Newspaper Page Text
PAGE FOURTEEN
A NEW SOLUTION OF THE RAIL
ROAD PROBLEM.
By Albert Griffin, Topeka, Kansas.
Against the united opposition of the
most powerful financial classes —and
greatly to their alarm —the railroads
problem is daily more and more in
sistent in demanding a prompt and
permanent settlement. People who
have any ideas on this subject consti
tute three groups. The first consists
of the beneficiaries of special privi
leges; those who practice “letting
things alone,” “attending to my own
business;” the laisser faire, conserva
tive, fossilized elements —that expect
all wrongs to ultimately right them
selves, and the inherently lazy, who
never try to right wrongs, or end evils,
until galvanized into abnormal activ
ity.
The second consists of those who,
apparently thinking that the law can
do everything, more or less earnestly
demand “the passage and enforcement
of wise laws prohibiting railroads from
doing wrong, and requiring them to
do right.” Although favoring private
ownership, they wish to end the evils
that grow out of it —but seldom get
beyond the “demanding” stage.
The third is made up of those who
believe that these evils can be ended
only by abolishing the special priv
ileges that make them possible, and,
therefore, insist upon public owner
ship and operation of the roads.
The first group is large—but its
members are usually so imperious to
argument that this article is addressed
only to the other two,
I.
Just now, President Roosevelt is the
foremost advocate of “effective rail
road regulation” by national authority.
His ability, sincerity and resourceful
ness, is admitted, and his following
is so large that he may be able to
induce the Republican party to en
dorse this policy in its national plat
form —in spite of the fact that the
majority of the railroad magnates call
themselves Republicans! Many able
Democrats also favoi’ this method of
dealing with the railroad —but they
have no recognized leader. On the
whole, at this writing, it looks as
though both of the great parties will
commit themselves more or less
strongly in favor of “stringent railroad
legislation”—but that the rank and file
for both will be irrevocably divided
upon it.
“Railroad regulation” has been ad
vocated for a long time —but it is a
very vague term, and its supporters
are wide apart as to its scope—as
to exactly What shall be done? and
By whom? Some insist that the set
tlement of this problem belongs to the
states, exclusively; some that the gen
eral government must assume entire
control of it; and others that, while it
primarily belongs to the states, the
nation can, and should, do whatever is
necessary to promote justice—especial
ly in the matter of inter-state traf
fic.
This situation necessarily brings up
for renewed consideration the old
problem of “State rights”—which
many suppose is buried with the bones
of those who fought over one of its
phases. Prior to Jackson’s administra
tion, the governmental trend was
strongly towards centralization; from
Jackson to Lincoln the movement was
the other way; but, during and since
the cival war, the advocates of state
rights have been very quiet. Never
theless, for several years, the feeling
has been growing that we have drift
ed too far from the basic idea of our
institutions —that of a dual govern
ment, with the national branch su
preme in all strictly national, and the
state branches as absolutely supreme
in all distinctly state, matters.
Raising a plea of “jurisdiction,” on
WATSON’S WEEKLY JEFFERSONIAN.
such a subject, seems like trifling to
those who suppose it necessary only
to agree on what is desirable, and to
go ahead and do it. But practical
thinkers know that this question of
jurisdiction lies at the very base of
operations; that it is a very difficult
one to decide —and is made many
times more so by the fact that the
privileged class whose business is to
be regulated are bitterly hostile to
every effective plan, are very wealthy,
and, politically, is the second most
powerful guild in existence; and by
the further fact that the passions of
the civil war, though dying out, are not
yet extinguished. But few of the ad
vocates of railroad regulation have se
riously considered this preliminary
step toward the solution of the prob
lem, and those who have are divided
upon it. Indeed, their views are not
merely conflicting, but irreconcilably
antagonistic.
But suppose the centralizationists
triumph, and the nation assumes the
whole duty of regulating the railroads,
even more difficult questions will re
main, viz.: In What Way ? and to What
Extent? shall railroad managers be re
stricted. And how can their scores of
thousands of subordinates —who neces
sarily must exercise more or less dis
cretion—be compelled to obey the spir
it of the laws? With most of the
wealth, and nearly all of the grafters,
more or less actively working to de
feat them, how can the friends of
effective regulation be not only united
at the polls when everything is at
white heat, but also be kept watchful
and active year after year?
It is much easier to find competent
and honest bookkeepers for any bus
ness than to procure those who can —
and will —examine the books of a great
corporation and ascertain, not only
that they balance, but that the thou
sands of entries in them are all exact
ly what they should be. It would be
much easier for the government to
find honest men to employ than to
convict the employes of law violating
corporations. Nine tenths of the dif
ficulty now is, not in the lack of laws,
but in the inability (or unwillingness)
of the proper officials to enforce them.
Witnesses who know the facts can
easily be summoned, but it is often im
possible to either persuade or compel
them to tell the truth.
In short, the success of the rail
road regulation policy requires the
election of a president of the Roose
velt, LaFollette, Tom Johnson, or Gov.
Folk type, and a majority of senators
and congressmen who are not merely
professed supporters of it, but who can
neither be corrupted, deceived, nor in
timidated —and that this shall be done
for many consecutive terms.
Neither honesty nor dishonesty,
competency nor incompetency, courage
nor cowardice, is ever entirely on one
side of any problem. Thus far, the
opponents of most fundamental re
forms have triumphed, or procured
long delays, by the help of men pledg
ed to the reform cause —some of whom
were not dishonest. And it is because
of such facts as the foregoing, that
nearly all thinkers with whom railroad
legislation is a paramount concern
ultimately become convinced that the
public must own the roads.
Forty years devoted to the study of
this problem has convinced me that,
in our state of evolution, it is simp
ly impossible to compel railroad cor
porations to use their franchises as
public trusts, and to deal fairly with
all of their patrons. President Roose
velt is rightly honored for the stand
he has taken, and the great work
he is doing; and the larger the num
ber of Republicans who honestly sup
port his policy, the better will it be for
the country—but candor requires the
addition that I do not think it possible
to permanently settle the railroad
problem on his line.
11.
Again the proposal to so control
railroad corporations by law as to se
cure just treatment to all, are array
ed those who hold that the roads must
be owned and operated by the people.
But these voters are scattered among
all of the parties—in none of which
this is a controlling issue; nor is
there any present indication that its
supporters will soon concentrate. Mr.
Bryan advocates this policy, but does
not insist upon its immediate endorse
ment by his party—which appears to
be as hopelessly divided on the gener
al subject as is the Republican, though
on somewhat different lines.
Suppose, however, that a party com
mitted to national ownership and oper
ation of railroads should elect a pres
ident and secure control of congress,
the next step must be to decide wheth
er to build an entire new railroad sys
tem, or to confiscate, or to purchase
the existing roads.
So far as I know, building and op
erating an entirely new system of
roads by the nation has had but few,
if any, advocates; and it has been
suggested only as an alternative —in
case a satisfactory arrangement can
not be made with the companies.
Confiscation is advocated by a few
who say, very truly, that the railroad
companies received from the people, in
subsidies and lands, much of the origi
nal cost of the roads; and that the
excessive charges since exacted by
them exceed, several times over, all
the money the original stockholders
actually put into them, or that was
subsequently properly used for their
improvement. And from these unde
niable facts they draw the conclu
sion that, in equity, the roads really
belong to the people, as a whole, rath
er than to their stockholders.
But, of the many billions of dol
lars of railroad stocks and bonds in
existence, a large part—which cannot
be even approximated—now belongs
to purchasers who had nothing to do
with building their roads, nor with the
wrong doings of their managers. That
these more or less innocent purchasers
have equities will not be denied, and,
without discussing the subject, it can
safely be assumed that the confisca
tion proposition will not be seriously
considered at the polls; and that any
successful government ownership par
ty will be practically unanimous
against it.
With confiscation eliminated, the
question will then arise, How much
shall be paid for the roads? Their
present capitalization is estimated at
about $14,000,000,000 —a truly enorm
ous sum—but the indications are that,
by the time a transfer could be au
thorized and effected, it will approx
imate twenty billions. Railroad build
ers say that the present system could
be duplicated for between one fourth
and one half its aggregate capitaliza
tion. Part of the present mileage is
unnecessary, or badly located; much
of the immense additions to capitali
zation that have been, and are be
ing, put onto the market, represent
little or no additional property; and
a considerable part of that which
would be transferred to the govern
ment would be really worn out. And
it is safe to asume that, when the
time for action arrives, an entirely
new system, that would be better than
the present one —much better —could
be built and equipped for one fourth
of the capitalization of that to be pur
chased. And to pay for so much wa
ter, would be like giving $4 a bushel
for wheat worth only sl.
Interest on the bonds at only 5 per
cent would be 20 per cent on the
actual value to the people of the prop
erty received.* Five per cent on $20,-
000,000,000 would be $1,000,000,000; of
which three fourths —or $750,000,000
would be paid each and every year for
nothing; and this for merely sentimen
tal reasons. Moreover, probably 95 per
cent of this vast sum would go into
the pockets of people who had been
active parties to, or beneficiaries of,
the wrongs so long endured. If the
roads could be purchased at their
real value —and the money paid to
those who are best entitled to it —
there would be practically no opposi
tion. But I repeat that this is im
possible.
If one stops to think what a crush
ing burden such a load of debt —
with nothing to show for it —would
be, he will realize that this is a very,
very, grave matter. Closet philoso
phers and curbstone orators may ar
gue that it would be better even to
pay such a price than to continue
present conditions —and that therefore,
it should be paid. But most unbiased
people, while assenting first
clause, will reject the conclusion —be-
cause they believe there must be a bet
ter way.
Discussion of this subject by the
people generally has really just begun,
and it seems clear that a majority of
them cannot be induced to commit
themselves next year to the policy of
government ownership and operation
of railroads; and that they are not
likely to do so in 1912 —unless rail
road owners themselves unite to “un
load onto the government.” And, if
they do this, they will try hard to get
enough men of their own sort into the
leadership of the government owner
ship party to direct its action. And
they would not be scrupulous as to
the means used.
Orators can convince and enthuse
some audiences, and a part of the
press can fill pages with unanswerable
facts and arguments, but railroad peo
ple can use similar agencies on a
vastly greater scale. Os the billions,
and billions, and billions of railroad
stocks and bonds representing only
water —and which bring in hundreds
of millions every year—a part belong
to the banks, trusts, insurance, and
other powerful financial corporations;
and some blocks constitute a part of
the endowment of educational, charit
able, and religious institutions, or of
the estates of widows, orphans and
others. Consequently, scores of thou
sands of influential people, living in
every community—whose neighbors
wonder why “such sensible and up
right persons always vote with the
railroads” —are strongly prejudiced by
their own interests in favor of such a
settlement as will save as much as
possible of their investments.
It is well within bounds to say that
these deeply interested voters con
trol, more or less completely, nine
tenths of the organs of thought and
news distribution; also, the principal
churches, and public institutions sus
tained by endowments and contribu
tions; and that some of them are in
touch with every grafter and purchas
able voter.
It is no secret that some of the larg
est owners of railroad securities are
not “filled with alarm” at the rapid
spread of the government ownership
idea —for the sufficient reason that
they expect to sell to the government
at high figures. While a few would like
to do this now, others are not yet
ready; but, as soon as they see that,
“if longer denied the people cannot
be controlled,” they are liable to take
Immediate steps to insure the triumph
of a party pledged to government own
ership, and “controlled by safe and
sane men”—men who will insist that
“the government must pay for all prop
erty it takes or destroys, what it is
really worth,” and that “its worth” is
shown by actual sales under normal
condition.
Much more might well be said on this