Newspaper Page Text
& TRUTH, JUSTICE
To the President, the Congressand the People of the United
Staes: Let Us Make America Also Safe for Democracy
g~ RESIDENT WILSON, with his rare faculty of
PP condensing in a single striking phrase the
vital essence of a great issue, has called upon
" the nation to consecrate all its energies to the splen
'! did task of making the world safe for democracy. By
I this one war ecry—MAKE THE WORLD SAFE
IFOR DEMOCRACY!—he has unified the great
American people, raised what might have degen
erated into a war for revenge to the high level of a
boly erusade, and given to the millions of our young
| men who must risk their all in the trenches the com
{fort and inspiration that they are, and their country
and the whole world knows them to be, the cham
pions, and, if need be, the martyrs, of a noble cause,
amd the central figures in a tremendous world erisis.
| The one conspicuous, perhaps the only, redeem
s ing feature of international or civil war is that it so
‘often calls forth and develops in nations and in indi
ividuals high qualities of self-sacrifice and devotion
| which are lving dormant and unsuspected, and
might perhaps have become atrophied altogether for
want of use. Among war’s many dombralizing and
destructive tendencies the most dangerous of all is
perhaps its tendency to distract the attention of pa
triotic citizens from internal perils and the oppor
‘ tunities of mischief which it affords to wolfish
enemies within the fold, '
. In every part of the republic traitorous finan
! cial oligarchies are striving to undermine our repub
' lican‘institutions under cover of the smoke and noise
!of the battlefields of Europe. The Russian extrem
'ists who have tried with too much success to offset
I the effectiveness of President Wilson’s eloquent ap
% peals, and to destroy the influence of American ex
% ample in guiding the Russian people from slavery to
freedom, by proclaiming that our nation is in fact
Qnot a republic but a plutoeracy, have grossly exag
gerated their case, but in their exaggeration there is
; unfortunately far too large a grain of truth. America
.i is not yet a plutocracy, but we have been for a gen
-eration steadily drifting in that direction, even
fthough in the last two decades strenuous and in a
'measure successful efforts have been made to stem
the tide. America is still on the whole a democracy,
' but democracy in America is very FAR from safe,
The nucleus and center of the tremendous finamx
cial combinations that threaten our free institutions
has been and still is the private ownership of the
railroads. The steel trust, the meat trust, the oil
trust, the coal trust, all were made possible by spe
}cial and secret privileges of transportation which
publicly-owned railroads would never have afforded.
!The colossal fortunes which dominated Wall Street,
and gave rise to thé money trust were in the main
acquired in railroad promotions and consolidations
and railroad wrecking. The corruption of our
national, State and municipal politics, which has
! led able and disinterested European students of our
] institutions like Bryece regretfully to doubt whether
our great experiment in government by the people is
“ destined to permanent success, all dates back to the
I great railroad expansion of the sixties and seventies,
| when the nation, in the throes of civil war and recon
' struetion, was beguiled into the monumental folly of
!abandoning to private exploitation and the Credit
f Mebilier the ownership of the great transcontinental
railroads built by the loan of public credit and the
' gift of public lands. From that day to this, at Wash
ii ington and in every State and Territory of the Union.
“ the baleful influence of the railroads upon our Gov
| ernment has been felt and denounced by publie
Let Love Be Without Dissimulation. Abhor That Which Is Evil: Cleave to That Which Is Gooa.—RoMANS, 11, 9
¥ AT N\ f T-y P L IAN w
spirited men of all political parties. As the Railroad
Commission of Georgia well said in 1881:
‘‘Transportation is king—he who controls it con
trols everything else. Powerful in wealth and pat-ronage,
powerful to bribe and to punish, it is already stronger in
many States than the Government, stronger than the peo
ple. It puts judges on the bench of the State and Federal
courts. The moral and social, as well as the political, re
sults of these corruptions are simply appalling. Their
demoralization is worse than war.”’
Or as Judge Cooley, of the Michigan Supreme
Court—afterwards of the Interstate Commerce Com
mission—more tersely and less dramatically puts it,
in his great and famous work on Constitutional Limi
tations:
‘“Some of the great and wea,lt}iy railroad corporations
actually have a greater influence in the country than the
State to which they owe their corporate existence.’’
Said President James A. Garfield, when a Con
gresman, in 1874:
“‘Not merely have the oficers and representatives of
States been subjected to the railways, but the corporations
have grasped the very sources and fountains of power and
controlled the choice of both officers and representatives.’’
And Governor Larrabee, of Towa, added, twenty
vears later:
‘‘The influence of the railroad managers extends from
the township assessor’s office to the national capital; from
the publisher of the small cross-roads paper to the editorial
staff of the metropolitan daily. It is felt in every State and
national election. The settled policy of these men is that if
they can prevent it no person not known to be friendly to
their cause shall be placed in public office. Their means
of controlling legislation are, first, the election of men who
for personal reasons are adherents of the railroad cause;
next, the delusion or even corruption of weak or unscru
pulous members; and, thirdly, the employing of lobbyists
and the subsidizing of newspapers.’’
From California and Oregon, from Nebraska,
Kansas and Missouri, from Wisconsin, Michigan and
Ohio, from New York, New Jersey, Maryland and
Pennsylvania, comes the same testimony of the cor
rupt dominance of the railroad corporations still en
dured or partially escaped. Governor—now United
States Senator-<Hiram .J ohnson, of California, de
clares that for more than a quarter of a century the
Government of California was a mere part of the
Southern Pacific Railroad Company, and was admin
istered as'a department of that great corporation.
The Republican State Convention of Nebraska has
denounced ‘“the vicious and demoralizing attempts
of the railroad corporations to econtrol all depart
ments of our State government—llegislative, execu
tive and judicial.”
And Professor Frank Parsons, whose painstak
ing, thorough and impartial studies of transporta
tion problems have rarely been equaled and never
surpassed, sums up the results of his long experi
ence and observation in these emphatic and almost
despairing words, published a vear or two before his
untimely death: ‘‘After traveling through many
lands, studying their railroad systems, the conclu
sion forees itself upon me that this greatest of all
republies is the only country of any importance on
earth that is dominated by industrial interests in the
hands of private corporations, among which the
railroads and their allies are the chief. At the na
tional capital and in more than twenty States I have
studied railroad conditions. Nearly everywhere the
dominance of railroad influence is a settled faet, ex
cept in spasms of popular upheaval. The legislative
bodies of many of the States are as wax under the
manipulations of these great corporations. The cor
ruption of political machinery has proceeded al
most simultaneously with the growth of railroad
November 719 |77
combinations. Against their insidious power the bal
lot 1s ineffectual and'evo;l revolution almost hope
less.”’ :
The American people have paid for their rail
roads over and over again, and ought now, like Ger
many, be deriving from them, as they do from the
postal service, a handsome revenue for the relief of
war taxation, instead of finding them a vampire ever
seeking to increase its stealthy drain upon the life
blood of the nation. They have been paid for once
in grants of more than eighty million acres of the
best farming and timber lands of the public domain,
an area nearly equal in extent to the entire territory
of the thirteen colonies that formed the original
United States. 1f the nation had built the roads, and
sold these lands when the provision of transportation
facilities had made them available for settlament
and use, THE PROCEEDS WOULD HAVE MORE
THAN PAID FOR ALL THE EXISTING RAIL--
ROADS AND RATLROAD EQUIPMENT IN THE
UNITED STATES. The roads have been paid for
again in overcharges required to pay interest and
dividends upon an enormously inflated capitaliza
tion.
As Professor Ripley states in his “Railroad Fi
nance and Organization,”’ the outstanding indebted
ness of the roads in 1914 totaled in round numbers
ten billions of dollars, of which tremendous sum the
bonded indebtedness alone exceeded the actual cost
of railroad construction taken as a wholé€, the rail
road stocks representing no actual investment what
ever. The Union Pacific, for instance, issued one
hundred and ten millions in'securities to cover an
actual cost of construction of only sixty millions, and
the West Shore issued seventy-six millions to cover
an actual investment of only twenty-nine millions.
The typical plan upon which the great railroad
arteries have been constructed and equipped has
been the issue by the promoters of stocks to the full
amount of the estimated cost of construction, togeth
er with first and second mortgage bonds aggregating
more than double that amount, so as to' leave for
themselves at the windup, over and above the profits
realized by them from the actual construction, a con
trolling interest in the companies, often used to en-”
able them to make a market for their shares by dis
hopest manipulations of operating accounts.
The original burden of overcapitalization has
been vastly increased in the process of monopoly
building by the absorption of competing lines, and
by the issue of stock dividends. Between 1868 and
1872 the stock of the Erie road was increased from
seventeen to seventy-eight millions by stock divi
dends. The New York Central declared a stock
dividend of 80 per cent in 1868, the Louisville and
Nashville a stock dividend of 100 per cent in 1880, the
Boston and Albany of 100 per cent in 1882, the At
lantic Coast Line of 105 per cent in 1900; and the New
Haven, in its futile attempt to monopolize the entire
transportation system of New England, swelled ita
liabilities to the extent of many millions, ©f which,
according to the Interstate Commerce Commission,
only a few went to inerease the actual assets of the
consolidated lines. And besides all this, the public
have been forced to pay for—without owning—the
railroads once again in extortionate charges for
service, enabling the companies to camouflage their
extortion by the capitalization of éxcessive earnings
which the people would never have tolerated if they
had realized their tremendous amount. From 1887
to 1911 the Pennsylvania Railroad applied one-half
of its net earnings to the development of its system,
PUBLIC SERVICE %
the total of two hundred and sixty-two millions so
capitalized being equal to two-thirds of the entire
construction cost of its two thousand miles of line,
In the ten years ending in 1900 alone, all the rail
roads taken together capitalized their carnings to the
amount of six hundred and six millions of dollars,
And to all these vast sums adroitly abstracted from
the pockets of the public by indirect taxation must
be added the national and State cash subsidies o
more millions and the vast, but never computed, aid
in money and land obtained by railroad promoters
from counties, towns and business interests along’
their projected lines.
With all this record of waste, trickery and ex
tortion behind them, the railroads, finding their. self
imposed burden of fixed charges, which ought never
to have been incurred, too heavy to permit the pay
ment of fat dividends upon stocks which ought never
to have been issued, now seek to add to the heavy
war burdens of the nation a fresh tax upon trans
portation and thereby swell still further the rising’
cost of all the necessaries of life. To accomplish
their nefarious ends they will certainly bring to bear
ALL THE CORRUPT AND CORRUPTING PO
LITICAL INFLUENCES AT THEIR COMMAND.
How corrupt and how powerful these influences are I
President Wilson is well aware, and he knows also |
the advantage which these treasonable machinations |
will derive from the absorption of public attention in
the international crisis.
The time for action is opportune; Congress hasj
committed to him the necessary powers; the roads
can be taken over now at a comparatively fair valu
ation, far less than will be the cost if the grant of
increased revenues enables them to launch out in a
fresh career of inflation. The enthusiastic approv- |
al of the great body of the people is assured. l
Regulation of the railroads and other pub]iél
utilities has utterly failed in this country. Forty |
years ago, when Germany faced the question of H
whether or not to attempt to regulate or own her'
own railroads, Bismarck warned the German people ‘
that regulation was in the very nature of things an '
impossibility, and so it has proved in this -country.‘
As fast as you close one door on mismanagement?
and corruption and extortion of the great public
corporations, the cunning managers open another
one, and thus the people are always locking the
barn door after the horse is stolen and holding post-'
mortems on a wrecked railroad property and a‘
wrecked publie pocketbook.
The railroads today have excessive power
without responsibility, and in human nature nobody
ever efgjoyed excessive power without responsibility
who did not abuse it, and when you have excessive
power i,n the hands of a few capable of being abused
and with a tendency to abuse it, you do not have a
democyacy, no matter what the forms of Govern
ment gnay be. We may call ours, with some truth, a I
demog racy today, because the people have not yet |
lost tjneir DISPOSITION and capacity to overturnL
and } control any corrupt Government whenever |
they{are awakened to the fact that they have such a
Govfernment.
But in time people become accustomed to things,
and \{they soon form the habit of slavery and lose the
capdieity and the WILL to reassert their power and
to re-establish democracy.
“ \Therefore it is that we have come to a parting
of the ways. If we do not want these great public
u\l\%ies to own and control us we must own and '-
contirol them. "