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s TRUTRH, JUSTICE
To the President, Congress and the People of the United
States: Let Us Make America Also Safe for Democracy
RESIDENT WILSON, with his rare faculty of
f P 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
i did task of making the world safe for democracy. By
this one war cry—MAKE THE WORLD SAFE
iFOR DEMOCRACY!—he ' has unified the great
’American people, raised what might have degen
'rerated into a war for revenge to the high level of a
‘holy crusade, and given to the millions of our young
‘ men who must risk their all in the trenches the com
i 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,
’and the central figures in a tremendous world erisis.
| The one congpicuous, perhaps the only, redeem
;*ing feature of international or civil war is that it so
often calls forth and develops in nations and in indi
wviduals high qualities of self-sacrifice and devotion
‘which are lying dormant and unsuspected, and
might perhaps have become atrophied altogether for
want of use. Among war’s many demoralizing and
destructive tendencies the most dangerous of all is
perhaps its tendency to distract the attention of pa
triotic eitizens from internal perils and the oppor
tunities of mischief which it affords to wolfish
“enemies within the fold. i
‘ 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 sucecess to offset
'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
not a republic but a plutocracy, have grossly exag
gerated their case, but in their exaggeration there is
unfortunately far too large a grain of truth. America
is not yet a plutocracy, but we have heen for a gen
eration steadily drifting in that direction, even
though 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 Ameriea is very FAR from safe,
The nucleus and center of the tremendous fina
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, a]l 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 the 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 Bryce regretfully to doubt whether
our great experiment in government by the people is
destined to permanent success, all dates back to the
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
Mobilier the ownership of the great transcontinental
railroads built by the loan of public eredit and the
} gift of public lands. From that day to this, at Wash
‘ington and in every State and Territory of the Union,
‘the baleful influence of the railroads upon our Goy
ermmment has been felt and denounced by publie-
Let Leve Be Without Dissimulation. Abhor That Which Is Evil? Cleave to That Which Is Gooa.—RroMANS, Xl, 9
+« ATEANTA®®-GEORGIAN
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 patronage,
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 Mithigan Supreme
Court—afterwards of the Interstate Commerce Com
mission—more tersely and leßs dramatically puts it,
in his great and famous work on Constitutional Limi
tations: ,
‘‘SBome of the great and wealthy 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 officers s:nd representatives of
States been subjected to the railways, but the corporations
have grasped the very sources and fountains of power and
controlled the ehoice 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 so 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 knéwn 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- o
pulous members; and, thirdly, the employing of lobbyists
and the subsidizing of newspapers.’’
From California and Oregon, from N ebraska,
Kansas and Missouri, from Wiscensin, 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 Johnson, 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
dencunced “‘the vicious and demoralizing attempts
of the railroad corporations to eontrol all depart
ments of our State government-—legislative, execu
tive and judieial.” ;
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 year or two before his
uptimely death: ‘“After traveling through many
lands, studying their railroad systems, the conclu
sion forces 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 fact, 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 simultaneousiy with the- 'growth of railroad
Wednesday, November 28, 1917
combinations. Against their insidious power the bal
lot is ineffectual and even 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 forded the original
United States. If the nation had built the roads, and
sold these lands when the provision of transportation
facilities had made theém available for settlement
and use, THE PROCEEDS WOULD HAVE MORE
THAN PAID FOR ALL THE EXISTING RAIL
ROADS AND RAILROAD 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 Orghnization," 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 whole, the rail
road stocks representing so 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 fro_m 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
henest 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 Jivi
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
lantie 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 its
liabilities to the extent of many millions, of which,
aceording to the Interstate Commerce Commission,
only a few went to increase the actual assets of the
consolidated Tines. And besides all this, the publie
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 excessive 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 svstem,
PUBLIC SERVICE %
the total of two hundred and sixty-two mfllionsvso'
capitalized being equal to two-thirds of the entire |
construction cost of its two thousand miles of line. ‘1
In the ten years ending in 1900 alone, all the rail-|
roads taken together capitalized their earnings to fi; fli
amount of six hundred and six millions of dollars ‘
And to all these vast sums adroitly abstracted from"l
the pockets of the public by indirect taxation must w
' be added the national and State cash subsidies of ;‘
more millions and the vast, but never computed, aids ;‘
in money and land obtained by railroad promote}fifi
from counties, towns and business interests alofié ’f
their projected lines. e ; I
With all this record of waste, trickery and e%l
tortion behind them, the railroads, finding their \sefi- |
imposed burden of fixed charges, which ought neve r'
to have been incurred, too heavy to permit the pay
ment of fat dividends upon stocks which ought ne er
to have been issued, now seek to add to the hea:
war burdens of the nation a fresh tax upon trags
portation and thereby swell still further the risif;
cost of all the necessaries of life. To accompl" :
| - their nefarious ends they will certainly bring to bea
" ALL THE CORRUPT AND CORRUPTING PO
LITICAL INFLUENCES AT THEIR COMMAN D
How corrupt and how powerful these influences anip
President ~Wils_on is well aware, and he knows aISQI
the advantage which these treasonable machinations'
will derive from the absorption of public attention i n
the international erisis. . ~-i‘:
The time for action is opportune; Congress f
committed to him the necessary powers; the roads!
can be taken over now at a comparatively fair val”
ation, far less than will be the cost if the grant &
increased revenues enables them to launch out m;
fresh career of inflation. The enthusiastic approv_"—
al of the great body of the people is assured.
Regulation of the railroads and other public|
utilities has utterly failed in this country. Forty |
years ago, when Germany faced the question of
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 publie
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 properiv and a
wrecked publie pocketbook. 4
The railroads today have excessive poweg_‘é
without responsibility, and in human nature nobody
ever enjoyed excessive power without responsibili
who did not abuse it, and when you have excessiy
power in the hands of a few capable of being abused
and with a tendency to abuse it, you do not have &
democracy, no matter what the forms of Govern |
ment may be. We may call ours, with.some truth, H
democracy today, because the people have not, yet!
lost their DISPOSITION and capacity to overtu ;
‘and control any corrupt Government whenevej
they are awakened to the fact that they have such a
Government. :
But in time people become accustomed to things,
and they soon form the habit of slavery and lose the
capacity 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 thosg great publie
utilities to own and control us we must own and|
~ control them. 3 !