Read Ebook: An Inquiry into the Principles of Political Oeconomy (Vol. 2 of 2) Being an essay on the science of domestic policy in free nations. In which are particularly considered population agriculture trade industry money coin interest circulation banks exchange by Steuart James Sir

Font size: 10 px 15 px 20 px 25 px 30 px 35 px

Background color: BlackWhiteGrayLight GrayDark GrayDim Gray

Text color: BlackWhiteGrayLight GrayDark GrayDim Gray

Apply/Save settings

Ebook has 2201 lines and 269747 words, and 45 pages

Under corporate control, railways and their officials have taken possession of the majority of the mines which furnish the fuel so necessary to domestic and industrial life, and there are but few coalfields where they do not fix the price at which so essential an article shall be sold, and the whole nation is thus forced to pay undue tribute.

Controlling rates and the distribution of cars, railway officials have driven nearly all the mine owners who have not railways or railway officials for partners, to the wall. For instance, in Eastern Kansas, on the line of the St. Louis & San Francisco Railway Company, were two coal companies, whose plants were of about equal capacity, and several individual shippers. The railway company and its officials became interested in one of the coal companies, and such company was, by the rebate and other processes, given rates which averaged but forty per cent. of the rates charged other shippers, the result being that all the other shippers were driven out of the business, a part of them being hopelessly ruined before giving up the struggle. In addition to gross discriminations in rates this railway company practised worse discriminations in the distribution of cars; for instance, during one period of five hundred and sixty-four days, as was proven in court, they delivered to the Pittsburg Coal Company, 2,371 empty cars to be loaded with coal, although such company had sale for, and capacity to produce and load, during the same period, more than 15,000 cars. During the same time this railway company delivered to the Rogers Coal Company, in which the railway company and C. W. Rogers, its vice-president and general manager, were interested, no less than 15,483 coal cars, while four hundred and fifty-six were delivered to individual shippers. In other words, the coal company owned in large part by the railway and its officials was given eighty-two per cent. of all the facilities to get coal to market, although the other shippers had much greater combined capacity than had the Rogers Coal Company.

During the last four months of the period named, and when the Pittsburg Coal Company had the plant, force, and capacity to load thirty cars per day, they received an average of one and a fourth cars per day, resulting, as was intended, in the utter ruin of a prosperous business and the involuntary sale of the property, while the railway coal company, the railway officials, and the accommodating friends who operated the Rogers Coal Company, made vast sums of money; and when all other shippers had thus been driven off the line the price of coal was advanced to the consumer.

On another railway, traversing the same coal-field, the railway or its officials became interested in the Keith & Perry Coal Company--the largest coal company doing business on the line--and here the plan seems to have been, in addition to the manipulation of rates, to starve other mine operators out, and force them to sell their coal to the Keith & Perry Company, by failing to furnish the needed cars to those who did not sell their coal to the Keith & Perry Company at a very low price.

When the Keith & Perry Company had a great demand for coal, such parties as sold the product of their mines to that company were furnished with cars, but for the other operators cars were not to be had, such cars as were brought to the field being assigned to such parties as were loading to the Keith & Perry Company, because that company furnished the coal consumed by the locomotives of the railway.

One operator, after being for years forced in this way to sell his product to the Keith & Perry Company, or see his several plants stand idle, has, in recent months, been obliged to build some seven miles of railway in order to reach four different roads, and thus have a fighting chance for cars, although all these railways are provided with coal mines owned by the corporations or their officials.

In Arkansas, Jay Gould, or his railway company, own coal mines and the coal is transported to the neighboring town at low rates, and there is an ample supply of cars for such mines; but the owners of an adjoining mine are forced to haul their coal some eighteen miles to the same town in wagons, as the rates charged them over Mr. Gould's railway are so high as to absorb the value of the coal at destination.

"Capt. Thomas H. Bates, before the railroad committee of the Colorado Senate, said: The Grand River Coal & Coke Company mine their coal in Garfield County, about fifty miles west of Leadville, and all they sell in Denver, Colorado Springs, and Pueblo, has to be hauled through Leadville. At Leadville the individual consumer has to pay .00 per ton for this coal, while in Denver, with an additional haul of 150 miles, the coal from the same mines is delivered to the individual consumer for .50 per ton. The Colorado Coal & Iron Company produce all the anthracite coal sold in Colorado. It is mined at Crested Butte, which is 150 miles nearer Leadville than Denver, yet this coal is sold in Leadville for .00 to the individual consumer, while the same coal is hauled 150 miles farther, and sold to the individual consumer for an advance of twenty-five cents per ton over the Leadville price, and is sold in Denver for .10 per ton in carload lots."

With the government operating the railways, discriminations would cease, as would individual and local oppression; and we may be sure that an instant and absolute divorce would be decreed between railways and their officials on one side, and commercial enterprises of every name and kind on the other.

LANCASHIRE FARMERS AND RAILWAY RATES.

After the counsel given them yesterday by Mr. A. B. Forwood, of Ormskirk, it may be expected that the Liverpool District Farmers' Club will be on the watch for tangible evidence of their grievances against the railway companies.... Under certain circumstances competition operates to the advantage of the public, and rival carriers are constrained to convey goods from place to place at moderate charges; but where a company is not held in check, the tendency is for rates to advance. In many cases, too, special interests of the companies are promoted at the expense of localities, and even individuals are subjected to the wrong of preferential charges. Hence the necessity for the Railway Commission to regulate the magnates of the iron road, who when left without restraint pay little regard to interests other than those of their shareholders.

Although Mr. Acworth fails to mention this phase of English railway administration, it would appear that the evils of discrimination are common under corporate management in Great Britain, and that they are inherent to and inseparable from such management; and that the questions of rates, discriminations, and free traffic in fuel can be satisfactorily adjusted only by national ownership, and if for no other reasons such ownership is greatly to be desired.

The failure to furnish equipment to do the business of the tributary country promptly is one of the greater evils of corporate administration, enabling officials to practise most injurious and oppressive forms of discrimination, and is one that neither federal nor State commission pays much attention to. With national ownership a sufficiency of cars would be provided. On many roads the funds that should have been devoted to furnishing the needed equipment, and which the corporations contracted to provide when they accepted their charters, have been divided as construction profits or, as in the case of the Santa Fe, Union Pacific, and many others, diverted to the payment of unearned dividends, while the public suffers from this failure to comply with charter obligations; yet Mr. Dillon informs us that the citizen commits an impertinence when he inquires why contract obligations, which are the express consideration for the exceptional powers granted, are not performed.

Under government management, traffic would take the direct route, as mail matter now does, and the industries of the country be relieved of the onerous tax imposed by needless hauls. Only those somewhat familiar with the extent of the diversions from direct routes can form any conception of the aggregate saving that would be effected by such change as would result from national ownership, and which may safely be estimated as equal to two and a half per cent. of the entire cost of the railway service, or ,000,000 per annum.

With the government operating the railways there would be a great reduction in the number of men employed in towns entered by more than one line. For instance, take a town where there are three or more railways, and we find three full-fledged staffs, three expensive up-town freight and ticket offices, three separate sets of all kinds of officials and employees, and three separate depots and yards to be maintained. Under government control these staffs--except in very large cities--would be reduced to one, and all trains would run into one centrally located depot; freight and passengers be transferred without present cost, annoyance, and friction, and public convenience and comfort subserved, and added to in manner and degree almost inconceivable.

Economies which would be affected by such staff reductions, would more than offset any additions to the force likely to be made at the instance of politicians, thus eliminating that objection; such saving may be estimated at ,000,000 per annum.

With the nation owning the railways the great number of expensive attorneys now employed, with all the attendant corruption of the fountains of justice, could be dispensed with; and there would be no corporations to take from the bench the best legal minds, by offering three or four times the federal salary; nor would there be occasion for a justice of the Supreme Court of Kansas to render a decision that a corporation chartered by Kansas for the sole purpose of building a railway in that State has the right and power under such charter to guarantee the bonds of corporations building railways in Old or New Mexico, and shortly after writing such decision be carted all over the seaboard States in one of the luxurious private cars of such corporation. Under national ownership such judges would pay their travelling expenses in some other way, and be transported in the ordinary manner, and not half as many judges would travel on passes. There are many judges whose decisions any number of passes would not affect; but if passes are not to have any effect upon legislation and litigation, why are congressmen, legislators, judges, and other court officials singled out for this kind of martyrdom? If the men who attain these positions remained private citizens, would passes be thrust upon them?

Although the reports of the Victorian Commissioners show, in detail, all the expenditures of railway administration, yet not one dollar is set down for attorneys' salaries or for legal expenses, and it is presumed that the ordinary law officers of the government attend to the little legal business arising, and yet judging from reports made by Kansas roads, the expenditures of the corporate owned railways of the United States for attorneys' salaries and other legal expenses, are at least two per cent. of the entire cost of operating the roads, and yearly aggregate some ,000,000, all of which is taken directly from railway users, and is a tax which would be saved under national ownership, as United States district attorneys could attend to such legal business as might arise. This expenditure is incurred in endless controversies between the corporations, in wrecking railways, in plundering the shareholders, in contending against State and federal regulation, in manipulating elections and legislation, and in wearing out such citizens as seek legal redress for some of the many outrageous acts of oppression practised by the corporations. Once the government was in control, these lawyers would be relegated to some employment where they would do less harm, even if not engaged in a more honorable vocation than that of trying to defeat justice by the use of such questionable means as the control of the vast revenues of the corporations place in their hands.

Is it possible that the railway companies can legitimately use anything like ,000,000 yearly in protecting their rights in the courts?

The president of the Union Pacific tells us that: "The courts are open to redress all real grievances of the citizen."

There is probably no man in the United States better aware than is Sidney Dillon that no citizen, unless he has as much wealth as the president of the Union Pacific, can successfully contest a case of any importance in the courts with one of these corporations which make a business, as a warning to other possible plaintiffs, of wearing out the unfortunate plaintiff with the law's costly delays; and failing this do not hesitate to spirit away the plaintiff's witnesses, and to pack and buy juries--retaining a special class of attorneys for this work--the command of great corporate revenues enabling them to accomplish their ends, and to utterly ruin nearly every man having the hardihood to seek Mr. Dillon's lauded legal redress, and when they have accomplished such nefarious object, the entire cost is charged back to the public, and collected in the form of tolls upon traffic. Laws are utterly powerless to restrain the corporations, and Mr. Dillon tells us how easy it is to evade them by pleading compliance, when there has been no compliance, and then having the expert servants of the corporation swear there has been.

The writer, as an executive officer of a railway company having authority to issue passes, has, during a session of the legislature, signed vast numbers of blank passes at the request of the legislative agents of such company, and under instructions of the president of the corporation to furnish such lobby agents with all the passes they should ask for. No reports of passes issued are made either to State or federal governments, or to confiding shareholders, and should such reports be asked for, by State or nation, in order to measure the extent of this evil, the Sidney Dillons would rush into print and tell us it was a piece of impertinence for any citizen to inquire into the extent of or the manner in which the corporations dispensed their favors. The only way to kill this monster is to put the instruments of transportation under such control as only national ownership can give. Laws and agreements between the corporations have been proven, time and again, wholly ineffective even to lessen this great and corrupting evil.

In every conceivable way are the net revenues of the corporations depleted, and needless burthens imposed upon the public, but one of the worst is the system of paying commissions for the diversion of traffic to particular lines, often the least direct. The more common practice is to pay such commissions to agents of connecting lines where it is possible to send the traffic over any one of two or more routes, and the one which may, by the payment of such commission, secure the carrying of the passenger may be the least desirable, and the one which would never have been taken but for the prevarications of an agent bribed by a commission to make false representations as to the desirableness of the route he selects for the confiding passenger.

This is but one of many phases of the commission evil, another being that these sums are ultimately paid, not by the corporations, but by the users of the railways, and but for the payment of such commissions the rates might be reduced in like amounts. Aside from commissions paid for diverting passenger traffic great sums are paid for "influencing" and "routing" freight traffic, and these sums, while paid to outsiders, or so-called brokers, are frequently divided with railway officials. When the writer was in charge of the transportation accounts of a railway running east from Chicago, it was a part of his duties to certify to the correctness of the vouchers on which commission payments were made, and he became aware of the fact that one Chicago brokerage firm was being paid a commission of from three to five cents per hundred pounds on nearly all the flour, grain, packing house, and distillery products being shipped out of Chicago over this railway, no matter where such shipments might originate, many of them, in fact, originating on and far west of the Mississippi River; and when he objected to certifying to shipments with which it was clear that the Chicago parties could have had nothing to do, he was told, by the manager, that his duties ended when he had ascertained and certified that such shipments had been made from Chicago station. From investigations instituted by the writer, he soon learned that some one connected with the management was deeply interested in the payment of the largest sums possible as commissions.

The corporations have ineffectually wrestled with the commission evil, and any number of agreements have been entered into to do away with it; but it is so thoroughly entrenched, and so many officials have an interest in its perpetuation, that they are utterly powerless in the presence of a system which imposes great and needless burthens upon their patrons, but which will die the day the government takes possession of the railways, as then there will be no corporations ready to pay for the diversion of traffic. National ownership alone can dispose of an administrative evil that, from such data as is obtainable, appears to cost the public from ,000,000 to ,000,000 per annum.

As a rule, American railways pay the highest salaries in the world for those engaged in directing business operations, but such salaries are not paid because transcendant talents are necessary to conduct the ordinary operations of railway administration, but for the purpose of checkmating the chicanery of corporate competitors. In other words, these exceptionally high salaries are paid for the purpose, and because their recipients are believed to have the ability to hold up their end in unscrupulous corporate warfare where, as one railway president expressed it, "the greatest liar comes out ahead." With the government operating the railways, there would be no conflicting interests necessitating the employment of such costly officials whose great diplomatic talents might well be dispensed with, while the running of trains, and the conduct of the real work of operating the roads, could be left to the same officials as at moderate salaries now perform such duties, and consolidation of all the conflicting interests in the hands of the government will enable the public to dispense with the services of the high priced managers now almost exclusively engaged in "keeping even with the other fellow," as well as with the costly staffs assisting such managers in keeping even, and the savings resulting may be estimated at from ,000,000 to ,000,000 per year.

Government control will enable railway users to dispense with the services of such high priced umpires as Mr. Aldace F. Walker, as well as of all the other officials of sixty-eight traffic associations, fruitlessly laboring to prevent each of five hundred corporations from getting the start of its fellows, and trying to prevent each of the five hundred from absorbing an undue share of the traffic. It appears that each of these costly peace-making attachments has an average of seven corporations to watch.

Referring to traffic associations, and their vain endeavors to keep the corporations within sight of commercial ethics, the Interstate Commerce Commission says: "But the most important provisions of the law have not so often been directly violated as they have been nullified through devices, carefully framed with legal assistance,--here is one of the places where the high-priced lawyer gets in his work--with a view to this very end, and in the belief that when brought to legal test the device hit upon would not be held by the courts to be so distinctly opposed to the terms of the law as to be criminally punishable." In this connection, it is well to remember what Mr. Dillon tells us of the ease with which the laws can be evaded.

With national ownership the expenditures involved in the maintenance of traffic associations would be saved, and railway users relieved of a tax that, judging from the reports of a limited number of corporations of their contributions towards the support of such organizations, must annually amount to between four and five million dollars.

Of the six hundred corporations operating railways, probably five hundred maintain costly general offices, where president, treasurer, and secretary pass the time surrounded by an expensive staff. The majority of such offices are off the lines of the respective corporations, in the larger cities, where high rents are paid, and great expenses entailed, that proper attention may be given to the bolstering or depressing the price of the corporation's shares, as the management may be long or short of the market. So far as the utility of the railways is concerned as instruments of anything but speculation, such offices and officers might as well be located in the moon, and their cost saved to the public. The average yearly cost of such offices is more than ,000, and the transfer of the railways to the nation would, in this matter alone, effect an annual saving of more than ,000,000, as both offices and officials could be dispensed with, and the service be no less efficient.

Moreover, with the nation owning the railways, the indirect but no less onerous tax levied upon the industries of the country, by the thousands of speculators who make day hideous on the stock exchanges, would be abrogated, as then there would be neither railway share nor bond for these harpies to make shuttlecocks of, and this would be another economy due to such ownership.

Railways spend enormous sums in advertising, the most of which national ownership would save, as it would be no more necessary to advertise the advantages of any particular line than it is to advertise the advantages of any given mail route. From reports made by railway corporations to some of the Western States, it appears that something over one per cent. of operating expenses are absorbed in advertising, aggregating something like ,000,000 per year, of which we may assume that but ,000,000 would be saved, as it would still be desirable to advertise train departures and arrivals.

A still greater expense is involved in the maintenance of freight and passenger offices off the respective lines, for the purpose of securing a portion of the competitive traffic. In this way vast sums are expended in the payment of rents, and the salaries of hordes of agents, solicitors, clerks, etc., etc. Taking the known expenditures, for this purpose, of a given mileage, it is estimated that the aggregate is not less than ,000,000 yearly, all of which is a tax upon the public, that would be saved did the government operate the railways.

Another, and an incalculable benefit, which would result from national ownership, would be the relief of State and national legislation from the pressure and corrupting practices of railway corporations which constitute one of the greatest dangers to which Republicaninstitutions can be subjected. This alone renders the nationalization of the railways most desirable, and at the same time such nationalization would have the effect of emancipating a large part of the press from a galling thraldom to the corporations.

With the nation operating the railways, we may have some hope that rates will be reduced by some system resembling the Hungarian zone which has had the effect of diminishing local passenger rates about forty per cent., resulting in such an increase of traffic as to greatly increase the revenues of the roads; the average of rates by ordinary third-class trains being about three fourths of a cent per mile, and one and a half cents per mile for first-class express trains.

Assuming that ,000 per mile is the maximum cost of existing railways--as is shown in THE ARENA for February,--and that there are 160,000 miles, it would give a total valuation of ,800,000,000; but that there may be no complaint that the nation is dealing unfairly with the owners of much water, it will be well to add twenty-five per cent. to what will be found to be the outside value of the railways when condemned under the law of eminent domain, and assuming that ,000,000,000 of three per cent. bonds are issued in order to make payment therefor, and it involves an interest charge of 0,000,000, to which add 0,000,000, as the cost of maintenance and operation, and ,000,000 as a sinking fund, and we have a total annual cost, for railway service, of 0,000,000 as against a present cost of ,050,000,000 resulting in a net annual saving to the public of 0,000,000 to which must be added the other various savings which it has been estimated would result from government control, and which, for the convenience of the reader, are here recapitulated, namely:--

It would appear that after yearly setting aside ,000,000 as a sinking fund, that there are the best of reasons for believing that the cost of the railway service would be some 0,000,000 less than under corporate management.

That ,000,000,000 is much more than it would cost to duplicate existing railways, will not be questioned by the disinterested familiar with late reductions in the cost of construction, and that such a valuation is excessive is manifest from the fact that it is much more than the market value of all the railway bonds and shares in existence.

After many years of familiarity with the turgid and obscure statements issued by American railway corporations, and which are usually of such a character that the more they are studied the less the shareholder knows of the affairs of the corporation, it is very refreshing to read the report of the Railway Commissioners of any one of the Australasian colonies, where every item of expenditure is made clear, and where words are not used for the purpose of misleading.

The last Victorian report shows this new and sparsely settled country as able to borrow money with which to build national railways, at three and one half per cent. per annum. How many American corporations are able to borrow money at such a rate? This saving in the interest charge directly benefits the public, and is due to national ownership, and a like saving will be made by the nationalization of American railways.

This report also shows that while the country is so rugged that in many cases the gradients are as great as one hundred and thirty feet per mile, and the cost of labor and supplies more than here, the roads are operated at less cost, as measured by the expense per train mile, than in the favored regions of the United States. The Kansas City, Fort Scott, and Memphis Railway is, admittedly, one of the best managed and most economically operated railways in the West, and with an abundance of very cheap coal; low gradients and running more trains than do the Victorian railways should be operated much more cheaply, yet the cost of operating this road, as measured by the cost per train mile,--and this is the best possible criterion of economy in operation,--is one third greater than on the government owned railways of Victoria.

Coal on the line named is worth about .50 per ton at the mines, while inferior coal is worth .75 per ton at the mines in Victoria.

An excellent measure of the efficiency of the management is the number of casualties, as proportioned to the number of passengers carried and men employed, which is very great in such countries as Russia, Roumania, and Portugal; but in Victoria, and other Australian colonies, the proportion is far less than in the United States, more attention being given to the adoption of such safety devices as interlocking switches, etc., and all the stations and crossings are provided with gates, and otherwise better guarded than with us, where the corporations are much more intent upon paying dividends than in serving the public, or in saving life and limb, while on the government-operated railways of Victoria, the management devotes its attention--with a due regard to economy,--to the convenience, comfort, and safety of railway users, and employees having no bond or share holders to provide for. In the United States one of the useless traffic associations pays its chief umpire nearly as much as Victoria pays her entire commission.

Those desirous of entering the railway service of Victoria are subjected to such a rigid examination as to qualifications and character, that but little more than one third are able to pass the ordeal, and a high standard of excellence in the personnel of the service results; when these servants are disabled or worn out by long service, they are pensioned or given a retiring allowance, and this system tends to reduce the inclination to strike, as a man who has been years in the service will long hesitate before he forfeits his right to a provision of this kind.

All the Australian reports and accounts which have come under the observation of the writer, are models of conciseness and clearness, and show that there is nothing inherent in railway accounts rendering it necessary that they be made obscure and misleading.

Neither in the Australian reports nor in the colonial press is there the least evidence of discriminations against individuals or localities, and this one fact is an argument of greater force in favor of national ownership than all that have ever been advanced against it.

WHERE MUST LASTING PROGRESS BEGIN?

BY ELIZABETH CADY STANTON.

To the calm observer there is nothing more impressive in society to-day than the varied and multitudinous associations for the amelioration of human poverty, ignorance, and crime; and nothing more depressing than the seeming immense waste of force scattered in these innumerable directions with results so intangible and undefined. From all the discussions we hear in the halls of legislation, and on the popular platform, on the relations of capital and labor, finance, free trade, land monopoly, taxation, individualism, and socialism, the rights of women, children, criminals, and animals, one would think that an entire change must speedily be effected in our theories of government, religion, and social life, and so there would be if a small minority, even, honestly believed in these specific reforms. But alas! our reading minds are yet to be educated into the first principles of social science; they are yet to learn that our present theories of life are all false. The old ideas of caste and class, of rich and poor, educated and uneducated, must pass away, and the many must no longer suffer that the few may shine. Our religion must teach the brotherhood of the race, the essential oneness of humanity, and our government must be based on the broad principles of equal rights to all. A religion that seeks to make the people satisfied in their degraded conditions, and releases them from all responsibility for its continuance, is unworthy our intelligent belief, and a government that holds half its people in slavery, practically chained where they are born, in ignorance, poverty, and vice, is unworthy our intelligent support.

The object of all our specific reforms is to secure equal conditions for the whole human race. The initiative steps to this end are:--

The rich must be taught that they have no right to live in luxury while others starve. The poor must be taught that they, too, have inalienable rights on this green earth, the right to life, liberty, and happiness, and to the fruits of their own industry, and it is the imperative duty of each class to concede the one and demand the other. The apathy and indifference of the masses in their degraded conditions are as culpable as the pride and satisfaction of the upper classes in their superior position.

Share on: WhatsApp @Hash Facebook Tweet