to evade them by pleading compliance, when there has been no compliance, and then having the expert servants of the corporation swear there has been.
With the government operating the railways, every citizen riding would pay fare adding immensely to the revenues. Few have any conception of the proportion who travel free, and half a centurys experience renders it doubtful if the pass evilso much greater than ever was the franking privilegecan be eliminated otherwise than by national ownership. From the experience of the writer, as an auditor of railway accounts, and as an executive officer issuing passes, he is able to say that fully ten per cent. travel free, the result being that the great mass of railway users are yearly mulcted some $30,000,000 for the benefit of the favored minority; hence it is evident that if all were required to pay for railway services, as they are for mail services, the rates might be reduced ten per cent. or more, and the corporate revenues be no less, and the operating expenses no more. In no other countryunless it be under the same system in Canadaare nine tenths of the people taxed to pay the travelling expenses of the other tenth. By what right do the corporations tax the public that members of Congress, legislators, judges, and other court officials and their families may ride free? Why is it that when a legislature is in session passes are as plentiful as leaves in the forest in autumn?
The writer, as an executive officer of a railway company having authority to issue passes, has, during a session of the legislature, signed vast numbers of blank passes at the request of the legislative agents of such company, and under instructions of the president of the corporation to furnish such lobby agents with all the passes they should ask for. No reports of passes issued are made either to State or federal governments, or to confiding shareholders, and should such reports be asked for, by State or nation, in order to measure the extent of this evil, the Sidney Dillons would rush into print and tell us it was a piece of impertinence for any citizen (or the public) to inquire into the extent of or the manner in which the corporations dispensed their favors. The only way to kill this monster is to put the instruments of transportation under such control as only national ownership can give. Laws and agreements between the corporations have been proven, time and again, wholly ineffective even to lessen this great and corrupting evil.
In every conceivable way are the net revenues of the corporations depleted, and needless burthens imposed upon the public, but one of the worst is the system of paying commissions for the diversion of traffic to particular lines, often the least direct. The more common practice is to pay such commissions to agents of connecting lines where it is possible to send the traffic over any one of two or more routes, and the one which may, by the payment of such commission, secure the carrying of the passenger (or merchandise) may be the least desirable, and the one which would never have been taken but for the prevarications of an agent bribed by a commission to make false representations as to the desirableness of the route he selects for the confiding passenger.
This is but one of many phases of the commission evil, another being that these sums are ultimately paid, not by the corporations, but by the users of the railways, and but for the payment of such commissions the rates might be reduced in like amounts. Aside from commissions paid for diverting passenger traffic great sums are paid for influencing and routing freight traffic, and these sums, while paid to outsiders, or so-called brokers, are frequently divided with railway officials. When the writer was in charge of the transportation accounts of a railway running east from Chicago, it was a part of his duties to certify to the correctness of the vouchers on which commission payments were made, and he became aware of the fact that one Chicago brokerage firm was being paid a commission of from three to five cents per hundred pounds on nearly all the flour, grain, packing house, and distillery products being shipped out of Chicago over this railway, no matter where such shipments might originate, many of them, in fact, originating on and far west of the Mississippi River; and when he objected to certifying to shipments with which it was clear that the Chicago parties could have had nothing to do, he was told, by the manager, that his duties ended when he had ascertained and certified that such shipments had been made from Chicago station. From investigations instituted by the writer, he soon learned that some one connected with the management was deeply interested in the payment of the largest sums possible as commissions.
The corporations have ineffectually wrestled with the commission evil, and any number of agreements have been entered into to do away with it; but it is so thoroughly entrenched, and so many officials have an interest in its perpetuation, that they are utterly powerless in the presence of a system which imposes great and needless burthens upon their patrons, but which will die the day the government takes possession of the railways, as then there will be no corporations ready to pay for the diversion of traffic. National ownership alone can dispose of an administrative evil that, from such data as is obtainable, appears to cost the public from $20,000,000 to $25,000,000 per annum.
10Mr. Meany, in his Sun article, summarizes six causes for the diminution of railway dividends and remarks: It is unnecessary to dwell at any great length upon the first five mentioned reasons, but too much could not be said on the sixth. It is now nearly seven years since James McHenry of London (and New York, Pennsylvania & Ohio Railway litigation fame) openly charged railway managers, in an interview published in the Sun, with criminal collusion in the matter of securing extraordinary privileges and unapproachable contracts with their several corporations for favored fast freight lines, express routes, bridge companies, etc., etc., in all the benefits of which such managers shared to a very great extent. On that occasion Mr. McHenry was promptly cried down. Would he be cried down to-day?
As a rule, American railways pay the highest salaries in the world for those engaged in directing business operations, but such salaries are not paid because transcendant talents are necessary to conduct the ordinary operations of railway administration, but for the purpose of checkmating the chicanery of corporate competitors. In other words, these exceptionally high salaries are paid for the purpose, and because their recipients are believed to have the ability to hold up their end in unscrupulous corporate warfare where, as one railway president expressed it, the greatest liar comes out ahead. With the government operating the railways, there would be no conflicting interests necessitating the employment of such costly officials whose great diplomatic talents might well be dispensed with, while the running of trains, and the conduct of the real work of operating the roads, could be left to the same officials as at moderate salaries now perform such duties, and consolidation of all the conflicting interests in the hands of the government will enable the public to dispense with the services of the high priced managers now almost exclusively engaged in keeping even with the other fellow, as well as with the costly staffs assisting such managers in keeping even, and the savings resulting may be estimated at from $4,000,000 to $5,000,000 per year.