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DECEMBER 11905
The Commoner.
RAILROAD EMPLOYES AND RATE LEGISLATION
Tho Commoner presents another Interview
with the gentleman who, having had wide ex
perience in railroad affairs, has written for the
benefit of Commoner readers several interesting
replies to the points sought to be made by repre
sentatives of the railroads.
Asked by The Commoner to say something
with respect to the delegation that waited upon
the president November 1G, this gentleman said:
The press dispatches of November 14 tell of
u protest being filed with President Roosevelt
against the proposed railroad rate legislation, by
a delegation apparently representing the railroad
employes. On November 16 it was discovered
that not one of the twenty-three who called upon
the president represented his organization in an
official capacity, not one of them having been
selected by the order or organization he claimed
to represent. Not one of them, tho dispatches
say, represented anybody but himself. President
Roosevelt, it is said, was greatly angered when
ho learned of the deception. This instance of
misrepresentation and duplicity shows to what
extent the railroad propaganda will go to accom
plish its purpose.- Notwithstanding the bogus
character of this delegation, their arguments have
gone before the public and should bo analyzed.
In presenting their objections they said:
Railroad rate legislation logically means
the lowering of rates, which will be followed
by a lessening of the earning power of rail
roads, and consequently the eventual reduc
tion of the wages of railroad employes.
The same plea is made when tariff legislation
is proposed. Corporate greed cannot be regulated
without injuring the workingman, therefore the
public must bear the burdens. The workingman
is always held up between the people and jus
tice. It is the "stand pat" and "let well enough
alone" policy brought down to date.
The interstate commerce commission, in its
seventh report, answered this plea as follows: .
The only way in which tho law directly
operates to limit railway profits is by pre
venting the exaction of unjust charges and
undue partiality in transportation facilities.
This claim, then, must rest upon the proposi
tion that the law,.by prohibiting the infliction
of wrongs, works injury to railway prosperity.
Such a plea' against the working of a statute
is anomolous.
It must have been very embarassing to the
president to listen to such twaddle as their spokes
man gave vent to, as it is a bore to any intelli
gent man to .read it. Here is their statement:
Why have the railroad interests, in par
ticular, been selected for this attack? Why
is not the interstate commerce commission
or some other commission, to be clothed with
the same absolute authority to fix the maxi
mum prices on bef, pork, oil, clothing, butter
and eggs in fact everything which one has '
to buy every day. It seems to us that such
a step would be infinitely more reasonable
than the proposed move on railroad rates.
As Mr. D. M. Parry used this same argument
at Chicago in his speech against railroad rate
regulation, we suspect it was not original with
this delegation. What similarity can there be be
tween commodity prices in the fixing of which
world-wide competition is a most potent and
controlling factor, and railroad rates in the fix
ing of which there is no competition whatever
at but one station out of ten? One railroad sta
tion in ten in the United States has two or more
competing lines, whjle the other nine are at the
absolute mercy of the railroads. Were a town
dependent upon one merchant who controlled ab
solutely the articles mentioned what would be
the result? There would be no limit upon the
extortion of that merchant. Tho residents of
that town would without hesitation invoke the
aid of the governmental authorities to place a
limit upon the greed and power of that merchant,
and the government would prove recreant in its
duty did it not fix a reasonable limit upon him.
Suppose again that this merchant would charge
the rich man 15 cents a pound for beef and
charge the poor man 25 cents a pound for the
same quality and quantity of beef? That is the
essential difference between railroad rates and
commodity prices. The natural and necessary
monopoly that railroads .have take them entirely
out of a comparison with ordinary business ven
tures. All other public service corporations,
such as street railways, gas and electric light
ing companies, water companies, telephone and
telegraph companies, are naturally and neces
sarily monopolistic in their nature, and for that
reason are and should bo. under public regula
tion. Originally, railroads in England were re
quired to admit to their lines the cars and loco
motives of other carrying companies, and the
tolls they were permitted to charge wero pro
scribed by public authority, just as had been '
done with turnpikes, canals and other public high
ways. The introduction of steam as a motive
power revolutionized conditions and compelled a
change. It was readily recognized that a rail
road must bo, to some extent, a monopoly, be
cause the highest degree of efllciency would be
attained by committing tho work of transporta
tion to but one carrier. That was sixty-five years
ago, and yet this delegation has not yet grasped
the fact. The element of monopoly in railroad
transportation was made the subject of inquiry
by a parliamentary committee in 1840. The com
mittee reported that "monopoly upon each line
was inevitable; that a single management of each
railway was expedient, and that those changed
conditions made necessary the protection of the
public interests." The railroadB of England aro
under very close restrictions more so than is
proposed by tho Esch-Townsend bill.
When the prices of commodities depend upon
the whim of monopoly, such as is now the case
with certain trust controlled products, cither pub
lic regulation of prices or the dissolution of the
monopoly, will become necessary. Were these
railroad men employed by the tru3t that controls
the necessaries of life they would cry out against
public regulation for the same reason that they
now object to the regulation of the railroad mo
nopolies. Were they otherwise employed they
would line up with the suffering public, just as
they would now do were the circumstances of
employment changed. But there is one very
great evil in railroad rate discrimination that
will never appear in a monopoly of the neces
saries of life, and that is the practice of making
low rates to the rich and powerful and at the
same time charging high rates to the poor and
weak. This policy is indefensible and intolerable
it is simply atrocious. Railroad competition is
rapidly being eliminated by consolidations, mer
gers and other illegal methods. What competi
tion there has been in the past tended to press
down and down the rates at competing points,
while at non-competing points tho depression was
upon business instead of rates. The inevitable
result was that the strong were unjustly and il
legally strengthened at the expense of the weak.
It made the rich richer and the poor poorer. We'
need not go further than the admissions of rail
road managers themselves to show that the
transportation business of this. country is honey
combed with unjust and criminal discriminations.
Formerly it was thought that competition in
railroad transportation would operate precisely
as it does in other lines of business. Experience
has shown that this idea of railroad competi
tion was erroneous; that it cannot be compared
with competition in the channels of commerce
in general; that there are no such tests of the
value of railroad service as can fix tho limit
down to which rates may go without inevitable
loss to the carrier In the aggregate; that it may
carry some classes of business at losing rates,
yet make profits upon its whole operations. There
is and- can be no rule of rate-making. A merchant
knows precisely what an article' can be sold for
to yield a profit, but no railroad manager or
railroad expert can or ever will be able to de
termine when" a certain rate passes below tho
exact cost of carrying an article.
On January 1, 1900, the railroads in what is
hnown as ofllcial classification territory, which
roughly described embraces that part of tho
United States lying east of a line drawn from
Chicago to St. Louis, thence to Cairo, 111., and
north of the Ohio and Potomac rivers, promul
gated a new classification of articles which made
824 changes, out of which 818 were advances
which averaged 35.5 per cent, and the remain
ing six were reductions. In referring to this
wholesale advance in rates the interstate com
merce commission, in its fourteenth report said:
The chairman of the classification com
mltteo testified, in substance, that tho rail-
ways for which the committee stood, deter
mined that they must increase their revenues
and instructed tho classification committee
to make changes In the classification for that
purpose. Acting upon these instructions,
those articles which it was thought could
best bear tho increase were arbitrarily
selected and advanced into higher classes.
There was litllo or no consideration as to
whether they ought to bo advanced or re
duced in comparison with othor nrtlcloa of
tho samo claBU. Tho only question was
whothcr they could stand tho advance. The
railway witnesses all agreod in this, that tho
moving and only purpose in tho greater part
of those changes was to obtain more rovonuo
by advancing rates. It was not
claimed that thoso carriers wero In any un
usual need of rovonuo. Indeed, not for yoars
had traffic been so heavy or gross receipts
as largo as then.
Confounding tho regulation of railroad rates
with the regulation of commodity prices by this
delegation displays a woeful lack of knowledge
as to the functions of a railroad and its rela
tions to the public. In 1880 a nelect committee
on Interstate commerco wan appointed by tho
United States senate to Investigate and report
upon the railroad question, and upon the Investi
gation and report of this committee the act to
regulate commerco was baaed. In their report
the committee said:
As a common carrier and as the priv
ileged manager of tho business of transporta
tion upon a public highway, the relations
and obligations of tho railroad to the com
munity and to the governmental authority
aro essentially different from those of tho
ordinary corporation which does not enjoy
similar exclusive privileges or perform a
public function. The only reason for
the existence of railroad corporations Is that
they might undertake a duty which the
state was unable or unwilling to perform. In
the performance of this duty, private capital
was invested, for the use of which it was
proper that due return should bo made. It
was also, necessary to provide In somo way '
for the expenses of maintenance and opera
tion. As the most convenient and equitable
method of raising whatever amount should
be needed for these purposes, such corpora
tions have been authorized to collect these
amounts from the persons making use of the
facilities for transportation afforded by the
railroad; or, in other words, to place this
burden, which must in some way ho borne
by the people, upon passengers and freight
transported instead of upon the property of
the entire community, as other taxes aro com
monly "ivied. By granting railroad corpora
tions authority to thus levy a tax upon com
merce, even with the express or Implied
reservation that their charges should bo
reasonable, they were necebsarlly given a
monopoly of this right, at least bo far as
their own highways were concerned, and the
fact that such a corporation is in the nature
of a monopoly Is a stronger and broader
reason why it should be subject to the control
and regulation of tho state, and widely ex
tends the jurisdiction of the state in that
respect. ' And as the agents of tho
state in supplying the community with facil
ities for transportation, the railroad corpora
tion necessarily rests under the same obliga
tion to deal fairly and equitably with all
its citizens, without favoritism or discrimina
tion, as the state itself.
In its sixth report the Interstate commerce
commission said: :
Tho railroad exists by virtue of authority
proceeding from the state, and' thus differs
in Us essential nature from every other form
of private enterprise. The carrier Is Invested
with extraordinary powers which are dele
gated by the sovereign, and thereby performs
a governmental function. So far
from being a private possession, it differs
from every species of property and Is in no
sense a commodity. Tho railroad, there
fore, can rightfully do nothing which the
state Itself might not do if it performed this
public service through its qwn agents Instead
of delegating it to corporations It has
created.
Again In its twelfth report the commission
said :
While railway transportation in this
country is carried on by private capital, it Is
essentially a governmental function. This
appears from the necessary conditions of rail
road construction. It is a universal. maxim
that private property can not be taken for
private uses, but only for public use. Yet
no railroad can be built without the appro
priation of private property.
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