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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