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 IATIONAL OWNERSHIP 
 
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THE TWENTIETH CENTUR Y LIBRAR Y 
 
 NATIONAL OWNERSHIP 
 
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 V " 
 
Nearly Ready. 
 
 The author has a book dealing with Modern, Social and Eco- 
 nomic Problems. 
 
 Among the topics treated are : The Economic Evolution; The 
 Production, Distribution and Consumption of Wealth, 
 Money, Value, and Wages; The Question of Interest; 
 Competition vs. Combination; Industrial Democracy, or 
 Democratic Government; The Moral Strength of Co-Opera- 
 tion; The Liquor Traffic; Poverty; Labor Saving Machin- 
 ery; Taxation; Illiteracy; Industrial Depressions and Crises; 
 The Condition of Labor, Past and Present Comparison; 
 Capitalism and Economic Waste; Etc., Etc. 
 
NATIONAL OWNERSHIP 
 
 OF 
 
 RAILWAYS 
 
 BY 
 
 Rev. CHARLES H. VAIL 
 
 NEW YORK 
 
 THE HUMBOLDT LIBRARY 
 
 64 FIFTH AVENUE. 
 
COPYRIGHT 1897. 
 BY 
 
 Rev. CHARLES H. VAIL. 
 
CONTENTS. 
 
 CHAPTER I. Public Highways, . . . .6 
 
 II. Analogy, , 7 
 
 III. Accumulation of Wealth, . . .8 
 
 IV. Corruption of Politics, . . . n 
 V. Discriminations, . . . 15 
 
 VI. The Remedy, . . .21 
 
 VII. Method of Purchase, . . . 22 
 
 VIII. The Cost, . . . . . 23 
 
 IX. Economy of Public Ownership, . . 25 
 
 X. Experience, . . . . .33 
 
 XI. Public Safety Demands Government Ownership, 36 
 
 XII. Objections Considered, 37 
 
 303090 
 
INTRODUCTION. 
 
 Society is 'an organism and as such is constantly 
 evolving new relations and bringing into the fore- 
 ground new duties. There is nothing in all past his- 
 tory to correspond with the rapid changes now going 
 on in the civilized world. These new conditions have 
 brought us problems that command our most earnest 
 attention. 
 
 Perhaps no greater question has appeared above the 
 horizon of the industrial world than the relation of 
 the government to the railways of the country. Shall 
 the railroads be owned and operated as private or as 
 public property ? This is the point at issue. Believ- 
 ing with many others that public ownership is the 
 only solution of the railroad problem, I offer in evi- 
 dence of this position the following reasons for thf 
 faith which is in us. 
 
NA T ZONAL O WNILRSHIP OF RAIL WA VS. 
 
 I. PUBLIC HIGHWAYS. 
 
 The Railways are Public Highways and as such, be- 
 ing necessary to transportation as a means of exchange, 
 they should be owned and operated ty Society in the 
 interest of Society. 
 
 Highways are not private but public institutions, 
 and when government lets out the construction of its 
 highways, giving to corporate bodies the privilege of 
 taxing those who use them, there is always retained a 
 superintending power, a right to regulate the charges 
 imposed upon the public. That the government has a 
 right to prescribe rates has been so well established 
 by judicial decisions that it is no longer a question 
 for discussion. It is the duty of the State to provide 
 inter-communication, and the chartering of a railroad 
 by a private company is for the purpose of performing 
 said duty for the State. Says Chief Justice Black: 
 " A railway is a public highway for the public benefit, 
 and the right of the corporation to exact a uniform, 
 reasonable, stipulated toll from those who pass over 
 it, does not make its main use a private one. The 
 public have an interest in such a road when it belongs 
 to a corporation as clearly as they would if it were 
 free, or if the tolls were payable to the State." 
 
 This fact is well stated by Mr. Stickney in the fol- 
 lowing language : " Whoever builds or operates a 
 railroad performs the functions of the government 
 under a license or authority from the government." 
 To quote an eminent Judge: "Railway companies 
 must be considered as trustees or agents of the State, 
 entrusted with certain of its powers for the purpose 
 of effecting particular objects coming within the legi- 
 
NATIONAL OWNERSHIP OF RAILWAYS. 7 
 
 timate ends of government. Upon no other theory is 
 it possible to justify the imposition of taxes to for- 
 ward the enterprise in which they are engaged, or the 
 exercise by them of the right of ' eminent domain V 
 
 This doctrine has been affirmed by the Supreme 
 Courts of many states as well as by the United States 
 Supreme Court, and may now be regarded as settled.* 
 Such being the Nation's prerogative, why should not 
 the Nation assume its duty directly, especially if its 
 agents are found to be oppressing the people whom 
 the government is bound to protect ? 
 II. ANALOGY. 
 
 Every civilized country has found it necessary to 
 own its own highways. Experience has shown that 
 interests of such vast importance cannot safely be en- 
 trusted to private parties. The owners of property 
 are quite inclined to use it to subserve their own in- 
 terest. If the people would secure the benefits they 
 must own the property. All the arguments in favor 
 of placing other highways under public control, are as 
 valid when applied to highways of iron. 
 
 James A. Garfield once said in Congress : " Since the 
 dawn of history, the great thoroughfares have be- 
 longed to the people, have been known as the king's 
 highways, or the public highways, and have been open 
 to the free use of all, on payment of a small uniform 
 tax or toll, to keep them in repair. But now the most 
 perfect, and by far the most important roads known to 
 mankind, are owned and managed as private property 
 by a comparatively small number of private citizens." 
 These "Corporations have become conscious of their 
 strength, and have entered upon the work of controll- 
 
 * kk The Hallway Problem," A. B. Stickney, Ch., XVII. Appendix. 
 " Railways of Europe and America," Mrs. Todd, Ch., IX. 
 
8 NATIONAL OWNERSHIP OF RAILWAYS. 
 
 ing the states. Already they have captured some of the 
 oldest and strongest of them; and these discrowned 
 sovereigns now follow in chains the triumphal chariot 
 of their conquerers. And this does not imply that 
 merely the officers and representatives of states have 
 been subjected to the railroads, but that the corpora- 
 tions have grasped the sources and fountains of power, 
 and control the choice of both officers and representa- 
 tives." These corporations "own our greatest high- 
 ways and levy tribute at will on all our vast industries." 
 Thus there is placed in the hands of few men the power 
 of taxing the people as they please, and without expla- 
 nation or representation. Such power no man or set 
 of men should be permitted to exercise, for, " taxation 
 without representation is tyranny." A small addi- 
 tional charge upon cereals means millions of dollars 
 from the pockets of the farmers. We cannot afford to 
 leave the property and the industrial interests of this 
 country at the mercy of a few men who recognize no 
 responsibility and no principle other than that of per- 
 sonal aggrandizement. As has been said, "Whoever 
 controls the highways of a country is master of that 
 country." 
 
 III. " ACCUMULATION OF WEALTH. 
 Many of the large fortunes of the last thirty years 
 have resulted from the private ownership of our 
 transportation system. The Tribune millionaire list 
 of 1892 shows that the railways are one of the four 
 chief causes of wealth congestion. The practice of 
 watering stock and wrecking railways in order that 
 they may be purchased at low prices, together with 
 the general state of corruption connected with the 
 private ownership of railroads, has been trulv astound 
 ing. Mr, Loucks, in treating this subjects, has col 
 
NA T10NAL O WNERSHIP OF RAIL WA YS. g 
 
 lected many statistics, among which is the following 
 quoted from John Davis, M.C., which I give as an illus- 
 tration : "The government of the United States paid 
 the company that built the Union Pacific Railway in 
 Kansas 12,800 acres of land, and $16,000 per mile for 
 building said road in the State of Kansas. The com- 
 pany report that they obtained $3.00 per acre for the 
 lands. The total subsidy, then, was $54 400 per mile 
 for building ihe road. This sum should have paid the 
 cost of building and equipping the road about twice, 
 and the road should have been turned over to the 
 government as a public highway, free from incum- 
 brance, to be operated in the interests of the people 
 at mere cost of running expenses and repairs. This, 
 however, is not the condition of matters. The com 
 pany has retained the road as its own property, and has 
 loaded it with a burden of stocks and bonds amounting 
 to $f 05, 454.78 per mile, on which the people must pay 
 dividends and interest. These official figures are 
 found in the annual reports of the board of railroad 
 commissioners of Kansas, Vol. i. and 7. 
 
 " They show that, after the general government has 
 paid for building the Union Pacific Railroad in this 
 state about twice its actual cost, the people must still 
 pay interest and dividends on four times its cost 
 for the privelege of using the road/' 
 
 Governor Pattison's figures in the Minority Report 
 of the United States Railroad Commission in 1887 
 show the most dishonorable dealings, and unparelled 
 robbery on the part of railroad managers. For in- 
 stance, the Union Pacific, which was built for $38,824,- 
 ooo was capitalized at $109,814,812 a fictitious capital 
 of $70,990,812. 
 
 The Central Pacific and Western Pacific added por- 
 
ro NA TIONAL O WNERSHIP OF RAIL WA VS. 
 
 tions, were built for $40,000,000 for which bonds and 
 stocks were issued amounting to $124,211,680, making 
 a fictitious capital of $84,21 1,680. His report is filled 
 with similar facts and figures, evidencing the perfidy 
 and dishonor connected with the six great railroad 
 companies to which the government loaned its credit 
 between the years 1865 and 1869. "The construction 
 companies, or inside combinations that built five of 
 the six roads have destroyed or concealed their books; 
 the exception being the Central Branch, and the com- 
 mission has been embarrassed in its work." But " from 
 the minutes and accounts of the railroad companies 
 and from fragmentary information gathered from 
 various sources, it is disclosed that the officers of at 
 least three of these companies made false statements 
 under oath, in affidavits now on file in the Interior 
 Department. From these affidavits the following has 
 been compiled: 
 
 STOCK TABLE. 
 
 Company. 
 
 Stock actually 
 paid in. 
 
 Stock paid in 
 as sworn to. 
 
 Name of 
 deponents. 
 
 Date of 
 
 affidavids. 
 
 Union Pacific, $400,650 
 Kansas " $250,000 
 Central " $760,000 
 Central " $386,000 
 
 $36,762,300 
 $ 5,072,500 
 $54,283,190 
 $ 980,600 
 
 Oliver Ames. 
 R. E. Carr. 
 L. Stanford. 
 R. M. Pomeroy 
 
 Sept. 27-1870. 
 " 28-1872. 
 " 18-1871. 
 " 21-1869. 
 
 TOTAL $1,796,650 | $97,098,590 
 
 Henry Clews, the noted Wall Street magnate, in 
 The Railway Age, says, " The railways of the country 
 are capitalized at probably fully 50 per cent, in excess 
 of their actual cost, " * Here is a prolific cause of vast 
 fortunes. Such frauds upon the public have burden- 
 ed the people with excessive taxation in railroad rates, 
 that dividends might be paid on watered stock. Un- 
 der public ownership there would be no stock to water. 
 
 * On Stock and Bond Inflation see Larrabee's " Railway Question, " ch. vi. 
 
NA TIONAL O WNERSHIP OF RAIL WA VS. ji 
 
 The Post-Office is not troubled with stock manipula- 
 tion. 
 
 IV. CORRUPTION OF POLITICS. 
 
 14 Their (the railways) great wealth and power has 
 made it possible for them to influence to a greater or 
 less extent every department of the National and State 
 governments. Their influence extends from the town- 
 ship assessor's office to the National Capitol, from the 
 publisher of the small cross roads paper to the editorial 
 staff of the Metropolitan daily. It is felt in every 
 caucus, in every nominating covention and at every 
 
 election The large means at the 
 
 command of railroad companies, their favors, their 
 vast armies of employees and attorneys and their 
 almost equally large force of special retainers 
 are freely employed to carry into execution their 
 political designs, and the standard of ethics recogn- 
 ized by railroad managers in their exploits is an ex- 
 ceedingly low one."* 
 
 In a report of the U. S. Senate Committee composed 
 of Thurber of New York, Smidley of Iowa, White of 
 Alabama, Dorrnan of Virginia and Moore of Illinois, 
 is the following: " It is in evidence that it has been 
 the custom of the managers of the Erie Railroad, from 
 year to year in the past, to spend large sums of money 
 to control elections and to influenc * legislation. 
 
 4< In the year 1868 more than one million of dolla/s 
 was discharged from the treasury of this company 
 for * extra and legal services. " 
 
 " Mr. Jay Gould, when last on the stand and ex- 
 amined in relation to various vouchers shown him, 
 admitted the payments of large sums, prior to 
 1872, to Barber, Tweed, and others, and to in 
 
 * "The Rail way Question " p. 205. 
 
I* NA T10NAL O WNERSHIP OF RAIL WA YS. 
 
 fluence legislation or elections. These amounts 
 were charged in the India rubber account. Mr. Gould, 
 when interrogated as to the instances of his sending 
 money for the purpose of controlling elections or in- 
 fluencing legislation, replied, 'that it would be as im- 
 possible tor him to specify the numerous instances as 
 it would to recall to mind the numerous freight cars 
 sent over the Erie from day to day/ " * 
 
 The elder Vanderbilt boasted that he spent $60,000 
 in a short time at AJbany for legislation which the 
 Erie railroad desired, and that ft he got it. f Hon. 
 Thomas V. Cator, who has made a careful study of 
 the subiect, says the corruption fund spent by the 
 railroads of the United States amounts to $30,000,000 
 annually. J No one doubts that, in most of our 
 states, the railroads own the legislatures. J. D. Law- 
 son, author of Leading Cases Simplified, warns the 
 student not to pay much attention to the decisions of 
 the Supreme Court of Pennsylvania. "The Pennsyl 
 vannia Railroad appears to run that tribunal with the 
 same success that it does its own trains. 1 ' Hon. J B. 
 Beck said in a speech in the U. S. Senate: " It is im- 
 possible to have an honest legislature, State or Federal, 
 so long as representatives are sent who owe their 
 election to or are personally interested in grea* 
 moneyed corporations or monopolies. No matter 
 whether they call themselves Democrats or Republi- 
 cans, they are not the representatives of the people > 
 they are simply the agents or attorneys of those 
 who seek their own aggrandizment by taxing the 
 masses." 
 
 Mr. Gowen, President of the Philadelphia and Read- 
 
 *Page 556 of Report. 
 
 t " The Public Ownership of Monopolies, " Prof. Parsons. 
 
 % " Rescue the Republic, " Cator. 
 
NA TJONAL WNERSHIP OF RAIL IV A YS. 13 
 
 ing R. R., said to the Committee on Commerce of the 
 House of Representatives, in 1880: " I have heard the 
 counsel of the Pennsylvania Railroad Co., standing 
 in the Sctpreme Court of Pennsylvania, threaten that 
 Court with the displeasure of his clients if it decided 
 against them." 
 
 Thomas V. Cator, in a valuable pamphlet quotes 
 from a circular sent out by the New York Board of 
 Trade and Transportation certain extracts, from which 
 I take the following : " ' The corruption of our elec- 
 tions, legislatures and courts the undermining of the 
 very foundations upon which our forefathers based our 
 free institutions the spectacle exhibited to the young, 
 of chicanery and fraud conferring the highest prizes 
 of society upon its most unscrupulous and unworthy 
 members these are features of our modern life 
 which suggest in the strongest manner a future, if not 
 a present, for our country, * where wealth accumulates 
 and men decay/ 
 
 "'If any are disposed to question the truth of this 
 picture let them consider a few undisputed facts. It 
 is not disputed : 
 
 " * That they (the railroads) control absolutely the 
 legislatures of a majority of the States in the Union; 
 make and unmake Governors, United States Senators 
 and Congressmen, and under the forms of popular 
 government are practical dictators of the govern- 
 ment policy of the United States.' " The circular fur 
 ther states "'that this wealth and power has been 
 acquired largely through bribery and corruption, .... 
 that because Senator Tharman was active in compell- 
 ing the Pacific Railroads to fulfil their contracts with 
 the government, that honest man and able states- 
 man could not return to the United States Senate.' " 
 
14 NATIONAL OWNERSHIP OF RAILWAYS. 
 
 And also, " Hon. David Davis, once a judge of the 
 Supreme Court and a Senator of the United States, 
 thus indicates the serious nature of the problem be- 
 fore us : ' The rapid growth of corporate power and 
 the malign influence which it exerts by combination on 
 the National and State Legislatures, is a well-grounded 
 cause for alarm. A struggle is pending in the near 
 future between this overgrown power, with its vast 
 ramifications all over the Union, and a hard grip on 
 much of the political machinery, on the one hand, and 
 the people in an unorganized condition on the other, 
 for control of the government. It will be watched by 
 every patriot with intense anxiety/ 
 
 "We have indeed reached the hour foreseen by the 
 prophetic Abraham Lincoln, when near the close of 
 the war he said : ' It has been indeed a trying hour for 
 the Republic ; but I see in the near future a crisis ap- 
 proaching that unnerves me and causes me to tremble 
 for the safety of our country/ 
 
 ' * As a result of the war corporations have been en- 
 throned, and an era of corruption in high places will 
 follow, and the money power of the country will en- 
 deavor to prolong its reign by working upon the pre- 
 judices of the people until all wealth is aggregated in 
 a few hands, and the Republic is destroyed ' 
 
 " * I feel at this moment more anxiety for the 
 safety of my country than ever before, even in the 
 midst of the war/ " * A volume might be filled with 
 similar testimony. 
 
 All of this vicious, corrupting influence in politics, 
 which results from private ownership of railways, 
 would be entirely removed by their nationalization. 
 
 *The authenticity of this quotations has been questioned, but its truth is evi- 
 dent. 
 
NA T10NAL WNERSHIP OF RAIL WA YS. 15 
 
 V. DISCRIMINATIONS. 
 
 One of the greatest evils of private ownership is the 
 discriminations between individuals, localities, corpo- 
 rations and communities This evil assumes maEy 
 forms. In the Northwest it has been the rule to re- 
 fuse to furnish cars to track- buyers and farmers, thus 
 compelling the sale of wheat to elevator companies. 
 
 Frequently railroad companies discriminate between 
 dealers, building up one and ruining many. Before 
 the United States Senate Committee of 1885, Mr. 
 Wicker, a former railroad official, testified that u this 
 discrimination, by reason of rebates, is a part of the 
 present railroad system." This is plainly to be seen 
 in the coal business. The favoritism in rates and re- 
 bates, and in the distribution of cars a failure to fur- 
 nish cars on some pretext, to certain companies, espe- 
 cially if they be rivals of those in which the railroad 
 officials are interested has been execrable. By this 
 method the railroads have gained possession of most 
 of the mines, so that there are today but few coal- 
 fields of which they do not fix the output. But a few 
 years ago, the Pittsburg Coal Company and many other 
 shippers were ruined in this manner. It was proven 
 in court that the Pittsburg Company, during one pe- 
 riod of 564 days, could get only 2,371 empty cars, al- 
 though the company had sale for, and capacity to pro- 
 duce and load, 15,000 cars. During this period the 
 Rogers Company, in which some of the railroad offi- 
 cials were interested, received 15,483 cars.* 
 
 " Within the last thirty years 95 per cent, of the an 
 thracite coal of America practically the entire sup- 
 ply, it was reported by Congress in 1893 has passed 
 
 *Louck's " Government Ownership," p. 33. 
 
r6 NA TIONAL O WNERSHIP OF RAIL WA VS. 
 
 from the ownership of private citizens, many thou- 
 sands in number, into the possession of the railroads 
 
 controlling the highways of the coal fields 
 
 1 Railroad syndicates,' says the investigation of 1888, 
 'are buying all the best bituminous coal lands along 
 their lines in Missouri, Kansas, Colorado, Arkansas, 
 Tennessee, Alabama, and other Western States and 
 Territories, no doubt with a view of levying tribute 
 upon the people's fuel and the industrial fires of the 
 country.' . . . The investigations by Congress 
 in 1888 and 1893 both state that the railroads of the 
 country are similarly becoming the owners of our iron 
 and timber lands, and both call upon the people to 
 save themselves. A new law of industry is rising into 
 view. Ownership of the highways ends in ownership 
 of everything and everybody that must use the high- 
 ways. . . 'Tne railroad companies engaged in mining 
 and transporting coal are practically in a combina- 
 tion to control the output and fix the price.' . . . 
 The anthracite collieries of Pennsylvania 
 could now produce 50,000,000 tons a year. The 
 railroads restrict them to 40,000,000 or 41,000,000 tons. 
 ... In the ten months between February and No- 
 vember, 1892, the price of coal in the East, as investi- 
 gated by Congress in 1893, was advanced by the coal 
 railroads as much as $1.25 and $1.35 a ton." * The ex- 
 tortion yearly by the railroad monopoly is about $40,- 
 000,000. This is on anthracite alone, and how many 
 thousands of dollars on bituminous, it is impossible to 
 know. This monopoly has been brought about by rail- 
 road discriminations. They have had it within their 
 power, by refusing to supply cars, and by charging 
 excessive rates, so that all shippers but those of the 
 
 * "Wealth VB, Commonwealth, " Lloyd, pp. 11, 12, 18. 
 
NA TIONAL O WNERSHIP OF ft AIL WA K5. 17 
 
 company, would lose money on every ton marketed, 
 to compel private owners to sell their mines. 
 
 But not only in grain and fuel do we find this favorit- 
 ism. It is also found in the meat business. " The 
 most conspicious illustration is the present position 
 of the four great Chicago firms engaged in slaughter- 
 ing and marketing beef. Their present business was 
 built up by rebates paid by the trunk lines, and each 
 began as a sort of protege of one of the railroads. 
 Now, with this immense business, by combining and 
 throwing the bulk ot it to one line, thev have become 
 dictators of rates to all the great railway corporations. 
 These firms care but little what rates they pay, pro- 
 vided they are less than are granted to other shippers, 
 so that they may continue to maintain their present 
 practical monopoly." * 
 
 Perhaps the most glaring discrimination and unjust 
 favoritism, was that in favor of the Standard Oil Com- 
 pany. Prof. Ely, in Problems of Today, speaking of 
 this matter, says, " It obtained a monopoly through an 
 alliance with the railways ot the country, and this gave 
 it special freight rates which no one else could secure. 
 The report of the special committee appointed to in- 
 vestigate the railroads of New York in 1879 showed 
 that the Standard Oil Company had received in rebates 
 ten million of dollars in eighteen months. It was im- 
 possible for competition to stand up against such 
 frightful odds. 1 ' A certain railroad was found to be 
 charging the Standard Oil Company but ten cents 
 freight per barrel, while it charged every other 
 shipper 35 cents per barrel, 25 cents of which was 
 turned over to the Standard Oil Co. It was this 
 alliance with the railroads which enabled this com- 
 
 *Stickney'i " Railway Problem," p. 38. 
 
i8 NATIONAL OWNERSHIP OF RAILWAYS. 
 
 pany to secure a monopoly. The rates charged Geo. 
 Rice, the principal competitor of the Standard Oil Co., 
 were from 100 per cent, to 300 per cent, higher. Can 
 one conceive of anything in the commercial realm 
 more outrageous ! f 
 
 In these several instances which I have enumerated, 
 we see that businesses have become monopolies by 
 their alliance with the railroads. Railways are nat- 
 ural monopolies, and nearly all artificial monopolies 
 have been created by some sort of a connection with a 
 natural monopoly. Nationalize the railways which 
 would mean no favor and artificial monopolies will 
 largely disappear. 
 
 The discrimination between localities is also des- 
 picable. This is done by refusing to stop trains, as 
 on the Northern Pacific where the road ran through a 
 town and built a depot three miles beyond, in order to 
 enhance the value of land which belonged to the com- 
 pany ; by building up a new town and destroying the 
 one already established, and also by making war on 
 localities through discriminations in rates. 
 
 Mr. Stickney, whose valuable book abounds in in- 
 stances of discriminations, says in his introduction: 
 " This unrestricted power to discriminate in the matter 
 of rates, lodged in the hands of one man, the mana- 
 ger of say five thousand miles of railway ; the power, 
 through malice, ignorance, or stupidity, to decree 
 which out of say a thousand cities and villages located 
 on his line should prosper, and which should not ; 
 which individuals out of say ten thousand merchants 
 doing business in those cities and villages should 
 make a profit or a loss, and if it suited the autocrat's 
 
 tFor full details see kk Wealth vs. Commonwealth, " also Hudson's " Railways 
 and the Republic. " 
 
NATIONAL OWNERSHIP OF RAILWAYS. iq 
 
 whim, the same man might be in favor one year and 
 under the ban the next, such enormous power over 
 the fortunes of so many should never be lodged in the 
 hands of any human being." 
 
 Mr. Stickney's book contains many diagrams illus- 
 trating the tariff schedules of railroads, showing rates, 
 etc. . The diagra n on page 68, giving the legal tariff 
 in operation in the autumn of 1888, is of special inter- 
 est. If one wishes to understand something of how 
 the chaos of rates are, as he says, a result of chance, 
 for no ingenuity could have planned such a snarl, 
 he should study this diagram. For instance, it shows 
 that the rates on flour and wheat are the same for 80 
 as for 420 miles ; coal 200 as for 400 miles ; coarse 
 grain twice as much as flour, and on some classes one 
 article is higher for 50 miles than the other, and vice- 
 versa, etc., etc. . Now, in addition to this chaos, let one 
 remember that at every town of importance men in 
 all branches of business, are securing special rates, 
 and one may realize something of the situation. 
 
 Another form of favoritism is the Pass. C. W. 
 Davis, a railway auditor of experience, and also an- 
 executive officer having power to issue p,asses says : 
 "Fully 10 percent, travel free, the result being that 
 the great mass of railway users are yearly mulcted 
 some $30,000,000 for the benefit of the favored min 
 ority ; hence it is evident that if all were required to 
 pay for railway services, as they are for mail services, 
 the rates might be reduced 10 per cent, or more, and 
 the corporate revenues be no less, and the operating 
 expenses no more, . . By what right do the cor- 
 porations tax the public that members of congress, 
 legislators, judges and other court officials and their 
 families may ride free ? Why is it that when a legis- 
 
20 NATIONAL OWNERSHIP OF RAILWAYS. 
 
 lature is in session that passes are as plentiful as 
 leaves in the forest in autumn? 
 
 "The writer, as an executive officer of a railway 
 company having authority to issue passes, has, 
 daring a session of the legislature, signed vast 
 numbers of blank passes at the request of the legisla- 
 tive 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." 
 
 In the report of the U. S. Senate Commission, Jan- 
 uary 18, 1896, we find these words: " Unjustifiable dis- 
 criminations are constantly made between individuals 
 . . and between localities similarily situated. . . 
 The effect of the prevailing policy of railroad man- 
 agement is by an elaborate system of secret special 
 rates, rebates, drawbacks and concessions to foster 
 monoply and enrich favored shippers. . . Such 
 favoritism and secrecy introduce an element into le- 
 gitimate business that greatly retards the develop- 
 ment of our industries and commerce."* 
 
 Prof. Parsons, after having cited the above in an 
 article in To-Day, says : " Public ownership would put 
 a stop to excessive charges, discriminating rates, un- 
 just rebates, favoritism, monopoly building, million- 
 aire making, and all the other wealth congesting oc- 
 cupations of the railroads, and confine them to their 
 proper business of carrying" persons and things from 
 one place to another. The post office does not make 
 millionaires, no Vanderbilts or Goulds or Rockefellers 
 have come out of the public school system, or the fire 
 department, or the weather bureau, but if they had 
 bten in private hands what mints of money would 
 have been made through special contracts, exorbitant 
 
 * See Eeport of Senate Committee, pp. 180, 188. 
 
NATIONAL OWNERSHIP OF RAILWAYS. 21 
 
 charges, etc. ." Not only this, but government owner- 
 ship would do away with all the gambling in railway 
 stocks which now constitutes fully one-half of all the 
 gambling in this country. 
 
 VI. THE REMEDY. 
 
 Public ownership, as has been said, is the only rem- 
 edy for these evils. The government must own the 
 railroads or the railroads will own the government. 
 Legislative regulation has been tried time and again 
 and proved futile. Take, for example, the Inter-State 
 Commerce Law. The penalties of the law are severe 
 enough, and its violation evident, but where are the 
 convictions ? The only one secured under it, was that 
 of a shipper for discriminating against a railroad. 
 And yet, Mr. Stickney, Chairman of the Board of Di- 
 rectors of the St. Paul and Kansas City Railroad, after 
 quoting a president of a large railroad system, to the 
 effect that, if all who have offended against the law 
 were convicted, there would not be jails enough in the 
 United States to hold them, says, " Probably it 
 would be no exaggeration to say that if the cases 
 were taken up and prosecuted to conviction in their 
 chronological order, the man who was cautious 
 enough to abstain from law- breaking, for say, two 
 weeks, could go on from that time defying the law 
 with impunity, as the docket would after that be so 
 crowded that his case would not be reached during 
 the remainder of his life." 
 
 But even if regulation could be made to succeed, it 
 would not be preferable to public ownership. Regu- 
 lation would not remove the root of the evil, viz., the 
 antagonism between public and private interests. Reg- 
 ulation would still leave the stock holders to appoint 
 their own managers, who in turn would, of course, 
 
ss NA T10NAL O WNERSHIP OF RAIL WA FS. 
 
 serve their electors. It is this antagonism of interests 
 which constitutes the evil of monopoly. Regulation, 
 instead of remedying, would only result in greater 
 evasion of the law and corruption of its officials. Reg- 
 ulation would still leave the big salaries, costs of liti- 
 gation, expense of commissions, enormous profits, high 
 rates, low wages, poor service, stock gambling, evasion 
 of taxes, watering of stock, disregard of safety, antag- 
 onisms of interests, long hours of labor, increased in- 
 centive to strikes, etc., etc. . 
 
 No ! regulation is not the remedy. Public and pri- 
 vate interests must be united, and complete harmony 
 restored. Public ownership is the only solution of 
 the problem. 
 
 VII. METHOD OF PURCHASE. 
 
 Several ways of making the railroads public prop- 
 erty have been proposed. 
 
 First Bonds might be issued, and the roads pur- 
 chased and operated for the benefit of the people, the 
 receipts which are now used to pay dividends and in- 
 terest on private capital being devoted to paying the 
 interest and principal of the bonds. This is the way 
 Wheeling, W.Va., purchased its gas works, and the 
 city now owns her plant free of debt. 
 
 Second Capitalists might form a syndicate to pay 
 for stock and bonds. The roads, taken by " eminent 
 domain," could then be leased to this syndicate under 
 contract of good service and their return free of debt, 
 within a given period. Springfield, 111., has adopted 
 this plan to obtain its electric light plant. 
 
 Third Postal savings-banks could be established, 
 and " receive deposits and loan on security at i or 2 
 per cent. then it could buy the roads with the funds 
 deposited or borrow the money at its banks at i per 
 
NATIONAL OWNERSHIP OF RAILWAYS. 23 
 
 cent, and the transaction would be in strict accord- 
 ance with the principles of the bankers and finan- 
 ciers."* This last plan is recommended by Prof. 
 Parsons of Boston University. 
 
 Many other methods have been proposed, but these, 
 all things considered, seem to me the most fair. I am 
 inclined to favor the first plan, inasmuch as govern- 
 ment savings banks can not be established without 
 much delay. 
 
 VIII. THE COST. 
 
 The question naturally arises here, What would be 
 the cost of such an undertaking ? 
 
 We have seen that the roads are^capitalized at more 
 than twice their actual cost. Surely, the government 
 ought not to pay for property twice as much as it is 
 worth. When we go to purchase a piece of land we do 
 not inquire what it cost, or how much the owner paid 
 for it twenty years ago, but, What is it worth to-day ? 
 
 If the State needs a man's property, it inquires as to 
 its market value, as to what property equally as good 
 can be bought for to-day, and pays him that. If the 
 property is worth but $1,000, the State does not pay 
 $2,000, even though it may have been worth that at 
 some former period. The law of " eminent domain " 
 only requires the State to pay the actual cash value at 
 the time of purchase. 
 
 What then is the actual cash value of the railroad 
 system? There is no doubt but that the whole system 
 could be replaced to-day for $20,000 per mile. In 1893 
 there were 175 508 miles f of railroad in this country, 
 (including elevated roads) which, at $20,000 per mile, 
 
 * "To-day," February, 1896. "Arena," April, 1895. 
 
 t For statistics, see Poor's "Manual of Railroads," 1894-95. 
 
a+ NA TIONAL O WNERSHIP OF RAIL WA VS. 
 
 would make a total cost of $3,510,160,000, and even this 
 is in excess of the actual cash capital invested by the 
 railway companies. The amount of bonds and inter- 
 est granted by the National Government to the Pacific 
 railroads is given by Mrs. Todd, in her valuable work, 
 The Railroads of Europe and America, as $147,929,722.29. 
 The amount oc land donated by Congress, according 
 to the National Economist, was 191,929,722 acres, which, 
 at $5.00 per acre, would amount to $959,648,610. Add 
 to this cash, bonds and stock bonuses from individ- 
 uals, cities, counties, etc., at least an equal amount, 
 and it is evident that the actual cash capital invested 
 by these companies is not in excess of the $3,510,160,- 
 ooo. The total 1 abilities of the railroads in 1893, were 
 $11,443,888,892. From this deduct $383,201,872 for cur- 
 rent accounts, and we have $11,060,687,020 as the total 
 capital investment, of which the capitalization, as we 
 have seen, is considerably more than half water. 
 
 But suppose that we be generous and allow $25,000 f 
 per mile, which, according to Gov. Larrabee, is a 
 liberal estimate of the average cost of American roads 
 to the stock and bondholders, and we have a total of 
 $4,387,700,000. Now let us go still further, and be 
 more than generous. Let the $25,000 stand for mere 
 cost, per mile, of track and allow for equipment $360, 
 120,000 for the 36,012 locomotives at $10,000 each; 
 $100,000,000 for th^ 27,169 passenger cars and the 7,805 
 baggage and mail cars ; $500,000,000 for the 1,161,282 
 freight cars, and we should have a total of $5,347,820,- 
 ooo. The interest of this at 3 per cent, would be $160,- 
 434,600. Of course, we shall be told that the Nation 
 can never assume such a responsibility. Well, let us see. 
 
 t Thousands of miles have been built in recent years from $10,000 to 
 $15,000 per mile. 
 
NA T2ONAL O WNERSHIP OF RAIL IV A VS. 2-; 
 
 We paid the railroads in 1893, $1,333,906 772 The 
 profits of the railroad companies that year were $475,- 
 880,041. We actually paid then the 160 millions and 
 315 millions besides. It is, therefore, perfect nonsense 
 to say we cannot pay it, when we are paying it, and 
 twice as much more, besides. 
 
 We could pay the $160,000,000, or even $200,000,000, 
 and then make a profit of over $200,000,000 on the 
 transaction. The dividends and surplus paid by the 
 railroads in 1893, * according to their figures, amounted 
 to $126,142,882. 
 
 IX. ECONOMY OF PUBLIC OWNERSHIP. 
 
 The savings to the people under public ownership 
 would be enormous. Mr. C. W. Davis has estimated 
 the economies of public ownership at $360,000,000, and 
 in his account many items are omitted. Thomas V. 
 Cator estimates that we could borrow the money, pay 
 2 per cent, interest on the loan, and at once save 520 
 millions out of the one billion dollars yearly paid the 
 railroads. 
 
 Prof. Parsons computes the " Savings by dispensing 
 with 599 out of 600 railway presidents with their costly 
 staffs, a similar number of managers and staffs, 68 
 traffic associations, the whole army of commercial 
 agents and lawyers, competing depots and uptown 
 offices ; savings by uniformity of rails, cars, etc , and 
 the multitudinous adjustments, co operations and 
 simplifications, that will result from consolidations, 
 will figure, according to careful data, not less than 
 $100,000,000 a year. The saving to the public from 
 purer administration, by abrogation of the pass evil, 
 commissions, rebates and corruption funds, and by 
 
 * 1893 being an average year, it has been chosen as the basis of these calcula- 
 tion!. 
 
26 NA TIONAL O WNERSHIP OF RAIL WA YS. 
 
 greater care in preventing accidents, $90,000,000. The 
 immediate savings in interest will be about 200 mill- 
 ions, so that the total savings will be 390 millions a 
 year at once, and when the roads have paid for them- 
 selves, there will be a saving to railway users of the 
 whole 400 millions that goes to railroad capital and 
 the entire savings will probably then exceed 600 
 millions." * 
 
 As some may desire to have these items more spe- 
 cialized, I have compiled the following table from 
 various authorities, especially C. Wood Davis, who is 
 a railroad man eminently qualified to speak upon the 
 subject: 
 
 ESTIMATES BY C. W. DAVIS f 
 
 Savings by 
 
 Dispensing with 599 presidents,: with their staffs - $25 000,000 
 
 Dispensing with high priced managers and their staffs 4,000,000 
 
 Abolishing attorneys and legal expenses - - 12 000,000 
 Abolishing solicitors and officers, maintained off the 
 
 regular lines, for securing competitive traffic - - 15,000,000 
 
 Consolidation of depots, officers and staffs 20 000,000 
 
 The exclusive use of shortest routes - 25,000,000 
 
 Abolishing 5-7 of the advertising account 5 000,000 
 
 Abrogation of the pass evil 30,000,000 
 
 Disbanding traffic associations whose only duty is to 
 
 adjust matters between competing lines - 4 coo.ooo 
 
 Abrogation of the commission system - ... 20 000,000 
 
 ESTIMATES BY PROF. PARSONS \ 
 
 Uniformity of rail, cars, machinery, etc., cheapening 
 their manufacture by avoiding freight blockades, 
 return of empties belonging to other roads, clerkage 
 to kef p account of foreign cars and adjust divisions 
 of earnings; by simple tariffs, saving time of public 
 and clerks; by all the numerous little economies of a 
 
 * " The Public Ownership of Monopolies, " p. 12. 
 
 t For basis of estimates see Louck's " r- r ernr~~" * Ownership." 
 
 j April tk Arena, " 1895. 
 
NATIONAL OWNERSHIP OF RAILWAYS. 27 
 
 vast business under a single management with no 
 competitive warfare to waste its energies - - $15,000,000 
 Avoiding strikes and developing a better spirit among 
 employees 10,000 ooo 
 
 POOR'S MANUAL 1894. 
 
 Having no dividends, interest, rent, etc., to pay - - 445,078,840 
 Putting the surplus into the people's treasury - - 30,801.201 
 
 ESTIMATES BY T. V. CATOR. 
 
 Abolishing corruption fund 30,000,000 
 
 Abrogating unjust rebates, etc. 50,000 oco 
 
 Total saving by Public Ownership - - - $740,880 041 
 
 In 1893 we paid the railroads $1,333,906,772, but the 
 same service under public ownership, if free of debt, 
 would have cost but about $590,000,000. This would 
 enable a reduction of one half in the rate and still 
 leave a profit. Even a greater reduction might be 
 made, for the lowering of rates would be followed by 
 increase of patronage which would greatly increase 
 revenue. It costs but little more to run full trains 
 than trains half full. If a road carries one million 
 passengers a year, it can carry another million for one 
 half what it costs to carry the first. If it makes 50 per 
 cent, profit on the first million it will make 75 per 
 cent, on the second ; or, if the first million are carried 
 at cost, the second will yield 100 per cent, profit .* Mr. 
 Acworth says that, up to the full capacity of the rail- 
 road equipment, the cost of each additional passenger 
 is not over one cent for 410 miles, f Herein may be 
 seen the reason why, under public ownership, fares 
 may be reduced not only to one tenth, but even to one 
 twentieth of their present rate, 
 
 * April " Arena," 1895. 
 tDecember " Arena, " 1895. 
 
** NATIONAL OWNERSHIP OF RAILWAYS. 
 
 It must not be forgotten that rates are now charged 
 to cover total expenses. There is a wide difference 
 between total expenses and operating expenses, the 
 former includes interest, dividends and profits. Again, 
 we must distinguish between actual operating ex- 
 penses, and expenses in which are included corruption 
 funds, rebates, etc. 
 
 In 1890,* the railroads place cost of a ton mile at 
 .6 of a cent, and a passenger mile at 2 cents. In round 
 numbers there were 11,848 millions passenger miles 
 and 76,207 millions ton miles. The total operating ex- 
 pense that year was, therefore, 693 millions of dollars. 
 The railway returns show that 60 millions dollars of 
 this amount were derived from mail, express, eleva- 
 tors, stockyards, car-mileage, etc. their own proper 
 incomes, so that the actual operating expense charge- 
 able to passenger and freight service was only 633 
 millions. Even this includes charges to cover rebates, 
 commissions, corruption money, etc., amounting as 
 estimated to $110,000,000. Deduct the 60 millions and 
 the no millions, from the 693 millions of dollars, and 
 we have left 523 millions as the actual cost of our 
 present freight and passenger service. This would 
 make the real cost ot moving one passenger one mile, 
 1.2 cents, and a ton of freight, ,5 of a cent. 
 
 Under public ownership, operating expenses would 
 be reduced at least one third, or to 462 millions of dol- 
 lars. Now, from this substract the 60 millions charge- 
 able to express, mail, etc., and we have 402 millions. 
 This alone, remember, would permit rates one-third 
 lower than at present. Now, if the burden were 
 
 * See Inter-State Commerce Commission Report of 1890, p. 51. The report con- 
 tains summary of 156, 404.06 miles of railway. The total number of miles operated 
 that year was 163,420. I use the statistics ef 1890 here so as to avail myself of the 
 valuable table given by Prof. Parsons in the April " Arena " of 1895, which are 
 based upon that year's report. 
 
NATIONAL OWNERSHIP OF RAILWAYS. * 9 
 
 thrown on freight so as to relieve passenger travel 
 as many advocate a uniform tariff of one half cent, 
 per ton mile and passenger mile, might be established. 
 This, in a year like 1890, would yield 440 millions of 
 dollars, an excess of 38 millions over operating ex- 
 penses, with a freight reduction of over three-tenths 
 and a passenger reduction of over three fourths of the 
 present charges. 
 
 The increase of traffic which would result from low 
 rates would, in a few years, enable the establishment 
 of a tariff of .4 ot a cent per ton mile and .1 of a cent 
 per passenger mile. If amount of freight only doubled 
 and passenger travel increased, but four and one half 
 times, this would give an income of 650 millions, 
 which, with revenues from express, etc , would cover 
 all expenses. Until the system is free from debt it 
 would be wise to establish rates a trifle higher so that 
 the income would pay cost of purchase. 
 
 That these estimates of increase are not too high 
 may be seen by statistics from Austro- Hungary, where 
 a reduction in fares of 40 per cent., in three years re- 
 sulted in an increased traffic of 46 4 per cent. Although 
 wages have been doubled in the meantime, and fares 
 reduced, still the system yields more than 100 per 
 cent, net, the operating expenses being less than one- 
 half the income.* 
 
 Many roads in this country sell season tickets at 
 but little over one-half cent a mile, which they would 
 not do, if the custom resulted in a loss. Other roads 
 sell season tickets at seven tenths of a cent a mile. 
 
 Of course, too, many roads have been built which 
 were not needed. This is evident from the fact that 
 one third of the railroads are in the hands of receivers. 
 
 * April "Arena," p. 228, note 3. 
 
jo NATIONAL OWNERSHIP OF RAILWAYS. 
 
 If these superfluous roads are excluded from our esti- 
 mates, we will find that the average cost of moving 
 one passenger one mile, with trains loaded as at pres- 
 ent forty-one passengers per train, is about one cent : 
 with the advantages of public ownership, it would 
 fall below one-half cent. In Dorsey's English and 
 American Railways, page 82, it is stated that the cost per 
 passenger mile on such roads as the Pennsylvania is 
 now about one-half cent. Where trains are well filled 
 the expense is very much reduced. The cost of mov- 
 ing a passenger train one mile, according to railway 
 reports, is eighty cents. In a train carrying 400 pas 
 sengers then, the cost per passenger mile would be but 
 one fifth of a cent. 
 
 This eighty cents per train mile includes all the ex- 
 pense of railway traffic, each train mile bearing its 
 proportion of waste, corruption money, rebates, etc. 
 
 Now, according to these figures, what is the real cost 
 of transporting passengers from New York to Chicago, 
 on well filled trains ? The distance is 913 miles,which, 
 multiplied by cost per passenger mile, gives a cost of 
 about $i 82, or for round trip, $3.64. 
 
 Again, the cost of moving a passenger train being 
 eighty cents per mile, if we multiply this by the num- 
 ber of miles, 913, we get the cost of running a train 
 from New York to Chicago, which is $730.40. Now, 
 by dividing this amount by the number of passengers 
 carried (400), we get the cost per passenger, $1.82. 
 This, remember, is based upon the railroad companies 
 own figures, and includes the pro rata share of labor, 
 taxes, rebates, wear and tear, lobby fees, etc. It covers 
 all expenses, and we may be sure, that their own pub- 
 lished estimates of the cost of moving trains are not 
 too low. 
 
NA riONAL WNERSHIP OF RAIL WA VS. 31 
 
 If the government owned the railroads we might go 
 to Chicago and back for $2.00 or less. Do you say this 
 is Utopian ? Let us see. We have found that public 
 ownership would reduce operating expenses one-third. 
 This would bring cost per train mile down to about 
 fifty- four cents, (.53 1-3) and the cost per passenger 
 mile to a little over one tenth of a cent ($.00135). 
 
 Now, if we multiply the distance, 913 miles, by cost 
 per train mile (64 cents), we shall have $493.02 as the 
 cost of running a train from New York to Chicago. 
 Divide this by the number of passengers (400) 
 and we find the cost per passenger to be $1.23. Or, 
 multiply the cost per passenger ($.00135) by the num- 
 ber of miles (913), and we obtain the same result. This 
 would make the round trip $2.46. 
 
 But this is not all. These estimates are based simply 
 upon the saving in operating expenses. If we add to 
 this the many other economies which have been 
 pointed out, it is not too much to say that the regular 
 fare would be less than $2.00 for the round trip, while 
 excursion rates need not exceed $1.00. 
 
 Not only this, but the economies of public owner 
 ship would enable us to go by excursion from New 
 York to San Francisco and return for a five dollar bill ! 
 Even the reduction of one third in operating expenses 
 would bring the regular fare down to about $9.00 for 
 the round trip, with trains fully loaded. Our estimate 
 of one- third reduction (54 cents per train mile), is by 
 no means excessive. English railway statistics show 
 that the average expense per train mile is only forty- 
 four cents, and on German Railways, under public own- 
 ership, the cost per car mile is already reduced below 
 five cents ; and this latter, notwithstanding the fact 
 that Germany employs on the railways about double 
 
3 2 NATIONAL OWNERSHIP OF RAILWAYS. 
 
 the number of men per mile, that are employed in this 
 country. Although larger wages are paid here, the 
 difference is more than made up by the fewer men 
 employed. 
 
 The German state road at Berlin sells yearly tickets, 
 good for five miles' ride in arid out of the city, on any 
 train, for $4.50. This means 3,650 miles for $4,50, if the 
 holder lives five miles out of the city and goes in and out 
 once a day. If he goes twice a day it means 7,300 
 miles for $4.50. The passenger may travel more miles 
 than from New York to San Francisco and return, and 
 all for $4.50. Can we not do that which Germany is 
 doing ? The government pays the railroads about $275 
 for transporting a loaded postal car from Boston to 
 San Francisco. A passenger car carrying 50 passen- 
 gers a* $10.00 each, would amount to $500, or a clear 
 profit under our present management of $225. Does 
 any one doubt that, under public ownership the excur- 
 sion rate could be placed at $5*00 ? 
 
 In the December Arena of 1895, Mr. J. L. Cowles 
 gives data of three excursions, which were run over 
 the Cleveland, Canton and Southern Railroad, from 
 Zanesville, Ohio, to Cleveland and return (286 miles), 
 for 75 cents round trip less than three-tenths of a 
 cent a mile. Each train carries 700 passengers, mak- 
 ing the receipts $525. per train. The cost of these ex- 
 cursion trains was but little greater than that of rr g 
 ular trains. Rut allowing $1.00 per train mile, inste ad 
 of the 80 cents, the cost to ihe railroads was only one- 
 seventh ot a cent per passenger mile, and the profit 
 was nearly 50 per cent. 
 
 Note. These estimates are based upon train of 400 passengers. If trains carried 
 from 600 to 800 the rate per passenger mile would be greatly reduced. Even at the 
 German rate of five cents per car mile, sixty occupying a car, tlie cost per pas- 
 senger mile would be reduced to .00083 1-3. This would make the regular fare from 
 New York to Chicago seventy -six cents. Who doubts, then, that excursions could 
 be run for fifty cents ? 
 
NATIONAL OWNERSHIP OF RAILWAYS. 33 
 
 All this but evidences that which Sir William Gait 
 proved before the Royal Commission of England some 
 years ago, that full trains can be run for one-tenth of 
 a cent per passenger mile. 
 
 Under public ownership it would not be too much to 
 expect that the regular fares would be reduced to one- 
 tenth of a cent per passenger mile, and probably would 
 fall below that, while for excursions, the rates, as we 
 have predicted, need not exceed one-twentieth of a 
 cent per passenger mile. 
 
 It is not necessary for me to speak of the importance 
 of cheap transportation. We all recognize travel as 
 a mighty educator. Nothing tends, more quickly, to 
 overcome prejudice and banish ignorance. 
 
 Economy and civilization call for public ownership. 
 X. EXPERIENCE. 
 
 "Experience is the best teacher." We are always 
 prone to look for precedents, and it might be well for 
 us to inquire, What has been the result of public own- 
 ership in the fifty- four countries now owning their 
 railway systems, wholly or in part ? 
 
 In the first place, we notice in such countries an ab- 
 sence of the f rauds,'corruption, and monopolies, which 
 grow out of our system. Official reports and the tes- 
 timony of travelers show that the service is cheaper, 
 safer, and more progressive than the service in this 
 country. 
 
 Another important feature of public ownership is 
 the revenue. 
 
 In Germany the net profits from government owner- 
 ship in 1890 were $121,412,166 60. The average passen- 
 ger fare is .01 17 cents per mile, and the average freight 
 rate is .0147 cents per ton mile. The net profits dur- 
 ing the last ten years have increased 41 per cent., 
 
34 NA TIONAL O WNERSHIP OF RAIL WA VS. 
 
 and wages are 121 per cent, higher than they were un 
 der private ownership. On third class fare one may 
 ride four miles for one cent, and ten miles on the Ber- 
 lin road for the same amount. 
 
 The reports of 1890 show that a surplus of 38.40 per 
 cent, was collected in excess of what was needed to 
 maintain the roads. Should it be deemed desirable to 
 run the roads at cost, rates might be reduced 38.40 
 per cent. But as this reduction in rates would result 
 in increased traffic, a surplus would still result even 
 at this low figure.* 
 
 The" experience of Belgium has been similar to that 
 of Germany. Fares and freight rates have been re- 
 duced one- half and wages of employees doubled under 
 governmental control. The net profits for 1891 were 
 
 In New Zealand the government owns 1,886 miles of 
 railroad, which paid in 1893 a net profit of $2,179,473. 
 The profits which have accrued to the colony in cheap- 
 ening transit are inestimable. 
 
 In New South Wales the government owns 2,351 
 miles of railroad, which paid in 1893 a profit of $9,565, 
 868 40. The saving in public lands alone would more 
 than pay the entire cost of the system. 
 
 In Victoria, with its population in 1891 of 1,140,405, 
 there were 2,903 miles of railway owned by the gov- 
 ernment, which in 1892 netted $4,641,367 55. This sum 
 in a large measure sufficed to pay all federal taxes. 
 In 1890 the railroads carried 71,058,940 passengers. 
 "Compared with population scarcely any country in 
 the world carried so many passengers by rail as Vic- 
 toria." The other colonies in Australia also bear im- 
 portant evidence for government ownership, but space 
 
 *Todd's " Railway's of Europe and America," p 41. 
 
NA TIONAL O WNERSHIP OF RAIL WA 1 S. 35 
 
 does not permit more specific mentioning. In Aust^a- 
 lia one may ride 1,000 miles, first class, for $6,50, and 
 workingmen may ride three miles for one cent. Wages 
 are from 25 to 30 per cent higher than in this coun- 
 try, and the working day is only eight hours. 
 
 In Natal, with a population in 1890 of only 543 913, 
 the government owned 399 miles of railroad which 
 netted in 1892 $810,357.40. The State was then build- 
 ing 100 miles more. 
 
 In Russia, in 1891, the government owned 6,824 miles 
 of railway, and was building 893 miles additional, be- 
 sides the New Siberian line, which will be 4,950 miles 
 Ion2f. The net return to the government from the 
 public railroads, in 1891, were $24,722,406. All private 
 roads revert to the government after a period ot from 
 37 to 85 years. Workingmen in Russia may ride 2,000 
 miles for $6.00. 
 
 In France the larger number of railroads are owned 
 by private companies, but their charters stipulate that 
 they shall revert to the government at the end of 99 
 years. The charters also require the railways to carry 
 all mail free, also officers, employees of the govern- 
 ment and soldiers, at very low rates. They also pay 
 the state 10 per cent, of the gross receipts of passenger 
 tariff and on freight carried on passenger trains. The 
 government itself owns 3,643 miles. 
 
 In Austro-Hungary the railroad reports for 1888 
 show a total net income of $50,457,822 The average 
 passenger fare is .01306 cents, and the average freight 
 rate per ton mile is .01557 cents, f 
 
 These statistics are sufficient to show the financial 
 advantage of public ownership. Experience, then, 
 
 tForfull statistics see Vrooman's ''Government Ownership" and " Todd's 
 Railways." 
 
NATIONAL OWNERSHIP OF RAILWAYS. 
 
 favors nationalization. Prof. Ely informs us that, 
 without exception, every man he met in Germany con- 
 sidered the test of experience as demonstration of the 
 superiority of government ownership. Even those 
 who were once bitterly opposed to the undertaking, 
 are now convinced of their error, and no one wishes 
 to return to private ownership. 
 
 XI. PUBLIC SAFETY DEMANDS GOVERNMENT OWN- 
 ERSHIP. 
 
 In every way the service under public ownership is 
 superior to that under private control. Prof. Ely, in 
 the Congngationalist of July 21, 1992, in speaking of the 
 German systen, mentions the extreme solicitude on the 
 part of railway managers for the safety of passengers. 
 This is evident from the following table which I have 
 prepared from the railroad reports of 1890: 
 
 Passengers Carried. 
 
 Killed. 
 
 Proportion. 
 
 Injured. 
 
 Proportion. 
 
 United States . . .-492,430,865 
 Germany . . .426,056,250 
 Austro-Hurgary. . 68,638,938 
 
 286 
 46 
 4 
 
 1 in every 
 1,721,786 
 1 in every 
 9,262,092 
 1 in every 
 17,109,734 
 
 2,425 
 236 
 53 
 
 1 in every 
 203,064 
 1 in every 
 1,805,323 
 1 in every 
 1,291,300 
 
 Men Employed. 
 
 Killed. 
 
 Proportion. 
 
 Injured. 
 
 Proportion. 
 
 United States 749,301 
 
 2,451 
 
 1 in every 306 
 
 22,396 
 
 1 in every 33 
 
 Germany 340,553 
 
 454 
 
 1 in every 750 
 
 2,011 
 
 1 in every 169 
 
 Austro-Hungary. 166,463 
 
 156 
 
 1 in every 
 1,067 
 
 570 
 
 1 in every 29^ 
 
 Other Persons. 
 
 Killed. 
 
 Injured. 
 
 Total 
 Killed. 
 
 Total Injured. 
 
 United States ... .... 
 
 3538 
 
 4,206 
 
 6.335 
 
 29027 
 
 Germany 
 
 226 
 
 205 
 
 726 
 
 2,452 
 
 Austro-Hungary 
 
 163 
 
 110 
 
 223 
 
 733 
 
 Over nine times as many were injured, and over six 
 
NATIONAL OWNERSHIP OF RAILWAYS. j 7 
 
 times as many were killed in the United States as in 
 Germany and Austro- Hungary combined. Why is 
 this? Simply because money is preferred to human 
 life. Dividends are of more importance to the man- 
 agers than the application of safety couplers, auto- 
 matic brakes, and the proper guarding of crossings 
 in cities.* Under public ownership safety would be 
 the first consideration, all the modern appliances 
 would be adopted, and men enough employed so that 
 exhaustion through overwork would be unknown. It 
 is this latter which is the direct cause of many dis 
 asters. It is six times as dangerous to be a passen 
 ger here as in Austro-Hungaty, and eight times as 
 dangerous as it is in Germany. It is four times as 
 dangerous to be an employee here as in Germany 
 and seven times as dangerous as in Austro Hungary. 
 Not safety but dividends are the chief concern of 
 private management of railroads. 
 "Public safety demands public ownership." 
 There are many other advantages to be gained by 
 public ownership. For instance, the interests of the 
 employees would be better subserved under govern- 
 ment ownership, as the government always pays 
 higher wages for shorter hours work than do private 
 corporations. But lack of space forbids further con- 
 sideration of this point. 
 
 It seems to me impossible for any unprejudiced 
 person to absorb the facts already presented and not 
 be heartily in favor of the nationalization of our rail- 
 way system. 
 
 XII. OBJECTIONS CONSIDERED. 
 And now in conclusion, let us consider the objec 
 
 *The report of June 30, 1895, shows that out of a total equipment of 1,806,000 
 locomotives and cars only 362,000 were fitted with train breaks and 408,000 with 
 automatic couplers. 
 
38 NA T1ONAL O WNERSHIPl OF RAIL WA VS. 
 
 tions usually raised against public ownership. 
 
 i. " Under government ownership there would be 
 less progress than under private ownership." 
 
 One need but glance at the postal service to see the 
 fallacy of this proposition. The claim is well refuted 
 by C. W. Davis, in the following words, " Instead of 
 national ownership being a hindrance to improve 
 ment and enterprise the results in Australia prove 
 the contrary, as in Victoria the government railways 
 are already provided with interlocking plants at all 
 grade crossings and one line does not have to wait the 
 motion of another, but all are governed by an active 
 and enlightened policy which adopts all beneficial 
 improvements, appliances or modes of administration 
 that will add either to the public safety, comfort or 
 convenience." We find, also, that government owner- 
 ship is superior to private ownership in the supply of 
 transportation facilities. We learn from the Inter- 
 State Commerce Commission of 1892 that for every 
 100 squares miles of territory, Great Britian, with 
 private ownership, has 16.52 miles ; France, 11.23 miles. 
 The United States, 5.67 miles ; Belgium, with govern- 
 ment ownership, 28 71 miles. Of course, comparison 
 with this country is hardly fair. But, compared with 
 our best supplied states, New York with 16.19 miles, 
 Illinois with 18.25 miles and New Jersey with 27.71 
 miles, and still Belgium holds the lead, having for its 
 area more miles of railway than any other country in 
 the world. 
 
 It may be thought that the cost of construction and 
 operation of railways is less in the old countries than 
 
 NOTE. In the United States, for year ending June 30, 1893, the number of em 
 ployees killed was 2,727; injured, 31,729; passengers killed, 299; injured, 3,529; other 
 persons killed, 4,320; injured, 5,435; total killed, 7,346; injured, 40,393. 
 
NATIONAL OWNERSHIP OF RAILWAYS. 3 g 
 
 here, and that thus they can afford to have more miles. 
 But this is an error. The cost of construction alone 
 of European railways is estimated at three times as 
 much per mile as in this country. Take the one item 
 of right of way, here usually given to railroads. In 
 England it costs on an average $20.000 per mile and 
 in Belgium $11.000.* Also the cost of operation is 
 greater in Europe, owning to the larger number of 
 men employed. Although labor is cheaper across the 
 Atlantic, the difference is more than balanced by the 
 increased number of employees per mile, as the fol- 
 lowing table by. Governor Larabee will show : f 
 
 Countries. 
 
 Number of men em- 
 ployed per mile. 
 
 Average wages paid 
 per annum. 
 
 Wages paid 
 per mile. 
 
 United. Kingdom 
 
 18 
 
 $335 
 
 $6000 
 
 Belgium 
 
 22 
 
 210 
 
 4 620 
 
 Russia 
 
 15 
 
 240 
 
 3 600 
 
 Germany 
 
 14 
 
 250 
 
 3 500 
 
 France 
 
 14 
 
 220 
 
 3 080 
 
 United States 
 
 5 
 
 555 
 
 2 625 
 
 
 
 
 
 As to the supposed insufficiency in speed, Prof. Ely 
 negatives this idea which is often put forth by ill-in- 
 formed persons. He says, " It is certain from calcula- 
 tions which have been made, that the average speed 
 of German trains is faster than the average speed of 
 
 trains in any other country on the continent 
 
 The fastest train from Berlin to Hamburg makes the 
 distance in three hours and twenty- four minutes, with 
 an average speed including all stops, of 52.28 miles per 
 hour. This is faster than any train in the United 
 States, and is, according to the Engineering News, the 
 
 * Larrabee's "Railway Question," p. 370. 
 t Ibid, p. 371. 
 
40 NA TIONAL O WNERSHIP^ OF RAIL WA KS. 
 
 fastest train in the world.* The fastest train from 
 Berlin to Cologne, according to my official railroad 
 guide, makes the distance in nine hours and five 
 minutes, with an average speed of 39.6 miles per hour, 
 a better rate of speed than that of the fastest limited 
 between New York and Chicago, unless there has been 
 an improvement since I last looked at the time tables 
 of these trains. From Wiesbaden to Cologne I made 
 35.48 miles an hour, all stops included, and my average 
 speed from Cologne to Bremen, likewise including all 
 stops, was 40.86 miles per hour. .. It is very doubtful if 
 in traveling north and south, east and west, in this 
 country, one could make as good time." f In Governor 
 Larrabee's book we find the following as to speed of 
 trains, quoted from Rail's Railroad Encyclopedia, "Berlin 
 and Brunswick line 45 1-2 miles an hour. Vienna and 
 Buda-Pesth Railway 42 miles an hour. Paris and 
 Calais Railway over 40 miles. Official reports give 
 the average speed of express trains in Northern Ger- 
 many 32.2 miles an hour, Southern Germany 28.8 miles, 
 Austria 27.8. The average speed of express trains 
 will certainly compare favorably with that of the 
 United States/' 
 
 As to efficiency, Mr. Jeans, a high authority, says 
 that "the lines worked by the state are those kept in 
 the best order, and the working of which gives the 
 greatest satisfaction to the commercial world, and the 
 public in general, as regards regularity of conveyance, 
 
 * The fastest regular trains in the United States for a short distance, are those 
 between Washington and Baltimore, on the Baltimore and Ohio Railroad. 
 Their speed being 53.33 miles an hour. The run from Washington to New York 
 is made at the rate of 48.0 miles per hour. Since data furnished by the "En- 
 gineering News," the Empire State Express has been placed on the New York Cen- 
 tral and Hudson River Railroad, which runs from New York to Buffalo, a distance 
 of 439 miles, in eight hours and forty minutes, making the rate of speed 50.7 miles 
 an hour. 
 
 t "Congregationalist," July 21, 1892. 
 
NA TJONAL O WNERSHIP OF RAIL WA KS. 41 
 
 cheapness of transit, and the comfort of travelers." 
 
 2. "Our government cannot operate the railroads 
 successfully." 
 
 It is somewhat amusing that such a claim should be 
 made in the face of the fact that the government, 
 through receivers, is now operating 25 per cent of the 
 whole railroad mileage of the United States, and 
 operating the same successfully. To such objectors 
 the words of Walter Vrooman should be sufficient, 
 " We claim incompetency, and yet we boast that ' we 
 are the greatest nation on earth ! ' that ' we are the 
 people/ that 'we are the most ingenious in mechanism,' 
 the most fertile in resource, the most daring in 
 method, and the most persistent in action.' And yet 
 we can't run railroads ! We can't prevent ourselves 
 from being swindled out of" untold millions every 
 year! Where is our greatness to thus submit to all 
 manner of imposition at far higher rates than paid in 
 Europe, Asia, Africa or Australia ?" 
 
 I believe we can do that which other nations are 
 doing. In fact, we are doing it. In 1894, 43,000 miles 
 of railroads were in the hands of receivers and thus 
 were being run by the government. 
 
 3. "Public ownership would put the railroads in 
 politics*" 
 
 This obiection might be a little more valid if the 
 railroads were not already in politics. It is difficult 
 to conceive how the railways could be more in poli- 
 tics than at present. This objection is only valuable 
 as it serves to point out the need of a true civil service 
 reform. Of course, the only danger in increased pat- 
 ronage, is because business and politics are not sepa- 
 rated. If civil service were entirely separated from 
 politics and placed upon a business basis, there could 
 
42 NA TIONAL O WNERSHIP OF RAIL WA YS. 
 
 be no danger from political patronage. The patronage 
 capable of abuse by any party would be reduced to 
 zero. If the railroad business were placed under non- 
 partisan boards, with true civil service rules, it would 
 be entirely removed from politics. Every industrial 
 office should be a life position, subject to good con- 
 duct, with a right to have all removals tested in court. 
 This done, all the trouble with patronage will be 
 relegated to " innocuous desuetude." The public owner- 
 ship of monopolies is in itself a tremendous influence 
 in the direction of reform of the civil service. There 
 is no way to compel the best men to take an interest 
 in this reform and in public questions in general, like 
 putting vast business interests into the hands of the 
 government. 
 
 We have but to refer to Birmingham, Glasgow and 
 many other European cities, in proof of this asser- 
 tion. These cities were once enormously corrupt, but 
 since the socialization of their natural monopolies they 
 have become the best governed cities in the world 
 Glasgow was full of the worst sort of toughs, and its 
 government was exceedingly corrupt until the gas 
 plant, the street railway, tenement houses, etc., became 
 public property. Then the best people said, "this 
 thing cannot continue ; it is getting too serious ; alto- 
 gether too much is at stake and we will not leave these 
 corrupt politicians any longer in power." And they 
 did not.* 
 
 No ! Nationalization would not put the railroads in 
 politics, but rather the contrary. To say that enlarg- 
 ing the sphere of the State would increase corruption 
 evidences a failure to trace the cause of the evil to its 
 source. The cause of corruption is private interest as 
 
 * kk Philosophy of Mutallism," Parsons, p. 32. 
 
NATIONAL OWNERSHIP OF RAILWAYS. 43 
 
 opposed to public interest. Self interest is the root. 
 So long as private individuals can further their own 
 interests at the expense ot the public, there will be 
 corruption. * The railroad lobby is the effect of which 
 self-interest is the cause." Under public ownership 
 there would exist no railroad interest as opposed to 
 the public interest, consequently there would be no 
 railroad lobby, as there is no post- office lobby. Public 
 ownership would notonly remove the opportunity, but 
 also the incentive to corruption. It is the only remedy 
 that will remove the railroads from political abuse, 
 and from political corruption. It is not our public 
 post-office which corrupts our legislatures, but our 
 private railroads. Destroy this corruption power and 
 give the government a chance to be honest. 
 
 In Australia, placing of the tenure of office under 
 non-partisan boards has ended all complaints of abuse 
 of patronage. 
 
 4. f< It is unconstitutional." 
 
 Not so, however. Congress has a right to take the 
 railways for public use either under the military power, 
 or the post-road clause. 
 
 5. "It is not within the sphere of the government 
 to operate railways." 
 
 Why not ? Is it not as much within the sphere of 
 government to operate railways as the postal service, 
 or the weather bureau ? Anything that is for the 
 public good is within the sphere of the government. 
 The government is but the agent of the people, the 
 instrument in their hands to secure their ends. 
 
 As I have said, society is in a^state of constant pro- 
 gress, and new relations and obligations are ever 
 evolving. Society should respond to these new duties 
 and gladly accept the wider responsibility. The let 
 
44 NA TIONAL WNERSHIP OF RAIL WA YS. 
 
 alone policy means the lessening of interest in public 
 life, and its consequent degradation. We are suffer- 
 ing to-day from extreme individualism. The lack of 
 a sense of responsibility to public welfare is due 
 largely to this cause. We have insisted on belittling 
 governmental functions until indifference has taken 
 a strong hold upon our best citizens. Is it not time to 
 call a halt and inquire if we are on the right track ? 
 It is this blind application of laisez faire that is 
 leading us on to social disaster. 
 
 6. "The cost of administration would be greater 
 under public management." 
 
 This has been fully answered by showing the great 
 economies of public ownership. Still, I will insert a 
 table given by Mrs. Todd which is of great importance. 
 The table shows the percentage of total working ex- 
 penses expended on administration of the state and 
 private lines. 
 
 Countries. 
 
 State Line per cent. 
 
 Companies Line per cent. 
 
 Germany 
 
 9.40 
 
 13.10 
 
 Austro-Hungary 
 
 650 
 
 8.47 
 
 Belgium ... ...'"* 
 
 5.05 
 
 10.13 
 
 Denmark . 
 
 689 
 
 5.77 
 
 
 16.16 
 
 9.58 
 
 Italy 
 
 6.49 
 
 8.76 
 
 Norway 
 
 7.30 
 
 7.00 
 
 Holland 
 
 5.30 
 
 10.35 
 
 Houmania 
 
 440 
 
 10.80 
 
 Russia 
 
 927 
 
 13.70 
 
 
 
 
 With the exception of France, which owns only the 
 feeders to the great trunk lines, the above table shows 
 the great economy in administration secured in mobt 
 of the countries by public management of the rail- 
 roads. 
 
 7. " The railways should be left to free competi- 
 tion." 
 
NATIONAL OWNERSHIP OF RAILWAYS. 4$ 
 
 As the railway business is a natural monopoly, it is 
 not Mibject to successful competition. All such efforts 
 end either in combination or ruin. Whenever compe- 
 tition is attempted it is simply a war a struggle tor 
 mastery and is certain to end. The history of the 
 West Shore and Nickel Plate roads is a,notable illustra- 
 tion. It is estimated that $200,000,000 was wasted in 
 this experiment. 
 
 No ! Competition is foreign to all natural monopo- 
 lies. England is probably the best country in which 
 to study the effect of competition on railroads. Prof. 
 Cohn, the noted authority on English railways, has 
 shown that the effect of competition, in every case, has 
 been to increase charges. The whole tendency in rail- 
 roads is toward combination and monopoly. Of the 
 40,000 railroad stations not more than 4,000 are junc- 
 tions, and even at such the ingenuity of the managers 
 has developed a system of "pooling" the traffic, so that 
 rates at competitive points are now under control. 
 
 As such a business is non competitive in character, 
 the result of turning it over to private corporations 
 could be naught else than harmful. ' The railway 
 transportation under our present conditions is to the 
 industrial world, what the atmosphere is to the physi- 
 cal world, it pervades and is essential to all indus- 
 tries."* Who would consent to allow a few men to 
 dictate to him, upon what terms the air shall be 
 breathed ? 
 
 All tnese objections were heard in Prussia, before 
 the government took possession of the roads, but pub- 
 lic ownership has shown them to have been ground- 
 less. Prof. Cohn, of the University oi Goettingen, 
 the general sentiment when he says, that in 
 
 * "Railway Problems;" p. 81. 
 
46 NATIONAL OWNERSHIP OF 
 
 Prussia the question of state ownership and man- 
 agement of railways has been settled by the test of 
 experience, f 
 
 CONCLUSION, 
 
 The trend of opinion in this country today is strong- 
 ly in favor of government ownership. People are be- 
 ginning to realize that the full benefit of the railways 
 can only be secured by making them public property, 
 owned and managed by society in the interests of so- 
 ciety. 
 
 The rights of the people can no longer be obscured 
 by false issues. The " innocent shareholder " and the 
 " widow and orphan " plea have done excellent ser- 
 vice in the past for unscrupulous men in the perpetra 
 tion of their schemes. It is often said that the re- 
 covery of all the peoples property which has been 
 fraudently obtained would, in many instances, work 
 hardship. Perhaps, in a few cases, this may be true. 
 But for everyone who would thus suffer there are now 
 thousands who suffer. Are not the interests of the 
 majority to be looked after ? Shall we continue to 
 leave a few innocent people in possession of stolen 
 property white the rights of the multitude are ne- 
 glected ? 
 
 That which is needed in this country is a public 
 spirit that will protect public property. When this 
 spirit has been aroused we need fear no aggression of 
 anarchism. There will be little difficulty in protect- 
 ing the really innocent shareholder. Civil and criminal 
 remedies would be very wholesome. If our govern- 
 ment should begin at once a real defence of public 
 rights, people would be more careful in their invest- 
 ments, and make needful inquiry regarding the acqui- 
 
 t " Socialism and Social Reform;" Ely, p 288. 
 
NATIONAL OWNERSHIP OF RAILWAYS. 47 
 
 sition of the stock offered 1'xir, sale. -If any cf che de- 
 pendent classes suffer innocently through the estab 
 lishment of public justice such could easily be 
 indemnified, either by public or private offerings. 
 
 This plea, however, has practically no bearing on 
 the question under consideration, although it has 
 often been made to do service in this connection. The 
 truth is, the stockholders of railroads have suffered 
 nearly as much as the public at the hands of railroad 
 managers. Their perfidious relations is a wound in 
 the commercial world. 
 
 Let no one be deceived or diverted from the issue 
 by clap trap arguments. That all the railroads of the 
 country ought to bs under one management is ac- 
 knowledged by as high an authority as Mr. C. P. 
 Huntington. The only question then, is, shall this 
 management be national or corporate? In behalf of 
 national ownership, I have submitted the foregoing. 
 My concluding word is, if you are convinced that pub 
 lie ownership is the true solution of the railroad 
 problem, evidence your faith by your works. Let 
 each do his part in a campaign of education, that this 
 much needed reform may be speedily consummated. 
 
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