ADDRESS OF
William C. Brown
Senior Vice-President
New York Central Lines
at
ANNUAL BANQUET
of the
Commercial Club of Davenport
Davenport, Iowa, January
14»
1909
Mr. Toastmaster and Members of The Davenport Com¬
mercial Club:
I appreciate a great deal more than I can express
this welcome on the part of your Toastmaster and the
membership of this club. I am going to ask you to
indulge me just a few minutes in matters personal to
myself and my family, and at the same time perhaps of
some interest to you gentlemen of Davenport.
I left New York yesterday at 3:30 p. m., got off the
train at Moline to-day just a little before two o'clock,
and all the way out 1 was reminded of a trip my father
and mother made sixty-seven years ago next May. They
left Utica by canal boat and came to Buffalo, taking
nearly seven days to make that trip, from Monday
morning until Saturday night. They were seven more
days coming to Chicago from Buffalo, and five more
days on a lumber wagon from Chicago to the forks of
the Maquoketa River, forty miles north of here, where
the little city of Maquoketa now stands.
I made the trip from Utica to Chicago in just a little
less number of hours than it took them days, and they
came by the quickest possible route at that time.
Some time ago I was looking over some old cor¬
respondence, and I want to read you an extract from a
letter written by my father a number of years ago in
which he tells of his first trip to Davenport. Father was
a Baptist preacher and was sent out to the territory of
Iowa by the Baptist Home Missionary Society.
In this letter he says :
"A meeting of all the Baptist churches in the
territory of Iowa, north of the Iowa River, was
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called at Davenport for September i6, 1842, for
the purpose of organizing an association.
''Mrs. Brown was very anxious to attend this
meeting and I was very desirous that she should
go, because of the opportunity it would afford of
meeting some of the old neighbors and friends from
the East, but there was no conveyance of any kind
in the settlement except heavy lumber wagons.
"Necessity, however, has always been the mother
of invention. I borrowed the rear axle, wheels and
hounds of one of the lumber wagons, made a pair
of shafts from fence poles, and a seat by boring
holes in these poles, putting in wooden pins of suit¬
able length and fastening a board on top. A bundle
of oats and a blanket made a cushion, and with
this conveyance we set out on our forty-mile ride
to Davenport.
"We thoroughly enjoyed the ride over the broad
prairies and through groves where, until very re¬
cently, the foot of civilized man had been a stranger
since time began.
"The first human habitation after leaving our
neighborhood was at Point Pleasant, Kirtley's ferry,
where we crossed the Wapsy. This was about
twenty-two miles from our little settlement at the
forks of the Maquoketa River. A few miles farther
brought us to Long Grove where some Scotch
families—brothers named Brownlee—had settled,
and where we stopped for the night and were made
at home in their frontier cabin.
"Early the next day we arrived in Davenport
where, notwithstanding the peculiar and conspicu¬
ous character of our conveyance, and the fact that
road carts were not as common and popular as in
later years, we had no hesitation and felt no em¬
barrassment in driving through Main street and to
the residence of Dr. Wither wax, where we were
most cordially welcomed and hospitably entertained.
"Our meetings were held in the chamber of a
small frame building on Front street. Six churches
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were represented: Bath (later named LeClaire).
Davenport, Dubuque, Bloomington (now Musca¬
tine), Iowa City, and the Forks of the Maquoketa;
comprising every church in existence at that time
north of the Iowa River, except one located on the
line between Delaware and Jones counties which,
on account of the long distance to be traveled, was
not represented.
"The winter following, 1842-3, long and cold,
set in early in November with a heavy fall of snow.
"Our unfinished log cabin away out on the bleak
prairie was not suitable to winter in and, with the
approval of the Home Missonary Board, we went
to Davenport, intending to return to Maquoketa in
the spring.
"We at once engaged in pastoral work with the
Davenport and Rock Island churches. Little could
have been accomplished at such a time at Maquo¬
keta, but there was a good opening in the new field.
For many weeks, in the dead of that long, hard
winter, revival meetings were held in the Rock
Island Court House, the solid ice bridge on the
river enabling the Davenport people to attend and
take part, which they did, and shared largely in the
good result of the work. More than fifty new mem¬
bers were received by conversion and baptism in
the two churches.
"During the fall of 1842 the brick walls of a
small house of worship were put up by the Daven¬
port church. A few mild days in January were im¬
proved to put the roof on, and in this condition it
served for holding meetings.
"At Davenport, in 1842-3, Johnny Dillon, a lad
of about twelve years, was one of my Sunday School
scholars.
"The family from Montgomery county, New
York, came to Davenport in 1838. They were, like
ourselves and many other pioneers, of limited means
and the humbler walks of life ; kind, pleasant
neighbors and good friends, of high character.
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"The boy, John Forrest Dillon, through his own
efforts, industry, integrity and ability, became Judge
and Chief Justice of the Supreme Court of Iowa,
Judge of the United States Circuit Court, and the
author of text books on important legal subjects—
a credit to the state of his adoption—loved, honored
and respected by its people. His reputation, as a
jurist, for ability, attainments, integrity and fair¬
ness, and as a law writer, is second to none in the
country."
I advised Judge Dillon recently that I was coming to
Davenport to address the Commercial Club on this occa¬
sion, and am going to take the liberty of reading a
letter I received from him just before leaving New
York:
New York City, Sunday, January lo, 1909.
No. i West 72d Street.
"My Dear Mr. Brown :
On your recent accession to the presidency of the
New York Central my mind at once went back to our
early days in the City Beautiful, and I sent you a tele¬
gram :
'Hearty congratulations to the son of my
Davenport Sunday School teacher.'
"I am delighted to learn from your note in reply that
you expect to go to Davenport this week to deliver an
address at the annual banquet of the Chamber of Com¬
merce of that city. This token of your love and regard
for the pioneer home of your revered father and his
family will add a fresher green to the memories of your
boyhood and will be gratefully appreciated by all the
people of the city. I avail myself of your kind offer to
bear a message from me, to say to my old friends and
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neighbors and to the Chamber of Commerce as repre¬
senting not. only its commercial interests but also its
citizens that I send my warmest greetings and I wish
with all my heart that the city's prosperity may equal the
fondest hopes of all her loyal sons.
Very sincerely yours,
John F. Dillon."
I want to say a few words in regard to the early
days in Iowa before railroads were built.
Your Toastmaster has said in rather a facetious vein
that the railroads located a good many farmers out here
in the West; and I want to say to you in very truth that
that is correct, for without the railroads very few farmers
could have located and those that might have located
could never have made much more than a bare living.
In 1850, if I remember correctly, but one railroad
had reached as far west as Toledo. Illinois was making
every possible effort to secure the building of a railroad,
and a bill was introduced in the House and Senate
giving a land grant to that road, providing they would
build a railroad from Cairo to the north line of the state
of Illinois and to the city of Chicago.
In the debate on this bill, the Hon. Stephen A.
Douglas said, referring to the lands which it was pro¬
posed to donate :
"These lands have been in the market twenty-
three years at $1.25 per acre without buyer, because
they are so distant from a market."
Senator Thomas H. Benton, of Missouri, said:
"Lands twenty-three years in the market without
purchasers can be classed as refuse lands."
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And added :
"These young states are made desolate, in a
great degree, by having lands in their midst that pay
no taxes, undergo no cultivation ; and, in fact, in
some parts of the country become jungles for the
protection of wild beasts that prey upon the flocks
and herds of the few scattered settlers/'
Hon. Henry Clay, that distinguished Senator from
Kentucky, said :
"This land is utterly worthless for any present
purpose, not because it is not fertile, but from the
fact that it is inaccessible, wanting all facilities for
reaching a market.
"Now, by constructing this road through the
prairie, through the center of the state of Illinois,
you will bring millions of acres of land immediately
into the market that will otherwise remain for years
and years unsalable."
This earnest advocacy of the Illinois Central land
grant was successful. Land to the value of $3,250,000,
figured on the basis of $1.25 per acre (at which price it
had been on the market for twenty-three years almost
without a purchaser), was "donated" to the Illinois
Central Railroad.
It was, in the end, like many other donations, a
calamity to the recipient. In consideration of this dona¬
tion the railroad was required in perpetuity to pay into
the state treasury seven per cent of its gross earnings.
Including the year 1907, the Illinois Central Railroad,
under this stipulation, has paid to the state of Illinois
$27,000,000.
In 1907 the payment was $1,200,000 and it is in-
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creasing every year. This payment is in lieu of taxes,
but the amount paid is fully double the ordinary tax
levies. The Illinois Central Railroad, therefore, has
already paid the state of Illinois more than thirteen
millions of dollars in return for three and one-quarter
millions of dollars worth of unsalable land, and will
continue to pay until the end of time.
Early in 1856 Congress made a grant of land to
four different railroads then organized to build lines
across the state of Iowa. These lines were the inception
of what are now the Burlington, the Rock Island, the
Northwestern and the Illinois Central railroads.
To the Burlington there were finally patented 358,000
acres of' land, valued by the government at $1.25 per
acre, but unsalable for want of transportation. The same
grant that gave to the railroad each odd-numbered sec¬
tion lying within six miles of the road, raised the price
of each even-numbered section retained by the govern¬
ment to $2.50 instead of $1.25 per acre. The building of
the railroad made it possible to sell readily at $2.50 per
acre land that before had been unsalable at half the
price. Two decades later, however, in 1876, Congress,,
by passing a law that reduced the compensation paid
land-grant railroads to eighty per cent of the regular
rate allowed other roads for the transportation of the
United States mails, took back double the value of the
land grant from the Burlington road and every other
road that accepted a land grant and built its line in pur¬
suance of its agreement with the government ; and in
the lapse of time this road and others upon which this
imposition was placed, will .pay the government a
thousand times the amount of the so-called "donation'^
of 1856.
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That twenty per cent reduction in compensation for
carrying the United States mail is costing the Burling¬
ton road $100,000 a year, because they complied fully
with their obligation to build the railroad and accepted
in good faith from the government every alternate sec¬
tion of land within six miles of the road, amounting
to 358,000 acres. This land was sold by the railroad to
actual settlers on long-time payments, and up to 1868,
in order to encourage settlement, the uniform price
charged was only $1.25 per acre, notwithstanding the
fact that the government had doubled the price of its
land.
I own 400 acres of this land out in western Iowa, for
which I paid $90 per acre, that is to-day worth $135 per
acre. The man from whom I bought the last quarter
section paid $1.25 per acre for it in 1858. Without the
Burlington Railroad I doubt if it would be worth $10
per acre to-day.
To appreciate the benefits that follow the building of
railroads through sections of the country not supplied
with means of transportation, let us look at the condi¬
tions that existed before railroads were built across
Iowa.
My people located in the northern part of Iowa in
the year 1842, when it was. yet a territory. As a child,
in 1859 and i860, I remember that the product of the
farm had to be hauled seventy-five miles to McGregor,
on the Mississippi River; and distinctly recall hearing
my father and others state frequently that if the cost
of making the trip were taken into consideration, it
amounted to much more than they received for what
they marketed at McGregor.
The following is an extract from a letter written by
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the Hon. James W. Grimes, at that time living in Bur¬
lington, and, I think, before he was elected governor of
the state:
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"We have had hard times here, such as were
never conceived in the East. I saw a man to-day
who had been keeping a shop. He was obliged to
sell on credit and hé had small notes due, to the
amount of twenty-five hundred dollars ; yet he could
not raise money enough to buy a bushel of corn
meal for his family. (A bushel of corn was worth
about eight cents). The settlers have no resources
of capital or credit, and many of them are unable
to pay the government the small sum of a dollar
and a quarter an acre for their land. * Of course,
there is no trouble in raising enough to eat, but the
fertility of the soil and the industry of the settlers
are almost valueless without a market.'^
Another of the old settlers writes of the condition of
things as late as 1855 as follows:
"Land and everything has gone down in value
to almost nominal prices. Corn and oats can be
bought for six to ten cents a bushel, pork for öne
dollar a hundred; the best horse a man can raise
will not sell for fifty dollars. Nearly all are in
debt, and the sheriff and constable with legal proc¬
esses are common visitors at every man's door."
A letter written by a settler in Grundy county (now
one of the richest and most prosperous counties of the
state) in 1856 says :
"While the land is fertile and productive almost
beyond belief to one accustomed to our stony land at
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home, we are ail in terribly: straitened circum¬
stances. We have an abundance of everything we
produce, and a large surplus to spare, but it is al¬
most worthless for want of a market. Wheat must
be hauled no miles to the river, and will bring only
from thirty-five to forty cents per bushel. The
trip takes from eight to ten days, and is a hard one.
Feed must be carried for the teams and provender
for the driver in order to have anything left with
which to buy sugar, cofifee, salt and the few articles
of clothing that we must have. If tavern bills
and feed for teams were counted, the expenses
would more than eat up the load of wheat."
Before the building of railroads in these states of
the Mississippi and Missouri river valleys, settlement
was exceedingly slow and the hardships and privations
incident to pioneer life were of such a character- as to
deter, if not permanently prevent, settlement. The soil
of these states possessed all the elements of fertility and
productiveness that have since made them the richest
agricultural, horticultural and stock-growing states of
the Union. Seed time was followed by bountiful har¬
vests, but the wealth of golden grain was almost as
valueless as the soil from which it sprung, for want of
facilities for transporting it to market.
The pioneer railroads did not wait until the country
had attained a population and a de'gree of prosperity
that would guarantee a profitable business. A policy of
this kind would have rendered impossible the wonderful
growth of the Middle West that we have seen and would
have postponed almost indefinitely the prosperity that
that territory now enjoys. The railroads were pioneers,
willing to cast their lot with other pioneers and content
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to share with them hard times and adversity, believing
that for this great trans-Mississippi territory there was a
marvelous future.
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I want to, relate an incident to illustrate this. In
1865, immediately following the war, the Burlington
road had been completed to Ottumwa. Mr. James F.
Joy was at that time president of the Michigan Central
Railroad. The late Mr. Charles E. Perkins, formerly
president of the Burlington road, was at that time super¬
intendent of the line from Burlington to Ottumwa.
These two gentlemen were sent from Ottumwa to a
point on the Missouri River in the neighborhood of
Plattsmouth to determine the feasibility of extending
that railroad across the state. After traveling four or
five days, one bright summer morning brought them to
the eminence where now the bustling little city of
Crestón stands. Mr. Perkins has told me that there
was nothing in sight as far as the eye could see but the
prairie, dotted with an occasional settler's cabin. Mr.
Joy, after gazing on the scene for some time, said to
Mr. Perkins that he thought they had gone as far as they
ought to go and that they should turn back. Mr. Perkins
asked him what his opinion was in regard to the pro¬
posed extension of the road, and he replied that it would
be thirty-five years before a railroad, if built through
that country, would pay its cost of operation alone, leav¬
ing out of consideration any question of profit.
Mr. Perkins was a young man and Mr. Joy at that
time was a veteran in railroad service; but Mr. Perkins
had lived in Iowa nine years and had caught a lot of
the enthusiastic, hopeful spirit of Iowa. He said to Mr.
Joy, "Mr. Joy, if that is to be your report, I am going
to put in a minority report." Mr. Perkins made his
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report and backed it up with such eloquence and such
enthusiasm as to the future of the country that the road
was put through, and within five years from that time
the population of the counties through which the rail¬
road had been built was quadrupled, and the road was
doing a good business.
In 1866 when this extension was determined upon,
the total railroad mileage of the country was 37,000
miles. At the close of 1908 it approximated 225,000
miles.
The railroads of the entire country employed, in
1907, nearly 1,700,000 men and, based on the accepted
rule for estimating population, supported directly ap¬
proximately 8,000,000 people.
This army of men carried on the payrolls of the rail¬
roads of the United States almost exactly equals in
number the standing armies of Great Britain, Germany,
France and Japan combined, and receives in wages an
aggregate of more than $1,000,000,000 per annum.
The gross earnings of the Nation's railways in 1907
amounted to approximately $2,586,000,000, or more than
$7,000,000 for each of the 365 days of the year. If the
railroads could have held in their treasuries the money
they earned in 1907, January i, 1908, would have
found the country bare of money; for practically every
dollar in circulation in the United States—gold, silver,
paper, nickel and copper—passes through their treasuries
each year. This being the case, it is interesting to see
how this vast sum of money is disposed of—-what be¬
comes of it.
Out of each $100 earned, forty dollars is directly and
immediately paid out to employes on the payrolls of
the railroads. Eight dollars is paid for fuel, waste, oil
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and water ; and seven of the eight goes to pay for labor,
required to produce these supplies. Eighteen dollars is
paid for steel rails, ties, cars, engines, structural steel,
stationery and the thousands of other things necessary in
the operation of a railroad. Of this eighteen dollars
approximately sixteen goes for labor.
Five dollars is paid for permanent improvements,
such as additions to yards, additional tracks, additions
and extensions of shops, roundhouses, and the like; and
four of the five dollars is paid for labor.
Three dollars goes to pay taxes ; two dollars for rent
of terminals, joint tracks, etc.
Fourteen dollars is paid as interest on bonds, which
represent money borrowed for original construction or
subsequent, improvements ; and this sum amounts to less
than an average of four per cent on the face value of
the bonds.
Nine dollars-goes to the owners of the railroads—the
shareholders—representing less than four per cent on
the face value of the stock.
One dollar is put into the surplus fund to provide for
necessary improvements to the property and as a reserve
against periods of hard times.
approximately seventy-one dollars out of every $ioo
earned by the railroads of the country is, therefore, al¬
most immediately paid out for labor, or for equipment
and material of which labor forms by far the largest
part.
During the ten years from 1897 to 1907, the United
States has enjoyed an almost continuous and uninter¬
rupted advance in prices of the products of its farms^
factories and mines. With a succession of bountiful
harvests, farm products—corn, oats, rye, barley, buck-
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wheat, hay and potatoes—show an average increase in
price in 1907 of seventy-one and one-quarter per cent
over those of 1897.
With a full, normal increase and no disease or epi¬
demic to deplete our flocks and herds, values have in¬
creased marvelously. Notwithstanding the advent of the
automobile, the price of horses and mules was 150 per
cent higher in 1907 than in 1897. The price of milch
cows in 1907 was thirty-two per cent higher, that of
sheep 113 per cent higher, and that of swine forty-seven
per cent higher than in 1897.
The products of forests make an equally marvelous
showing: Pine, hemlock, oak, poplar, cedar, ash and
chestnut sold, in 1907, at an average price fifty-seven per
cent higher than in 1897.
Our Southern neighbors have shared in full measure
in these enhanced values:
Middling cotton shows increase in price of 72.9%
Standard sheeting " " " " " 61.1%
Standard drilling " " " " " 60.4%
Bleached sheeting " " " " " 40-5%
Standard prints " " " " 27-7%
Ohio fleece wool in the Eastern market shows an
increase in price of from 78.9% to . 89.5%
Anthracite coal shows increase in price of 28.6%
Bituminous " " " " " " SS.Sfi
Lard " " " " " 108.1%
Pork " " " " " 99.0%
Tallow " " " " 88.8%
During this time farm land in all portions of the
West and Middle West has fully doubled in value.
I recognize that statistics as a rule are dull and un¬
interesting, but at the same time these statistics, in their
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effect on conditions, must appeal to the sober thought
of every business man in this room to-night.
This great increase in the cost of things has affected
the railroad directly and severely. Comparing the prices
of 1907 with those of 1897 ^ articles used in
great quantities by the railroads, the following large in¬
creases are shown ;
Fuel 38.0%
Ties 76.4%
Steel rails 47.4%
Angle bars 52.0%
Gray iron castings . . . . . . . 46.9%
Bar iron 47.9%
Cast-iron pipe . . . 62.8%
Track spike . . -37-3%
Cast-iron wheels . 39-2%
Barbed wire 47.1 %
Bridge timber 77-3%
Car axles 41.4%
Locomotive steel forgings 45.4%
Stationery, paper, etc. . . . . . . 20.0%
Locomotives 50.0%
Cars . . 72.0%
Labor shows an average increase of approximately
thirty per cent.
If the material used in 1907 by the railroads of the
United States, in operation and maintenance alone, could
have been purchased at the prices of 1897, it would
have resulted in a saving of approximately $176,500,000.
If the labor actually employed by the railroads in
1907, in operation and maintenance, had been paid on the
wage scale of 1897, this item would have cost $254,-
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000,000 less than it did. If the taxes of 1907 had been
at the same rate per mile of road as in 1897, the rail¬
roads of the country would have paid $26,800,000 less
taxes than they did in 1907.
If the locomotives, cars, rails, ties, etc., purchased
in 1907 for additions and improvements and charged to
"Capital Account" could have been bought at the prices
of 1897, they would have cost $219,100,000 less than
they did, and the bonded debt of the roads, on which
interest must be paid, and for the retirement of which
at maturity funds must be provided, would be that
much less.
The money raised by railroads for extensions and im¬
provements in 1897 was obtained at an average interest
rate of 3.90 per cent, while the average rate of interest
in 1907 was 4.62 per cent, or an increase of 18.46 per
cent.
Let us look at the other side of the ledger and see
what, if anything, the railroads have been able to secure
in the way of increased rates to offset these tremendous
increases in cost.
In a communication under date of May 18, 1907,
Mr. J. M. Glenn, secretary of the Illinois Manufacturers^
Association, stated that rates had been advanced in
Central Traffic and Trunk Line Territory on more than
800 articles ; that by changes in classification many "Lake
and Rail" rates had been substantially increased ; and,
in a general way, challenged my statement that, con¬
sidered as a whole, rates in that territory had been re¬
duced.
I could not answer Mr. Glenn's statement; there was
not a traffic officer in the United States at that time that
could ; and it is only after ten months of the most
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thorough, painstaking investigation and analysis that it
is possible to answer it now.
Mr. Glenn was right in stating that during the last
ten years increases have been made, by changes in
classification, in the freight rates on approximately 800
articles. To be exact, in the ten years from 1898 to
1908, rates hawe been advanced in this manner on 897
articles. But, during the same period, rates have been
reduced by changes in classification on 876 articles ; and
the net result in money on the 1,773 articles on which
changes in rates have been made was a reduction of
10.69 per cent.
Concisely stated, if the railroads could have pur¬
chased the material and equipment used, and obtained
the labor employed, in the year 1907, on the basis of
prices and scale of wages in effect in 1897, their cost of
operation, plus the cost of improvements and extensions,
would have been approximately $676,000,000 less; and
had they received for doing the business of 1907 the
rates of 1897, their earnings would have been approxi¬
mately $90,000,000 greater than they were.
These are the conditions with which the railroads of
the country have had to contend during the last ten
years, and the conditions that confront them to-day.
This hasty review of some of the past history and
the present condition of the transportation business of
the country suggests an inquiring glance into the future.
What is to be the development, the growth, of agri¬
culture, of merchandising, of manufacturing and of
mining during the first quarter of the new century?
What will be the population of this country at the end of
that period? What will be required in the way of in¬
creased transportation facilities, and how will these in¬
creased facilities be supplied?
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During the fifteen years from 1892 to 1907, the rail¬
road mileage of the United States increased from 175,170
miles to 225,584 miles, an increase of 50,414 miles. The
population increased almost 21,000,000. The production
of anthracite coal in 1907 exceeded that of 1892 by al¬
most 20,000,000 tons. Bituminous coal by more than
200,000,000 tohs. Pig iron shows an increase of 181
per cent, and steel 374 per cent. *
The annual production of corn in 1907 exceeded that
of 1892 by almost 1,000,000,000 bushels. Four and one-
half million more bales of cotton were raised in 1907
than in 1892; while cattle, horses, sheep, mules and
swine increased more than 35,000,000 in number.
The wealth of the nation increased from $65,000,-
000,000 to $107,000,000,000, an increase of about $42,-
000,000,000.
Vast as these increases are, I doubt if they repre¬
sent a fair average for fifteen years, and certain it is
that they fall far short of approximating the probable
increase of the fifteen years to come.
During the fifteen years ending with the year 1907,
it must be remembered that the country passed through
one of the most disastrous panics in its history; and that
the great question of free silver, the maintenance of the
national honor and credit, was fought out and righteous¬
ly settled.
Accepting these figures, however, as a basis for com¬
putation, the end of the first quarter of this century will
see a population in this country approximating 125,000,-
.000 people. The production of anthracite coal at that
time will have increased to approximately 90,000,000
tons per annum, as compared ^vith 63,000,000 tons in
1907 ; that of bituminous coal to ' 892,000,000 tons, as
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compared with the present output of 306,000,000 tons;
that of pig iron to more than 72,000,000 tons, as com¬
pared with approximately 26,000,000 tons produced in
1907, and that of steel to more than 111,000,000 tons, as
compared with 23,000,000 tons produced in 1907. The
production of cotton, which was 13,500,000 bales in
1907, will have reached more than 20,000,000 bales an¬
nually; that of wheat nearly 800,000,000 of bushels, as
compared with 634,000,000 bushels in 1907, and the pro¬
duction of corn, which in 1907 was 2,500,000,000 bushels,
in 1925 will exceed 4,000,000,000 bushels.
Farm animals—horses, sheep, mules, swine—will
have increased in number by approximately 50,000,000,
and by more than $3,250,000,000 in value.
The total national wealth will have increased to ap¬
proximately $177,000,000,000, as compared with $107,-
000,000,000 in 1907.
These figures, especially as they relate to farm prod¬
ucts, suggest the inquiry whether or not such tremendous
increase in production is possible in view of the dimin¬
ishing amount of unimproved land.
Nearly all my active life has been spent in the West,
and I have made something of a study of the question
of reclamation of arid lands by irrigation. I have also
given some attention to the possibility of increasing the
productiveness of land already under cultivation by the
careful selection of seed and the application of improved
methods of fertilization and cultivation; and I do not
hesitate to say that by these means alone our cereal crops
can be doubled without adding an acre to the land now
under cultivation. In this connection, however^ it should
be borne in mind that under the recently enacted laws
for the reclamation of arid lands, millions of acres now
19
T
Sterile and valueless will, during the next fifteen years,
by irrigation, be made the most highly productive land
in the country.
The United States, with the most fertile soil in the
world, but with its wasteful, slipshod methods of seed
selection and cultivation, produces an average annual
yield of only fourteen bushels of wheat to the acre,
whereas England produces more than thirty-two bushels
to the acre, Germany about twenty-eight bushels, the
Netherlands more than thirty-four bushels and France
approximately twenty bushels.
Of oats, the United States produces an average an¬
nual yield of 23.7 bushels per acre, England forty-two
bushels, Germany forty-six bushels and the Netherlands
fifty-three bushels per acre.
The average yield of potatoes in the United States
is eighty-five bushels per acre, while that of Germany,
Belgium and Great Britain is 250 bushels.
Potatoes, like wheat or bread, are a food staple of
the poor man. Germany, with an area no greater than
any one of . a majority of our states, produces approxi¬
mately 2,000,000,000 bushels of potatoes annually, while
the aggregate crop of the United States averages barely
275,000,000 bushels per annum.
Are not these facts, startling and discreditable as
they are, suggestive of very serious thought?
The land, our kindly, patient mother earth, upon
which not only prosperity, but life itself, depends, is
year after year being robbed and impoverished.
Our annual average yield of wheat for ten years
was 13.88 bushels per acre. This is less than it was
thirty years ago. Instead of improving we are retro¬
gressing.
One hundred years ago the average production of
20
Great Britain was about the same as our present yield.
A royal commission (which is still in existence) was
appointed, a campaign of education was entered upon,
and to-day the farms of the United Kingdom, tilled for
centuries, in a climate less favorable than ours, produce
over thirty-two bushels of wheat to the acre.
Is it not a time for constructive statesmanship?
We are building great battleships, from two to four
every year, at a cost, completely equipped, of from
$7?ooo?ooo to $9,000,000 each. What one of these
fighting machines costs would establish and fully equip a
splendid experimental farm of 640 acres in every state
in the Union, to be operated by and at the expense of
the general government.
Such a farm would soon be followed by a 160-acre
farm owned and operated by the state in every county in
our great agricultural states.
Such farms, once established, would not only be self-
sustaining but, in my opinion, would show ß, handsome
profit.
The effect of such a system of practical education
upon the product and the profit of the nation's farms
would be almost beyond comprehension.
Every thriftless or uninformed farmer would quickly
note the difference between the result of his loose
methods and those of the experimental farm and benefit
by the comparison.
Men who have no books on this important subject,
and who could find no time to study if they had them,
would learn by that most thorough and apt teacher,
observation, the value of improved methods and would
adopt them.
Invest the price of one battleship in this important
21
o
work, follow the investment up intelligently and perse-
veringly for ten years, and the value you will have added
to each year's crops of the nation's farms will buy and
pay for every battleship in the most powerful navy in
the world.
Above and beyond all other considerations, this sys¬
tem would dignify and make attractive a life now too
full of drudgery. It would keep the boys on the farm
and attract from the cities and towns thousands for
whom farm life now has few attractions. It would
multiply farms and multiply prosperous farmers, because
80 acres intelligently tilled will produce as much as 160
acres produce under our present slack and ignorant
methods. It would return the preponderance of political
power to the rural districts, where it can more safely
be left than to the congested centers of population, al¬
ready ominously powerful in many of our states.
There is no other country with which we can com¬
pare our corn crop, but I confidently believe that the
average yield of the last ten years, which is also the
largest average yield for any similar period in the his¬
tory of our country, can be more than doubled.
Accepting these figures, we come to the all-impor¬
tant question of what will be required in the way of
additional transportation facilities to handle the tremen¬
dous and rapidly increasing business of the next fifteen
years, and how these facilities are to be provided.
During the year 1907, the 225,000 miles of railroad
in the United States were operated intelligently, skill¬
fully, and to the very limit of their capacity ; and it is a
fact well known to every business man in the country
that there was hardly a day during that year when it
was possible for the railroads (on account of inadequate
22
1.84
facilities, very largely terminal facilities) to promptly
move the traffic. There were days and weeks during
that year that vessels cleared from Atlantic ports with
their holds filled with sand and gravel for ballast, at the
same time holding charters for grain that had been sold
for export but that the railroads were unable to move
from interior points; and this in face of the fact that
the railroads were handling every day, week in and week
out, a record-breaking volume of business.
Mr. Logan G. McPherson, a special lecturer on
Economics at Johns Hopkins University, who has made
this question a study, and who has been conducting an
exhaustive inquiry and investigation in all parts of the
country, in the September number of the Political
Science Quarterly, says:
"Speaking broadly, the freight traffic of this
country increases about loo per cent every ten years,
and there is every likelihood that it will increase
100 per cent or more in the next ten years, a period
of depression being more than made up by a return
of prosperity.
"If provision for a loo per cent increase of traffic
meant an increase of icq per cent in facilities, the
existing railroad plant of the United States would
have to be doubled. Let us assume, however, that
the traffic increased by loo per cent can be handled
with facilities increased by eighty per cent.
"Taking the cost of main-line track at $30,000
per mile, other track at $15,000 per mile, locomotives
at $15,000 each, freight cars at $1,000 each, and pas¬
senger cars at $5,000 each, it will be found that an
eighty per cent increase in the track and equipment
of 1905 would cost over $8,500,000,000. The requis-
23
.tr ~7\
ite real estate would probably cost another $500,000,-
000, bringing the total expenditure necessary to pro¬
vide for the traffic of the decade, ending with 1915
to an average annual investment of $900,000,000."
During the great congestion of 1907, Mr. James J.
Hill, one of the most able, far-sighted, conservative men
of this generation, estimated that it would require the
expenditure of $1,000,000,000 a year for five years to
make the railroad facilities of the United States equal
to the demand they will be called upon to meet.
I do not regard Mr. HilFs statement as extravagant,
but reducing it by half and applying it to the period
covered by the estimates for increasing traffic that I have
given, will make it necessary to raise $7,500,000,000 for
the purpose of increasing and improving railroad facili¬
ties during the coming fifteen years.
The West, and especially the great Southwest, must
have thousands of miles of new railroads to make pos¬
sible the tremendous development of which that region
is capable.
Texas alone has fifty-five counties in which the
whistle of a locomotive has never been heard, and the
state of Texas can, with adequate railroad facilities and
proper cultivation, raise more cotton than is now pro¬
duced in the United States, or double the annual corn
crop of the country.
The East requires little in the way of new railroads,
but does need and must have vast improvements in exist¬
ing roads, especially in their great Atlantic seaboard
terminals.
During the two decades from 1905 to 1925, the New
York Central Railroad will expend in such improvements
24
an amount closely approximating, if it does not exceed,
the original cost of the road.
These conditions will demand, in the future, and in
the very near future, the investment of vast sums of
money, the only alternative being a calamitous limitation
of the nation's growth.
This is the problem that confronts the railroads, and
every citizen, in whatever line of business activity he may
be engaged, has a most vital interest in its solution.
I do not wish to speak in a spirit of complaint or
criticism; but I want to ask you to carefully study the
legislation, national and state, that has been passed dur¬
ing the last five years in the so-called regulation of
railroads; regulation that has resulted in almost every
instance in either seriously reducing revenue or largely
increasing the cost of operation.
Recall the campaign of violent agitation and extrava¬
gant, unmeasured condemnation of the past four years.
Bear in mind that the average return on capital invested
in our railroads is about 4.4 per cent, whereas the re¬
turn on money invested in agriculture (using statistics
of 1905 as a basis) averages about ten per cent ; in manu¬
facturing, over fifteen per cent, and in merchandising
and banking above twenty per cent.
Remember that everything in the way of development
of railroad transportation in the past has been the result
•of the investment of private capital, and that if these ex¬
tensions, enlargements and improvements, absolutely in¬
dispensable to national growth and development, are
made, it must be by the further investment of private
capital by private citizens, or that dread alternative of
government ownership.
Then ask yourselves if these conditions are of such
25
a character as to attract new investors or to encourage
those that have already invested largely in railroads to
materially increase their investments.
The railroad construction of 1908 was the smallest in
ten years, and that of 1909 promises to be less. The
problem is an important one and may well engage the
very serious consideration of every citizen interested in
the growth and development of our country.
The four great foundation stones upon which the
commercial supremacy of this nation has been builded,
and upon which its future development and prosperity
depend, are agriculture, manufacturing, merchandising
and transportation.
I have placed the great function of transportation
last, but it is in no sense least, because the prosperity,
aye, the very existence of the others depends upon it.
In the free, untrammeled rise and fall of prices to
meet changing conditions, agriculture, manufacturing
and merchandising respond promptly, almost auto¬
matically.
The great business of transportation alone, subject
to and as acutely sensitive to conditions that affect cost
of production as either of the others, is hedged about
and restricted by legislative enactment and supervision
of commissions, national and in almost every state.
Further than this, every act, every change in tariff
made or suggested by the railroads is the subject of
instant challenge and investigation by hundreds of alert,
aggressive associations such as yours.
I do not for an instant question the right, the wisdom,
or the necessity for this supervision and regulation of
railroads by the nation or the state that creates them.
No man can gainsay the right and duty of the Daven-
26
port Commercial Club or any kindred organization to
most minutely scrutinize every change in rates, classi¬
fications or conditions that may aflfect your interests.
Under our form of government, the people rule, and
the terms "rule" and "regulate" are synonymous. The
right to rule or regulate carries with it the power, if
unwisely exercised, to very seriously injure the interest
or thing regulated. In view of this, should not the right
to regulate the railroads by both the state and nation be
exercised in a spirit of broadminded, unprejudiced,
judicial impartiality, uninfluenced alike by the impor¬
tunities of great interests on one side or uninformed
popular clamor on the other? Should not the right to
regulate, the power to control, carry with it the solemn
duty to protect in every proper and legitimate way the
interest thus controlled?
No one of the four great cornerstones of this vast
commercial structure can be undermined, damaged or
weakened without injury to the structure itself. The
interests of agriculture, manufacturing, merchandising
and transportation are so interwoven, so interdependent,
that no lasting injury can come to one without permanent
injury to all.
Authority to regulate the railways of the country
has been and is being conferred upon national and state
commissions, limited only by that provision of the Con¬
stitution that protects the property of the citizen from
confiscation.
Does not the interest of every citizen, the growth,
the development, the prosperity of the nation, demand
that this power be used conscientiously, with the most
scrupulous conservatism, and above all, with the broad¬
est possible constructive wisdom?
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