GIFT OF 
 
illll^ 
 
 Official Proceedings 
 
 Central States Conference 
 
 mini 
 
 -nr 
 
 on 
 
 Rail and Water 
 Transportation 
 
 I 
 
 Under the Auspices of the 
 
 Evansville Chamber of Commerce 
 
 Evansville, Ind. 
 December 14-15, 1916 
 
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Official Proceedings 
 
 of 
 
 Central States Conference 
 
 on 
 
 Rail and Water Transportation 
 
 Held Under the Auspices of the 
 
 Evansville Chamber of Commerce 
 Evansville, Indiana 
 
 December 14 and 15, 1916 
 
FOREWORD 
 
 Realizing the vital interest of the business men of the nation in a 
 sound solution of the problems involved in the question of transportation 
 legislation, now engaging the attention of the administration and Con- 
 gress, it was suggested to the Evansville Chamber of Commerce by Mr. 
 Henry C. Murphy, its retiring president and a member of its Board of 
 Directors, that this Chamber of Commerce might render a valuable public 
 service. 
 
 Mr. Murphy's plan, which has since come to be widely known as 
 "The Evansville Plan", was outlined to the directors of the Evansville 
 Chamber of Commerce, and approved by them on November llth, 1916, 
 and was consummated in the Central States Conference on Rail and 
 Water Transportation, held in Evansville, Indiana, on Thursday and Fri- 
 day, December 14th and 15th, 1916. 
 
 The purpose of the Conference was to arouse business men to a reali- 
 zation of their interest and responsibility in the formulation of legisla- 
 tion on the subject of transportation. It was thought that if a conference 
 of business men, representative of the six central western states, Indiana, 
 Ohio, Kentucky, Tennessee, Missouri and Illinois, should be arranged, 
 with a program including addresses by men of national prominence and 
 importance, representative of all sides of the transportation question, 
 namely: the Railways, Labor, the Investor, the Shipper and the Public; 
 and providing also for open discussions by participants in the Conference, 
 so that each might have an opportunity to present his views and his judg- 
 ment of the attitude of his community as he conceived it, the way might 
 be paved for much helpful publicity of the transportation problems, not 
 only in the region covered by the Conference, but throughout the nation. 
 From the attrition of minds thus brought together in earnest discussion 
 and enlightened by the presentation of the various aspects of the subject 
 by leading authorities, it was thought some common ground of agreement 
 on at least some phases of the subject might be found and expressed 
 in resolutions reflecting prevailing sentiment of the Conference. Thus a 
 stimulus might be given to the discussion of the transportation problem 
 through the adoption by other cities of the "Evansville Plan" or in some 
 other way devised "by them. 
 
 The idea of having a regional Conference comprising six states was 
 that in this way efforts might be concentrated, and business men and rep- 
 resentatives of civic organizations might attend with little expense and 
 loss of time. Upon this theory the plan was prosecuted. 
 
 In more than two hundred and fifty cities and towns in the six states, 
 the newspapers, the leading business men, including the officers and di- 
 rectors of all the banks, and all of the Chambers of Commerce and other 
 civic organizations^ were furni&ed ^with the program of the Conference 
 and full information- about its purpose and scope. 
 
 Forty thousand circulars and programs were distributed. More than 
 three hundred 'coi^mjercUr-oi-gamzations were furnished with literature, 
 
and over twenty-five thousand letters were sent out by the Evansville 
 Chamber of Commerce. 
 
 Fifteen thousand telephone messages calling attention to the Confer- 
 ence in over two hundred cities and towns, were delivered by local tele- 
 phone to carefully selected lists of prominent and public spirited busi- 
 ness men. 
 
 More than three hundred newspapers in the six states carried articles 
 on the Conference, and many of them also commendatory editorials. In 
 other states, from coast to coast, the leading dailies carried articles on the 
 Conference and its possibilities. 
 
 Thus, as was contemplated, a vast amount of most valuable publicity 
 was given to the vital importance of the transportation question. 
 
 The President of the United States, members of Congress, and lead- 
 ers in the movement for constructive legislation for the best interest of the 
 nation, have expressed their unqualified approval of the purpose of the 
 Conference and their interest in its results. 
 
 During the first morning session of the Conference, President Wilson 
 sent the following message by telegraph: 
 
 "May I not send my greetings to the Central States Transportation 
 Conference and express my deep interest in the great questions it has as- 
 sembled to discuss. I wish that I might have the benefit of hearing these 
 discussions." 
 
 (Signed) WOODROW WILSON. 
 
 * 
 
 It is confidently hoped that the wide distribution which will be made 
 of this report of the proceedings of the Conference will serve to stimulate 
 further discussion of the question and aid the law-makers in formulating 
 sound and constructive legislation. 
 
 Evansville, Ind. 
 
 EVANSVILLE CHAMBER OF COMMERCE. 
 
 349143 
 
THE CENTRAL STATES CONFERENCE 
 
 THE CENTRAL STATES CONFERENCE 
 
 The Conference was called to order at 10 a. m. Thursday, December 
 14, 1916, by Chairman Henry C. Murphy, publisher of the Evansville 
 Courier, with delegates and visitors from Indiana, Illinois, Tennessee, 
 Ohio, Kentucky and Missouri in attendance. 
 
 Following the invocation by Rev. William N. Dresel, of Evansville, 
 Mayor Benjamin Bosse delivered a cordial address of welcome, into 
 which he introduced many pertinent and significant allusions to the dif- 
 ficulties involved in any proper solution of the transportation problems. 
 
 Chairman Murphy then addressed the Conference as follows, his sub- 
 ject being "Purpose and Scope of The Central States Conference." 
 
 Plan to Build Up Carrying Facilities. 
 
 If I have a correct conception of the purpose of this conference, 
 we are here, not to damn the public, as did a famed railroad magnate 
 in an ill-considered moment, nor to damn the railroads, as 00 many hot 
 tempered Americans have been doing for many years. Instead, we have 
 come to this meeting to help to dam the waterways that they may serve 
 their full function as real factors in our national system of transporta- 
 tion. Finally, we are here to develop and adopt a constructive program 
 that may contribute in some measure to dam the flood of adverse criti- 
 cism and hostle legislation to which the American systems of transpor- 
 tation have been subjected for more than a decade legislation and criti- 
 cism that has retarded progress, growth and development, not only of the 
 railways and waterways, but of the business of the nation your business 
 and my business. 
 
 Huxley defined the first agnostic as the man who was the first to 
 see that clear knowledge of what one does not know is quite as important 
 as knowing what one does know. The sanctification of doubt had its origin 
 in the intellectual and moral strength of Socrates, to be further sancti- 
 fied in a later century by the luminous mathematician Descartes. Had 
 Huxley's agnostic been fortunate enough to be associated with the intel- 
 lectual followers of Socrates and Descartes and had the group been faced 
 with a transportation problem such as we face today they promptly would 
 have called a conference and invited to it the Thorns, Lees, Walshs, 
 Trumbulls, Muirs, Kingsburys, Lathrops, Leighs, Bellevilles and 
 Thornes of their day. After listening to the views and judgments of these 
 men, they would have formed honest, just conclusions, settled on a defi- 
 nite, thorough and adaptable policy, and, through it, found a way out of 
 their difficulties. 
 
THE CENTRAL STATES CONFERENCE 5 
 
 All Not Well With Transportation 
 
 The Central States conference, which we today bring into being, 
 is composed, I hope and believe, of doubters of the Huxley type. Each of 
 us comes here with the knowledge, vague or certain, that all is not well 
 with the transportation systems of the United States; that the doctors 
 and nurses are worried about their patients' condition; that the remedies 
 previously administered have had but temporary beneficial effect. Some 
 of us are optimistic enough to believe the attack merely an insignificant 
 indisposition, due to high living and a consequent inactive liver, to be 
 alleviated by time and clearer weather. 
 
 Others regard the illness as more serious, but not necessarily fatal. 
 Their theory is that the patient is suffering from mal-nutrition, due to 
 too economical supervision of diet by a parsimonious guardian, and that a 
 speedy cure can readily be accomplished by furnishing a larger and more 
 varied regimen of food and drink, expressed in terms of higher tariffs, 
 with relief from the mischievous, nerve-racking demands for small change 
 and frequent holidays of the patients' children, as represented by labor 
 unions. 
 
 Some of us may be utter pessimists, thoroughly discouraged and dis- 
 traught, certain that the malady is of a fatal nature, which will respond 
 to no treatment, however scientific. Such believe the very vitals of the 
 patient are so diseased that it is folly even to attempt to stay the surgeon's 
 knife. They see the undertaker, in the person of Uncle Samuel, just be- 
 yond the portals of the sorrowing household and, as discerning, provi- 
 dent and time-saving men, they would call in that undertaker, even 
 though the corpse is not ready. They argue he is a busy person, this un- 
 dertaker, and economy for him and everybody concerned will result if 
 he can have a look about, measure the almost moribund shape on the bed, 
 and start making preparations for what is to happen the day after to- 
 morrow. Further than this, they would bring in the lawyer and appraiser 
 that a quick inventory be made of the chattels and realty of the about-to- 
 be lamented. 
 
 Diversity of Opinion 
 
 To repeat, each of us is convinced there is sickness in the house, 
 though the authorities have not yet tacked up the yellow flag. Probably 
 each man before me has a well-defined opinion of the course properly 
 to be pursued by the medical men who are in charge of the situation 
 our nation's president the surgeon-in-chief and his assistants the 
 members of the Interstate Commerce board, Congress and the various 
 state commissions. Diversity of opinion as to what serum should be in- 
 jected to aid the sick body is common among us. Each one of us may 
 think himself fully competent to diagnose the ailment and treat the ill 
 person and too many of us, I fear, are inclined to proceed in haste, using 
 the remedies within easy reach, while some, and they are not an insigni- 
 ficant few, favor a quick incision with the scalpel. 
 
 One of the main reasons for America's commercial supremacy is to 
 be found in the personal egotism of the American business man. His in- 
 nate esteem for his own capacity leads him to attack any problem and 
 any undertaking, no matter what its proportions, with sublime self-con- 
 fidence and assurance that brooks no thought of failure. He has conquered 
 equally perplexing situations before and is disturbed by no fear that a so- 
 lution to the vexed new question is impossible. 
 
 Our conference is representative of American business men of this 
 very type, and their presence here in such large numbers leads me to 
 think they are about to attack another problem. This question, though not 
 new, in recent months has presented phases that are constantly changing 
 as kaleidoscopic variations occur in our industrial and commercial life. 
 This problem the grave, internal question confronting the American 
 people today is defined tersely, yet completely, in the query, "What shall 
 be done for and with the American railways and waterways?" We are 
 
6 THE CENTRAL STATES CONFERENCE 
 
 here at this conference to answer that question for the business men of 
 the Central States. 
 
 President Wilson Interested 
 
 When the plan of the Evansville conference was outlined to Presi- 
 dent Wilson, he caught its significance immediately and enthusiastically 
 applauded the idea, voicing a hope that other cities may follow Evans- 
 ville's lead with the result that regional conferences all over the United 
 States might be called. The president further gave it as his opinion that 
 constructive policies should result from our deliberations and praised a 
 movement broad enough to include in its program every side and angle 
 of the transportation question. 
 
 I mention Mr. Wilson's views, not with the thought of exploiting 
 our initial adventure in the uncharted wilds of business congresses, nor 
 to emphasize the worthiness of our idea, but rather to indicate the trend 
 of the executive's thought. As I view this expression, I take it that he feels 
 the need of suggestion and counsel, and he looks to the business men of 
 East, West, North and South to volunteer as guides to lead him and con- 
 gress out of the Hercynian forest. 
 
 I may exaggerate the importance of this conference and the other 
 sectional councils that are sure to succeed it, but it is my firm belief that 
 only by means of these assemblages will be found a just and true solution 
 of the transportation problem. The whole truth about the railways is not 
 to be discovered at a board meeting of railway presidents, nor in a con- 
 clave of brotherhood trainmen, nor in a shippers' convention, nor yet in 
 the sessions of congress or of the commissions handling transportation 
 matters. But it may be dug out of the mass of testimony offered by the 
 witnesses for the various sides to this controversy and it will be revealed 
 if we are honest in our search for it and listen with impartial ear to the 
 advocates of the various parties at interest. The task is one to appall a 
 Sisyphos, but Americans tolerate no laissez faire policy when vital issues 
 are at stake. 
 
 Magnitude of the Problem 
 
 Statistics are exceeding tiresome and should not be allowed to 
 Intrude themselves in a well-ordered conference. Realizing this, I hesi- 
 tate to offer figures, but I want every individual here to realize the magni- 
 tude of the problem with which we deal. To do this, you must know we 
 are concerned with questions involving railroads which operate over 380,- 
 000 miles of track, with investments in road and equipment aggregating 
 over twenty billions of dollars. When we comprehend that this vast sum 
 represents fully as much as the total wealth of a great nation like Italy, 
 we are staggered by its significance. 
 
 These roads, and I should explain I do not include the intra-state 
 carriers in these figures, but only those reporting to Washington, carry 
 over a billion passengers per year and transport freight amounting to 
 nearly two and one-half billion tons. The annual gross revenues of these 
 carriers now exceed three billions with a yearly distribution for expense 
 of approximately $2,500,000,000. In the management and operation of 
 these systems, nearly two millions of individuals find employment the 
 number varying by hundreds of thousands with the ebb and flow of pros- 
 perity and its hand maiden, Commerce. 
 
 The figures are astonishing by reason of their immensity and the 
 problems that confront government in its regulation of the carriers and 
 the railways in their relation to government and people are equal \y .be- 
 wildering. 
 
 Within the past sixty days the significant announcement was publish- 
 ed that 1,100 miles of new railways in China had been financed by Ameri- 
 can capital and would be constructed under American supervision. The 
 work will require an expenditure of approximately $100,000,000. 
 
 Do you find pregnant meaning in that announcement of the American 
 International Corporation? You will when you think of it in connection 
 
THE CENTRAL STATES CONFERENCE 7 
 
 with the difficulties American railroads have in obtaining capital needed 
 for rehabilitation and development. With the stock of money gold in 
 this country standing at $2,750,000,000 an increase of $700,000,000 
 over a year back with $4,500,000,000 of actual money in circulation 
 among our people, with business at such a peak that the railroads are 
 108,000 cars short of the urgent demand with all these evidences of 
 utterly unprecedented material well being, where could one find a man 
 or group of men, willing to finance and construct 1,100 miles of new 
 railway in the United States? I venture the belief that the needed cap- 
 ital would be hard to find. 
 
 Only 2,500 miles of rail were laid in the United States in 1914, and 
 in 1915 the new mileage laid down was insignificant less, I have read, 
 than was built in any single year since the Civil War. Since 1906 our 
 total mileage has increased only 28,000 whereas our proper internal de- 
 velopment demanded an increase of 100,000 miles. 
 
 Meaning to Business and the Home 
 
 The import of this tremendously significant fact has dawned on the 
 man who is paying $4.00 or $5.00 per ton for coal, whereas his usual cost 
 is under $3 and to the housekeeper who checks his or her monthly gro- 
 cery, butcher and department store accounts. The high cost of living, 
 about which newspaper paragraphers love to dilate, has a direct relation 
 to the lack of railroad development. And back of this insufficiency of 
 mileage is the timidity of capital and back of this timidity of capital is 
 the reckless and dishonest railway management of an earlier era and the 
 consequent destructive public criticism and hostile legislation. 
 
 It is axiomatic that the permanent prosperity of the nation and of 
 business in general can not be disassociated from the prosperity of the 
 railways. One is utterly dependent upon the other. Prosperity is epi- 
 demic in America today, but the stabilization of railway credit is as far 
 distant, despite prosperity, as it was in the lean days before we were en- 
 gulfed by the tidal wave of foreign gold. 
 
 Just as good wagon roads bring reduced operating cost to the farmer 
 and lowered living expenses to the city workman so highly developed 
 railways, constantly growing and expanding with the country's growth 
 and development, will bring similar and larger benefits in which we all 
 shall share. 
 
 More attentuated remarks from the temporary chairman might have 
 been expected and relished, but I have deemed it wise to elaborate fully 
 the diverse issues that confront us. I have introduced little as bearing on 
 the needs of waterways and I want just a word on that topic. So long as 
 the great newspapers of America journals like the Chicago Tribune, New 
 York Sun, Boston Herald, Philadelphia Ledger and others equally promi- 
 nent persist in associating the word "pork" with the canalization of our 
 great inland water carriers, such as the Ohio, the Mississippi and the Mis- 
 souri; so long as they connect these absolutely worthy plans with the im- 
 provement of Bilious Creek and Stickfoot Lake, just so long we shall 
 have a popular misconception of honest, necessary nay, vital projects, 
 I need not tell you that the popular misconceptions produce no" construc- 
 tive congressional legislation and mighty few dollars in the way of 
 appropriations. 
 
 Cannot Remain Neutral 
 
 The business interests of this land cannot remain neutral and uncon- 
 cerned in the present situation. We must cease being commuters on the 
 line of least resistance. If politicians are to be the pilots of the trans- 
 portation ship they will steer a course for the harbor of government owner- 
 ship. Siren voices will sing the glories of that calm refuge for storm 
 wrecked ship and sailors. If we are wise we shall follow the advice of 
 Circe to Ulysses and stop our ears with wax to avoid the enchanting re- 
 frain. My plea today is that you gentlemen who honor Evansville by 
 
8 THE CENTRAL STATES CONFERENCE 
 
 your presence give to the coming speeches and debates calm, dispassionate 
 attention. Hear each and every side before you pass your final judg- 
 ment. Whatever your present emotional bias, and I fear each of us is 
 conscious of some emotion and some bias, I urge that it be set aside and 
 forgotten, that all the evidence may be weighed conscientiously before a 
 verdict is rendered. 
 
 My fervent hope is that we may equal the expectations of Woodrow 
 Wilson and by the attrition of many minds give to America the sensible, 
 just, progressive and sane solution of our transportation problem. 
 
 After a brief discussion among the delegates concerning the order 
 of procedure, Henry C. Murphy was elected permanent chairman and 
 Robert Bonham secretary of the Conference. The delegates then voted 
 unanimously to adopt the following plan of procedure: 
 
 1. All non-resident participants in the Conference shall register 
 with the Secretary. 
 
 2. Only registered participants and members of the Evans ville 
 Chamber of Commerce shall be entitled to a voice and vote in the Con- 
 ference proceedings. 
 
 3. The order of business shall follow the printed program prepared 
 for the Conference. 
 
 4. A five minute limit shall apply to all remarks outside the pro- 
 gram, unless express consent be given by the Conference. 
 
 5. All voting shall be viva voce or by division. 
 
 6. . The Chairman of the Conference shall appoint a committee of 
 eleven on resolutions and this committee's report shall come up for dis- 
 cussion at the afternoon session of Friday, December 15th. 
 
 7. All resolutions offered must be in writing and shall be referred 
 by the Chairman to the committee on resolutions without debate. 
 
 The Chairman thereupon introduced Mr. Alfred P. Thorn, Counsel for 
 the Railway Executives' Advisory Committee on Federal Legislation, and 
 General Counsel of the Southern Railway, alluding to him as one of the 
 most conspicuous figures now before the public in connection with the 
 transportation problem. 
 
 Mr. Thorn then delivered a remarkable address, choosing as his topic 
 "The Government and the Railroads." 
 
THE CENTRAL STATES CONFERENCE 
 
 The Government and the Railways. 
 
 By Alfred P. Thorn 
 Counsel Railway Executives* Committee on Federal Legislation 
 
 Mr. Chairman, Mr. Mayor, and gentlemen of the Conference: I think 
 it is a matter of national congratulation that there has been wisdom and 
 initiative enough in the City of Evansville to bring together a conference 
 on this tremendous Question. At last the problem of transportation has 
 come out into the sunlight of public consideration and discussion. To my 
 mind it is a most momentous question that confronts the American peo- 
 ple. It is the foundation of their entire commercial and social life. It is 
 the means by which communities and individuals communicate and trade 
 with one another. It is the one thing that is absolutely essential to the 
 greatness and the glory of our nation. 
 
 I have no doubt from things that have come to me from time to 
 time that the real transportation question is somewhat obscured by the 
 idea that it means questions arising out of the Adamson act. That is a 
 mere incident in the problem. Long before the recent controversy be- 
 tween the employers and the employees of the railroads occurred, the more 
 fundamental questions of the relations of government to the railroads 
 had arisen, and President Wilson in his address to Congress on the 7th 
 of last December, a little more than a year ago, brought this question 
 prominently to the attention of Congress and suggested a comprehensive 
 study of the whole question of transportation in all its relationship, so 
 that, "a new appraisement" in his language, might be had of the twenty- 
 nine years of experience of regulation in this country, so that we might 
 readjust our views in any matter where readjustment was necessary in 
 order to come to a correct solution of this problem. 
 
 In denning the problem, in ascertaining just what it is that we 
 have to do with, it may be helpful to you, as it has often been helpful 
 to me, to review to a certain extent the history of governmental regula- 
 tion of railroads of America. At the outset of that consideration it is 
 necessary for us to bear in mind the contrast between the systems of regu- 
 lation adopted by the government in respect to other great public insti- 
 tutions and the system of regulation adopted by the government in re- 
 spect to transportation. 
 
 As an illustration of what I mean, I ask your attention to the dif- 
 ference between governmental regulation as applied to the banking sys- 
 tems of the United States and governmental regulation as applied to the 
 railways of the United States. 
 
 The system of regulation of banks had its inception when the banks 
 had their inception. It was created as a part of a system which was to 
 create an efficient banking system for all the people of America. It was a 
 part of a great constructive work. It was not adopted in the spirit of an- 
 tagonism to the bank nor in a spirit of criticism, nor in a spirit of outrage 
 coming from abuse; but it came as a natural and constructive part of 
 building up a banking system and possessed all the elements necessary 
 to construct a system which would create adequate commercial banking 
 facilities for the people of this country. 
 
 The history of regulation as applied to the railsoads is just the con- 
 trary. It was adopted long after the railroads had come into existence. It 
 was not a part of an entire constructive scheme. The railroads had not 
 been built by government. They had not been organized by government. 
 But they came into existence as a result of private enterprise and initia- 
 tive. They were everywhere welcome. Subsidies were voted for them. 
 The most liberal charters were granted. Land grants were given to them, 
 the great fundamental and controlling public purpose being to obtain 
 
10 THE CENTRAL STATES CONFERENCE 
 
 them as a means of intercommunication between men and communities. 
 None of the possible abuses had then appeared. Every public purpose was 
 concentrated upon the necessity of bringing them into being and of pro- 
 viding the inducements essential to that end. 
 
 Now, the men that built the railroads were men. They had human 
 instincts and human frailities just as other men had; and the result of 
 the welcome which was thus given, the result of the inducements which 
 were thus offered, the result of the undeveloped public condition of public 
 mind in respect to them was to create the impression upon the men that 
 built those railroads that they were building and were owning a piece of 
 private property. That is not to be wondered at. That was the inevita- 
 ble 'result of the methods which were adopted and of the encouragement 
 that was given. 
 
 Soon after this matter of railway transportation passed into another 
 stage. The use of these great properties for private ends, the sale of their 
 services to the man to whom the sale could be made most advantageously 
 to the owner, on different terms at wholesale to the large dealer than were 
 given at retail to the small dealer, the exploiting of their securities on 
 the markets for the private purposes of the owner, all these things were 
 the natural outgrowth of the conception that these properties were private 
 properties just as other private property was private property. 
 
 But as time progressed it became apparent that the power of con- 
 trolling transportation was too great in its influence upon the destinies 
 of communities and of men and of nations to be permitted to go uncon- 
 trolled, that the possession of a power so immense that it made and un- 
 made prosperity, that created cities, that made the destinies of nations, 
 should not be left in the hands of their private owners unrestricted by the 
 imposition of the conception of a public obligation. So that on the one side 
 there still was the conception of private property with all the rights of 
 private property and on the other there was a growing conviction that a 
 power so great, with consequences so immense, should not be left in the 
 uncontrolled possession of people that built it. 
 
 Now, gentlemen, we have all come to see that the public conception 
 of these instrumentalities of commerce was a sound one. We have all 
 come to see that no other conception could be permanently tolerated. But 
 that did not prevent a bitter fight between the men who went into the 
 enterprises with the encouragement and belief that they were private 
 enterprises and the men that were insisting on the public conception of a 
 higher obligation to the whole people. 
 
 Rebates, whereby one man was favored over another, the affording 
 of facilities to one concern and the denial of them to another, favoring 
 rates to certain communities which were denied to others, all were abuses 
 which could not be permanently tolerated, and the fight for a system 
 of regulation as applied to the railroads was a fight between those men 
 who wished to impose the public conception upon the private owner and 
 the private owner who wished to resent any interference of his supposed 
 rights. 
 
 The battle went on with fierceness. It was ultimately won, as it 
 was inevitable that it must be won, by the sound public view that a power 
 so immense imposed certain public obligations which must be recognized. 
 But when the question of imposing a system of regulation came, it came 
 with a demand from a people enraged by the denial of just rights, by the 
 existence of far-reaching abuses and the terms imposed were the terms 
 which the victor imposes upon the vanquished. It was terms of regulation 
 dealing with the abuses which had been revealed, and dealing with them 
 alone. The system of regulation was a system which was applicable to the 
 removal of abuses and was one that was characterized by the ideas of 
 correction, of punishment and of repression. 
 
 That was twenty-nine years ago. The public ij\ making this regula- 
 tion had no help from the railroads, because they went down as the van- 
 quished in the fight. But the thing that we must remember is the Genesis 
 
THE CENTRAL STATES CONFERENCE 11 
 
 of the system of regulation and the character which that Genesis neces- 
 sarily gave to the system of regulation. Now, the question before the 
 American people is whether a system of governmental regulation can be 
 permanently based simply upon the principles of repression and correc- 
 tion or whether the time has not come now to inquire whether the prin- 
 ciples of encouragement and helpfulness and constructiveness must be 
 introduced into it. (Applause) 
 
 I realize that in presenting this question I cannot expect from Con- 
 gress, nor can I expect from the American people, any help to a mere 
 private business. I have no more right in representing the rairoads to 
 ask special privileges of government than any of you gentlemen have to 
 ask special privilege's of government in respect to your business. I realize 
 that any proposal I shall make, in any suggestion which I shall bring for- 
 ward, I must consent to have it measured by the public interests, and if 
 it does not come up to that standard, if it does not faithfully measure up 
 to the public interests, then it must be, and it should be, discarded. So 
 that in nothing which I shall say shall I ask for anything on private 
 grounds, but all will be based upon a willingness, at least upon my part, 
 to have my suggestions measured by what the public interests and the 
 public interests alone require. (Applause) 
 
 Now, gentlemen, let us see what the public interest is. What is public 
 interest in respect to transportation? Is it an interest primarily or prin- 
 cipally in respect to the charges of transportation? Are you, as a funda- 
 mental question, most interested in the charges which you have to pay 
 to the railroads? That is a legitimate public interest, but we must recog- 
 nize that the existing machinery is entirely adequate to prevent exorbitant 
 charges, that there is no demand from any source for amended instru- 
 mentalities by which exorbitant charges shall be guarded against. Your 
 Interstate Commerce Commission has power amply able to deal with any 
 question of exorbitant charges. I say that in passing, but I say moreover 
 that your principal interest is not in regard to charges. 
 
 Your principal interest is in the existence of means of commercial 
 intercourse, in the entire adequacy of those means to provide for your 
 commercial needs and in the fact that as the commercial and productive 
 industries of this country grow your transportation facilities will grow to 
 keep pace with them. 
 
 I cannot forget that I was present in the last day of August at a 
 committee meeting in the capitol at Washington, when a threatened strike, 
 nation-wide in its extent, menaced the continuance of railroad transporta- 
 tion in America. I heard no talk of rates; I heard no talk of charges, but 
 I saw the President of the United States and the Congress of the United 
 States busy only with the question of how the wheels of commerce should 
 be kept running and how the American people could be kept supplied 
 with transportation facilities. 
 
 I suppose that there is no man within the sound of my voice who will 
 deny that if it was necessary in order to continue the instrumentalities of 
 transportation, he would be willing, however reluctant he might be, he 
 would at last make the choice of paying double the amount of charges in 
 order to preserve them. The question with America is not the rate of the 
 charges, but the question of the continuance and adequacy of your com- 
 mercial instrumentalities. Will you permit me to digress and to say that 
 in no move that we are making, in no suggestion that we are bringing 
 forward to Congress, are we trying to get increased charges as a result 
 of congressional action. Our plea to Congress is not that it shall pass a 
 law increasing our charges, but that it shall perfect the instrumentalities 
 of regulation so that when the time comes when charges should be in- 
 creased or should be decreased, the machinery may respond promptly 
 and in a business-like way to the needs of the situation. 
 
 Is there nothing to alarm the American people about their transpor- 
 tation facilities? Has nothing occurred to arrest their attention? Why, let 
 your mind revert to the year 1907, when in the midst of the greatest 
 
12 THE CENTRAL STATES CONFERENCE 
 
 commercial movement of the day, there was a sudden panic brought on 
 by the absolute failure of the railroads to be able to transport the com- 
 merce that was offered, not enough tracks, not enough cars, not enough 
 yards, not enough of the instrumentalities of transportation to carry the 
 commerce that was offered it. There was precipitated in that year what 
 is known as a panic of plenty. 
 
 Last year it was found necessary to set an embargo upon the move- 
 ment of commerce, especially in the New England states, and so great was 
 that necessity that Commissioner Clark of the Interstate Commerce Com- 
 mission went with a number of gentlemen, associated with him, to make 
 a study of the situation so that commerce might move; and notwithstand- 
 ing the effort that he is making that situation has not yet been remedied, 
 because of the fundamental lack of tracks, the fundamental lack of yards, 
 and the fundamental lack of equipment. 
 
 Just now as I speak, the commercial capacity of America is crippled 
 by the fact that there is a shortage of cars, an inability to carry the traf- 
 fic. We must recognize that the transportation capacity of these carriers 
 sets a maximum limit upon the productive and commercial capacity of the 
 people, because a people can not and will not produce more than they can 
 get to a market; and when you reduce to them the facilities of access to 
 market, when you set a limit upon what can be sent to market you set 
 the same limit upon what the people can produce. 
 
 So I shall take it for granted that the prime interest of the American 
 commercial man is to be assured of an adequacy of transportation facili- 
 ties and to be assured that they will always grow to keep pace with the 
 demands of his business, so that an artificial limit shall not be set upon 
 the commercial and productive capacity of America. If I am right in that 
 then I can define an issue which must be accepted by every man that at- 
 tempts to debate this question, and that issue .and that definition is this: 
 Those who demand a change in present governmental regulation must 
 justify that demand by showing that such a change is necessary to the 
 continued efficiency of the instrumentalities of commerce in America, up 
 to the public needs at all times. And those who oppose a change must 
 make their appeal to the public judgment on the ground that no change is 
 needed in order to assure the American people an adequacy and a suffi- 
 ciency of transportation facilities. Now, I appeal to you for a moment to 
 pause and see if that is not a fair statement of the issues that ought to be 
 debated in the public interest. Those that demand a change should justi- 
 fy their demand in the public judgment and show that the change is ne- 
 cessary to give to the people transportation facilities that are necessary 
 to their needs. And those who oppose any change must justify their de- 
 mand and their appeal to the public judgment on a proposition that ex- 
 isting conditions do assure to the public an adequate supply of transporta- 
 tion facilities. 
 
 Fortunately for us in that debate we have facts to which we may 
 point under an unchanged system of regulation. We have the fact which 
 I mentioned a moment ago of a panic which occurred in 1907, because the 
 facilities were not adequate. The fact of the embargoes that were put 
 upon business last spring because the transportation facilities were in- 
 adequate, the fact of the car shortage, which is even now stopping the 
 elevators in the Interstate Commerce building in Washington on account 
 of lack of coal, and the further fact referred to by the President of your 
 Association that in 1916 there was less construction of new railroads in 
 the United States than in any year since 1848, leaving out the years of the 
 Civil War, being less than one thousand miles. There are further facts 
 in our recent history. Those are facts which the men interested in the 
 development of the business of America should bear in mind in consider- 
 ing this question. That new construction, the practical suspension of the 
 building of railways in America, comes at a time when the cost of living 
 is at its highest point. We have heard one political party after another 
 attempt to suggest a solution of this cost of living. You heard one party 
 
THE CENTRAL STATES CONFERENCE 13 
 
 say that it was due to combinations and they passed the anti-trust laws. 
 You heard another party say that it was due to a high tariff and they 
 passed a low tariff, and you see that the cost of living has mounted stead- 
 ily up, notwithstanding all of their legislation. What, gentlemen, about the 
 old and familiar doctrine of supply and demand? Why not try to in- 
 crease your supply in order to deal with your cost of living? Why not go 
 into the untouched resources of America, to the new fields waiting for 
 the plow and the agriculturalist, to the new mines waiting for the pick of 
 the miner, to the new forests that are waiting for the ax of the lumber- 
 man, in order to bring in your new supplies and put them at the feet of 
 an evergrowing and expanding population? And yet, notwithstanding this 
 rule of supply and demand, notwithstanding that law is the inexorable 
 law of prices, you will find that the railroad construction of this country 
 has been practically suspended and there are no new fields being opened 
 and no new mines and no new forests. Isn't that a fact to attract the at- 
 tention of business men, of all men who are anxious to have a solution 
 of what is a public and a national problem? Is it not remarkable that al- 
 though under a system heretofore existing we have been able to build 
 260,000 miles of railroad in America, that all of a sudden the desire 
 of the investor has been stopped, his investments have turned in other 
 directions and the expansion of the railroad system throughout the coun- 
 try has been arrested? 
 
 Now, what is the cause of that? What is the cause of it? You will 
 hear those gentlemen who advocate that no change be made proclaim to 
 you that the cause of all of this has been railroad mismanagement and 
 financial dishonesty on the part of those in charge of the railroads. You 
 will hear a great deal about the Alton case. You will hear a great deal 
 about the Frisco case and the Rock Island case and the New Haven. 
 They will tell you that these railroad men have brought the situation on 
 themselves. Now, the man that makes that argument must be able to 
 provide for your need, for future securities by demonstrating that that is 
 the cause of it. If that is not the cause of it, if he is unable to show 
 that it is the cause of it, he introduces simply the doctrine of hate, the 
 doctrine of public condemnation, the doctrine that there should be pun- 
 ishment; but he has solved no problem of the future . 
 
 We all know that what has occurred in the Alton case and in the 
 Rock Island case and in these other cases has been ruthlessly exposed 
 by existing methods. We all know that that involves not ten per cent of 
 the railroad mileage in this country. And we all know that in every pro- 
 fession, in banking, in mercantile life, among lawyers, among physicians 
 and I may say among churchmen, there are a certain percentage of men 
 who do go wrong. But we do not abolish commerce, we do not abolish 
 the profession, we do not abolish the churches; we try to do the thing 
 that will make them a more useful instrumentality for the public good. 
 
 It is a trying thing, gentlemen, to these men who, engaged in the 
 honest purpose of building up and doing something of first importance 
 to the American people, to find themselves at every turn pointed at with 
 a finger of scorn because somebody else has done this or that. If the rail- 
 road management of this country is as a whole dishonest, if they are not 
 to be trusted, then after all these years of purification it has been demon- 
 strated that there is something special in the railroad life to make men 
 dishonest and you will have to do away with it and supplant it by gov- 
 ernment itself. But I stand before you and proclaim as my solemn con- 
 viction that the man, the prevailing type of man in the railroad, is just 
 as honest as the prevailing type of man in any other business and is just 
 as full of purpose to do a good work for the public as any other man. 
 (Applause) 
 
 Now, these gentlemen say, "Now, here is the explanation of your dif- 
 ficulty." They don't say to remove it will add to your tracks or will add 
 to your cars or will add to your terminals, but let us Ipok for a moment 
 as to that contention. On the one hand there exists these cases which no 
 
14 THE CENTRAL STATES CONFERENCE 
 
 one will deny and which no one will defend. But let me ask you, one 
 of you gentlemen, to come up here as an investor, and you look on the 
 one side, on all of those abuses that have been talked about, but what do 
 you see besides that? 
 
 You are asked to invest in a railroad security; what confronts you? 
 The first thing that you see is that your revenues are beyond your own 
 control, that the amount of your revenues is not fixed by your own indus- 
 try, by your own initiative or by your own genius, but they are prescribed 
 and limited by law. That is the first thing you see. Is there anything in 
 that to make you prefer to invest in that business rather than in some 
 business where, by industry and by economy and by genius, you may be 
 able to increase your revenues up to the point commensurate with your 
 work? Here we have an industry where the revenue level is settled, not 
 by you, the investor, not under your control, but under the control of law. 
 Is that an encouraging condition? You find that it is not only controlled 
 by law, but it is controlled by forty-niiue different instrumentalities who 
 can have an effect upon your revenues, not by one body with a large, 
 comprehensive view of the whole American field and its needs, but by 
 forty-nine bodies, one federal and forty-eight states, unco-ordinated with 
 different policies, with differing outlooks, with different ideals, all able to 
 put a restriction upon the amount of your earnings. Now, is that a thing 
 that will induce you to believe that a railroad is a first-class investment? 
 
 But let us turn to the other side. What about your expense account? 
 Can you control your expense account? Why, the big bulk of your expense 
 account is created by labor unions. Your expense account is affected by 
 the requirements of public bodies for investment in non-revenue pro- 
 ducing sources of expense, I mean non-revenue producing additions to 
 your plant. You can be required to build handsome stations. You can be 
 required to separate grades. You can be required to put extra crews upon 
 trains. You can have your expenses made for you, not by your own idea 
 of what your business requires, but by law, and not by the law of one 
 body, with one outlook, but by forty-nine different law making bodies. 
 
 There, you have your revenue side and your expense side beyond 
 your control, your revenue side beyond your control, and your expense 
 side beyond your control. Now, Mr. Investor, what do you see in that 
 situation to attract you into a railroad investment? But, is that all you 
 see? 
 
 You see an application made to one of these regulating bodies in 
 one of your states, not far from here, and the commission grants it; and 
 the history of that state is that every time the commission grants an 
 increased rate there is a bill introduced in the legislature of that state 
 to abolish the commission. So that you haven't a fair show, a fair busi- 
 ness show for consideration of the question of whether you ought to have 
 additional revenue. Politics comes in and politics threatens the body that 
 passes on your proposal with being abolished in case it passes on it in 
 favor of increased revenue. 
 
 But that is not all that occurs. The Interstate Commerce Commission, 
 after long consideration and after a few hearings, increased rates in what 
 is known as the Shreveport rate case, and what was the effect? Two im- 
 portant senators, two men that appeal especially to the progressive senti- 
 ment of America, arose on the Senate floor and denounced the Interstate 
 Commerce Commission for having granted that measure of relief. Now, 
 I will ask this investor again, who can't control either his revenue or his 
 expenses, but who when he makes a case before one of these bodies that 
 does control his revenues, finds that body the subject of attack of a most 
 influential character among the law-making bodies on which that body 
 is dependent. Now, is there anything encouraging in that, to make a man 
 come and put his money into railroads? 
 
 But, there is another thing to which I would like to call your at- 
 
THE CENTRAL STATES CONFERENCE 15 
 
 tention as bearing upon the conclusion that will be reached by Mr. In- 
 vestor when confronted by this question. Every man of you who owns a 
 piece of property knows that you cannot borrow the whole value of it on 
 that property, that the desirability of the loan depends upon the margin 
 that is left in value. In other words, there is a recognized line of safety 
 between the amount of borrowed money that a man should get into his 
 business and the amount he should contribute himself. Now, the railroad 
 bond represents money borrowed and represents a fixed charge. The rail- 
 road stock represents money put in by the owner and it does not involve 
 a fixed charge. Now, there is a line of safety as to how much of the capital 
 of a railroad ought to be contributed, ought to be obtained through mort- 
 gages and fixed charges and how much ought to be obtained through 
 stock. Some men say that line of safety is fifty and fifty. Some men say 
 that the railroads can stand a fixed charge of sixty per cent of their in- 
 debtedness, if forty per cent is contributed in the way of stock. I have 
 heard no man say that forty per cent is too little to have coming from 
 the stockholder in order to make the bond a staple investment. 
 
 Now, what has been the history of railroads in that respect? In 1900 
 the amount of railroad capital secured through bonds was a trifle less than 
 fifty per cent. It was forty-nine and a fraction, fifty and a fraction being 
 contributed through stocks. In 1914 the amount contributed through 
 bonds had increased to over sixty-one per cent; and in 1916 it is sup- 
 posed to have increased to sixty-five per cent. So that in the sixteen years 
 since 1900, there has been a growth in the amount that was contributed 
 through fixed charges of one per cent a year, or sixteen per cent, and 
 today the American railways are confronted with the narrow margin of 
 thirty-five per cent only, where the line of safety ought to at least be 
 forty per cent, and some people think sixty per cent. When you ask 
 the investor to invest his money in that he is confronted with this dis- 
 appearing line of safety and, with its recession beyond the point where 
 it is any longer considered a line of safety. 
 
 But more than that is he confronted with? He is confronted by the 
 fact that he can go into other lines of investment which are not sub- 
 ject to these governmental vicissitudes and get greater security and larger 
 returns which are more attractive to him. 
 
 So much is that the case that there are whole sections in this coun- 
 try that really contribute little, if any, of their credit to support their 
 transportation systems. Take my own portion of the country, which is the 
 South. Recently we were able, through the income tax returns, to trace 
 the ownership of a block of $100,000,000 of bonds of one of our railroads 
 running through the South, touching the South at every vital point. But 
 three and a half per cent of them were held in the South, ninety-six and 
 one-half per cent, being contributed by the credit of other portions of the 
 country. So that railroad securities are not a favorite at the South and 
 the South gives little of its credit to supply the transportation facilities 
 of the- country. The same is true, I am told, in a less degree of the West, 
 that the western people as a rule make their investments in other things 
 than railroads. At one time you could go to Europe, but Europe has re- 
 cently sent back from three to five billions of our securities which have 
 been resold in America and they had to be absorbed here; and after the 
 war Europe will be a borrower instead of a lender. They must build up 
 their own waste places. They will have need not only for all their own 
 capital, but for all that they can borrow. They will not be sending their 
 money here to help build railroads in America. So we have a reduced 
 territory, only a little section of the country which we may denominate the 
 East from which the money has to come to supply North America with its 
 railroad facilities. 
 
 Now, is there nothing in that to attract your attention as business 
 men, dependent on these railroads for your opportunities of commercial 
 growth? 
 
16 THE CENTRAL STATES CONFERENCE 
 
 I don't mean, gentlemen, I don't mean that first-class railroad se- 
 curities already on the market do not sell well. They do. But you are not 
 interested in that. I am not interested in that. What we are interested in 
 is how is the new money to come, and when we get to the question of 
 new money we must consider, the margin of security that is left. We must 
 consider that the line of safety has already been past and there is now 
 no possibility of financing these railroad companies through selling stock 
 and raising the line of safety. 
 
 Now, gentlemen, it is estimated that in order to make a stock salable 
 at par there must be an earning capacity of six per cent with a surplus of 
 three per cent, to make up for during the lean years. Do you know that 
 measured according to that rule, there are but thirty-nine railroads, 
 having a mileage of 47,363 miles, which could probably be financed by 
 the issue of stock at par? Under this test 137 railroads, having a mileage 
 of about 185,000 miles, could not be financed by the issue of stock at par. 
 Now, that is a railroad problem. We have got to get new money. We are 
 trying to estimate how much new money the railroads will need in the 
 next ten or fifteen years. We can only do that by the past. We see that 
 commerce has grown, that productiveness has grown in America eight 
 and nine per cent a year during that time, for the last twenty years. The 
 railroad facilities at the moment are no more than necessary for what the 
 commerce of the country needs today and if that is to be extended to carry 
 this eight or nine per cent., additional, you must add eight or nine per 
 cent, to them, with the result that there will be needed during the next 
 ten years for railroad construction in America, unless a limit is to be put 
 on your commercial activities, and your productiveness, about $1,250,000,- 
 000 a year. It will be necessary to refund maturing obligations, some 
 $250,000,000. So that it is no exaggeration to say, unless the productive 
 capacity of America is to be limited, that there ought to be $1,500,000,000 
 a year spent on these railroads for the next ten years. 
 
 Now, where is that money coming from? Is it not fair to ask of a 
 system of regulation which limits revenues and does not limit expenses, 
 where that amount of money is to come from? We say it is to come from 
 the introduction into your system of governmental regulation all the 
 qualities of encouragement and helpfulness so that a man will be sure of 
 governmental friendship when he puts his money into this vital enter- 
 prise. (Applause) 
 
 The experiment that we are willing to make gives to you and yours 
 assurance when you put your new money into these enterprises that you 
 will be confronted by a governmental attitude of cordiality and friendship 
 and not by a governmental attitude of distrust, of detection, of correction 
 and repression. Will you put your money, you gentlemen, you who are the 
 American public, will you put your money in these enterprises unless 
 you are assured of fair governmental treatment of business and not poli- 
 tical treatment? 
 
 Now, the time for my train is nearly here and I have only a brief 
 opportunity of outlining the suggestions which we think are wise. In the 
 first place we think that commerce has become a national thing in Amer- 
 ica. Eighty-five per cent, of your business, and by that I mean the busi- 
 ness of all the American continent, is interstate business. Ninety-three 
 per cent, of Indiana's business is interstate business. Ought the system 
 of regulation rcognize that fact? Ought it to be the power of any state 
 to break down the instrumentalities of interstate commerce or to deter- 
 mine its standard of usefulness and efficiency? 
 
 Let me give you an illustration of something that is going on. Here 
 are two states, the states of New Jersey and Pennsylvania, who have 
 adopted what is known by some people as the full-crew law but what is 
 called by the railroad people the extra-crew law. The cost of the law, 
 of complying with that law by the railroads running through those states, 
 is $1,700,000 a year. Those same railroads run through the states of New 
 
THE CENTRAL STATES CONFERENCE 17 
 
 York, of Ohio, of Indiana, of Illinois, of Maryland, of Delaware, and West 
 Virginia. None of these other states have adopted the policy of the full- 
 crew law. Now, $1,700,000 a year is interest, at five per cent, a year, on 
 a capital fund of $34,000,000. Is there any more right in New Jersey 
 and Pennsylvania to impose that burden than there is in Indiana and Illi- 
 nois to do it? And yet the commerce of Indiana and Illinois and of Ohio 
 and New York and these other states has to bear the burden of that 
 charge that is put upon their interstate carriers by these two states. If 
 you regard it from the standpoint of a capital fund of thirty-four million 
 dollars which could be applied to the purchase of new equipment and the 
 laying of double tracks and to the establishment of larger yards and 
 terminals, then by the act of those two states a capital fund of thirty- 
 four millions of dollars has been withdrawn not only from their own uses 
 but from the uses of these other states by a policy which these other 
 states have never yet approved in a legislative way. Now, is that a power 
 which should be possessed by any one of the states, to put a burden like 
 that on a sister state? 
 
 Let us take another illustration. Here is Illinois. Illinois has a law 
 which requires that no railroad shall issue any securities without the ap- 
 proval of its commission and even if it is approved that there shall be 
 a tax of one dollar per thousand to the state of Illinois for that approval. 
 Now, here is the New York Central railroad running from New York 
 through that state and through Ohio and Indiana and into Illinois to a 
 less extent than into any of the other states. In their recent organization 
 they had to go to that body for permission to issue their securities and 
 they gave their permission and they put upon that railroad a charge, a 
 tax of six hundred thousand dollars for doing it. Now, why shouldn't 
 Indiana have put on that charge? Why shouldn't Ohio have done it and 
 New York? They each have more of the property in them than Illinois 
 has in it of that railroad. And if they had done it here would have been 
 a tax charge on the issue of those securities so immense that the issue 
 would have been impossible. Because they did not do it their commerce 
 must help to pay that bill to the state of Illinois. Now, is that right? Is 
 that a helpful principle of law? I have not time to give you an infinite 
 rfumber of illustrations, but I will give you just a few more. 
 
 Here is Texas. Texas has adopted a system of rates for the purpose 
 of controlling its own market to its own jobber. And here is the state 
 of Louisiana across the way that wants to get into the Texas market, and 
 they find the interstate rates higher than the intra-state rates in Texas 
 and they cannot trade there. Then they have a fight over that proposi- 
 tion. The Interstate Commerce Commission determined that that is un- 
 lawful. A bill is introduced in the senate of the United States to abolish 
 the doctrine of the Interstate Commerce Commission which has been af- 
 firmed by the supreme court and directly a contest arose in the senate 
 over the matter. Texas through its representatives, Louisiana through its 
 representatives, were arguing back and forth and in a little while it was 
 developed that while Louisiana was attempting to get into Texas markets, 
 Natchez, Mississippi, was being held out of Louisiana markets; and Sen- 
 ator Reed of Missouri came into the hearing to protest in the name of St. 
 Louis against the laws of Illinois which sought to build up East St. Louis 
 and sought to exclude St. Louis from Illinois territory. Through Senator 
 Reed came the further complaint from Missouri that Kansas City, Mis- 
 souri, was being excluded from Kansas and Oklahoma in favor of Kansas 
 and Oklahoma, territory, and then from my own section Senator McKellar 
 came up from Memphis and complained that the state of Arkansas was 
 preventing the Memphis merchants from trading in Arkansas. Now, that 
 is another one of the situations. 
 
 The New York, New Haven & Hartford railroad operating in the New 
 England states, recently proposed an issue of $67,000,000 of bonds to re- 
 fund a number of short term notes, and to provide in addition a fund of 
 
18 THE CENTRAL STATES CONFERENCE 
 
 $25,000,000 to be used in the purchase of enlarged terminals, more equip- 
 ment and better facilities to be used in public service .The state of Rhode 
 Island gave its approval; the state of Connecticut gave its approval, but 
 when the state of Massachusetts was reached, although its commision 
 approved of what ought to be done, it was found that the laws of Massa- 
 chusetts forbade that issue, so that the proposed improvement could not 
 be carried out, and we see the effect today in the congestion and delays 
 in the handling of traffic which are impeding the commerce of New Eng- 
 land. 
 
 Now, gentlemen, when we consider what brought about this govern- 
 ment we can see that we are running counter to the whole constitutional 
 purpose of our government by submitting to such a situation as this. After 
 the revolution, when the question of the adoption of a constitution in this 
 country was being considered, it was found that the various states of the 
 Union, through their own inability to control, to pass export laws and im- 
 port laws, were excluding the commerce of their sister states. Virginia, 
 by imposing a big export tax, was keeping her product at home. North 
 Carolina was doing the same. Maryland was doing the same; and New 
 York, by a prohibitory import tax, was preventing the New Jersey peo- 
 ple from trading in the markets of New York, and Connecticut from bring- 
 ing its fire wood there, and Rhode Island, the great port of the country 
 at that time, was paying the whole state government expense by import 
 duty on goods intended for shipment to other states. And there, gentle- 
 men, arose also a great historic question involving this territory. The 
 question was, 'what should become of the great northwestern territory. 
 There was England on the north anxious to alienate the affections of the 
 settlers in this northwestern territory by close commercial bond with 
 England; and there was Spain on the south attempting to do the same 
 thing. General Washington came forward and said that the only way on 
 earth to hold the affections of these western people was to assure them 
 free trade among the states so that they would not be called upon to pay 
 import duties to the states on the Atlantic coast, but that there should be 
 quality of ports and that there should be free trade so that these people 
 would not be taxed beyond their endurance and their allegiance go to Eng- 
 land on the north or to Spain on the south. So that these facts were the 
 inspiration of the constitution. 
 
 The states derived immense advantages from the constitution. They 
 acquired immense rights by getting into the Union. Too much effort 
 has been made to talk about the reserved rights of the states. Let us 
 think for a moment of the acquired rights of the states. Did Indiana not 
 obtain a valuable advantage when it obtained the right to have one en- 
 tire and consistent 'postoff ice system? Is that not a state right of Indiana? 
 Did not New York obtain a tremendous right for the state when it ob- 
 tained the right to ask that the whole power of this nation should be 
 brought there to defend it from the invader and to throw him from her 
 shores, and that the defense of each state should be undertaken by the 
 national power? Did each state not acquire a tremendous right when it 
 acquired a right to equality of ports in this country, so that there should 
 not be import duties put upon their commerce that would be burden- 
 some? Did each state not acquire a tremendous right when it acquired 
 the right to a uniform tariff at that time throughout the Union? Side 
 by side with those acquired rights there was placed in the constitution the 
 provision that the national government should regulate and control in- 
 terstate and foreign commerce, and that is a right of the states as valuable 
 as these others I have mentioned and as sacred. So when we appeal for 
 an instrumentality that will be co-extensive with the limits of the nation 
 and with the avenues of commerce, to take a broad and comprehensive 
 view of the needs of all the people, to regulate commerce as an entire 
 thing and according to commercial needs. We are not contending for a 
 denial of state rights, but for an assertion of one of the greatest and most 
 valuable rights of the states. And let me call your attention, gentlemen, 
 
THE CENTRAL STATES CONFERENCE 19 
 
 to the facts that those who oppose it will not be able to sustain themselves 
 upon any economic or commercial ground, but they must appeal to some 
 political prejudice, a prejudice which has no part in the determination of 
 this business question, and the fact that it is injected, the fact that it is 
 relied upon is one additional deterent circumstance to prevent the in- 
 vestor from being satisfied with his investment. 
 
 Gentlemen, I find that my time has about expired. Unfortunately 
 for my cause and for my ability to place it before you, there was a limita- 
 tion of time put upon me by the time that I have to go to a meeting at 
 another point. I would be glad to show you all that we propose. 
 
 In a word we propose that there shall be one comprehensive and wise 
 regulating authority whose powers shall be coextensive with the whole 
 power of interstate commerce and that we shall not be subjected to loose 
 regulation, but that we shall be subjected to consistent, homogeneous 
 and one regulation, a regulation that will recognize the needs of com- 
 merce and in consequence recognize the needs of commercial instrumen- 
 tality. We ask tttat our securities before they are issued shall be safe- 
 guarded by the approval of the Interstate Commerce Commission, but 
 that when that approval is given we need not have to go to forty-eight 
 or ten other governmental bodies in order to obtain their approval. We 
 ask for one consistent, homogeneous, wise and American system of regu- 
 lation. (Applause.) 
 
 Prolonged and enthusiastic applause followed the address and a 
 vote of thanks was ordered for Mr. Thorn. With the conclusion of a dis- 
 cussion lasting 15 minutes, during which Mayor Bosse, C. C. Gilbert of 
 Tennessee, R. L. McKellar and E. V. Knight, of Kentucky, were heard, 
 the Conference adjourned until 2 p. m. 
 
 THURSDAY AFTERNOON SESSION. 
 Dec. 14, 1916. 
 
 After introducing the next speaker, Mr. John Muir, of New York 
 City, President of the Railway Investors' League, the chairman invited 
 Mr. Wilbur Erskine, President of the Evansville Chamber of Commerce, 
 to take the chair. 
 
 Mr. Muir then spoke on the subject "Investors the Real Railroad 
 Owners." 
 
20 
 
 THE CENTRAL STATES CONFERENCE 
 
 Investors the Real Railroad Owners. 
 
 John Muir Shows How Public Now Chiefly Owns Lines Have Remedy If 
 
 Protected. 
 
 The first address of the second 
 session of the conference Thursday 
 afternoon was by John Muir, chairman 
 of the Railway Investors' league. His 
 subject was "The Real Owner of the 
 Railroads the Investor. Why he is 
 worried over the present situation and 
 how fair treatment will induce him to 
 supply a solution of present American 
 transportation problems." Mr. Muir 
 said: 
 
 Any discussion on the subject of rail 
 and water transportation or any sound 
 analysis of the present condition of 
 American transportation cannot be 
 complete, cannot secure effective rem- 
 edies without the participation of the 
 real owners of the railroads the in- 
 vestors. 
 
 Quietly, but with a steadiness which 
 has accomplished marvelous results, 
 there has been going on, for the past 
 ten years, with cumulative force, the 
 persistent absorption of railway stocks 
 and bonds -of the leading railway sys- 
 tems of the country by the man of mod- 
 erate means, the small investor. 
 
 Starting with the 1907 panic, known 
 in Wall street as the "Rich Man's 
 Panic," there has been a steady and 
 rapid increase in the individual num- 
 ber and amount of securities held. The 
 result has been that, whereas in 1901 
 many leading railroads were owned 
 by a few hundred or at most thousands 
 of investors, now men (and women, 
 too) with moderate amounts of money 
 who were impressed with the oppor- 
 tunity to secure liberal and permanenet 
 income are the chief owners. Coinci- 
 dent with the opportunity, there devel- 
 oped, among financial houses, firms 
 specializing in service to the small in- 
 vestor, firms which studied his needs, 
 catered to his wants, selected with care 
 the security desired, whether a single 
 share of stock or a single hundred dol- 
 lar bond. And what is now the result? 
 Listen to this short array of official 
 figures as to number of stockholders 
 given out by the larger railroad sys- 
 tems: 
 
 Atchison 1901, 1,300 today, 45,000 
 
 Pennsylvania. 1901, 27,000 today, 94,000 
 
 C., M. & St. P. 1901, 5,000 today, 17,000 
 
 Gt. Northern .1901, 1,700 today, 25,000 
 
 B. & O 1901, 3,200 today, 27,000 
 
 Sou. Pacific.. 1901, 1,500 today, 33,000 
 and so on down the list. 
 
 The New Wall Street 
 And let me state right here a word 
 for Wall street. I have a right to say 
 it, because, first, I am a railroad man 
 of extensive western traffic experi- 
 ence, and, second, because today and 
 for the past twenty years, I have had 
 practical experience in Wall street with 
 the hydra-headed and hard-headed 
 small investor. Wall street has changed 
 very much during the past ten years. 
 Many houses now have thousands of 
 customers, where houses doing a larger 
 business have only hundreds. This is 
 due to the immense detail, the careful 
 painstaking work required, to meet the 
 needs of the small investor. Wall street 
 is no longer a gambler's paradise. It is 
 a section of hard work, devoted to re- 
 search to obtain facts and informa- 
 tion to guide the thrifty, how and what 
 to buy. It is to Wall street earnest 
 minded people come with their savings 
 to buy in small quantities securities 
 representing the best lines of transpor- 
 tation in the country. 
 
 During this period of increasing pop- 
 ular participation in investment, I have 
 been actively interested in the work, 
 and I know whereof I speak, but my 
 experience previously was distinctly in 
 the railroad field. I think I can pre- 
 sent evidence entitling me to member- 
 ship among the railroad men who help- 
 ed build up the middle and far West. 
 
 Some Past Experience 
 
 I am presenting this evidence in order 
 to anticipate the objection which we 
 are all likely to cite when another fac- 
 tor intrudes in a discussion which we 
 have come to consider limited to a cer- 
 tain class of debaters. So please ab- 
 solve me of any charge of egotism 
 when I say that forty years ago I was 
 general freight agent of the Kansas 
 Pacific railway, the only trunk line of 
 Kansas running from the Missouri river 
 to the Rocky mountains. I saw Kan- 
 sas emerge from her scourging by 
 grasshoppers and drought to a state of 
 continuous rich crops and plenty. 
 Thence I went to the great Northwest 
 Pacific coast, where existed a compli- 
 cated transportation system of river, 
 rail, ocean and sound. I transformed 
 the measurement basis of transporta- 
 tion charge to that of weight. The rate 
 on a horse, for instance, was reached 
 by measuring from the tip of his nose 
 to the end of his tail (we didn't allow 
 
THE CENTRAL STATES CONFERENCE 
 
 21 
 
 for cropped tails) and charged on the 
 basis of 40 cubic feet per ton of space 
 occupied. On the completion of the 
 Northern Pacific railroad, I became 
 traffic manager of the new transconti- 
 nental line, which revolutionized the 
 making of through rates to the Pacific 
 coast. All of that great development I 
 saw; part of it I was. Later, thirty 
 years ago, I became traffic manager of 
 the Chesapeake & Ohio railroad, now 
 so ably represented by our friend, Mr. 
 Frank Trumbull. 
 
 In the recent history of railroading 
 and in the present discussion on rail- 
 way development, the great army of 
 investors in railway securities have not 
 taken a prominent part. They have 
 taken hardly any part, but on the basis 
 of a practical railroad experience and 
 on the basis of a practical investment 
 experience, I believe it is in approach- 
 ing present problems from the stand- 
 point of the investor that we are most 
 likely to reach a proper solution. 
 
 Throughout the country there is a 
 great army of investors ready to sup- 
 ply money for the railroad development 
 which the country so badly needs. If 
 these investors can be convinced that 
 capital invested in the railroads will be 
 given proper consideration in the solv- 
 ing of all problems, that most pressing 
 problem, the raising of the , great 
 amount of money needed for new con- 
 struction and development, can be eas- 
 ily solved. 
 
 Now let me get down to the present 
 status of this matter. 
 
 The Present Conflict 
 
 There is at present a conflict raging 
 between two elements in the railroad 
 transportation business. 
 
 On one side, are the directors and ex- 
 ecutives of the railroads. On the other 
 side, are the four brotherhoods of en- 
 gineers, firemen, conductors and train- 
 men. The brotherhoods, 400,000 strong, 
 united and alert, say with one voice, 
 "We must have more pay or shorter 
 hours or both or we'll strike." The 
 executives answer, "With our restricted 
 rates and higher cost of operation, we 
 cannot grant your request." A dead- 
 lock occurs, the matter is appealed to 
 the president and he, to avert a calam- 
 ity, promises to grant, through con- 
 gress, what the roads deny. 
 
 The investors, 600,000 strong, the real 
 owners of the properties, scattered all 
 over this country, having an immense 
 power vested in them, unorganized, are 
 unable to come forward with the com- 
 bined voice of even a paltry dozen. 
 They are uneasy. They chafe. They 
 hesitate. They ask the question, "How 
 about future investments in railroads 
 torn by dissensions between execu- 
 tives and employes?" 
 
 They finally evolve this thought: 
 The executives of the road represent 
 us and, in the main, do it satisfactor- 
 ily; but, owing to the fact that there 
 is a prejudice against them in congress, 
 in the commissions, and in the mind of 
 the public, they can't, in their official 
 capacity, exert as much influence in 
 certain fields as we could if we should 
 act for ourselves independently. Let 
 us get together and let us, the owners 
 of the roads, show to congress and the 
 commissions that political influence 
 and voting power are not wholly con- 
 fined to shippers and the four brother- 
 hoods. 
 
 The investors, in addition to thinking 
 in this manner as to the attitude exist- 
 ing between their railroad executives 
 and the brotherhoods, evolve another 
 thought, as follows: 
 
 We are the real owners of the rail- 
 roads. It is our money which is in- 
 vested, therefore, you, the brotherhoods, 
 are our employes. Now what is the 
 matter? We are 600,000 strong; you 
 are 400,000 strong. You are organized; 
 we are not. You have put one over on 
 us, because you are organized, but it is 
 unfair. It won't stand the test. Let us 
 talk over our grievances. You have 
 yours. We have ours. We can't pay 
 what you demand unless we are helped. 
 Instead of snarling and quarreling with 
 your executives, let us together find 
 the solution of the matter and, when 
 we get what we ought to have (and we 
 ask you to help us get it), you may be 
 sure that we in turn will allow you 
 what you must see under this high 
 cost of operation we cannot grant. 
 
 At Cross Purposes 
 
 Now, gentlemen, you must see, in 
 the present condition' of this conflict 
 between the railroads and their em- 
 ployes, that they are working at cross 
 purposes. 
 
 The great army of railroad brother- 
 hoods have been forehanded. Upon 
 small contributions from their wages 
 and with skilful and astute leadership, 
 they have built up a power and force 
 which have enabled them to go before 
 the highest authority in the land and 
 demand and obtain a promise of in- 
 creased pay upon threat, if not granted, 
 of closing up the traffic of the country. 
 
 These 400,000 employes of 600,000 in- 
 vestment owners, of our $20,000,000,000 
 national transportation system, did 
 this. How did they get away with it? 
 Was it because their numerical strength 
 made them politically formidable? Is 
 this big free country to be coerced by 
 such tactics? 
 
 And right here, is it not logical to 
 ask if the brotherhoods can by this 
 threat obtain higher wages why can 
 
22 
 
 THE CENTRAL STATES CONFERENCE 
 
 they not by similar threat more simply 
 solve this problem and obtain for their 
 employers; the railroad, higher rates to 
 enable them to pay higher wages? 
 
 "It is well to have a giant's strength, 
 but it is tyrannous to use it as a giant." 
 
 Now I submit that the brotherhoods, 
 in taking the course which they did, 
 committed a great mistake. If an em- 
 ploye of mine comes into my office with 
 pistol in hand and says to me, "Mr. 
 Muir, I want you to raise my pay. If 
 you don't, I will blow your head off," 
 I tell him at once to clear out. But if 
 he comes to me and says, "You are 
 making money. My pay is not enough 
 under this increased cost of living. Will 
 you not raise it?" I immediately rea- 
 son with him and devise ways and 
 means to satisfy him. 
 
 This course of the brotherhoods will 
 not stand the test. The railroads, un- 
 der present conditions, cannot stand for 
 the demand of the brotherhoods and 
 continue successful operation. If the 
 brotherhoods had used the same influ- 
 ence and force with the same author- 
 ity in Washington in presenting the 
 needs of the railroads and gained for 
 their employers what they think they 
 have secured for themselves, the rail- 
 roads would today be able to meet their 
 demands. 
 
 The Real Owners 
 
 And where in this controversy stand 
 the 600,000 railway investors, who em- 
 body the great force that lies latent in 
 the owners of the railroad property? 
 Nobody ever hears a peep from them, 
 and congress and the commissions sim- 
 ply ignore them as if they were a neg- 
 ligible quantity. That is not the way 
 to carry on an effective campaign. 
 Why shouldn't they appear by means 
 of their own chosen representatives, be- 
 fore the Newlands commission or what- 
 ever body may finally be appointed to 
 crystallize conclusions on this all im- 
 portant problem? Why shouldn't they, 
 as an organized and politically formid- 
 able body, bring their influence to bear 
 on the press and on the public? Of 
 course, their representatives in the per- 
 sons of presidents, legal counsel, etc., 
 appear and speak for them, but .we all 
 know very well that isn't the same 
 thing, because the public prejudice is 
 against the managers of railroads, not 
 against the stockholders who own them. 
 It is of supreme importance that the 
 owners should be satisfied, because it is 
 they who furnish the funds to develop 
 the sections of country not now proper- 
 ly supplied with transportation facili- 
 ties. It is the owners that congress 
 and the commissions ought to hear 
 from, and the owners are as dumb as 
 oysters and as powerless as jellyfish 
 
 with no solidarity or means of expres- 
 sion. 
 
 And now the Saturday Evening Post 
 says, "In the face of a billion net last 
 year, railroad managers and investors 
 in railroad securities are wondering 
 what the situation will be after the 
 boom, if public regulation of railroads 
 is applied in as narrow and jealous a 
 spirit as it was for some years before 
 the war. Individual shippers may ap- 
 plaud when a particular rate they are 
 interested in is cut down. Farmers 
 here and there may be fooled into think- 
 ing that the lowest possible freight rate 
 which does not throw the carriers into 
 actual bankruptcy is to their interest. 
 But it is very certain that, for the coun- 
 try at large, regulation in that haggling, 
 oppressive spirit does not pay." 
 
 I quote from the bible when I say, 
 "Beware of the withholding which lead- 
 eth to poverty." 
 
 You have no doubt seen that the pres- 
 ent condition of the railroads has been 
 likened to a man suffering from hard- 
 ening of the arteries. This is a striking 
 simile, but I cannot fully subscribe to it. 
 Hardening of the arteries means age, 
 decay and approaching dissolution. 
 This is not the case with this country. 
 We are young, vigorous and have 
 plenty, of rich virgin sections yet to 
 open and cultivate. But we are ham- 
 pered and hemmed in by the wants of 
 this growing nation. We need blood to 
 pulsate through these arteries. The 
 thousands and tens of thousands of 
 small investors stand ready to furnish 
 the means to inject blood in the shape 
 of rails, ties, rolling stock, terminal fa- 
 cilities, to develop these new fields. 
 But they hesitate and fight shy of new 
 propositions where, by the lessons of 
 last summer, they see that their em- 
 ployes' demands are satisfied and taken 
 out of the earnings of the railroads by 
 the government and their own rights 
 for proper compensation are ignored. 
 
 Purpose of the League 
 
 Now, the Railway Investors' league 
 has been organized to consolidate, for 
 protective action, that immense power 
 and influence possessed, but heretofore 
 unused, by hundreds of thousands of 
 unorganized investors. 
 
 The league is neither anti-labor nor 
 political. Its aim is to secure fair play 
 alike from railroad managers, railroad 
 workers, railroad regulatory bodies and 
 political parties. It will oppose unfair 
 tactics, whether attempted by federal 
 or state government bodies, by railroad 
 managements or railroad employes. It 
 is "anti" nothing save unjust prac- 
 tices from above or below, from with- 
 out or within. 
 
 This is the Railway Investors' league 
 
THE CENTRAL STATES CONFERENCE 
 
 23 
 
 which is now growing like a young 
 giant and to which we want every man 
 or woman who owns one share of stock 
 or one thousand, one hundred dollar 
 bonds or thousands, to belong and to 
 Support this immense power for fair 
 play fair play for owners and em- 
 ployes, for shippers, for the public and 
 for the country. 
 
 Mr. Paul Mack Whelan, the secretary 
 of the league, is here. He will furnish 
 the platform of the league, and, if you 
 are in sympathy and accord with its 
 object and purpose, enroll yourself now. 
 
 More especially do I invite co-operation 
 and enrollment from the members of 
 the brotherhoods. There is not one 
 idea or sentiment in the Railway In- 
 vestors' league incompatible with the 
 brotherhoods' desire to obtain fair play 
 from their corporations and for their 
 corporations. Instead of being 400,000 
 and 600,000, let us make it a million, 
 combined to assert, maintain and de- 
 fend our rights. 
 
 Brothers of the brotherhoods, are you 
 with us? If so, come forward now and 
 act jointly with us. 
 
 After the applause had subsided and the thanks of the delegates and 
 visitors had been voted Mr. Muir, Chairman Erskine introduced Lansing 
 H. Beach, of Cincinnati, Ohio, Colonel U. S. A. Corps of Engineers, as one 
 of the most competent authorities on river and harbor improvement. Col. 
 Beach then addressed the Conference on the subject: 
 
 "The Improvement of the Ohio River." 
 
24 THE CENTRAL STATES CONFERENCE 
 
 The Improvement of the Ohio River. 
 
 By Lansing H. Beach, 
 Colonel U. S. A. Corps of Engineers. 
 
 It may seem a little superfluous to describe the Ohio river to the 
 people of Evansville and those who live upon its banks, but as many peo- 
 ple of the Conference are not from the shores of the Ohio, a few state- 
 ments covering the characteristics of that stream may not be amiss. 
 
 It drains a territory of about 204,000 square miles in extent, derived 
 from fourteen states, either wholly or in part. It is formed by the junc- 
 tion of the Allegheny and Monongahela rivers at Pittsburgh. It has a 
 course of about 968 miles to its mouth at Cairo. In the upper portion 
 of the stream the slope is quite steep, about seventeen inches to the mile. 
 This is gradually decreased as it gets down the river to about eleven inches 
 a mile. 
 
 The water flow in the Ohio is not uniform. They have a surplus fre- 
 quently, decidedly more than enough in the early spring or late winter, 
 and in the fall months the river becomes so low that above Cincinnati 
 there is sometimes a navigable depth of only a foot and a half, practically 
 no navigation at all, and from Cincinnati down they frequently have no 
 more than two and a half feet. It was to remedy this condition that the 
 improvement of the Ohio was started. Now, the improvement of the Ohio 
 was like Topsy. It wasn't born, it simply grew. It commenced in 1827 
 and from that time until the late seventies efforts to secure a channel 
 were confined to dredging or to construction of dikes which would throw 
 the water upon the most obstructive sandbars and wash them out. This, 
 however, proved unsatisfactory, especially for the movement of coal, 
 which formed the largest commodity transported over the river. Conse- 
 quently in 1875 the first dam was constructed at Pittsburgh. This, how- 
 ever, did not originate in the desire to make a deep channel throughout 
 the river. It was simply formed for the purpose of creating a harbor at 
 Pittsburgh so that the coal fleets could be made up at that locality and be 
 able to start down the river on the front of the rise and consequently onto 
 the lower river and the Mississippi. Formerly the coal was kept in the 
 pools of the Monongahela river and had to be brought out in the Ohio 
 after the high water had come. Eleven feet was about the depth that 
 was needed in order to let the coal boats pass down safely. It was fre- 
 quently found that the small rise would be lost. The water would run 
 out before the coal fleets could be made up and started down river. Con- 
 sequently it was believed advantageous to build dam No. 1, as it was then 
 called, the Davis Island dam, about nine miles below Pittsburgh, so that 
 these fleets could be made up and be ready to start on the rise. This, 
 however, was found so advantageous that it was considered advisable to 
 build some lower down and the improvement was so marked and the ef- 
 fects so beneficial that Congress, in 1910, decided that it would be a good 
 plan to build locks and dams throughout the river. 
 
 Now, these dams differ from those ordinarily constructed in most 
 streams, in that they are what are called movable dams. That is, they 
 can be raised when the river is low, but put down, lying on the bottom 
 of the river when the depth is sufficient for boats to pass over them in 
 the ordinary river channel. The effect of a lot of fixed dams, as they are 
 called, would not be advantageous on the Ohio for the reason that the 
 traffic would have to pass through the locks at all times. As the number 
 of locks from Pittsburgh to Cairo will be 54 when all are completed, it 
 can easily be seen that this would ue quite a handicap on through navi- 
 gation. The result of a fixed dam was also greatly feared on the upper 
 Ohio for the reason that it was believed that it would increase flood 
 
THE CENTRAL STATES CONFERENCE 25 
 
 heights, and that was the reason why consent was given for movable dams 
 as well as the advantage to navigation. 
 
 Now, the pictures which will be shown on the screen will describe 
 better than I could tell you just what the work is. 
 
 Moving pictures of the Ohio river and dams were then shown on the 
 screen. 
 
 Following Col. Beach's address and the moving pictures, a vote of 
 thanks was ordered and a motion made and unanimously passed, "That 
 it shall be the sense of this meeting that the legitimate improvements of 
 the Ohio river, as outlined and illustrated by Col. Beach, shall not be con- 
 sidered in any sense, what has so often been termed, a *pork measure.' " 
 
 Chairman Murphy resumed the chair and announced the appointment 
 of the following to constitute the Resolutions Committee: 
 
 Hon. Benjamin Bosse, Evansville, Ind., Chairman; David Hirsh, 
 Louisville, Ky.; J. R. A. Hobson, Evansville, Ind.; George H. Evans, In- 
 dianapolis, Ind.; Samuel L. Orr, Evansville, Ind.; Marcus A. Sonntag, 
 Evansville, Ind.; R. L. McKellar, Louisville, Ky. ; E. Vernon Knight, New 
 Albany, Ind.; J. L. Bayard, Vincennes, Ind.; Prank Ellison, Cincinnati, 
 O. ; Phelps Darby, Evansville, Ind. 
 
 At this moment the Chairman was handed a telegram, which he read 
 to the audience: 
 
 "Henry C. Murphy, Chairman, Central States Conference on Rail and 
 
 Water Transportation, Evansville, Indiana. 
 
 "May I not send my greetings to the Central States Transportation 
 Conference and express my deep interest in the great questions it has as- 
 sembled to discuss. I wish that I might have the benefit of hearing those 
 discussions. WOODROW WILSON." 
 
 The Chairman then read a telegram from John E. Lathrop, of New 
 York, who wired from Omaha his regret at being unable to reach Evans- 
 ville to personally address the Conference. Mr. Murphy thereupon intro- 
 duced Mr. J. C. Johnson, requesting that he read Mr. Lathrop's speech. 
 Mr. Johnson then read the following from Mr. Lathrop on the subject: 
 
 "Car Shortage and the Cost of Living." 
 
26 THE CENTRAL STATES CONFERENCE 
 
 Car Shortage and the Cost of Living. 
 
 By John E. Lathrop, 
 
 Director, City Planning Department, American City Bureau of New York; 
 And Secretary, Indiana City Planning Committee. 
 
 The high cost of living takes its rise from two cognate causes: 
 
 That which is purely economic and which is more or less from human 
 faults and imperfections. 
 
 That which arises from defects in physical processes. 
 
 Our entire fabric of business, industrial and financial activities is 
 divisible into two functions: 
 
 Production. 
 
 Distribution. 
 
 I refer, of course, to the physical process of distribution, rather than 
 the economic distribution of wealth. 
 
 Important economies have been introduced in the function of pro- 
 duction. The principle has been recognized generally. All who engage in 
 the performance of the productive function will be forced at once to reach 
 the new standard, if they have not already done so. I have confidence in 
 American brains, energy and patriotism to believe that, in respect of our 
 productive processes, we shall attain a level of economy as high as that 
 which has been achieved by any nation under the sun. 
 
 However, in the physical distribution of products, we Americans have 
 woefully fallen down. Our distributive system is wasteful in the extreme. 
 It is so wasteful that, in my opinion, the question of railroad rates is not 
 so important as another, service, which I purpose to raise herein. 
 
 I am not unmindful of the necessities which have been laid upon this 
 republic to regulate rates, but at the same time I remember that the In- 
 terstate Commerce Law invests the Interstate Commerce Commission with 
 authority to regulate "rates and practices," and I believe that, before our 
 transportation problems are solved, we shall have to give vastly more at- 
 tention to "practices"; and that, as a people, we must take official cogni- 
 zance of still another thing, equipment and plant, to a greater extent than 
 we have in the past. 
 
 Delays in the shipment of goods and products are today the night- 
 mare of this nation. This nocturnal steed troubles the slumbers of every 
 business man, punctuates his every-day conversation, in every locality. 
 
 We refer to this difficulty as "car shortage." My thesis is to show 
 that it is not actually car shortage, but the non-use of that which would 
 be an abundant supply of equipment, if we had adequate systems of rail 
 terminals and water routes and terminals. 
 
 This so-called car shortage is not new, although aggravated beyond 
 most previous experiences of a similar nature. During fifteen years, in 
 which I have closely followed the proceedings before the Interstate Com- 
 merce Commission, I have noted these gluts of freight with recurring regu- 
 larity. Every time an extra burden is laid on our transportation system, 
 the machine breaks down. 
 
 Speaking in the language of the engineer, our transportation system 
 in this country is carrying the peak load practically all the time. 
 
 It has become the rule among business men to expect the aforesaid 
 delays in the shipment of goods and products. All contracts are figured 
 at a higher price level to take care of the cost and waste of such delays. 
 So that the tendency is to estimate all processes, commercial and indus- 
 trial, on that higher price level. It has been interwoven as an essential 
 factor into the business activities of the country. 
 
THE CENTRAL STATES CONFERENCE 27 
 
 Herein do we find a major, if not the major, cause of the high cost of 
 living; and this enormous waste caused by these delays is on account of 
 the inadequacy of our terminal systems. 
 
 In the United States we have approximately three million freight 
 cars of all classes. The average movement per car per twenty-four hour 
 day on the Pennsylvania Railway for the last year was 23.6 miles; or 
 slightly less than one mile an hour. (I am so informed in a letter to me 
 from Mr. Shafer, Superintendent of Transportation on the Pennsylvania 
 lines.) The average for the whole country of movement per car per 
 twenty-four hour day is about seventeen miles. 
 
 Now, freight trains move up to seventeen miles an hour. An aver- 
 age freight train movement of twelve miles an hour would give us 288 
 miles per 24-hour day. Of course, no one expects such an average move- 
 ment per car per 24-hour day as 288 miles. 
 
 But, if the average movement per car on all roads is only seventeen 
 twenty-fourths of a mile an hour, and under a mile an hour on one of the 
 most efficiently managed railway system of the country, obviously there 
 is a serious discrepancy somewhere. 
 
 I find it in the terminal system in the deplorable inadequacy of ter- 
 minal facilities to permit the movement of freight at a higher average rate 
 of distance per day. 
 
 Recently I made a shipment from Fort Wayne to Evansville. It 
 moved, from the time I offered it in Fort Wayne to the time it was de- 
 livered to me in Evansville, an average of one and one-half miles an hour. 
 This was true, notwithstanding every official of the Pennsylvania Railroad 
 and the Chicago & Eastern Illinois Railroad most courteously pounded 
 that shipment on the back and by telegraphing and telephoning made of 
 it relatively a race horse. 
 
 Transportation for me began when I offered the shipment at the rail- 
 way platform; it ended when the stuff was offered me again in Evansville 
 for loading on a truck, and it has been hauled through the streets to the 
 building which was my terminus. What was the trouble? The freight 
 trains on the Pennsylvania and the Chicago & Eastern Illinois moved, as I 
 say, up to seventeen miles an hour; yet the average movement for me on 
 the total transaction was one and one-half miles an hour. 
 
 I traced the history of that shipment. It was four days getting out 
 of the Fort Wayne terminal on account of a glut. It had to pass through 
 Columbia City and Terre Haute and into the terminal at Evansville, at 
 which point it arrived a day before it was available for unloading. 
 
 I am not complaining, but on the other hand am acknowledging the 
 courtesies of the railway men who exerted themselves to extricate me from 
 my difficulty. 
 
 But there should have been no difficulty. Furthermore, my difficulty 
 arose not from car shortage, but from terminal facility shortage; and that 
 is the crux of this whole situation. 
 
 Shortly ago, the owner of a mine in a town a few miles west of Evans- 
 ville had a shipment of machinery coming from Pittsburgh. He needed it 
 desperately. He sent a man to Pittsburgh personally to accompany and 
 actually ride in the freight car. This he did, inducing the train and yard 
 crews to hurry up that shipment probably using up one or two boxes 
 of cigars (I hope for the sake of the railway men, they were good ones), 
 and he arrived in Evansville, believing his troubles were at an end. He 
 boarded a passenger train and went to his home town. 
 
 Four days later, instead of one day later, the car reached his mine, 
 in the meantime, it had been flooded. It cost him fifteen thousand dol- 
 lars of actual damage, plus the loss of production, pending repairs and 
 pumping out. 
 
 Last June, I rode from Altoona to Harrisburg, Pennsylvania, on the 
 rear end of one of the express trains. There was a solid line of loaded 
 
28 THE CENTRAL STATES CONFERENCE 
 
 cars to move East, which were not moving. These cars extended from 
 station to station, practically all the way. 
 
 What was the matter? Car shortage? Certainly not. These cars 
 could not be gotten through the terminal at Harrisburg. You talk of 
 car shortage? Assume that the Pennsylvania Railroad had placed a mil- 
 lion additional cars on the tracks this side of Altoona. Would that have 
 helped to get these glutted cars through the Harrisburg terminal? Of 
 course, it would not. It was terminal facility shortage. 
 
 It is terminal facility improvements that is needed to stop this low 
 potency use of railway equipment. Here are two or three million freight 
 cars moving less than a mile an hour, on the average, on one of the best 
 managed railroads of the United States. 
 
 Were there adequate terminal facilities, could we not, by increasing 
 the movement per car per hour for the whole mass of equipment, make 
 say, three million cars do the work of vastly more cars? 
 
 Suppose we attained an average movement per car per 24-hour day 
 of forty-eight miles, or two miles an hour. Would not that more than 
 double the movement of freight; or be tantamount to putting five to six 
 million car movements into operation instead of two or three million? 
 
 I am conscious of- the fact that there are other elements entering into 
 the situation. The prevalency of demurrage rates on detained cars in 
 freight yards is proof evident that one factor is the sometimes tardy un- 
 loading or loading of cars offered by the railway company, but I am sure 
 that this factor compared with terminal facility shortage is negligible. 
 
 However, in passing, let me say that I believe that demurrage rules 
 should not be less severe, but that they should be rather stiff to take care 
 of that element of sometimes negligence; or at least to spur to highest 
 endeavor to unload freighted cars or load empties when offered in response 
 to demand therefor. 
 
 I am informed that lately ten thousand cars of wheat stood on the 
 Chicago tracks, not unloaded, because there were not facilities to handle 
 them; practically nine million bushels of wheat which were in cars which 
 were being used as warehouses, when there should be facilities to handle 
 them and the cars be offered again for traffic. All the time after a brief 
 period, these cars were paying a demurrage rate of five dollars a day 
 and the cost was being marked up against the sacks of flour that were be- 
 ing sold. 
 
 I wish to revert momentarily to answer a possible objection that con- 
 ditions are now unusual; they are unusual only that the trouble is slightly 
 aggravated. In principle, this condition has been present in marked de- 
 gree, as we all know, with frequency for many years past. 
 
 During a total travel of three hundred thousand miles during the last 
 twenty years, most of it in this country, I have noted these conditions in 
 all parts of the United States. Have I any technical authority for the bur- 
 den of my thesis? 
 
 James J. Hill six years ago said, "The United States should invest 
 annually a billion dollars in terminals. Were this to be done for ten 
 years, at the end of that period we should "find that repressed and new 
 traffic would have absorbed the added facilities and we should again have 
 serious congestion." 
 
 But Mr. Hill said another and most striking thing: "I can haul a ton 
 of freight three hundred miles cheaper than I can pass it through the 
 average city terminal." 
 
 Let us take the whole fabric of transportation between Chicago and 
 New York, approximately nine hundred miles, or three units of three 
 hundred miles haulage each. There are about eight major terminals be- 
 tween these two metropolises, or ten in all, with the originating and des- 
 tination terminals. Make an equation on the basis of Mr. Hill's phil- 
 osophy: 
 
THE CENTRAL STATES CONFERENCE 29 
 
 Thirteen, or the Chicago-New York fabric of transportation, equals 
 three units of actual haulage, plus ten units of terminal operations. 
 
 I submit that this equation indicates essentially the largest problem 
 that relates to car shortage and the high cost of living. 
 
 In Washington, D. C., I personally organized an investigation into 
 the cost at the kitchen door of thirty food products from the Potomac 
 Valley, compared with the prices paid the farmers and fruit men at the 
 wharf. These articles in no case advanced less than three hundred per 
 cent, in many cases advanced a thousand per cent, and in some as high 
 as eighteen hundred per cent. 
 
 I realize that there were many factors in this enormous advance from 
 the point of ultimate production to the point of ultimate distribution; 
 that the prices in one city affect the prices in another, and that all tend 
 to take the highest price level of the largest city; but I cite the Wash- 
 ington case chiefly to call attention to the crudities of the facilities in 
 Washington, which are typical of the American standard of co-ordinating 
 of land and water facilities. Washington prices were largely a reflection 
 of the very high prices of New York, and the crude water and land termi- 
 nal facilities at Washington unfortunately are a reflection of the crude 
 facilities of like nature across the continent. 
 
 That brings me at least to a mention of something which cannot be 
 ignored in this thesis. We are in the third phase of the development 
 of our transportation processes. In the first we had rivers and canals; 
 in the second railroad development with a confessed hostility to water 
 carrying by the railroad men, and indifference, unfortunately, by the peo- 
 ple as a whole. This third phase, which we are now entering, must be the 
 co-ordination of rail and water facilities. 
 
 The cool truth is that we have not been able and shall not be able to 
 move our tonnage on rail to the practically total exclusion of inland water- 
 ways. We shall -have to develop our inland waterway system, as much for 
 the relief of the railways as for the economic benefit to the nation. 
 
 I have always held to that school of transportation economists which 
 believed that the railways were short-sighted in opposing the develop- 
 ment of inland water routes. I insist that, with the slower moving and 
 low price freight handled as much as possible on the waterways, the rail- 
 roads, thus relieved for many of the low price hauls, could utilize their 
 investment to carry the higher priced freight to their financial better- 
 ment. 
 
 However, the railroads now favor the development of inland water 
 routes. 
 
 I believe we shall have to adopt the system employed in Germany, 
 where about thirty per cent, of their tonnage moves on canals or canalized 
 rivers; but wherever water facilities are developed, there is always present 
 the most perfect engineering device for the trans-shipment from water 
 to rail or rail to water. We must use this as our model. 
 
 Along the great Ohio valley, must move a vast water tonnage, and 
 at Evansville, St. Louis, Louisville, and Cincinnati must be developed the 
 absolutely best engineering devices for trans-shipment. All this will 
 call for enormous additional investments. The way has been paved for 
 part of this added investment by the introduction of economies in the 
 operation of railroads. When a few years ago Louis D. Brandies of Bos- 
 ton, now a justice of the United States Supreme Court, asserted that the 
 railroads were wasting a million dollars a day, which could be saved by 
 economies without increasing rates, the railroad interests scoffed. 
 
 The other day a representative of the railway executives' organiza- 
 tion specifically admitted that Mr. Brandies had been quite accurate in 
 his estimate, and that since the Brandies allegation was made, the rail- 
 roads had effected operating economies of about a million dollars a day. 
 
 I do not pretend to estimate even vaguely what this added invest- 
 
30 THE CENTRAL STATES CONFERENCE 
 
 ment must be, but it is safe to predict from the statements of James J. 
 Hill and other great transportation scientists that it will run into the bil- 
 lions. 
 
 Where shall we get these additional billions? Why should we not 
 all frankly face the facts? I apprehend that not a dozen men within the 
 sound of my voice question in their inmost hearts that the ultimate solu- 
 tion is going to be government ownership. I honestly believe that even 
 those who oppose government ownership as a policy in most cases admit 
 that it is coming. 
 
 If this be true, why should we not as a people have the moral cour- 
 age to face the facts? Of course, it is a colossal problem, and the easy 
 way is to push it from us into the far future; but is it not the part of 
 wisdom frankly to address ourselves to the facts, rather than to adopt 
 the weak policy of pretending something which we know is not true? 
 
 The intensive development of our internal processes is in its infancy. 
 Potential agricultural productivity is certainly not more than fifty per cent 
 developed. Imagine the processes of the older European countries ap- 
 plied to our husbandry, and an annual form and livestock production of 
 eleven billions increased to twenty-two billions; our coal, gas and oil mo- 
 tive power supplemented by the utilization of our vast, but practically un- 
 used, water powers; our population increased as it is increasing, and try 
 to picture the colossal task of moving all the freight on rail. 
 
 Gentlemen, it would be to attempt the impossible. Money could not 
 be poured from a horn of plenty into which had been dumped the wealth 
 of a thousand Golconda mines fast enough to meet the immediately press- 
 ing demands for transportation facilities and give even a little attention 
 to future needs, without the most extensive use of all possible inland 
 water routes. 
 
 A lot of buncombe has been talked about the pork barrel. I have 
 seen a good many rivers and harbors appropriation bills in the process 
 of the making, and I freely admit that a lot of Mud Creeks have been 
 recognized which are not more than deep enough to provide Johnnie 
 with a swimming hole; but, on the other hand, no one, with a glimmer 
 of reason or the slightest conception of the transportation situation of 
 this country, will question that we must hurry to develop our inland 
 water routes and co-ordinate them with our rail systems. The great units 
 in the water system will be the Ohio River, the Mississippi River, the 
 Missouri River, the Great Lakes with its co-ordinate New York Barge 
 Canal, the Inter-coastal water route along the Atlantic water front, and 
 the Columbia River Basin. 
 
 As we work out this vast system, we must study the co-ordination of 
 rail and water facilities, and we must end the era in which, in the dis- 
 cussion of rates and transportation practices, the rail transportation sys- 
 tem appears before the courts as an opponent of, or enemy of, the water 
 system. The two must be regarded as essential parts of the whole. 
 
 These, gentlemen, are, in my opinion, the most deeply fundamental 
 questions with relation to car shortage and the cost of living. Humanity 
 is prone to superficial processes. We are at this time more or less super- 
 ficial in our discussion of the best means to combat the high cost of liv- 
 ing. We see some surface symptom and treat it, rather than to go co the 
 fundamental cause of the disease. These superficial treatments are not 
 without their values, because we cannot always wait to work out our 
 fundamental ultimates, but we shall have to go deeper and attack the 
 real issue. 
 
 And in doing so, we must rise to a level of real patriotism. Every 
 class, the railroad man, the shipper, the consumer, the laboring man, the 
 official must step up to that higher altitude of consideration for the good 
 of the whole mass which we have not yet attained to the necessary de- 
 gree. When this spirit shall have taken possession of us and we rise su- 
 
THE CENTRAL STATES CONFERENCE 31 
 
 perior to the pettier, littler selfish motives which lead us into foolish class 
 antagonisms, we shall perhaps will you pardon me for just a touch of 
 sentiment? we shall perhaps discover the practical beauty in these lines 
 of the poet, Sam Foss: 
 
 Let me live in my house by the side of the road, 
 
 Where the race of men go by. 
 
 They are good, they are bad, 
 
 They are weak, they are strong, 
 
 Wise, foolish; so am I. 
 
 So why should I sit in the scorner's seat, 
 
 Or hurl the cynic's ban? 
 
 Let me live in my house by the side of the road, 
 
 And be a friend of man. 
 
 THURSDAY EVENING SESSION. 
 December 14th, 1916. 
 
 Chairman Murphy called the meeting to order at 8:30 o'clock p. m. 
 
 Ladies and gentlemen : We will resume our deliberations accord- 
 ing to our program. Up to this hour we have had transportation dis- 
 cussed from the angle of the railways, the first address being the monu- 
 mental effort of Mr. Alfred P. Thorn. The next phase was the discussion 
 of the subject from the angle of the investors, as represented by Mr. John 
 Muir, who made an equally remarkable presentation of the case of the 
 man who puts up the capital. Third, we had the neutral viewpoint pre- 
 sented by Mr. John E. Lathrop. Tonight we are going to have the oppor- 
 tunity of hearing from a man who presents the side of the fellow that 
 pays the bills, the shipper's side. We are fortunate, indeed, in having 
 with us so able a representative of the great shippers' interests. When 
 I was seeking a man to fill this place I wired Colonel George Pope, of the 
 National Manufacturers Association, and asked him if he couldn't come 
 to talk for the shippers and the big manufacturers. He replied that en- 
 gagements in New York prohibited his attendance. Thereupon I wired 
 for suggestions and immediately the reply came back, "Get E. B. Leigh 
 and J. M. Belleville." Through fortuitous circumstances we have been 
 able to secure both of these men. We are indeed lucky in having these 
 men here, "because the shippers of this country have no abler representa- 
 tives than they. We have alloted them plenty of time for the discussion 
 of the subject. 
 
 Mr. E. B. Leigh, of Chicago, a director in the National Association 
 of Manufacturers, and Vice-President of the Railways Business Associa- 
 tion, will talk to us on the subject, "The Shippers, Their True Relation to 
 the Transportation Problem." There is no man in the country who can 
 better define the interests of the shippers than Mr. Leigh. 
 
 I have the pleasure of introducing Mr. Leigh to this audience. (Ap- 
 plause.) 
 
32 
 
 THE CENTRAL STATES CONFERENCE 
 
 The Shippers, Their True Relation to the Trans- 
 portation Problem. 
 
 By Mr. E. B. Leigh. 
 
 Having been invited to speak from 
 the standpoint of "The Shippers," it 
 may not be out of place to say that, 
 owing to the inability of Col. George 
 Pope, president of the National Associ- 
 ation of Manufacturers, to be present, 
 our esteemed chairman, Col. Murphy, 
 generously accepted Col. Pope's sug- 
 gestion of my name as a substitute for 
 his own, and as a director of that as- 
 sociation. 
 
 In like manner, and because of the 
 necessary absence of Mr. George A. 
 Post, president of the Railway Bus- 
 iness association, I am responding to 
 the call of that association as one of 
 its vice-presidents thus appearing in 
 somewhat dual capacity. 
 
 The direct business with which I 
 am identified is such that it is allied 
 with both of these associations. As 
 criticism, or question may arise as to 
 the unbiased view point of a company 
 selling its products to railways, I trust 
 you will permit me to say that 70 per 
 cent of my company's business is en- 
 tirely removed from railway contact 
 but 30 per cent having such contact. 
 
 These conditions being explained to 
 Col. Murphy, he requested that the 
 cause of the shipper be presented on 
 broad lines. 
 
 In this effort, there may be some ad- 
 vantage in having two angles, or view 
 points, each of which may be tested 
 by its effect upon the other the two- 
 fold relation thus perhaps serving to 
 induce a broader and fairer consider- 
 ation of the question involved. 
 
 What is the interest of the shipper 
 in the railway problem? 
 
 This question, when asked, may 
 elicit many answers, the most com- 
 mon of which would doubtless be: "low 
 freight rates." This is the most pop- 
 ular conception of the primary inter- 
 est of the shipper in the railways of 
 the country; yet upon analysis it is 
 found that every industry, every com- 
 mercial enterprise, and every individ- 
 ual is interested not only in the rail- 
 ways as such, but in their effective 
 and profitable operation as well. 
 
 This universal dependence varies, 
 however, in directness, in form, and in 
 the consciousness of the individual. 
 
 The products of the farm would be 
 of relatively small value, minus the 
 facilities of transportation to markets 
 
 of sale and consumption. The pro- 
 duction of the infinite variety of com- 
 modities, essential to the maintenance 
 of our present day civilization, is 
 made possible by the railways. The 
 daily necessities and luxuries of life 
 come to us, as individuals, so almost 
 automatically as to warrant the ex- 
 pression, "as free as the air we 
 breathe"; yet we have to look back but 
 a little to see that the railway is the 
 handmaiden of us all. 
 
 So when we speak of the "shipper," 
 we naturally ask who is the shipper; 
 what is he; and why? The answer 
 seems obvious; he is every one of us 
 that is, in the sense that every one of 
 us is an interested party, when the 
 railways of the country are under 
 consideration. 
 
 But referring to the shipper, as he 
 is commonly conceived in our business 
 life: 
 
 How often have we heard our great 
 manufacturers speak of the two fund- 
 amental divisions of industry as con- 
 sisting of making and selling goods; 
 and of further likening them to the 
 two sound legs upon which every 
 healthy man must stand. The anal- 
 ogy is apt, so far as it goes, that is, 
 if the man has merely to stand. Just 
 so with the great furnace, the great 
 mill, or warehouses if their functions 
 are complete with the goods piled be- 
 fore their doors. But the strong man's 
 limbs will surely atrophy if he has 
 no road to travel; just as all manu- 
 facture will stagnate without the 
 means of highly diversified distribu- 
 tion of its products. 
 
 Thus there is a third fundamental 
 element in all industry and commerce, 
 appearing at the threshold of any 
 producing enterprise, and again when 
 the product has been sold, and is ready 
 for distribution transportation ; a 
 third partner not within our corpor- 
 ate organization, but one vitally es- 
 sential to it. How shall we treat him? 
 
 We are extremely careful in the sel- 
 ection of our corporate officials. We 
 seek men of the highest order of abil- 
 ity to evolve and conduct our manu- 
 facturing processes; we seek men of 
 judgment, foresight, discretion and 
 tact to outline and execute our com- 
 mercial policies to sell our product. 
 
THE CENTRAL STATES CONFERENCE 
 
 33 
 
 And as we logically regard both as 
 among our most valuable assets, we 
 conserve their health and strength, and 
 stimulate their activity by liberal 
 compensation. 
 
 We do these things, not from philan- 
 thropic motives; but from the sound- 
 est of all business reasons because 
 it pays.. 
 
 Now, if all industry and commerce 
 rest upon this triangular base of mak- 
 ing, selling and distributing; why 
 should we jealously guard the sustain- 
 ing power of the two legs of the tri- 
 pod, and imperil the equilibrium of the 
 entire structure by a gross indiffer- 
 ence to the third. 
 
 Perhaps it may be said of this ex- 
 ternal partner that he is not one oJ 
 us; that he is a third party: 
 
 Could anything be more fallacious? 
 Can we say he is not of us, when 
 without him we would have to retire 
 from business? Can we look upon him 
 askance as a third party, when we 
 realize that he has made possible our 
 industrial and commercial existence? 
 
 Maculay has said: "Of all inventions, 
 the alphabet and the printing press 
 alone excepted, those inventions which 
 abridge distances have done most for 
 the civilization of our species." 
 
 While a no less famous writer than 
 Lord Bacon aptly said: There are 
 three things which . make a nation 
 great and prosperous; a fertile soil, a 
 busy workshop and easy conveyance 
 for man and goods from place to* 
 place." 
 
 I assume that every business man 
 believes in the economic theory that 
 all industry and commerce, to sur- 
 vive, must be conducted at a reason- 
 able profit. I also assume that, in- 
 dividually, every one of us is weak 
 enough, or human enough, to buy any 
 commodity we may need at as low a 
 price as we can impose upon the seller 
 and I blush to add regardless of 
 whether that price is above or below 
 cost of production that is not our 
 concern, as we conceive it 
 
 In an economic sense, the railways 
 are selling, and the shippers are buy- 
 ing a commodity transportation. And 
 right here arises the anomaly of the 
 transaction. As individuals, when yon 
 sell and I buy, we are each of us 
 wholly untrammeled by any dictation 
 as to price other than your knowledge 
 on your part of your cost of produc- 
 tion and for my own part, my knowl- 
 edge as to the figure at which I can 
 secure the commodity elsewhere. Each 
 party is a free agent, with discretion 
 to act, and only limited by economic 
 considerations. 
 
 On the other hand, how different 
 when we, as shippers, buy from th, 
 railways; for here there are not two 
 
 independent parties, with power to 
 act. The function of negotiation, \i\ 
 this instance, between these two ele- 
 ments (seller and buyer) is vested by 
 law in the Interstate Commerce com- 
 mission. 
 
 Sitting as a court of arbitration, so 
 to speak, the commission fixes the 
 price of transportation. Following the 
 testimony of all parties at interest 
 (and which merely comprises the 
 two the selling railway and the 
 buying shipper) the "reasonableness" 
 of a proposed rate is then determined 
 by the commission. What does this 
 rate, when it emerges from this pro- 
 cess, really mean? 
 
 Apparently, it means nothing defin- 
 ite; for the railways are not secur- 
 ing an adequate price for their com- 
 modity transportation, and the ship- 
 per without knowing whether the price 
 is fair or not, on general principles 
 objects to it on the assumption that 
 it must be high, because he does not 
 know to the contrary so inherent is 
 this instinct. 
 
 Of necessity, these rates (while be- 
 fore the commission) are discussed by 
 representatives of large groups or 
 classes of shippers, and who in most 
 instances make the unhappy error of 
 assuming that when, as a group, they 
 bear down the rate for all hands 
 round, that is for all shippers, they are 
 benefiting themselves, in somewhat 
 the same manner as that of one in- 
 dividual as against another in an open 
 competition. They completely over- 
 look the fact that stability of trans- 
 portation rates, like stability of com- 
 modity prices, is of vastly more Im- 
 portance to them as shippers than tho 
 level of rates themselves. 
 
 These rates cannot remain stable 
 unless they are equitable; for stability 
 and equity are manifestly inseparable 
 in any form of continued activity, and 
 particularly where the activity com- 
 prises three such fundamental contrib- 
 utory elements as production, sale and 
 distribution. 
 
 Imagine for a moment these three 
 elements combined under one owner- 
 ship and management; would the exec- 
 utive management of such an enter- 
 prise maintain two of these elements 
 on a sound economic basis, and saddle 
 an insuperable burden upon the third? 
 Would a corporation so conduct its op- 
 erations as to permit two of its de- 
 partments to prosper, while it impov- 
 erished the third, and which would in- 
 evitably impair the other two? And 
 yet, the principle governing all three 
 is, in an economic sense, the same un- 
 der diverse ownership as it would be 
 under sole ownership. 
 
 The wisdom and policy of maintain- 
 ing the integrity and stability of the 
 
34 
 
 THE CENTRAL STATES CONFERENCE 
 
 triple alliance thus becomes mani- 
 fest. 
 
 In these days of accelerated devel- 
 opment, we are frequently made to 
 realize that we are surrounded by 
 forces or conditions vitally affecting 
 our existence, but as to the effect of 
 which we have been unconsciously ig- 
 norant. 
 
 We have spoken of the tripod. It 
 so happens that there is another vital 
 element, not so frequently known or 
 recognized, but of vast importance, 
 and really making it a quadruple al- 
 liance. Singularly too, this fourth 
 element proceeds from this same "ex- 
 ternal partner" the railway. 
 
 One branch of the speaker's busi- 
 ness has been in the railway equip- 
 ment line. For many years it was 
 noted that the first significant sign of 
 a revival of general business, was 
 railway buying and its cessation one 
 of the first signs of impending general 
 recession. 
 
 This became such a settled convic- 
 tion, that a means of testing and 
 demonstrating its accuracy was sought. 
 A few years ago I had the curiosity to 
 procure data from the well known 
 Brookmire Economic Service, of St. 
 Louis. On one occasion I said to Mr. . 
 Brookmire that I had the idea that if 
 a chart could be constructed indicat- 
 ing the curve up and down through 
 the years of railway purchases on one 
 line, and the volume of general busi- 
 ness on the other line, it would be 
 found that an upward turn on the rail- 
 way purchase line was pretty regular- 
 ly followed by an upward turn, of cor- 
 responding magnitude, upon the gen- 
 eral business line; and that when 
 railway purchases went down, general 
 business followed soon afterword. 
 
 Mr. Brookmire proved to have a 
 unit, measuring general business, 
 based upon an average of a large num- 
 ber of commodities. To compare rail- 
 way purchases with this unit, we ar- 
 bitrarily agreed that a representative 
 figure would be "car orders," exper- 
 ience having shown that when car 
 orders rise or fall, this is accompanied 
 by a closely corresponding fluctuation 
 in the purchases of locomotives, and 
 of the various products which are used 
 in building and maintaining track and 
 structures. 
 
 When the chart was laid before me 
 I was pleased to find that my pro- 
 phecy had come true in an uncanny 
 degree. Enormous, in bulk are the 
 transactions of the railways. There 
 is hardly a commodity which the roads 
 do not buy. To remove from the mar- 
 ket railway purchases of almost any 
 article, causes a readjustment in that 
 particular industry. 
 
 As our survey progresses into the 
 industries, a large part or the whole of 
 
 whose product is consumed by the car- 
 riers, we observe two things: Fir^t, 
 that the readjustment amounts to a 
 convulsion and prostration; second, 
 that this prostration of industry im- 
 mediately brings distress, and in some 
 communities, disaster to every branch 
 of trade and manufacture. 
 
 In other words, railway purchasing 
 power is so great a factor- in total pur- 
 chasing power of the country that its 
 instability spells general instability. 
 Anything which affects the railways ad- 
 versely is instantly communicated to 
 the whole business structure. 
 
 From time to time I have thought it 
 worth while to have this chart brought 
 down to date. In the fall of 191*4, the 
 line indicating railway purchases sank 
 to a point lower than the point shown 
 at any time in 1908, the previous low 
 point for the period covered by the 
 chart, which begins with 1901. The 
 business index in 1914 followed the rail- 
 way purchasing index down, with about 
 three months interval, and reached a 
 level lower than the low point in 1908. 
 Before the end of the year the business 
 index shot sharply upward, in advance 
 of any upward trend in railway pur- 
 chases. 
 
 In the spring of 1915 railway pur- 
 chases rose a few points. In the lat- 
 ter half of 1915 we had the unprecedent- 
 ed phenomenon of a business index rig- 
 ing almost perpendicularly, until in the 
 .autumn of 1916 a substantially higher 
 point has been reached than at any 
 time in the years, whereas simultane- 
 ously railway purchases turned sharp- 
 ly downward. Car orders in the mid- 
 dle of 1916 had reached a lower point 
 even than in the middle of 1914. Hence, 
 a sixteen year period closed with the 
 business index at the highest point ever 
 shown, and the railway purchases at a 
 low point for the period. 
 
 It has been conclusively shown that 
 under normal conditions, the vast rail- 
 way purchasing power, is the funda- 
 mental factor in the general business 
 of the country. 
 
 So this "external partner" not only 
 starts the wheels of business general 
 business; but controls its movement. 
 
 We now have a structure supported 
 by four legs two of which are the rail- 
 ways. With two legs impaired, what 
 support can the other two legs give to 
 this structure? 
 
 The business index, at the present 
 moment, has reached the limit of the 
 barometer, so if it continues to rise, s. 
 new instrument will have to be pro- 
 vided. The "railway purchase" bar- 
 ometer, however, even with the recent 
 large purchases, is still below normal. 
 
 But your time need not be consumed 
 in a discursive proof that the appar- 
 ent exception involved in the chart for 
 
THE CENTRAL STATES CONFERENCE 
 
 35 
 
 1916 was due to another gigantic pur- 
 chasing power coming into the market 
 at a time when the railways were not 
 buying namely, the munitions con- 
 tracts and war business. 
 
 What will be the total purchasing 
 power of the American people at the 
 close of the war in Europe? 
 
 You, gentlemen, have before you two 
 diametrically opposed prophecies. 
 Profits have been made in munitions 
 manufacture, and in a wide range of 
 miscellaneous manufacture and trade, 
 growing out of the purchasing power so 
 created. You are asked by some to be- 
 lieve that these profits will give Amer- 
 ica means to continue the maintenance 
 of active trade. Another important 
 item of accumulation of capital, you are 
 told, will be the retention in this coun- 
 try of great sums formerly sent annu- 
 ally to Europe, in the shape of interest 
 and dividends upon American securi- 
 ties held there, but bought back by 
 Americans in the course of the Euro- 
 pean conflict. 
 
 You have been invited to consider 
 European necessities, in the way of re- 
 placing machinery and plant destroyed 
 by the war, and promising large con- 
 sumption of American products. Those 
 who emphasize this view, underscore 
 also the scarcity of labor abroad, due 
 to death and disfigurement in the war, 
 assuring, they think, high labor cost in 
 Europe, as well as under-production. 
 These factors, we are urged to believe, 
 will make it easy for the United States 
 to compete with Europe in trade, after 
 the war. 
 
 From others, you have the opposite 
 prediction made with equal positive- 
 ness. You are reminded by them that 
 the United States, just prior to the 
 outbreak of hostilities, was in a state 
 of extreme industrial depression. They 
 state that nothing has occurred since 
 to improve industrial conditions in thij 
 country, except the war. 
 
 A new currency system, it is admit- 
 ted, has gone into effect, and every- 
 body hopes that this will give America 
 the same immunity from financial pan- 
 ics, which has been enjoyed by most 
 countries of the world for many years. 
 But it was not a panic which precipi- 
 tated the condition which existed in the 
 United States in the middle of 1914. 
 There had not been a financial convul- 
 sion since 1907. In 1913, business had 
 reached a high mark. We may have 
 widespread and prolonged depression, 
 whether or not precipitated by panic. 
 
 The American financial position, 
 again, we assure you, is not really as 
 strong as it seems. Busy as a great 
 part of our industrial equipment now is, 
 and large as have been some people's 
 profits, I need hardly say to you, gen- 
 tlemen, that the manufacture of muni- 
 
 tions has brought disaster to some, 
 and meagre, if any, profit to many; and 
 that there are a number of industrial 
 plants not doing at the present time 
 more than a small percentage of the 
 capacity for which they are prepared. 
 
 We warn you to be alarmed, more- 
 over, at certain habits which have be- 
 come prevalent in America. There is 
 a universal extravagance, personal and 
 corporate. This applies to employes, 
 but it also applies to managers. Aris- 
 ing from this, and other causes, there 
 is a cost of doing business which is 
 undoubtedly the highest ever known in 
 any country, at any time. 
 
 Contrast this situation with what we 
 see abroad. Consult astute observers, 
 familiar with what has been accom- 
 plished by the warring nations, in or- 
 ganization of their resources. They de- 
 clare that Europe has made great moral 
 gains. The warring nations have orga- 
 nized their resources. They have de- 
 veloped discipline, economy, adaptation 
 of means to ends, co-operation of man- 
 agers and men, general co-ordination 
 of energies. These, they assert, have 
 given Europe a productive capacity, a 
 great deal more than offsetting the loss 
 through death and disablement in the 
 war. Not the least new factor is the 
 labor of women. 
 
 Europe, again it is declared, has fully 
 restored the habit of saving, which had 
 in some countries been somewhat re- 
 laxed before the war. Those who look 
 at it in this way conceive Europe as a 
 group of highly efficient nations, drilled 
 thoroughly and drastically, capable of 
 accumulating capital even when doing 
 business at cut-throat prices, ready to 
 repeat the miracle of the past in the 
 direction of paying off war debts, hun- 
 gry for foreign markets, and looking 
 with avaricious eyes, not only upon 
 those consumers abroad throughout the 
 earth to whom America must sell if 
 America is to hold her ground, but up- 
 on consumers in the United States it- 
 self. 
 
 You have before you these two views. 
 Some tell you that the troubles of the 
 railways are not your troubles as a 
 matter of purchasing power, because 
 prosperity will persist after the war in 
 any event. On the other hand you are 
 asked to regard the troubles of the rail- 
 ways as your troubles on the score* of 
 purchasing power because, it is pre- 
 dicted, you will be in the greatest pos- 
 sible need of railway purchasing pow- 
 er, as soon as the war purchasing pow- 
 er is withdrawn. 
 
 Now it is not necessary to ask you to 
 espouse either of these views. All that 
 I need urge upon you is the vital im- 
 portance of doing the utmost that in 
 you lies, to meet the situation which- 
 ever prophecy proves inspired. Here 
 
36 
 
 THE CENTRAL STATES CONFERENCE 
 
 is a great national juncture. Is it not 
 the part of prudence, as it would be in 
 a critical business situation facing any 
 one of you in his own affairs, to assume 
 the worst, and put your house in order 
 accordingly? 
 
 It is not advocated that the railways 
 of the United States should be encour- 
 aged or permitted to buy one unneces- 
 sary dollar's worth of equipment or ter- 
 minal facilities; or to construct one un- 
 necessary mile of road. One of our 
 greatest sins as a nation is, that we 
 buy things which we don't need, and 
 which we would be beter off without. 
 3ut no such situation exists. It used 
 to be the accepted scheme of things to 
 assign to the railways a certain part 
 in building up the country. 
 
 For years and years the roads have 
 not been playing that part, but have 
 been lagging upon the stage; post- 
 poning what they could, patching up 
 what they must, and all but ceasing to 
 grow. 
 
 You have been told, until it must 
 have been impressed upon you, that 
 not 1,000 miles of railway were built in 
 the United States last year the great- 
 est year in volume of general business 
 for the railways to carry, in our his- 
 tory. 
 
 That brings me to the single provi- 
 sion of law which I have selected from 
 among the many now pending before 
 congress to call to your special atten- 
 tion. The phase I have in mind has 
 nothing to do with state's rights. It 
 has nothing to do with incorporation, or 
 the regulation of security issues. It 
 has nothing to do with the organiztaion 
 of the Interstate Commerce commission 
 or any of its auxiliaries. What it has 
 to do with, is the standard which the 
 national legislature shall set by statute, 
 whereby the Interstate Commerce com- 
 mission is to measure railway earnings 
 in the regulation of rates. 
 
 I never drew a bill, or an amendment 
 to a bill, in my life. To this abstinence 
 I attribute in part the good health 
 which I enjoy, and such degree of pros- 
 perity as a gracious Providence has in- 
 termittently allowed me. I shall not 
 offer you statutory language. The best 
 I can do is to give you what I hope you 
 will regard as business English. If I 
 were you I would do all I could to pro- 
 mote, not in the next congress or the 
 congress after that, but in the congress 
 which expires March 4, 1917, the enact- 
 ment of an amendment either in con- 
 nection with bills to meet the eight 
 hour situation, or to the act to regu- 
 late commerce, providing that the rule 
 for the measure of earnings in regulat- 
 ing rates shall be in substance the 
 same rule that any board of directors 
 of any business corporation on this 
 
 planet would have to follow if that 
 corporation were to thrive and grow 
 and perform the functions expected 
 of it. 
 
 Three alternatives exist. One is to 
 regulate individual rates with regard 
 to their reasonableness and with regard 
 to discrimination without considering 
 the relation of total revenue to total 
 expenses. In other words, bankruptcy 
 and government ownership. If that is 
 what you want, you can have it by 
 leaving the law as it stands. 
 
 The second alternative, is to ordain 
 that rates shall be high enough to pro- 
 duce earnings, out of which improve- 
 ments and extensions and the develop- 
 ment of territory not now served, can 
 come without the investment of new 
 capital through stocks and bonds. It 
 may be that you gentleman can per- 
 suade the congress of the United States 
 to pass such an amendment, but I do 
 not believe you can. 
 
 The third alternative is to lay down 
 the rule that such a rate structure shall 
 be permitted in every large region that 
 on the average of all the roads tra- 
 versing that region, and on the aver- 
 age over a period of years, earnings 
 shall be sufficient to attract investment 
 for additions and betterments to exist- 
 ing lines, and for construction of new 
 mileage. 
 
 I do not profess to prophecy whether 
 congress will pass such an amendment 
 or not. I do predict without hesitation 
 that if congress does not adopt such 
 an amendment, and adopt it at the 
 present session, the end of the war in 
 Europe will in due course be followed 
 by an American depression of the first 
 magnitude in severity and in length of 
 duration. 
 
 You had it in 1914, before this war 
 began. You will resume' it after this 
 war is over, if you do not allow a 
 gigantic purchasing power to take the 
 place of the gigantic purchasing power 
 which will be taken out of your mar- 
 kets when munitions and war con- 
 tracts cease to operate. 
 
 Therefore, gentlemen, the true rela- 
 tion of the shippers to the railway prob- 
 lem, is to have this problem solved 
 quickly, fairly, economically; but in 
 such a way as will place this great in- 
 dustry upon a proper business basis, 
 with that full measure of prosperity 
 which will enable it to again take, and 
 maintain, its proper position as the 
 great fundamental factor in our na- 
 tional prosperity. 
 
 This, every shipper in the country 
 can logically urge upon the broad 
 ground of "live and let live"; of equity, 
 of fair dealing, further reinforced, if 
 need be, upon the most narrow ground 
 of "self-interest." 
 
THE CENTRAL STATES CONFERENCE 37 
 
 The Conference then gave Mr. Leigh a vote of appreciation and 
 thanks. Announcement was next made of the receipt, by special delivery, 
 of a brief statement from Mr. S. P. Bush, President Buckeye Steel Casting 
 Co., of Columbus, Ohio, and a director of the Ohio Manufacturers Asso- 
 ciation. Mr. Bush asked that his letter be read before the Conference and 
 the Chairman requested Mr. Samuel L Orr to read the communication, 
 which follows: 
 
 The vital questions in connection with the steam railway transpor- 
 tation interests of the country that have been brought prominently before 
 the public and shippers during the past few years have been those of 
 railway regulation, adequate revenues for the railways and the settle- 
 ment of controversies between the railways and certain groups of their 
 employes. 
 
 Railway Regulation. 
 
 Not very long since, the Ohio Manufacturers' Association, by reso- 
 lution, expressed itself in favor of federal regulation and control of all 
 railways conducting interstate commerce. 
 
 It further expressed itself in favor of increasing the number com- 
 prising the Interstate Commerce Commission with the understanding that 
 such is believed by the present commission to be necessary and *hat the 
 power of the commission to regulate should be complete and positive in 
 the matter of increasing as well as decreasing rates, and thus be in posi- 
 tion to establish some fair relation between cost and operating revenues. 
 
 It still further believes that the power to control the issue of the se- 
 curities of interstate commerce carriers should be federal rather than 
 state, and that the state power should be confined to the regulation of 
 those things that are inherently and purely state matters. 
 
 Briefly, in explanation of the foregoing, the Ohio Manufacturers' 
 Association believes that regulation and operation of the transportation 
 interests of the country should be put on a purely business and economic 
 basis, and freed from political influences as far as possible, and this we 
 believe can be best accomplished by a larger measure of single federal 
 control as against the multiple control which we now have. 
 
 We believe that with proper organization of the federal power that 
 the rights and interests of the several states and of the nation can be 
 more consistently and uniformly conserved than by the present cumber- 
 some and unbusinesslike plan. 
 
 As business men we look at the whole problem as a business one in 
 a business way, observing the wastefulness and inefficiency of the present 
 system. 
 
 We feel that the abuses of the past have long since been eliminated 
 and that our governmental policy toward all business, while maintaining 
 thorough regulation, should be genuinely constructive. 
 
 We manufacturers of Ohio believe that if our own industries are to 
 prosper that other industries must prosper; that if we demand fair treat- 
 ment and efficient regulation on the part of the government that we must 
 concede this to all other industries. 
 
 Governmental regulation in all business, including transportation, is 
 directed to a wrong objective when not in harmony and not promoting the 
 natural laws of business and a maximum economic efficiency. Natural 
 laws and statutory laws must align with each other. 
 
 We feel that much of the regulation of all business has contained and 
 still contains an element of vindictiveness that should be abolished. Regu- 
 lation of the railways should have efficiency and the national welfare 
 as its aim, and nothing else. Prosperity is the objective point and pros- 
 
38 THE CENTRAL STATES CONFERENCE 
 
 perity of the various separate interests is the fundamental basis for na- 
 tional prosperity, the true safeguard for national welfare. 
 
 Railway Revenues. 
 
 It is a fundamental principle vital to the national economic welfare 
 that if any considerable interest is not thriving fairly or able to improve 
 and develop in civilization, that it is harmful to all interests. 
 
 Business done at a profit is the fundamental basis for individual and 
 national prosperity, and with this in view where natural conditions make 
 it possible, we ask for ourselves and others not to be restricted and regu- 
 lated by law so that under fair average management we cannot make a 
 profit that will make it possible not only for industry to live, but to pro- 
 gress and develop. 
 
 The railway transportation industry being such a vast factor in con- 
 nection with all of the country's interests, should be so regulated as to 
 make this result possible, not only in justice to the railway interests 
 themselves but in justice to all other industries. 
 
 It. is a matter of vast importance that the railways shall be per- 
 mitted to co-operate in the greatest possible degree to the end that waste 
 may be eliminated and efficiency promoted. 
 
 The manufacturers of Ohio are particularly interested in seeing the 
 most efficient railway operation to the end that rates of railway trans- 
 portation may not be made any more than is absolutely necessary. See- 
 ing as we have in the past, diverse, conflicting and wasteful regulations 
 of the several states, unnecessary and uneconomic financial burdens in 
 some cases, we think that much that is desirable may be accomplished 
 by regulation that is more uniform and more free from selfish interest. 
 
 Railways and Employes. 
 
 With reference to controversies between railways and their employes, 
 which during the past few years have become more and more acute, and 
 recently threatening a very general suspension of the transportation 
 service, the public and shippers have been very apprehensive. 
 
 The main question involved in these controversies is generally that 
 of wages. Unquestionably the public desires to see all of the railway em- 
 ployes fairly compensated and otherwise fairly treated, also that the rail- 
 ways may be fairly treated, and public sentiment, it is believed, can gen- 
 erally be relied upon to throw its influence on the side of justice. 
 
 Up to the present time there have been various mediation and arbi- 
 tration proceedings, but little, if any, substantial information has come 
 to the public from these; in fact, it has been reliably stated that the facts 
 brought out at these mediation and arbitration proceedings could not be 
 made public by reason of an agreement between the parties that they 
 should not be made public. 
 
 With both sides to these controversies asking for the support of pub- 
 lic opinion and the public being such a vitally interested party, it would 
 seem that the public really has a right to a knowledge of all the facts. 
 
 We are very strongly in favor of arbitration in such controversies 
 between common carriers and their employes, both as a principle and 
 as a practice. 
 
 When such controversies arise it would seem that a determination 
 of the facts by a committee or board composed of men thoroughly quali- 
 fied to determine all of the facts having any bearing on the questions at 
 issue should be made and at least given to the public, although if such 
 committee had power to render an award, even though not binding by 
 
THE CENTRAL STATES CONFERENCE 39 
 
 law, it would go far towards eliminating the possibility of railway tie- 
 ups. 
 
 It would seem that some form of legal procedure in the determina- 
 tion of the facts and even the making of an award must be applicable to 
 these controversies. It seems strange that in all of the mediation and ar- 
 bitration proceedings, held thus far, no foundation has been laid in the 
 way of standards for the determination of fair compensation. Certainly 
 there must be some relation between the value of the service rendered by 
 railway employes and those engaged in other industries. The degree of 
 intelligence, of skill, of hazard, of physical and mental strain and reason- 
 ableness of service requirements must be fairly determinable, and it does 
 not appear that any of the rights of either party need be curtailed or taken 
 away, and undoubtedly the public should not be called upon to suffer 
 the suspension of its transportation facilities because either side to such 
 a controversy may have the power to impose it arbitrarily, when any of 
 the questions involved can be settled fairly by orderly proceedings, and 
 according to common and natural standards. 
 
 We are, therefore, very strongly of the opinion that investigation and 
 publication of all the facts bearing on such controversies prior to the 
 suspension of railway transportation should be a lawful requirement. 
 (Applause.) 
 
 Chairman Murphy then explained to the Conference that Mr. John A. 
 Russell, Dean of the School of Commerce and Finance of the University 
 of Detroit, who was expected to lead a discussion, had been unable to at- 
 tend because of an injury to his eye. The Chairman then called on Mr. S. 
 J. Roy, Field Secretary of the National Rivers and Harbors Congress, 
 who spoke on the following subject: 
 
 "Development of Our Waterways." 
 
40 THE CENTRAL STATES CONFERENCE 
 
 Development of Our Waterways. 
 
 By Sidney J. Roy, 
 Field Secretary of the National Rivers and Harbors Congress. 
 
 Mr. Chairman, Ladies and Gentlemen: I am here attending this Con- 
 ference on my own invitation. Whenever a field secretary of the Na- 
 tional Rivers and Harbors Congress hears of any conference anywhere 
 within the confines of the republic that has for its purpose the consider- 
 ation of the great fundamental question of transportation, he is expected 
 to buy a ticket to that place immediately. So I was over in Chicago 
 yesterday and I came down last night. I am glad I am here. 
 
 I expect since you have been listening during this afternoon and this 
 evening to these splendid and well-prepared addresses that you feel very 
 much like the toastmaster did out in Missouri who introduced me to an 
 audience one evening after a dinner. After we had disposed of the coffee 
 and had taken a cigar (he was a little nervous and new at the business 
 of being toastmaster) he said, ''Brother Roy, shall I introduce you now 
 or shall we continue to enjoy ourselves a while longer?" (Laughter.) 
 
 I haven't any prepared address for you and I feel a little embarrassed 
 following these five or six splendidly prepared and brilliant addresses on 
 the great question of transportation. I feel very much like two famous 
 men did when they met in Chicago. One of them was from my town. 
 Mark Twain was introduced to General Grant, and Mark said, "General, 
 I am embarrassed. Are you?" After the General became President of 
 the United States and after he had been President he went around the 
 world and when he came back by way of 'Frisco over to Chicago the Grand 
 Army of the Republic had a great banquet at the old Palmer House. 
 Everybody of any distinction in the army was there and they invited that 
 great Missourian to be a guest. Mark Twain met the General for the first 
 time in quite a number of years, the only time in fact since he had met him 
 and made that remark. He met him now in the presence of that great 
 audience that was welcoming the victorious general and the great presi- 
 dent on his return from around the world. The General, you know, had 
 a very tenacious memory and he said /'Mark, I am not embarrassed. Are 
 you?" (Laughter.) So I am not going to embarrass you this evening and 
 I am not going to be embarrassed either. I am going to start talking 
 waterways right now. 
 
 In all this waterway business and transportation business in the 
 United States, I mean railway and water transportation which has de- 
 veloped during the last forty years, its development and growth has been 
 the most wonderful thing on this continent. I sometimes think that it 
 has developed a good deal like a negro down in Oklahoma said about the 
 Rock Island railroad. A traveling man went down to the station and 
 met Jim, the porter of the hotel, and he said, "Jim, is this the Rock Island 
 System?" Jim says, "No, sir, this ain't the Rock Island System." The 
 traveling man said, "You mean to say that this is not the Rock Island 
 system? Isn't it the Rock Island railroad?" Jim says, "Oh, yes, sir, 
 this is the Rock Island railroad, but we never had no system connected 
 with it." (Laughter.) 
 
 Now, there has been a good deal of lack of system in developing our 
 railways and a good deal of lack of system in developing our waterways. 
 
 There are three kinds of transportation: Railways, waterways and 
 highways. A community must have, if it would prosper, all three kinds 
 of transportation developed to their highest point of efficiency. Now, the 
 great trouble with most of the American communities is that they only 
 have one kind of transportation. Now, down here in Southern Indiana, 
 
THE CENTRAL STATES CONFERENCE 41 
 
 you only have one kind, and in that way you are a good deal like the other 
 states of the Union. You have the right-of-way for some highways; but 
 only a few highways. You have the right-of-way for a waterway out here 
 but you are waiting patiently for the government to build it for you. 
 
 Now, during the last forty years the building of two hundred and fifty 
 thousand miles of railways has absorbed the imagination, the energies 
 and the finances of the continent. Down on the banks of the Ohio, up on 
 the lakes and everywhere else, you have almost forgotten the kind of 
 transportation out of which this civilization came. This splendid town 
 here, the men who laid its foundation, came here by waterway; and this 
 splendid little metropolis of southern Indiana will only have its maximum 
 development as an industrial and commercial, intellectual and social cen- 
 ter when it has developed its maximum in the carrying of freight on the 
 great Ohio river. 
 
 You know there have been some empire builders in this country. In 
 1827 when New York built the Erie Canal it built the most far-reaching 
 piece of internal improvement ever built in any country in the world. Its 
 influence on commercial and industrial development on this continent has 
 been the most profound of any other public work. When that canal was 
 built New York was the smallest of the three large cities in this country, 
 Philadelphia, Boston and New York. A few years after that canal was 
 built New York began to grow as a jobbing center and then as a manu- 
 facturing center and then as a financial center and then as an intellectual 
 center and as a printing center, until today, with this continent back of 
 it, it is the financial, intellectual and culture center of the world, made so 
 and made possible by a little strip of water across the state of New York 
 that tapped the great inland waterways, the lakes, and literally compelled 
 a great continent to throw its tonnage into the Hudson and pay toll to New 
 York, at a cost of $27,000,000. Right now, not yesterday, and not to- 
 morrow, but today, the state of New York is spending $150,000,000 of its 
 own money to build the Erie canal into the state barge canal. Why is it 
 building it? Just for fun? Just to spend the money? Why, no; they are 
 rebuilding the Erie canal into the state barge canal, not to build New 
 York, but in order that New York may continue to compel the great north- 
 western territory to send its tonnage out into the commerce of the world 
 through the port of New York and continue to pay toll to New York . 
 
 The first railway freight rate made in the United States to compete 
 with the waterway was made by the New York Central railroad to com- 
 pete with that little strip of water across the state of New York and then 
 an ingenious freight clerk out in Buffalo said, "Here, if you can carry it 
 here why not carry it on further and compete a little further west?" So 
 they extended that rate by percentage out to Chicago and by virtue of the 
 Erie canal and the lakes Chicago became the center of the earth so far 
 as freight rates is concerned. You know that. You shippers especially 
 know that. It is like the zenith city of fame and story, so near the center 
 of the earth that the horizon comes down at the same distance all 
 around it, and the commerce comes down at the same distance all around 
 Chicago. 
 
 Now, let me call your attention to a little thing. In the early devel- 
 opment of this country the Ohio river was a great highway. It was not a 
 navigable stream but they used it as a navigable stream at times. It was 
 not dependably navigable. But our ancestors out in Missouri all came 
 by here on their way out into Missouri and back again into Kentucky and 
 Virginia. Pittsburgh started and grew by water transportation and ac- 
 cumulated population and wealth, and then the railroads came. Cincin- 
 nati the same way. Old Louisville started by the falls of the Ohio river. 
 But during the last two decades that row of towns, starting with Pitts- 
 burgh, Cincinnati, Louisville, Evansville, and St. Louis have been, not 
 standing still, but they Gave not been growing like they ought to grow. 
 But at the same time old Buffalo has been growing twice as fast as Pitts- 
 
42 THE CENTRAL STATES CONFERENCE 
 
 burgh. Cleveland has outstripped Cincinnati about three to one, and De- 
 troit, you know, has passed Louisville. They are not mentioned in the 
 same class as growing American cities. And Chicago has passed St. Louis 
 until they are not mentioned in the same class as great, growing Ameri- 
 can cities . 
 
 What is the reason? That row of cities on the lakes has all kinds 
 of transportation developed to their highest point of efficiency. The most 
 efficient railroads on this continent or any other continent has are the 
 railroads that parallel the most efficient waterways and you will find 
 them along the lakes. You know that row of cities on the Ohio river. If 
 you will look into it you will find they have not been growing like you 
 hoped they would grow and they will not grow in the future unless they 
 have the same kind of transportation that the other fellow has, and they 
 can't have it unless the Ohio river is canalized for nine feet and opened 
 to dependable navigation. (Applause.) 
 
 Now, here is the situation. I am not going to go into the details or 
 the reasons why waterway transportation is cheaper and more economical 
 than railways. We have got to have them both. No advocate of water- 
 way development in this country who is worthy to be in it is going to de- 
 cry railroads. We need them. We are compelled to have them. We want 
 them, but we want them to come along and work with the waterways. 
 Now, I am not afraid about their going to do it. About ten or twelve 
 years ago it was quite the popular thing among railroad men to decry 
 waterways; but the great propaganda that has been growing all over this 
 country during that time has educated the railroad men the same as it 
 has educated the rest of us, until the owners of the railroads and the 
 operators of the railroads are now conceding that the rivers and lakes 
 and these vast improvements should all be built up and made to serve 
 the growing commerce that is here and the still greater growing and stu- 
 pendous commerce that is to come. They must work together. As I say, 
 I am not afraid that they are going to work together. The waterways of 
 the country are owned by the people of the United States. The railways 
 are owned by the people of the United States. And we are going to com- 
 pel both of them to serve the highest ends of modern civilization. (Ap- 
 plause.) 
 
 There are some tendencies going on in this country of ours, and I am 
 not going to speak but just a moment, Mr. Chairman. The railroads can 
 only do about so much to serve a certain territory. Now, you take the 
 great Mississippi river; we had hoped, you had hoped in Evansville, we 
 had hoped over in Missouri, and they had hoped up in Illinois, up in 
 Ohio, that this great valley would grow and become the great dominating 
 industrial center of the world. We all had hoped individually that the 
 Ohio valley and that the Mississippi valley would grow and become the 
 great industrial and dominating centers. You know they are not doing 
 it just like you would like to have them do it.* Now, why is it they are 
 not doing it? 
 
 Let me give you an illustration which might in a way show you the 
 reason why they are not doing it. Over in Kansas City is the Peet Broth- 
 ers' soap factory, which is a bi-product of the live stock business of Kan- 
 sas and Missouri and Nebraska. When the Panama Canal was opened up 
 the rate up to 'Frisco and Oakland, California, was eighty cents. The in- 
 tercostal rate from Oakland to 'Frisco was forty cents. It meant that the 
 soap from Kansas City would not be used to cleanse the Pacific Coast. 
 Now, what happened? The Peet soap factory has just completed the 
 building of a $250,000.00 soap factory in Oakland, California. What does 
 that mean? That means the transferring from Missouri of $250,000.00 
 of invested capital and putting it out on the Pacific Coast. What further 
 does that mean? That means further the employment on the Pacific 
 Coast for those people in the making of soap in that factory. It will mean 
 
THE CENTRAL STATES CONFERENCE 43 
 
 that the people from Kansas, and from Missouri and from Nebraska will 
 move out there to get employment in that factory. It will mean the tak- 
 ing away of just so much wealth from the Kansas City district. What 
 does that mean further? It means that the life in the Mississippi river 
 valley will not be as progressive, will not grow. It will mean further 
 that Oakland, California, and the Pacific Coast will get this growth, that 
 the people will go there, will spend their money there, and will educate 
 their families in California. 
 
 Another example of that kind: The Proctor and Gamble Soap Com- 
 pany of Cincinnati, Ohio, had to build on the Atlantic Coast a soap fac- 
 tory in order to hold its business. Why? Because it could not compete 
 on account of the freight rates. 
 
 So you keep on with the process. The rates on manufactured pro- 
 ducts frpm this city here in the state of Indiana are such that if you have 
 a competitor in the same line, if you have close competition and work on 
 a close margin against a competition on the Atlantic or Pacific Coast, 
 that you can't enter in the South American countries. Why, you can't get 
 in this country, into the southern part of this country as against New 
 York. Do you know that New York and Boston and Philadelphia can 
 ship shoes from Lynn, Massachusetts, to the south at twenty-four cents 
 a hundred, cheaper than the St. Louis man can ship them to your back 
 door? It is simply because of the waterways. The rate on wire screen 
 shelving for refrigerators from Clinton, Iowa, this is a humble thing I 
 am giving you, but it is the God's truth $2.80 to 'Frisco from Clinton, 
 Iowa; $1.60 sent through New York, around through the Panama Canal 
 to San Francisco. What was the result? A shipment of 1450 pounds 
 went around through New York, a saving Of 36 per cent, on freight rates, 
 and a saving of 18 per cent, on the value of the invoice. Can the manu- 
 facturing and industrial lives of this great valley stand that? You can't 
 do it; and railroads cannot give you the relief. The only thing that can 
 relieve you is the enactment and the enforcement of the law, and the edu- 
 cation of the men who own the railroads, to build and develop the water- 
 ways and the railroads and compel both of them to work together and 
 serve you and serve this great valley. That is the only solution for get- 
 ting your commerce out into the world. 
 
 What is the result if you don't get it out? During the last census 
 decade you thought you were going to increase in population and power 
 and have more to do with the government of this great republic than you 
 have ever had before, but on account of the transportation facilities along 
 the coast the population piled up along the coast, because they could do 
 business there better and cheaper than you could in the interior. You 
 can do a domestic business satisfactorily, inside your own states, but the 
 next great spurt in growth in this country in manufacturing is going to 
 be incidental to your participation in the great foreign commerce of this 
 continent. And what chances are you going to have in that, unless you 
 have the same equipment for participating in the foreign commerce that 
 the other fellow has, and you can't have it unless you can assemble ma- 
 terials of manufacture in your community as economically as they can 
 be assembled in the other fellow's community. And unless you are able 
 to distribute the products of that factory into the uttermost parts of the 
 country as economically as they can be distributed from any other part of 
 this country or any other country, you are not going to participate in that 
 growth. 
 
 Now, here Is the final result. If you can't hold the manufacturing 
 in the Mississippi valley the great population will drift out to the shore 
 line and there will go the accumulated wealth of the nation and we will 
 be paying toll to the outside. 
 
 What is the final result? The great universities and art galleries 
 and things that dominate the finer life of the American continent will be 
 
44 THE CENTRAL STATES CONFERENCE 
 
 built where the accumulated wealth is. If we are going to build up in 
 Indiana, in Ohio, in Illinois and Missouri and in Kentucky, in this great 
 rich valley here, we must have the transportation facilities. We must 
 have the facilities for the transaction of business, just as good and a little 
 better than the other fellow has. If we don't, the wealth of the country 
 will go to that place that has the transportation facilities. 
 
 The one hope of this valley is the building and the welding together 
 of all kinds of transportation and compelling them by law to serve the 
 great ends of this civilization. I thank you. (Applause.) 
 
 Following Mr. Roy's address Mayor Bosse took the floor and outlined 
 the plans for the complimentary banquet scheduled the following evening. 
 The meeting then adjourned until Friday morning. 
 
 FRIDAY MORNING SESSION. 
 December 15, 1916. 
 
 Chairman Murphy called the meeting to order at 10 a. m. and aftei 
 a few general instructions requested Mr. Robert L. McKellar, of Louis* 
 ville, Ky., Director of the Louisville Board of Trade to preside. Mr. Me- 
 iCellar, upon taking the chair, spoke as follows: 
 
 Mr. Murphy, and Gentlemen: First, you will let me say that I am 
 a director of the Louisville Board of Trade and the delegate to this con* 
 ference from that organization and I wish to extend from that association 
 greetings to the Evansville Chamber of Commerce and other bodies that 
 are making this conference such a constructive one, and such a success, 
 and to congratulate this city upon being to the front in calling a confer- 
 ence of this kind. 
 
 As a member of the railroad fraternity I also wish to thank the 
 chairman of the conference for the honor conferred upon our fraternity 
 by selecting one of its members to preside at this session this morning, 
 Evansville is quite popular with the railroad fraternity and any railroad 
 that has not a line into Evansville is either blind to its own interests or 
 else so unfortunate as to not have recognized the value of Evansville and 
 built into here before the time came when railroad securities were unde- 
 sirable as investments. 
 
 I want to say a word or two more about Evansville, if I may be per- 
 mitted. The products of the mills and factories of Evansville go all over 
 this country, from Maine to California, and from the lakes to the gulf, 
 from Canada to South America, to the wheat fields of Russia and the rice 
 fields of the Orient. It is, therefore, very proper that Evansville should 
 take the lead in studying a question that the whole country is now con- 
 sidering transportation. I don't suppose that there ever has been a 
 period in the history of this country when the question of transportation 
 was being studied as intensively, seriously and as generally as it is being 
 studied at the present time. The reason for that is that we are up against 
 the necessity for studying this question. I am not going to touch on our 
 greatest troubles, how they would be relieved. Others have thought that 
 out and will have something to say on that. But I wish to have a little 
 something to say or a few words to say in regard to the troubles of the 
 recent past, present and the near future in the way of car shortage. That 
 is what is pressing us mostly at the present time. 
 
 In the latter part of October the car shortage became very acute and 
 it became necessary for the railroads all over the country, as well as the 
 shippers, to begin to study the question as to how cars could be distributed 
 
THE CENTRAL STATES CONFERENCE 45 
 
 so as to take care of the immediate needs of commerce. The interstate 
 commerce commission, under Commissioner McCord, held a meeting, a 
 car shortage hearing in Louisville, lasting from November 3rd until No- 
 vember 22nd, a total of fifteen days, with two sessions and sometimes 
 three sessions a day. Notwithstanding the fact that that is a good long 
 while to give to the special study of one subject, almost that entire time 
 was taken up in considering the shortage of coal cars alone. The short- 
 age in box cars was hardly referred to until the latter part of the con- 
 ference. Representative carriers from all over the United States were 
 present at that hearing, as were the interested shippers. The question was 
 gone into very thoroughly, with the result that when they adjourned on 
 the 22nd of November it was to reconvene in the City of Washington, to 
 take up at that point the question for further study in connection with 
 what is termed an efficiency committee appointed by the American Rail- 
 way Association. That efficiency committee is composed of four railroad 
 representatives and one representative from the American Railway Asso- 
 ciation. For the south and southwest Mr. Worthington of the Southern 
 Pacific has been appointed on that committee. From the northwest Mr. 
 W. L. Park, of the Illinois Central, has been appointed. For the east is 
 Mr. Shaeffer of the Pennsylvania railroad, and for the south is Mr. Coap- 
 man of the Southern railway. Mr. Hodges is Chairman of that committee 
 and he represents the American Railway Association, therefore represent- 
 ing all of the carriers. Working with that committee is chairman Mc- 
 Cord, who was in charge of the Louisville hearing, and Frank S. P. Dow, 
 who was also associated with Mr. McCord at the Louisville hearing. 
 
 This efficiency committee is studying every phase of the car short- 
 age problem and from day to day is issuing such orders as it thinks will 
 bring about a better distribution of cars in order to relieve the car short- 
 age throughout the various parts of the country. 
 
 It is my suggestion that if any community, or if any set of shippers 
 feel that the car situation is not being properly handled, for them to com- 
 municate with this efficiency committee and let their wants and their 
 troubles be known. 
 
 As I say, it is not my intention to go into the transportation subject, 
 but as a railroad man I wish to say just a word or two in connection with 
 water transportation. 
 
 I believe at one time it was the general feeling that the railroads 
 were all opposed to any consideration of the inland waterways. In my 
 opinion, that has long since become an exploded theory. There is no ob- 
 jection whatever, so far as I know, on the part of the railroads to the Im- 
 provement of the inland waterways. A number of the railroads are co- 
 operating in that effort; and I hope that if any such thought still remains 
 in the minds of some people, that the carriers as a whole are in opposition 
 to the improvement of the waterways, that that impression may be dis- 
 missed as unfounded. 
 
 In mentioning the connection of Evansville with this important ques- 
 tion of transportation and her activity and aggressiveness in going into 
 the question, while it is a live one, I also wish to congratulate the people 
 of Evansville on the work of their Mayor. He has certainly to the out- 
 side world placed Evansville on the map and I think he is doing his fnll 
 part toward keeping it there. We congratulate him and you are to be 
 congratulated in having such a man at the head of your city affairs. 
 
 If I understood the wishes of our chairman a few moments ago, it 
 was that until the arrival of the next speaker that we should have short 
 talks from different ones in the audience who would like to be heard on 
 the question of transportation. I will now invite five minute talks from 
 anyone in the audience who wishes to be heard on this subject. I hope, 
 gentlemen, that you will net be backward in coming forward. 
 
46 THE CENTRAL STATES CONFERENCE 
 
 Mr. Charles C. Gilbert, (Secretary Tennessee Manufacturers' Asso- 
 ciation, Nashville, Tennessee) : Mr. Chairman. 
 
 Chairman McKellar: Mr. Gilbert. 
 
 Mr. Charles C. Gilbert: It is my pleasure to attend .this conven- 
 tion as a representative of the Tennessee Manufacturers' Association and 
 on behalf of that organization I want to congratulate and compliment the 
 Chamber of Commerce of Evansville, backed by its splendid citizenship 
 for its forethought in arranging for this conference. 
 
 I want to say, Mr. Chairman, and to you, gentlemen, that it omens 
 well for the welfare of this country when business interests will gather 
 together in a conference like this to discuss a question that is of such 
 great importance to the upbuilding and development of this great coun- 
 try. 
 
 The Tennessee Manufacturers' Association looks upon this question 
 of transportation as going hand and hand with the development of our 
 stale, and never for once will that organization submit a stumbling .block 
 to be thrown in the way of the development and the upbuilding jof the 
 transportation systems and facilities in our state. We have three means 
 of transportation throughout Tennessee that we are encouraging: Name- 
 ly, the rail, the river and the highway. Never do we lose an opportunity 
 to foster any of these movements that will tend toward their improve- 
 ment. 
 
 Mr. Chairman, I want to say further that the manufacturers of this 
 great section of our country cannot afford to arrest and embarrass the 
 transportation systems of the south, because the railroads and the river 
 transportation systems go hand in hand with the manufacture of our 
 products. (Applause. ) 
 
 Now, in our state, in the state of Tennessee, we have at least thirty 
 counties that are not touched by rail or river. The goods that are pro- 
 duced in those counties, the raw materials that the manufacturer needs 
 so badly, must be transported overland. I want to tell you during the 
 last ten years that the railroads have not developed in the south. Their 
 percentage of construction has been distressingly small. I am ashamed 
 for our own state in that regard. Tennessee has constructed fewer miles 
 of railroad during the last ten years than any of the southern or central 
 states. We attribute that largely to the demagogues that exist in our state. 
 I have served in our legislature in Tennessee and I have sat there and lis- 
 tened to the demagogue as he would face the gathering and lift his voice 
 almost to the sky and damn the railroads from start to finish just to hear 
 the applause from the gallery. 
 
 My friends, we have got to stop that kind of business. This railroad 
 proposition is a business proposition and until the business interests of 
 this country, the people of this country realize that unless the railroads 
 are left alone and assisted in their construction and development, the 
 manufacturing industries and its various interests that are dependent up- 
 on the development of our resources, unless those interests are encour- 
 aged, then our country is not going to go forward as it should go for- 
 ward. When the great war is over, and it is going to be over some of 
 these days, this country is going to be looked upon as the greatest coun- 
 try under the sun, if it is not looked upon in that light at the present 
 time. We must take advantage of the opportunity. We must lock and 
 dam our rivers and we must encourage the building of railroads until 
 every section of the whole country is touched by some branch of one of 
 our splendid systems of railroads. Our association in the old Volunteer 
 State fs doing everything it can to encourage these means of transpor- 
 tation, not for our good, but for the good of the men, women and chil- 
 dren who live in that state and the states that touch our borders. 
 
THE CENTRAL STATES CONFERENCE 47 
 
 We are glad to compliment Evansville and you people from other 
 states who have given of your time and efforts towards making this con- 
 ference a success. 
 
 Mr. Murphy: Mr Chairman, I desire to read into the record a tele- 
 gram I have had from Theodore N. Vail, President of the American Tele- 
 phone & Telegraph Company. He says, "The questions you propose to 
 discuss are the most important ones now before the country. Upon the 
 wisdom of their handling and ultimate settlement largely depends our 
 immediate future. I can only express my highest appreciation of your 
 invitation to address your meeting and deeply regret that I am forced 
 to decline owing to an unexpected call from the country on important 
 business. THEODORE N. VAIL." 
 
 (Applause.) 
 
 Chairman McKellar: Gentlemen, I am sure you all enjoyed hearing 
 from the Tennessee Manufacturers' Association and the message that they 
 had to deliver to us today. Next to Kentucky is Tennessee. Is Mr. Law- 
 rence Finn of the Kentucky Railroad Commission in the audience? 
 
 Mr. Lawrence Finn: Mr. Chairman, I thank you very much for 
 calling on me, but I want to take some of your time this afternoon. I 
 might possibly request you to listen to me then and, therefore, I would 
 not care to impose on you now. 
 
 Chairman McKellar: We shall be glad to listen to Mr. Finn at any 
 time he desires to address us. Will Mr. L. K. Webb, of Louisville, Ken- 
 tucky, give us a few words? 
 
 Mr. L. K. Webb, (Manager Cumberland Telephone Company, Louis- 
 ville, Kentucky). Mr. Chairman and gentlemen: I think that inasmuch 
 as the Louisville delegate was made chairman of this convention this 
 morning that our city is amply represented. I will not take up any of 
 your time. However, I appreciate the opportunity of coming to Evans- 
 ville and would like to come back again for this purpose. I do congratu- 
 late you, gentlemen, on this convention. 
 
 Chairman McKellar: Is Mr. J. C. Clair, of the Illinois Central Rail- 
 road of Chicago, Illinois, in the audience? If so, we will be pleased to 
 hear from Mr. Clair. 
 
 Mr. John C. Clair: (Industrial and Immigration commissioner, Illi- 
 nois Central Railroad, Chicago, Illinois.) Mr. Chairman and gentlemen: 
 Against my physician's orders I am here this morning, but in view of the 
 request of our vice-president, Mr. F. P. Bowes, in charge of traffic, and 
 our freight traffic manager, in view of their wishes I am here, simply to 
 meet with the delegate to participate by way of shaking hands. 
 
 It affords me great pleasure to offer a few words upon that second 
 greatest industry of the world transportation. We all know that agri- 
 culture comes first. Transportation depends upon agriculture, as does 
 every other industry of this country. The work of my department is that 
 of development in the Mississippi Valley, and I want to say in considera- 
 tion of that work that there is no part of the United States today that 
 offers such national advantages and inducements in the uplift of our 
 great industries as does Dixie land to the south. (Applause.) 
 
 And so in Evansvilte this morning, near the center of the population 
 of the United States, it would seem psychological that this conference 
 was called at this point, and I, too, in line with the other speakers, wish 
 to congratulate the Chamber of Commerce of this very active city as well 
 as your great public spirited citizen, your very notable citizen, your Mayor 
 
48 THE CENTRAL STATES CONFERENCE 
 
 Bosse, for what they have done in bringing about the audience that is here 
 this morning. 
 
 Now, gentlemen, regarding transportation, it was pleasing to listen 
 to the gentleman this morning who spoke so generously as to the stand- 
 ing of the railroads. Yes, indeed, the railroads of this country are in- 
 terested in the waterways and all other mediums of transportation. It 
 would be a very narrow railroad and a very narrow-minded individual who 
 would think otherwise. 
 
 I want to say in behalf of the Illinois Central Railroad, gentlemen, 
 that when the deep waterways are completed from the lakes to the gulf, 
 I predict that the Illinois Central Railroad win be a four-track line instead 
 of a two- track line from Chicago to New Orleans. (Applause) 
 
 Take into consideration for a moment what is the most important 
 avenue of that work. It is our public highways. Do you realize that up- 
 wards of ninety per cent, of all traffic handled by the railroads of this 
 country is first handled over dirt roads or the highways? Therefore the 
 railroads' interest in our highways. We have two counties in the state 
 of Illinois that are still waiting for rail transportation. Compare the citi- 
 zenship of those counties with the other counties and you will readily 
 understand the importance of railroad transportation. 
 
 In behalf of my company, I am very much appreciative of the honor 
 that has been bestowed upon me, but just a word again with reference 
 to agriculture, our first great industry. The railroads of today are very 
 much interested in their sister industry, and well they may be. After 
 the war is concluded we will then have more reasons to appreciate the 
 importance of our farm land. This country today, the richest in the world, 
 is the most wasteful. My friends, we haven't yet begun to study economics. 
 I want to cite just for the moment and by the way, I don't wish to take 
 up the time here, Mr. Chairman, if there are other speakers ready- 
 Chairman McKellar: Go right ahead. We are glad to hear from 
 you. 
 
 Mr. John C. Clair: Thank you very much. I will take up just a few 
 moments, but I want to say a few things now with reference to this coun- 
 try of ours and with respect to agriculture. Take the four neutral coun- 
 tries of Europe, Norway, Sweden, Holland and Denmark. They represent 
 the great dairy business of the old world. Now, Denmark is about the 
 size of the state of Illinois; has a population equal to that of Chicago, two 
 and a quarter millions. But Denmark sends to England $40,000,000 worth 
 of butter, and $20,000,000 worth of bacon, and lays aside $7.50 an acre. 
 That shows the value of economics, gentlemen. We do not need to go 
 across the seas for illustrations. In our own Wisconsin last year the 
 returns from dairy products was $100,000,000. 
 
 I want to thank you for the courtesy of inviting me to speak. (Ap- 
 plause) 
 
 Chairman McKellar: I am sure that everyone is pleased to have these 
 words from the representative of the Illinois Central Railroad, who makes 
 it his business to understand conditions of particularly the territory 
 served by the Illinois Central Railroad. He is, therefore, in a position 
 to speak authoritatively on this subject. If Mr. Van Winkle, President of 
 the Indiana Manufacturers' Association is in the audience, we would be 
 glad if he would favor us with a few remarks. 
 
 Mr. A. M. Van Winkle: (Indianapolis.) Mr. Chairman. 
 Chairman McKellar: Mr. Van Winkle. 
 
 Mr. A. M. Van Winkle: I am here as a representative of the Indiana 
 Manufacturers' Association. 
 
THE CENTRAL STATES CONFERENCE 49 
 
 This problem of transportation is a question in which every manu- 
 facturer, industry and section of our country is deeply interested. With- 
 out transportation it would be impossible to manufacture except in a 
 very limited way, and we could only manufacture goods that could be dis- 
 tributed in the immediate neighborhood, if it were not for our transpor- 
 tation lines. Anything that interferes with the development and with the 
 proper operation of our transportation lines is a most serious mistake 
 and will work most serious injury to the public. 
 
 Just what should be done in the way of development of these great 
 arteries of commerce, it would be presumptuous in me to undertake to 
 state, but we believe that those men who are making a study of the ne- 
 cessities of transportation will work out this proposition to the end that 
 nothing may happen to cripple the lines or to hinder their development. 
 
 The improvement of our waterways, the natural lines of transporta- 
 tion, is of very great importance and we ought not to be satisfied until 
 we have made available all the natural waterways that are susceptible of 
 being improved to the point of carrying freight. (Applause) The indus- 
 tries of the United States produce about $24,000,000,000 worth of manu- 
 factured articles. That is a tremendous amount, and when you think of 
 the tremendous tonnage that must be moved by the railroads, or the 
 waterways, it is something to stagger the imagination,' 5 ' it is something 
 most wonderful. The society of any nation is so absolutely dependent 
 upon the manufacturing industries that it could not exist without them. 
 The human family uses but very few things in the form nature produced 
 them. Almost every article we use, every tool, every article of clothing, 
 and the greater portion of our foods are the products of the factory, and 
 with the process of manufacture has been added to the raw material a 
 value of the raw material of from one hundred to five thousand per cent. 
 When we consider that the products of the factories of the United States 
 amount to $24,000,000,000 a year and will represent the added value of 
 one thousand per cent, over the raw material cost, you will better realize 
 the absolute necessity of providing ways and means by which manufac- 
 turing may be encouraged. One of the essential things to a manufacturing 
 community and manufacturing location is ample facilities to transport 
 your raw materials to your factory and your finished products 
 to the markets. Without that your factories are absolutely 
 dead. Therefore, the business world, the manufacturing world 
 and the consuming world are all vitally interested in the pro- 
 tection and in the further improvement of our transportation facilities; 
 and anything that hinders that, hinders the welfare and development of 
 this country. 
 
 I thank you, gentlemen. (Applause) 
 
 Chairman McKellar: Gentlemen, we will now take up the regular 
 program of the morning. One of the most intricate and also fascinating 
 subjects in connection with "railroad commissions is that of rate adjust- 
 ment. 
 
 Our next speaker has made that one of great study. He has appeared 
 before the Interstate Commerce Commission any number of times. He has 
 spent days and weeks, and I expect, even months in testifying before that 
 body. He is a recognized expert all over the continent on the subject of 
 rate adjustment, and on the subject of rate regulation. His address today 
 will be on the latter subject. I have the honor of introducing to you Mr. 
 Clifford Thorne, Chairman of the Board of Railway Commissioners of 
 Iowa, whose subject will be "Does Regulation Pay?" Mr. Thorne. (Ap- 
 plause) 
 
50 THE CENTRAL STATES CONFERENCE 
 
 Does Regulation Pay? 
 
 By Mr. Clifford Thorne 
 Chairman of the Board of Railway Commissioners of Iowa. 
 
 Mr. Chairman, I am not going to testify months this morning. I will 
 try to make it a little shorter. 
 
 I have been glancing over your proceedings of yesterday. I find that 
 you have heard from the General Solicitor for the great railway systems, 
 condemning public regulation as it has developed in this country. I find 
 also that the president of the Railway Investors' Association has joined 
 in this condemnation. I find that a representative of a railway supply as- 
 sociation has joined more or less in the same condemnation. I find on your 
 program this evening that you are going to hear from the chairman of 
 another committee, a very prominent man in railroad circles. I find on 
 the platform this morning a representative of the railway employes. I 
 do not know what position he is going to take on this question. I find 
 that I am sandwiched in here between these distinguished gentlemen and 
 it is with extreme hesitancy and fear that I may not be able to present 
 facts that you should consider before reaching conclusions on one of 
 these great questions that is being pounded home on the human mind at 
 the present moment. I beg of you to have a care, gentlemen, have a care. 
 Don't embarrass by any action that you may take a just, equitable solu- 
 tion of these problems by tribunals that will patiently examine into all 
 of the facts before they announce their conclusions. (Applause) 
 
 We are met today in the heart of industry of a continent. The cen- 
 ter of population has been within the bounds of Indiana for a generation. 
 The center of the food products of the nation lies within three states to 
 the west of you, Illinois, Missouri, and Iowa. The center of manufactures 
 lies just over the border to the east of you, in the state of Ohio. Here, in 
 the very heart of the center of the industry of a nation, it is eminently 
 fitting that we should sit down quietly, calmly, to review some phases of 
 this great economic question that is confronting the people of the present 
 hour. 
 
 Telephone, telegraph, railroads, gas plants, transmission lines, etc., 
 etc., are all subject to state and federal regulation of one kind or another. 
 The invention of steam or the discovery of the practical application of 
 steam and electricity to our needs, to the efficient, rapid, economic distri- 
 bution and to the manufacture of the luxuries and necessities of life, have 
 revolutionized human industry during the past half century. It marks an 
 epoch in the industrial history of the world. These marvelous changes 
 have brought with them some perplexing problems for us to consider. One 
 of these is how can we efficiently, and sanely, regulate business. 
 
 We are just at the threshold of this subject, just nibbling around 
 the edges. You know, the capacity of American railroads is ten times 
 greater than the capacity of your national banks and yet you have only 
 had railroads with you within the lives of those whom you and I see oc- 
 casionally on the street. Why, you had national banks for several thous- 
 and years. I mean, you have had banks for centuries and centuries. 
 
 It is not strange that we have not thoroughly grasped this subject as 
 yet, that we do not fully appreciate its importance. Do you realize how 
 often you pay a railroad tax? Come with me this morning. I sat down 
 here at the Vendome hotel and had some oatmeal, coffee and toast. 
 Freight rates have been paid upon the oats from some outlying country 
 district to the mill. Freight rates have been paid on the oatmeal from 
 that place where it was made to the City of Evansville. Freight rates 
 
THE CENTRAL STATES CONFERENCE 51 
 
 have been paid upon the dishes upon the table. Perhaps not on the table, 
 I guess you make tables here, don't you? 
 
 Chairman Murphy: Yes, we do. 
 
 Mr. Clifford Thome: Freight rates have probably been paid on the 
 table cloths, or do you make them, too? 
 
 Chairman Murphy: No. 
 
 Mr. Clifford Thorne: Freight rates have probably been paid upon the 
 furniture, the chair upon which I sat, the pictures on the wall. Freight 
 rates have been paid on practically everything that I have on. Last 
 night when I left Chicago I paid some money to the railroads in order to 
 get here, and finally I am here, worth about thirty cents, and you will say 
 twenty- three before I get through. (Laughter.) Freight rates are paid 
 upon practically everything you eat or wear. You pay a railroad tax 
 whenever you go any place, whenever you ship anything, whenever you 
 buy anything that comes to the town where you live. You are paying your 
 railroad tax every day, on practically everything you eat or wear, and 
 whenever you go any place, whether you are rich or poor, learned or ig- 
 norant, great or small, whether you are running a ranch or selling pea- 
 nuts, you must pay this railroad tax constantly, day in and day out. It is 
 the most gigantic industry that has ever been developed in the life story 
 of mankind outside of agriculture. 
 
 A few years ago I had Mr. Hugh L. Cooper on the stand. Perhaps 
 you know of him. He has built more waterpower plants than 
 any other three men who have ever lived on the face of the earth. He built 
 the celebrated Keokuk dam, which is the largest individual waterpower 
 plant in the world. During the examination of Mr. Cooper I asked him 
 about how muck the cost averages, the cost of power in the manufacture 
 of staple products. He said that experts had estimated that as applied 
 to the manufacture of flour, which could be considered fairly representa-^ 
 tive of a staple product, the average was one and two-thirds cents a hun- 
 dred pounds. At that time we were trying to get a reduction in the 
 rates to Keokuk from the East. The citizens were paying nine cents a 
 hundred pounds more than St. Louis for precisely the same service from 
 New York City on first class, and four cents on the sixth class and corre- 
 spondingly higher on the intermediate classes. Did you follow these 
 figures? In other words, according to the sworn testimony of the man that 
 built the largest waterpower plant on earth, according to his testimony, 
 a man who would be^apt to estimate to its full the importance of the cost 
 of power to manufacturing, according to his estimate, a reduction of a 
 few cents in the freight rates, of from four to nine cents in the freight 
 rates to Keokuk was of more importance, several times over, to the in- 
 dustrial development of Keokuk than the building of this great dam at 
 the cost of twenty-five millions of dollars at her very door. (Applause.) 
 According to his testimony, if the citizens of Keokuk had built that dam 
 from the money in their own pockets, at their own expense, and would 
 have said to the manufacturers of the country, "Come to Keokuk; we will 
 give you your power free of cost;" it is more important that she should 
 get on an equality with St. Louis by the reduction of a few cents in the 
 freight rates, and the manufacturer could better afford to go to St. Louis, 
 or Quincy, than to Keokuk, even though the Keokuk citizens would give 
 the power free of cost to anybody that would locate there. 
 
 Well, the Interstate Commerce Commission, recognizing the justness 
 of the claims of the citizens of Keokuk, Burlington and the upper river 
 crossings, put them on an equality with St. Louis on traffic from the At- 
 lantic seaboard. We are now trying to get the same equality from St. Louis 
 to our association territory, Michigan, Ohio and Indiana, generally speak- 
 ing. In that case was regulation worth while? 
 
52 THE CENTRAL STATES CONFERENCE 
 
 It was natural for regulation to concern itself at an early date with 
 railroads, because next to agriculture railroads are our greatest industry 
 and railroads are undoubtedly the most gigantic example of organized 
 wealth which the world has ever seen up to the present day. At the 
 present time we have had twenty-seven years of experience with the reg- 
 ulation of our railroads. The record of this experience is kept officially 
 by the interstate commerce commission, compiled from the sworn reports 
 of the carriers to the commission. There may be occasionally very light 
 errors in the figures in those reports, but I know of no attack upon the 
 validity of those reports of a substantial character from any source what- 
 ever. The railroads are constantly quoting those statistics. They are en- 
 titled to your unqualified confidence, providing they are properly inter- 
 preted. 
 
 From this vantage point of twenty-seven years of experience, let us 
 glance back over the records and see what regulation has accomplished. 
 Is it really worth while? Where has it succeeded and where has it failed? 
 What are the defects, if any, that should be remedied at the present time? 
 
 I am here, gentlemen, today please do not misunderstand me I 
 am here today not with a brief for any cause or any case. I am here simply 
 to review hurriedly the records of what regulation has done, to see 
 whether the attacks that are now being hurled at public regulations are 
 well founded or not. 
 
 I have a friend who claims that he has analyzed cranberries and 
 found out that they have a larger percentage of a certain acid than the 
 laws of a certain western state permit. I am now speaking of cranberries 
 in the raw state. In other words, the Lord God Almighty has violated the 
 pure food law of that western state. (Laughter) I do not know whether 
 the very capable and efficient attorney general of that state is going 
 to prosecute God for violating the pure food law. It might be quite difficult 
 to enforce a prison sentence. We should be sane and well-balanced in our 
 efforts to regulate. (Applause) 
 
 Of course, errors will be made, and when they are made the quicker 
 we stop the opportunity for their recurring the better it is for everybody 
 concerned. There is absolutely no disagreement amongst us on that prop- 
 osition. But I am not here dealing with details. Mistakes are made in 
 every line of endeavor. I venture the very bold and presumptuous as- 
 sertion that even you perhaps once or twice in your entire life have made 
 a mistake. 
 
 What has regulation accomplished? It can be summarized briefly 
 under a few heads. I fully appreciate what a tremendously stupendous 
 and nervy task I suggest, to attempt to summarize in a few minutes the 
 achievements of a quarter of a century of regulation; but let us look 
 over the ground and just view the high spots for a few moments. 
 
 First, rebates have been largely eliminated. 
 
 Second, the pass system has been so thoroughly placed under our 
 control that its abuse has been largely abolished. 
 
 Third, discriminations between shippers at the same point of origin 
 have been practically eliminated. There are some few important excep- 
 tions, but the principal part of that task has been completed. 
 
 Fourth, discriminations between localities have been removed to 
 some extent. We have only commenced that task, but substantial steps 
 have been completed. Rome was not built in a day. 
 
 Fifth, so far as safety is concerned, the public and the employes are 
 in better condition today than when regulation commenced. But it is only 
 just to state that most of the credit for that work should be given to the 
 railway companies rather than to the public. We have helped some in 
 
THE CENTRAL STATES CONFERENCE 53 
 
 regard to safety appliances, hours of labor. We have not helped much 
 as to the institution of block signals or steel cars. I would have placed 
 safety first had it not been that public regulation has not made as large 
 a contribution to that subject as it has upon these others which I have 
 just reviewed and probably not as much as it should have done in the 
 past. I am not touching the present controversy about hours of labor. I 
 am not entering into that discussion to any extent. I have some other 
 discussions that I am trying to cover. 
 
 Sixth, as to service, we have not accomplished very much as to ser- 
 vice, the regulatory bodies of the country, not as much as we should 
 have accomplished. Greater power should be given to the Interstate Com- 
 merce commission over the interchange of cars between carriers, over the 
 requirements as to roadbed. 
 
 While we have not accomplished so much along that line there is 
 some reason for it. A company is willing to give you practically anything 
 that you desire that it makes, providing you- are willing to pay for it. 
 When I go into a store I can have the finest cloth in that store if I am 
 willing to pay for it. There is no conflict between the man that sells and 
 the man that buys on that issue. The issue comes in how much are you 
 willing to pay. It is natural that the question of rates should be the subject 
 of the keenest contests. Railroads are built to make money and they 
 make their money out of the rates which they charge. There is nothing 
 dishonest about it. The railroad wants to have as much as it can get for 
 the service which it has to sell providing it does not seriously interfere 
 with general business activity and growth. On the other hand, it is to 
 the interests of the purchasers of transportation to secure that service 
 at as reasonable and low a charge as is consistent with the fair and 
 reasonable growth and development of the railway companies. On many 
 matters our interests are in common but upon this issue of the rates 
 which shall be charged, the interests of the public as a whole and the in- 
 terests of the railroads as a whole are diametrically opposed. There is no 
 use of trying to cover up that situation with a lot of honeyed phrases 
 about love and friendship and co-operation. It is true, it is the same old 
 situation of buyer and seller that exists in every line of industry in the 
 country. 
 
 The man that sells the cabbages or the potatoes at the corner gro- 
 cery store wants as much as he can get for what he sells and the buyer 
 wants to get it as low as he can without serious injury to either party. 
 There is nothing dishonest or objectionable about that strife. I am in the 
 same fix. I have something to sell and I want to get just as much for it 
 as I can, and so do you. The issue comes, gentlemen, on how much is rea- 
 sonable and fair. Now, let us consider that question. 
 
 What has regulation done to the railroads? I have before me tables 
 covering the official reports as to the total mileage, total capitalization, 
 total gross earnings, total expenses, total net earnings, total capitalization, 
 total dividends, from the organization of the Interstate Commerce Com- 
 mission down to the present date. Now, in one or a few sentences, what 
 does that record show? 
 
 Without attempting to go through the details they are available 
 to anyone who desires to look at them after I am through we find that 
 expenses have increased enormously during the past twenty-seven years, 
 from 1888 to 1914. But what about the other side of the story? Earnings 
 have also increased enormously. I find that railroads have increased their 
 single track mileage since 1888 almost 100 per cent. I think it is 87 per 
 cent, to be accurate. Just think of this vast transcontinental system, cov- 
 ering this centinent, it has increased almost 90 per cent, since 1888. We 
 have had railroads fer eighty-six or seven years. I find the capitaliza- 
 tion of American railroads during these twenty-seven years has increased 
 127 per cent; while the dividends in dollars and cents have increased ap- 
 
54 THE CENTRAL STATES CONFERENCE 
 
 proximately 463 per cent. The mileage has almost doubled; the capi- 
 talization has more than doubled and the total dividends in dollars and 
 cents has more than tripled. 
 
 Up to 1899 there was competition in this country in the railroad 
 world in regard to the rates which they should charge, which competition 
 was very keen. At that time the Interstate Commerce Commission made 
 its reports, vast consolidations in the railroad world were being made. 
 You will find that in the report to Congress in 1899 in which they urged 
 that some measure should be taken to control the situation. Rates de- 
 clined from 1888 to 1899 something like 27 per cent, or 28 per cent. 
 During that entire period there was no large reduction in rates ordered 
 by the Interstate Commerce Commission throughout any substantial part 
 of the nation. Finally the supreme court said they had no power to re- 
 duce rates. I challenge any man in the room to cite one example of a 
 large reduction affecting railway revenue or an example where the com- 
 mission prevented an increase in rates during that period. Since 1899 
 there have been reductions in rates, but there have been advances and to- 
 day the average freight revenue for every ton hauled a mile is a little 
 higher than it was in 1899, while the net revenues of American rail- 
 roads last year were something like $500,000,000 greater than 1899. 
 
 In 1888 railroads were making about two per cent on their capital 
 stock as a whole and yet people said that the railroad rates were exor- 
 bitant. Because they thought two per cent was too high? No. You know 
 the reason why that two per cent existed. I do not need to state it. Today, 
 the railroads are making almost double, are declaring dividends as a whole 
 almost double what they did when regulation commenced, in proportion 
 to their capital stock. I am speaking of railroads as a whole, and there 
 is not a man in this room that dares question the accuracy of one of those 
 figures. I will make him a present of a brand new suit of clothes with a 
 check for a thousand dollars inside of it if he can prove an error in that 
 statement. I don't know whether he will cash the check or not. (Laugh- 
 ter) 
 
 I will be perfectly willing to set down with you and examine the 
 official reports of the commission and you will be persuaded that I am 
 absolutely correct. 
 
 You remember in 1913 there was a great advance rate case on, in- 
 volving fifty millions of dollars annually. If you had a case 
 in your court involving a hundred thousand dollars or a mil- 
 lion dollars, you would think that it was some case. If it were a 
 million dollars it would be subjected to much comment in your city 
 and perhaps in your entire state. Here was a case, not involving a million 
 dollars, but fifty millions of dollars; not fifty millions of dollars in one 
 bunch, but fifty millions of dollars every year, or five per cent, interest 
 on one thousand millions of dollars. Never before or since the dawn 
 of civilization has there ever been a contest between private parties be- 
 fore a human tribunal involving such a large sum of money as that, with 
 one exception, and that was in 1910, when a similar case was before the 
 commission. 
 
 I have before me an exhibit in that case. It was introduced by the 
 railroads. I didn't prepare it. That is a consolidated statement covering 
 all the railroads in official territory. That paper shows that all the rail- 
 roads as a whole, big and little, that were in that case, and there were 
 only a very few insignificant companies that did not get into the case, 
 I presume the mileage represented on that sheet is probably ninety-eight 
 per cent, of the mileage in official classification territory, and it shows 
 that these railroads as a whole, during that year, the last year, 1913, 
 were able to pay all of their operating expenses, all of their taxes, all of 
 their interests on bonds and debt and had enough left over to equal more 
 
THE CENTRAL STATES CONFERENCE 55 
 
 than eight per cent on all of their capital stock outstanding, rich and 
 poor, altogether, in one sum. 
 
 Reference is frequently made to property invested. What about the 
 return on the cost of the property, we are told. What does property in- 
 vestment mean, gentlemen? Property investment is their book cost, their 
 book value. In past years as capitalization was raised, say, a hundred 
 million dollars, property investment was raised a hundred million dollars. 
 It wavered up and down until within recent years, largely within the 
 control of the company, in order to make it correspond to their capitali- 
 zation. The figure is very unreliable. For instance, the property invest- 
 ment of the Erie railroad is greater per mile of line than their capitali- 
 zation. Now, is there anybody here that thinks that kind of property invest- 
 ment, that would give a larger value or cost per mile of line than the capi- 
 talization of the famous Erie railroad, is worthy of very much confidence? 
 Why, the property investment of the Erie is greater per mile of line than 
 the Pennsylvania Railroad system, greater than that of the New York Cen- 
 tral railroad. The figure is so unreliable that the Interstate Commerce 
 Commission in its annual report to Congress, in a recent year, stated that 
 no court or commission, or accountant, of any standing, would suggest 
 that this book cost and property represented, suggested even in the 
 slightest degree a fair statement of the original cost or the present value 
 of our railroads. 
 
 I had about twenty minutes this morning, before I came over here, 
 to look over Mr. Thorn's address of yesterday. I find this statement: "At 
 this present moment there is such a scarcity of railroad equipment and 
 other facilities, that commercial interests have risen in arms and the 
 Interstate Commerce Commission has found it necessary to conduct an 
 exhaustive investigation to find a way of supplying with cars the com- 
 mercial needs of this country. Have we failed to take note of the fact 
 that in the last year there has been a smaller railroad construction than 
 in any year, leaving out the civil war period, since 1848, and that in the 
 last year there have been less than one thousand miles of new railroad 
 constructed in the United States? In a field which has heretofore been 
 an inviting field of private enterprise we find that railroad construction 
 into new territory has been practically arrested." 
 
 I have great admiration for Mr. Thorn, a man of eminent ability, an 
 honest man, no doubt. I have no desire to utter a word of disparagement 
 of his ability or his integrity. But let us see if there are not some facts 
 to be taken into consideration, when you consider that fact, very care- 
 fully, gentlemen, that last year a less amount of construction of rail- 
 roads in the west, purchase of cars, than any year since 1848. A striking 
 condition. Whose fault? Was it inadequate revenues? Last year the 
 American railways, according to the preliminary report of the Inter- 
 state Commerce Commission, made net above all expenses and taxes, net, 
 the tidy sum of $300,000,000 more than in 1914. They made net during 
 the last fiscal year, that of 1916, for which the report was compiled, they 
 made net more than $200,000,000 in excess of any other year in the 
 entire history of American railroading. (Applause) There is not a man 
 in this room that dare challenge that. If so, I wish he would stand up. 
 (Applause) 
 
 Whose fault was it that we did not have more cars purchased and 
 more railroads constructed? In all fairness to the shippers and the con- 
 sumers and producers of America, I ask Mr. Thorn to answer that ques- 
 tion. 
 
 A few years ago I had Mr. Rey, the President of the Pennsylvania 
 Railroad System, on the stand on cross-examination. In pitiful terms he 
 and others described the rnin of credit of the American railroads. I asked 
 him what was a good estimate, really. I won't attempt to repeat his testi- 
 mony entirely, but he knows and you know that the best test of credit 
 
56 THE CENTRAL STATES CONFERENCE 
 
 is the rate at which you can borrow money; isn't it? That tells whether 
 your credit is good. If I can borrow money at 5 ^ or 6 per cent, and you 
 have to pay 8, I have got a better credit than you have. I asked Mr. Rey 
 the rate at which he had been compelled to borrow money during the past 
 year, or during the past five years, and I challenged him to 
 name any other company or any other line of business in this whole 
 nation that had been able to borrow money at a cheaper rate than he and 
 his company had been able to borrow it, and he was unable to name one 
 such company. He said, "I suppose you want to ask if our credit is not 
 about at the top?" I said, "Yes, sir. That is just what I was about to ask" 
 and he said "If you want my opinion I will say that it is." The Pennsyl- 
 vania Railroad handles something like 27 per cent, of the business be- 
 tween the Atlantic coast and the Mississippi river in the official territory. 
 I asked the bond expert, a leading witness that was put on the stand, if 
 the railroads in the past were not able to borrow money at as good a fig' 
 ure as any other line of business, and he said they were. I can give you 
 the exact language, the page of the transcript, to any person that desires 
 to know. 
 
 In 1914 the commission was inclined to hold the 1914 revenues in- 
 adequate. In 1915 the western advance rate case came for hearing, 
 and in that case the evidence showed conclusively that the railroads were 
 compelled to pay more, a higher rate than they had ten or fifteen years 
 ago. Now, under the rule I stated a while ago, does that prove that their 
 credit has declined? There is no question but what that is a fact. It 
 must be concluded that their credit has declined. Let's see. Suppose that 
 the increase in the supply of corn or the failure of a certain line or de- 
 partment, or something even world wide in extent had so affected the gen- 
 eral financial situation throughout the entire world that the interest rate 
 that company had to pay in all lines of industry had gradually risen. 
 There is another factor to be considered than the rate which a given com- 
 pany has to pay, which is what other companies have to pay. It is the 
 relation between your rate and the pure money rate. We searched every 
 financial work for some analysis of this pure money rate over some per- 
 iod of years. We were unable to find such an analysis. We then start- 
 ed to investigate the subject on our own responsibility, according to our 
 own facilities and- means. In the preparation of an exhibit on that one 
 proposition something like twelve thousand dollars was spent by our asso- 
 ciation and commission. Visits were made to New York and Chicago. An 
 expert accountant was put on the task and his exhibit showed the follow- 
 ing: 
 
 Government bonds, as you know, are probably the closest to the pure 
 money rate that we have, but it will be immediately agreed that the rate 
 at which governments are able to borrow money, the United States Gov- 
 ernment especially, and the European governments, prior to the war, was 
 slightly below the pure money rate, because of certain privileges, deposit 
 privileges that are attached to the bonds. Therefore, they can borrow 
 money slightly below the pure money rate. On the other hand, the bonds 
 of large cities, Philadelphia, New York, Chicago and so forth, these 
 cities are able to borrow money at slightly above the pure money rate, 
 because there is some element of hazard. We then took the market prices 
 on government bonds, of government bonds of the four greatest nations 
 on earth, of United States, England, France and Germany, since 1900. 
 We found the trend of the prices on those bonds, the interest rate at which 
 they sold, or, in other words, it was called the yield on government bond 
 investments. We then took all the quotations on all of the bonds of the 
 twenty-five largest cities in the United States and found the trend of that 
 yield. Now, one line represented something slightly above the pure money 
 rate and the other line represented something that was slightly below 
 the pure money rate. It was our proposition that the pure money rate 
 lie between those two lines; and we drew a medium line. The exhibit, 
 
THE CENTRAL STATES CONFERENCE 57 
 
 the accuracy of the deduction, was not questioned by either the carriers 
 or the commission. It showed that the increase in the yield, the rate of 
 increase in the yield on the pure money rate, the rate estimated, also the 
 yield on government bonds, also the increase in the yield of the bonds of 
 the twenty-five largest cities in the United States, had been greater than 
 the increase in the rate at which railroad bonds sold during the same 
 period. In other words, compared to the general financial situation, 
 railway credit as a whole had improved. And in that case the com- 
 mission refrained from finding revenues as inadequate, refrained from 
 finding railroad credit had been ruined. 
 
 I know there are facts on the other sides of those questions that I 
 have named. I don't want to be put in the position of judging the matter. 
 I have stated to you some of the facts on the other side of these issues be- 
 cause I know that you are hearing plenty of them on that side. There are 
 always, almost always two sides to these great questions; and I urge upon 
 your minds the unwisdom of passing resolutions off-hand after you have 
 given half-baked consideration to the purport of these resolutions. (Ap- 
 plause). 
 
 There are two sides to these questions, and when your resolutions 
 come up I hope there are some men that will have the courage and abil- 
 ity to stand up here and champion the proposition of remaining neutral 
 until these other bodies that are appointed to weigh and consider shall 
 reach their conclusions. (Applause). 
 
 I said there were two sides. Mr. Lee, gentlemen, has been very kind 
 to me* A few years ago I was trying a case in Chicago. Mr. , 
 I won't mention his name. I hate to deal in personalities. Suffice it 
 to say, that he is the traffic manager for one of the greatest railroad sys- 
 tems in the west. He introduced an exhibit in which he attempted to 
 show that the freight rates on live stock from Wisconsin to Chicago 
 were higher than those from Iowa to Chicago. I was trying to get the 
 rates from Iowa to Chicago reduced. That was not a very good show- 
 ing for me, and I was simply a little country lawyer from out in Iowa. I 
 asked Mr. Blank to give me a copy of his tariffs from which I could check 
 his exhibit. He said they didn't have any extra copies on hand of that 
 particular tariff. Mr. Belleville, you have heard of it occasionally; 
 haven't you? 
 
 Mr. J. M. Belleville: Yes sir. 
 
 Mr. Clifford Thorne: I asked the Interstate Commerce Commission 
 if they would not send a copy. They said they didn't have any extra 
 copy on hand. I asked if they wouldn't write for that copy and send 
 it to me. I wasn't used to the situation then, and they said they were 
 too busy to do that, and in fact Mr. Blank would not perjure himself. He 
 was certainly telling the truth, and the exhibit was there, I could see 
 with my own eyes words to that effect probably not quite so strong as 
 that. Finally, however, through a friend of mine in Chicago, I got a 
 copy of those tariffs sent to me in my home town. I found that this dis- 
 tinguished traffic expert had been kind enough to only use eighty-three 
 towns in Wisconsin, leaving out over two hundred. He had used all of 
 the towns in Iowa. He had selected the rates from that part of the 
 state which proved his point, up in the northern part of Wisconsin, where 
 those eighty-three towns were located, up where they wouldn't recognize 
 a cow if they saw one coming down the path. (Laughter.) Up there 
 they don't raise hogs to ship. They only average a quarter of a hog to 
 a quarter of a section, and they don't ship him; they eat him. I found 
 that when you used all of the towns in the territory from which live 
 stock is shipped that you proved directly the opposite from what that 
 gentleman testified to. Later his counsel, in oral argument, apologized for 
 that. He said the reason was the clerk had misunderstood the instruc- 
 tions that had been given to him. (Laughter). I am very sorry for that 
 
58 THE CENTRAL STATES CONFERENCE 
 
 clerk. I don't question it at all. He also testified to the fact that Min- 
 nesota rates on live stock were lower than Iowa-Chicago rates, Minnesota 
 rates to St. Paul. I checked that up. I found that he only used ten per 
 cent, of the towns in Minnesota, leaving out ninety per cent. The same 
 gentleman under oath testified, before this young, poor country lawyer as 
 the opposing counsel, that the freight rates on cattle in Illinois had been 
 reduced in 1906 to conform to eastern rates on cattle. 
 
 Now, Thome was trying to get those eastern rates on cattle applied 
 from Iowa to Chicago. I asked him how he knew the Illinois rates on cat- 
 tle were reduced in 1906. "Why," he said, "I took part in the proceed- 
 ings, Mr. Thorne." A gentleman under oath, of wide experience and un- 
 questioned character. Later I secured the certified statement from the Illi- 
 nois Railroad and Warehouse Commission to the effect that there had not 
 been a reduction in cattle rates in Illinois for a quarter of a century, 
 and the Interstate Commerce Commission specifically sustained my posi- 
 tion on that proposition in their inquiry. 
 
 Now, that poor clerk, I am sorry for him for misunderstanding those 
 instructions. The only thing that I am sorry for from my standpoint is 
 that all these mistakes had been in one line, one way, one direction. I 
 only wish he could have made a few mistakes my way in the compilation 
 of those exhibits. 
 
 I say there are two sides to this question. I have in front of me that 
 exhibit again. Gentlemen, that shows that for the five years ending with 
 1912, the average rate on all outstanding capital stock, net corporate 
 income on the capital stock is 7.85. For the preceding five years it was 
 8.80 and for 1913 it was 8.07. Now, that would indicate that the aver- 
 age rate during the last five years was less than during the preceding 
 five years. Next: It indicates that the average rate in 1913 was less 
 than those first five years. That indicates a downward tendency, doesn't 
 it? Anybody can see that. It was so testified to by the companies. 
 
 I don't know whether your friend caught those figures or not. Those 
 first five years were from 1903 to 1907. The next five years were 
 from 1908 to 1912, inclusive. In other words, the man that compiled fig- 
 ures left out 1913 from either side. You know, when I saw that I fell 
 into meditativeness : Now why, did that account start with 1903 and stop 
 with 1912? Why didn't he use the next two periods commencing with 
 1904 and ending with 1913? My curiosity was aroused. That was all. 
 You know the old saying, it is an old chestnut, about how figures never 
 lie but liars figure. 
 
 Now, this chart 1 recompiled and I took his same figures without 
 the alteration of a numeral. I commenced with 1904 *to 1908 inclusive 
 and 1909 to 1913 inclusive, and it showed precisely the opposite. 
 It showed a higher rate in the last five years than during the preceding five 
 years; and it showed a higher rate in 1913 than in either five year period. 
 
 Again, I challenge any man to question the accuracy of that state- 
 ment. The sheet is here. Anybody can see it and you can check it up. 
 You will find that I am telling you the truth and nobody dare to deny it. 
 
 Folks, I said there are two sides to these questions. Mr. Trumbull 
 will present to you the other side. I do not know that he can present 
 it ably and forcibly. The only little I want left lingering in your mind 
 is this: Perhaps there is another side to that. Perhaps that I ought 
 to consider when Mr. Trumbull gets through, before I make up my own 
 mind. 
 
 Today there are three great movements in the railroad world. 
 
 The first relates to the making of a uniform classification of 
 freight throughout the United States. The railroads of the country have 
 united and they have divided the country into three great districts, i. e., 
 
THE CENTRAL STATES CONFERENCE 59 
 
 the Official Classification territory, Southern Classification territory and 
 Western Classification territory. This results in confusion in the discrim- 
 ination of packages, in rules and regulations and in ratings, a confusion 
 with which you as shippers are thoroughly conversant. The railroads 
 appreciate that fact and so does the Interstate Commerce Commission 
 and so do the state commissions. The changing of the little letter "1" op- 
 posite an article in one of those classifications covering eight thousand 
 items automatically increases, as you know, the rates that must be paid 
 by twenty to thirty millions of people on that article, increases the rates 
 immediately when it becomes effective, by one hundred per cent, eight 
 thousand items in that classification. 
 
 Nine men have been appointed to reframe the classifications of 
 the country. I claim that that is a task of the size and magnitude that 
 it is a governmental function, and the men who perform that task 
 should not be in the employ of either the railroads or of the shippers. 
 The National Association of Railway Commissioners for a dozen years 
 has unanimously recommended that the Interstate Commerce Commission 
 should undertake that task. (Applause). I don't care whether Mr. 
 Fyfe, or these other men that are at present working on it would continue 
 on the committee or not. I have confidence in their ability and their in- 
 tegrity enough to know that when they are working for the railroads 
 they are going to try to boost the rates, and when they are working for 
 the people, for the government instead of the shippers or the railroads, 
 they might be more fair in their conclusions, providing their job was 
 good enough, the salary was large enough, and the probable tenure of 
 office was safe enough that they would not continually be working with 
 their hands behind their backs, waiting for a job from the railroads. 
 (Applause). 
 
 The second great movement now on in the railroad world relates 
 to the appraisal, the valuation of our railroads. The magnitude of some 
 of the issues in that case is almost too great for the brain to grasp them. 
 The celebrated Gould printing press incident only involved $23,000,000. 
 Just consider one item at issue in this national appraisal. 
 
 The Massachusettes commission held that a railroad was entitled 
 to but two per cent, for contingencies. The Michigan commission held 
 that a railroad is entitled to about ten per cent, for contingencies. There 
 is a variation of about eight per cent, in that one item. The railroads 
 claim the value of American railroads is from $15.000.000.000 to $20,- 
 000,000,000. A variation of 82 per cent, on $15,000 000,000 amounts to 
 over one thousand million dollars, involved in that one little issue which is 
 to be determined by seven men living over here in Washington. 
 
 A few months ago a case was closed out here in Los Angeles, in- 
 volving the appraisal of an electric plant that was purchased by the city 
 of Los Angeles. The experts in the employ of the company under oath, 
 on the witness stand, testified to a value of that electric plant amounting to 
 $22,000,000, while the experts in the employ of the city of Los Angeles, 
 experts gathered from all portions of the country, men of eminent ability, 
 testified to a value of that property of less than $4,000,000. 
 
 In other words, gentlemen, in that one case there is a variation of 
 more than 500 per cent, in the valuation of the same property, for the 
 same purpose, before the same tribunal, at the same time. 
 
 Now, contemplate, if you can, the possibilities of this national ap- 
 praisal of American railroads. 
 
 But how are you looking after your interests? The Interstate Com- 
 merce Commission is to decide the issue. They have organized a com- 
 mittee of nine men of the most distinguished lawyers in our country. 
 They have several hundred experts working under their direction con- 
 stantly. Whenever a little group of employes of the commission goes out 
 
60 THE CENTRAL STATES CONFERENCE 
 
 to inspect the condition of so many cars or so many rails or the roadbed, 
 in order to determine the facts that shall be reported to the commission, 
 a railroad employe goes along with that little group of men. You have 
 constantly, on one side a representative of their interests; and who 
 is representing your side of the controversy? 
 
 The commission is to decide the issue. There is not a judge in the 
 land but what hates to decide a case upon an ex parte showing. If you 
 have a case in court involving $100,000 and the other side is represented 
 constantly, will you sit calmly at home doing nothing? No; if you have 
 got one grain of sense, if you are not bothered with a lot of asinine stu- 
 pidity, you will follow every stage, every step in that contest, every stage 
 in the proceedings. 
 
 To show you how it works practically: You have confidence in 
 the Supreme Court of the United States, haven't you? And yet if there 
 is a case before the Supreme Court of the United States, a corporation 
 has violated the law, that corporation has its representative there cham- 
 pioning its case, and the government has its representative on the other 
 side, and the Supreme Court decides the issue. Are you looking after your 
 interests? 
 
 Here is a table of the unit values of the different articles going into 
 the making of railroads: The price of rails and ties and cars and en- 
 gines. It is placed before the representatives of the railroads to check 
 those unit values. Those railroad representatives will be apt to push up 
 the values when they are too low. Is there anybody on the other side 
 to push them down? 
 
 The point is that both sides should have an advocate. The Nation- 
 al Association of Railway Commissioners have employed one attorney and 
 one stenographer to represent a hundred million people on the other 
 side of the case, in a case involving fifteen to twenty billion dollars' worth 
 of property. It seems to me that it is up to the shippers to consolidate 
 their interests in some efficient manner to see that they are properly 
 guarded. 
 
 Now, there is just one other great railroad movement to which I de- 
 sire to call your attention, one other great movement in the railroad 
 world, and then I am through with that proposition. 
 
 The Newlands committee, a joint committee of both House and 
 Senate, has undertaken an appraisal of our present methods of regula- 
 tion. They are going to go over the records to see where regulation has 
 fallen short, to see where it can be improved. Various suggestions have 
 been made by both parties. Where is the shipper directly concerned, in 
 this investigation before the Newlands committee, in which they are go- 
 ing to appraise our present methods of regulation? The railroads are 
 again well represented. I am most delighted with this concrete demon- 
 stration of that fact by the conference being held in this city yester- 
 day and today. They are represented. Here is Mr. Thorn, Mr. Trumbull, 
 Mr. Muir, the representative of the Railway Investors, going about the 
 nation, bolstering up public sentiment on their side of the issue. 
 
 Mr. Thorn has spent months analyzing arguments, getting ready for 
 the hearing. They have employed experts, gatherd data, and prepared. 
 I do not criticise that for one instant. It is eminently proper and fitting 
 that they should do so. If I were in their shoes I would do the same 
 thing provided I had enough brains. 
 
 The point that I am making is, how are you represented? Have 
 you prepared data, an analysis of the situation, with your experts, etc., 
 and ready for this great investigation? 
 
 I wish I could discuss some of those issues that are going to be thresh- 
 ed out before the committee, but I must not do so. I have imposed upon 
 your patience too long. Just one or two sentences upon one proposition 
 they propose, which is to eliminate state regulation. 
 
THE CENTRAL STATES CONFERENCE 61 
 
 There are some matters it is well for the national government to 
 do; there are some matters it is well for the states to do. Some others 
 are better for the county to attend to and some others for the city to 
 attend to, and some things ought to be really left to the man himself. It 
 might be well to have a world federation to compel peace amongst na- 
 tions. But I would not like to leave it to that world federation to de- 
 cide how the sewers should be laid in my home town, what kind of pants 
 I ought to wear or when I ought to get up in the morning. There are 
 some things that the state can do better than the nation, and some things, 
 as I said, that the county can do better than the state. 
 
 What is the distinguishing characteristic of this American system of 
 government? It is not a great centralized power, because there have been 
 greater nations in the world so far as size is concerned. What is the dis- 
 tinguishing characteristic, the great contribution that America has made 
 in the science of government? It is not separate states, small enough 
 so that you can have home rule. There have been small countries where 
 democracy has existed, Greece and Switzerland over here. What is the 
 distinguishing feature? It is the great combination of a great body of 
 states into one nation, combining efficient home rule with a great cen- 
 tralized power. And anybody that attacks that federal system of gov- 
 ernment is attacking the fundamental characteristic that distinguishes 
 the United States government from all others that have ever existed. 
 (Applause). 
 
 Mr. Thorn has told the committee that he does not desire, and the 
 railroads are not asking, for an advance in revenue. That is not their 
 purpose. Let us see. There have been just eleven cases before the Inter- 
 state Commerce Commission where the state rates have conflicted with the 
 interstate rates, the interstate rates being those established by the com- 
 mission and levied by the railroads. One or two of these have been re- 
 opened. In not one instance has the Interstate Commerce Commission 
 adopted the state rate as the standard. Every one of those cases result- 
 ed in an increase in rates. I ask you, isn't the purpose very, very plain? 
 I am heartily in accord with their proposition that where discriminations 
 exist between state and interstate rates of a substantial character, 
 enough to constitute a burden on interstate commerce, there ought to be 
 some method of ironing out the discrimination. The public will never 
 consent to any other program. 
 
 Now, the National Association of Railway Commissioners has sug- 
 gested this idea, i. e., when there is a dispute between two parties, is it 
 well to leave it to one of the disputants to determine the matter at issue? 
 Is that a good move? You don't follow it generally. Our suggestion 
 is that when a state rate and a rate established by a state authority, 
 either state legislature or state commission, conflicts with the interstate 
 rate that it should be left to a third party, a court, to determine which is 
 reasonable. 
 
 It has been suggested that a ourt cannot establish or make reason- 
 able rates. Yes, that is true for the future. But the courts have held 
 that while they have no power to establish reasonable rates for the fu- 
 ture, they do have power to pass upon the reasonableness of rates already 
 established. 
 
 There are so many of these problems of such gigantic size and im- 
 portance that I would like to talk more about them; but I hope I have 
 driven home one point, and one point only, which is that there are two 
 sides to these questions, and how are you being represented? How are 
 you taking care of your interests? 
 
 It was a striking scene the other day when a railroad conductor 
 went back to Washington, D. C., to call upon the president and the pres- 
 ident adjourned the cabinet meeting to hear him talk. Could he in his 
 individual capacity produce that result? No. Because he represented a 
 large and efficiently organized body of men. He told Congress that by a 
 
62 THE CENTRAL STATES CONFERENCE 
 
 certain date they had to pass such a law. Congress did so. Could he in 
 his individual capacity have brought about that result? 
 
 You have scores of railroad organizations of all kinds, scores of 
 railroad companies, several hundred, I think. But they have one feder- 
 ation of all the companies, the American Railway Association, and when 
 it speaks it speaks with power. There are many labor unions and organ- 
 izations of laboring men, but there is a federation known as the Ameri- 
 can Federation of Labor, which speaks with power. You have the Ameri- 
 can National Live Stock Association composed of stockmen in some 
 twenty-two western states, the National Industrial Traffic League, com- 
 posed of shippers and manufacturers in many large cities. You have 
 the American National Manufacturers Association, National Council of 
 Grain Dealers, organizations of wool growers, organizations of chambers 
 of commerce, live stock exchanges, retail hardware men, retail clothiers, 
 and etc., etc. But it is my thought that there should be a federation 
 of all. 
 
 That little incident in Washington, D. C., I don't want to misquote 
 anybody it was a striking scene. The Literary Digest is my authority 
 for the following: Mr. Garretson said, in times of great industrial read- 
 justment, "men go back to primal instincts. They go back to the day 
 of the caveman, the caveman who with his half-gnawed bone, snarled at 
 the other caveman who wanted to take his bone away." Then he added, 
 the railroad world, "When we hit a 'cow'," he said, "specks in the sky 
 that were vultures could soon be seen over the carcass. Now, the pub- 
 lic is the carcass. And we are all, perhaps, the vultures," Mr. Garretson 
 said to the committee. He said the brotherhoods were protecting the 
 pockets of their men, that the railway companies were protecting the 
 pockets of their stockholders, and the public was without a protector, and 
 would pay the bill. Is that a correct quotation, or not, Mr. Lee? 
 
 Mr. W. G. Lee: I think it is; but I do not agree with it by any 
 means. (Applause). 
 
 Mr. Thome: Do you agree with this proposition, Mr. Lee, that it 
 would be well if the shippers were as efficiently organized as the rail- 
 roads? 
 
 Mr. W. G. Lee: Yes, sir; absolutely; they should be. It is their 
 fault if they are not. 
 
 Mr. Thorne: There is a lesson here that is of stupendous import- 
 ance to the shipping public. It needs no elaboration. I only offer the 
 suggestion in passing through your midst. 
 
 You have an amalgamation of all the railways in the American 
 Railway Association. You have a consolidation of labor that is composed 
 of the American Federation of Labor. It would seem well to me that 
 here in these gatherings of representatives of various cities, here in the 
 great Mississippi Valley, here in the heart of industry of our country, 
 that you should begin to lay the foundation of a consolidation of your or- 
 ganizations, a sort of an amalgamation that might be termed perhaps the 
 National Federation of Shippers, and then when you speak you will speak 
 with the weight and the power that is your due in the councils of the 
 nation. 
 
 I thank you. (Applause). 
 
 A vote of thanks was tendered to Mr. Thorne for his address, after 
 which Charles C. Gilbert, secretary of the Tennessee Manufacturers' 
 Association, asked for permission to introduce a resolution regarding 
 the location of the proposed Government nitrate plant. Chairman Mc- 
 Kellar advised Mr. Gilbert to prepare his resolution and submit it to the 
 committee. 
 
 The resolution as offered later was as follows: 
 
 Whereas, The congress of the United States had made an appropria- 
 tion for the establishment of a nitrate plant for the manufacture of ni- 
 
THE CENTRAL STATES CONFERENCE 63 
 
 trate, and whereas this plant must be located on an inland stream afford- 
 ing sufficient water power development, as well as being in close prox- 
 imity to the necessary natural raw material for the manufacture of ni- 
 trate, and whereas, Mussel Shoals, Alabama, on the Tennessee river, is 
 considered by government engineers and many other eminent authorities 
 as a suitable location: 
 
 Be it Resolved, by the Central States Conference on Rail and Water 
 Transportation, that the president of the United States be urged to locate 
 the government plant at Mussel Shoals. 
 
 Be it further resolved, That the secretary of this conference be in- 
 structed to forward a copy of this resolution to President Wilson. 
 
 (Action on Mr. Gilbert's resolution was not taken by the committee 
 for the reason that no opportunity was afforded for a general discussion 
 of the proposal in the Conference. It was reported, however, that each 
 member of the Resolutions Committee signified hearty approval of the 
 idea. Editor.) 
 
 Chairman McKellar next recognized Mr. J. R. A. Hobson, of Evans- 
 ville. 
 
 Mr. Chairman, I am requested by Mr. Murphy to read a letter re- 
 ceived from Mr. William A. Rawles, Dean of the Faculty of the College 
 of Liberal Arts, Indiana University. They have in this university a cor- 
 r spondence school on transportation in which are enrolled many hun- 
 dred students from this state. 
 
 "December 14, 1916. 
 
 Mr. H. C. Murphy, Evansville Chamber of Commerce, Evansville, Indiana. 
 My Dear Mr. Murphy: 
 
 "I have received your letter of December llth inviting me to attend 
 the Conference on Rail and Water Transportation to be held at Evansville 
 this week and to. participate in the discussion. I regret exceedingly that 
 it will be impossible for me to do so. 
 
 "I am much interested in the question of transportation. I think 
 you have done a great thing in bringing together on the same platform 
 the representatives of all elements of this difficult problem. I sincerely 
 trust that it will be profitable to the whole middle west. Very truly yours, 
 Wm. A. Rawles." 
 
 After a few announcements by the chairman the conference ad- 
 journed until 2 p. m. 
 
 FRIDAY AFTERNOON SESSION. 
 December 15, 1916. 
 
 Chairman Murphy presided, and called the meeting to order at 2:30 
 p. m. 
 
 A flashlight picture of the Conference was taken. 
 
 CHAIRMAN MURPHY: Gentlemen of the Conference, and guests: 
 We now proceed to a part of the program that should afford the most 
 intense interest to our delegates, to our guests and to our whole people. 
 Perhaps the chief point that will be developed in this conference is the 
 point of view of the men who run the railroads. I do not mean the opera- 
 tors. I refer to the workmen. We think we have secured as the man to 
 elaborate the point of view of these people the ablest representative of 
 organized labor in the United States. 
 
 I have the pleasure of introducing Mr. W. G. Lee, the president of 
 the Brotherhood of Railway Trainmen, who will talk to you upon the 
 "Hours and Working Conditions of Railway Employes." I have the honor 
 to present Mr. W. G. Lee. (Applause) 
 
64 THE CENTRAL STATES CONFERENCE 
 
 Hours and Working Conditions of Railway 
 Employes. 
 
 By W. G. Lee t President of the Brotherhood of Railway Trainmen 
 
 Mr. Chairman, ladies and gentlemen: I feel highly honored in being 
 asked to come here to talk to you on any subject and more particularly 
 on the subject of labor. Perhaps it might not be out of place for me to 
 say in the beginning that I am not an orator, as you will undoubtedly 
 find out before I get through, I am just an ordinary railway man, with- 
 out even the advantage of having a high school education. I was running 
 a train as conductor before I was twenty-one years of age for the Sante 
 Fe Railroad, out in the western country. Whatever experience I have 
 gained has been through rubbing shoulders with men like those on this 
 platform and in this audience. I do not know but that after twenty-two 
 years' experience as an officer of a labor organizati@n I cannot truth- 
 fully say that, regardless of education, if the man or men do not meet the 
 occasion in man fashion he is a failure in whatever business he may under- 
 take or attempt to follow. I have often regretted, of course, on being com- 
 pelled to take the platform with men like our most distinguished ex-Pres- 
 ident Roosevelt and ex-President Taft and others that I had not given 
 more of my younger days to schooling; but even then I have tried in guid- 
 ing the organization of 142,000 men to go along the lines of decent 
 methods, the square deal and making good our word in all instances as 
 agreed to with our employer. 
 
 The Brotherhood of Locomotive Engineers was the first to blaze the 
 way through an organized territory. A few men running engines got to- 
 gether away back in 1866, which resulted in the organization of the 
 Brotherhood of Locomotive Engineers. Ten years later what is now known 
 as the Order of Railway Conductors came into existence, a non-striking 
 and non-protective organization until 1893. In 1873 the Brotherhood of 
 Locomotive Firemen's organization came into existence, and ten years 
 later, September 23, 1883, the Brotherhood of Railroad Brakemen, later 
 changed in name to the Brotherhood of Railroad Trainmen, was 
 organized and at this time, as I stated, has a membership of something 
 over 142,000 men. 
 
 These four organizations have beneficiary insurance attached, paying 
 to their membership upon death or permanent disability payments on 
 policies ranging from five hundred to three thousand dollars, accord- 
 ing to age and certain other conditions. All of the members are com- 
 pelled to carry one of the policies if between the age of 18 and 45, and if 
 their physical condition at the time of admission to the organization is 
 such as to permit them to pass the necessary examination. It will suffice 
 to say to you that to date, or as of December 1st, the organization I have 
 the honor to represent has paid out in excess of $34,000,000 to the 
 widow, the orphan, and the maimed, collected dollar by dollar from men 
 receiving a salary of from two dollars to four dollars per day. And 
 even with that expenditure, doing so much good that I could not tell you 
 about it except to point out perhaps in your city instances where the 
 widow and children have been able to keep from asking for public char- 
 ity, which otherwise they would have had to have done on the death 
 of the husband and father. All over this country are living monuments 
 of the good accomplished by these organizations in that respect. 
 
 Now, these organizations are not only insurance organizations, but 
 they are labor organizations doing a beneficiary insurance business. The 
 the amount paid out by each of the other organizations, running into the 
 
THE CENTRAL STATES CONFERENCE 65 
 
 many, many millions of dollars, and still back of that these organiza- 
 tions have accumulated a treasury fund amounting in my own organiza- 
 tion to something in excess of $4,225,000 to protect against outstand- 
 ing policies and against accidents of any kind that might overtake the 
 organization. In making those statements, I do it for the purpose of first 
 trying to get you to understand that we believe we are handling our or- 
 ganizations along business lines. 
 
 We have been criticized often by some other trade unions because 
 we have not followed in their path, because we have deemed it advisable 
 to conduct our own organizations in our own way; and perhaps it is not 
 out of place for me to again say that I have often criticised labor organi- 
 zations for not making good their word, their contract or their agree- 
 ment, and I have often stated, and I repeat, that any organization of labor 
 that expects to live, that expects to continue, must make good its contract 
 with its employer, no matter what discipline it must administer to its 
 membership to do so. (Applause) 
 
 The employer will deal more kindly with those representing labor if 
 they are guaranteed or assured that labor will make good its word, and 
 the employer can proceed to contract, no matter what his business may 
 be, if he can be assured that his business will not be interrupted with a 
 strike without notice or without due process of law. For these organiza- 
 tions have their own code of laws, and for the railroad organizations I 
 insist they live up to them. So today these organizations have working 
 agreements with practically every railroad in the United States and Can- 
 ada, not a closed shop agreement. 
 
 We have never yet asked for a closed shop agreement. We hope the 
 time will never come when we must do so, although we have no criticism 
 of an organization or of organizations who believe it to their advantage 
 to insist upon the closed shop condition. With us we have tried to make 
 our organizations so good that the men of our class will affiliate with 
 them without being compelled to ask for the discharge of a man or the 
 displacement of a man because he does not belong to organized labor. 
 How well we have succeeded, you can form your own conclusion, when I 
 say to you that of our class fully eighty-five per cent, of those engaged 
 in the transportation departments, as we know them, are organized. There 
 are men on every railroad that work throughout their natural lifetime 
 without becoming affiliated with the organization representing the cause. 
 That is their business. We naturally feel that they should become affil- 
 iated with the organization, but if they don't do so, we have never 
 yet asked for the discharge of one of those men. We have said to the 
 railroad companies that those men must receive the same consideration, 
 the same rates of pay, and the same working rules that our membership 
 received. And so we think we have fairly well succeeded along these 
 lines. 
 
 With this brief outline of our policy you will perhaps be interested 
 to know something of this so-called Adamson law, eight-hour law. I do not 
 believe there has ever been a law enacted that has been talked about 
 and so maliciously talked about to any greater extent than that law, 
 known as the eight-hour law. 
 
 These four organizations and the railroad companies in the United 
 States have what is known as the Eastern, Western and Southern As- 
 sociations. The Eastern Association assumes to deal with the territory 
 east of the Mississippi River and north of the Ohio River. The Southern 
 Association for the territory south of the Ohio River and east of the 
 Mississippi River; while the Western Association deals with the railroads 
 west of the Mississippi River, or west of the main line of the Illinois Cen- 
 tral Railroad. In these three different territories, these organi- 
 
66 THE CENTRAL STATES CONFERENCE 
 
 zations have moved at different times for better working con- 
 ditions, better rates of pay, and all that, but never before 
 did they attempt to move in conjunction with each other. 
 But last January, a proposition was filed with the general managers of 
 all of the railroads in the United States asking for two things: i. e., the 
 eight-hour basic day; time and a half for overtime. 
 
 That notice was presented to these railroads last January and later 
 a conference was held with the National Conference Committee. Perhaps 
 I should explain to you just what that means. There is a committee known 
 as the National Conference Committee, of which Mr. Elisha Lee is chair- 
 man. It consists of eighteen members, vice-presidents or general mana- 
 gers of railroads, authorized to speak for approximately all of the princi- 
 pal railroads in the United States. So when our request was forwarded to 
 the general managers of the different railroads it naturally found its way 
 to this conference committee, and when we later met the conference 
 committee to discuss those propositions, all of which is made a matter 
 of record, is published, a stenographic report kept at that time, they re- 
 fused our proposition, as we expected they would. Because, right here I 
 might say to you, that we have not found it the custom of railroad com- 
 panies to hand out anything, nor do I believe it is of employes generally, 
 unless they can see something coming back to fully repay them or more. 
 
 So when this request was declined we submitted to our membership 
 in circular form, and asked them to read and at the bottom subscribe 
 their names, and to what? "I have read the foregoing statement and here- 
 by cast my vote for or against the strike, unless a satisfactory settle- 
 ment of the questions at issue can otherwise be made. Full authority is 
 hereby given to our general committeemen and officers in charge to speak 
 for and represent us." Power of attorney, in fact, was given in that bal- 
 lot. So, when the ballot was canvassed on the first day of August, all of 
 this time having elapsed from January 1st to August 1st, we found that 
 approximately ninety-six per cent, of the nearly four hundred thousand 
 men of our several callings had voted in favor of leaving the service 
 unless a satisfactory settlement could be made. 
 
 Now, what did a satisfactory settlement mean? Any settlement that 
 the committeemen and four grand lodge officers in charge should feel 
 like accepting. 
 
 Well, when we met the conference committee on August 1st and out- 
 lined to them the evidence they still refused to grant our request, and 
 asked us, "Will you join with us in appealing to the Board of Mediation 
 and Conciliation to handle this matter?" We said to them, "No. Under the 
 federal act you can appeal or apply to that board just as we could do it." 
 Then they said to us, "Will you leave this entire matter to arbitration?" 
 "No, no; not as you suggested it." "Why?" "We will tell you why. When 
 we filed our proposition it was for practically every railroad in the United 
 States. When this conference committee of yours answered us it excluded 
 from the list all railways which you were willing to have speak for them- 
 selves. Something like seventy-five railroads; you excluded from that list 
 all of the colored brakemen, firemen, switchmen and others all through 
 the south who are doing exactly the same that the brakemen or the fire- 
 men or the hostlers or switchmen of the north are doing. You promised 
 to speak for these men. You told us they could not join our organizations 
 and, therefore, you promised to speak for them, although we always held 
 that we were legislating for the class, for the job, and not for the man, 
 that it makes no difference to us whether he was white or black, whether 
 he was Catholic or Protestant, or what not, we believe that if he were 
 doing the same work our men were doing, that he was entitled to the 
 same consideration. And if your proposition is to lead to arbitrating this 
 question, excluding those seventy-five railroads, excluding those classes, 
 then we will not arbitrate the question." (Applause) 
 
THE CENTRAL STATES CONFERENCE 67 
 
 And let me say to you right here, our four organizations are pledged 
 to arbitration. Convention after convention has passed resolutions pledg- 
 ing us to arbitration; but, gentlemen, that does not mean arbitration un- 
 der any and all conditions. It means arbitration with honor. There is not 
 one of you in this house that will agree to arbitrate a controversy that 
 you might have with someone and let the someone solely dictate the terms 
 of arbitration, not one of you. (Applause.) 
 
 The railroad companies proposed that we arbitrate the eight-hour 
 day, the question of time and a half; for what? For the railroads that 
 they wanted it arbitrated for, excluding all the others, for the employes 
 that they wanted it arbitrated for, excluding all the others; and we would 
 not agree to it; we never will agree to it, while we have organizations. 
 But we are pledged to arbitration. That means both parties to the con- 
 troversy can dictate, that they shall have equal rights as to what the 
 terms of arbitration shall be. 
 
 Let me ask you if our government in your opinion would arbitrate 
 with Mexico today and let Mexico dictate the terms of arbitration? No. 
 We would probably find in that agreement to arbitrate the question of 
 who in the future should own Texas, because Texas for many years be- 
 longed to Mexico. Do you think our government would bow humbly to 
 that and agree? Not quite. 
 
 There is not one of you that would arbitrate the question of whether 
 or not you shall be permitted to live in the home that you bought and 
 paid for. And why do I say that? Because, gentlemen, on 65,700 miles of 
 railroad in the United States and Canada today, and for several years 
 back, we have, and have had, the eight-hour basic day in through freight 
 service. Through freight se'rvice is the class of service that handles our 
 large percentage of tonnage, the largest percentage of tonnage of all 
 business in the country, as every one of you shippers know. 
 
 What does the eight-hour basic day mean? Our schedules today are 
 all written in this language, speaking now of the Eastern territory only: 
 "100 miles or less, 10 hours or less, shall constitute a day." That is the 
 wording in every one of the schedules in freight service. Now, get that 
 again: "100 miles or less, 10 hours or less," shall constitute a day. Let 
 us digest that just for a moment. 
 
 If a freight crew is called and by the way, all of these freight men 
 are piece-workers all through freight workers are piece-workers. They 
 are only paid when they are called and sent out, and they may not be 
 called for a day or a week. If not, they will not receive a penny. They 
 are paid by the mile and paid when they are called and make a trip, but 
 they are guaranteed a minimum day's pay when they are called to go out. 
 
 Now, let's see what that means, 100 miles or less, 10 hours or less. 
 That means this, that if a crew is called to leave Evansville today in 
 through freight service and makes the division of one hundred miles in 
 three hours or four hours or five hours, any member of that crew has 
 given to the company ten hours' service equivalent, because he has gone 
 100 miles. Now, 100 miles, or ten hours, in this territory is one and the 
 same in every schedule in effect, recognized by the railroad companies for 
 years, recognized by us. So that if in making that one hundred miles that 
 crew is the full ten hours in making it, it gets exactly the same amount of 
 money as though they had been able to go over that division in three 
 hours or four hours. With the tonnage of today, I think the records that 
 will later be filed by this special committee of Mr. Goethals, will prove 
 conclusively that the men are today working practically on an hourly 
 basis rather than a mileage basis, because the tonnage on these trains 
 is such as to keep them, generally speaking, less than ten miles per hour. 
 
 Now, if that is understood by you, then in this eastern territory in 
 freight service we have an eight-hour day now, and have had it since 1913, 
 
68 THE CENTRAL STATES CONFERENCE 
 
 when it was changed from a monthly basis or a trip basis to the mileage 
 basis, just as we had it in the west for ten, fifteen or twenty years. There- 
 fore, don't lose sight of this. Our request was the basic hours a day which 
 meant 100 miles or less, eight hours or less, shall constitute a day. 
 
 You have probably seen in the press repeatedly criticism of these 
 organizations because we ask for an eight-hour day. You have been told 
 by some that the Adamson law was not an eight-hour day law, while 
 others have told you that it was. I don't know what it is. If I did I would 
 have the supreme court beaten, because it is up to the supreme court to 
 tell us by the twenty-second of January. I don't know what it is. But re- 
 gardless of that fact, before I get through I want to tell you who is re- 
 sponsible for that law, I want to tell you who took the president by the 
 neck, I want to tell you who took Congress by the neck and made 
 them say "Uncle!" as these papers would have you believe our organiza- 
 tions were the ones who did it, the Big Four. I want you to judge who 
 did it and I want you to judge from what I say before I get through. 
 
 We know that the companies could have established the eight-hour 
 basic day, which would have meant that if the division were one hun- 
 dred miles long overtime would start after eight hours, regardless of 
 how many hours it would take that crew to make that run over that hun- 
 dred miles in through freight service. If they made that run over that 
 hundred miles in through freight service in four hours they would get 
 paid for it. But what do they get paid? A brakeman's rate today in this 
 entire Eastern territory is $2.67 for ten hours, $2.67 for one hundred 
 miles. Get those figures properly. I want to show you later some of these 
 millionaire brakemen that have been reported through the press and that 
 you have been told about. Please get out your pencil and paper and at the 
 rate of $2.67 for ten hours, $2.67 for one hundred miles, how long it would 
 take and how many miles he would have to cover for that brakeman 
 to get to be a millionaire. Figure out how long it would take that brake- 
 man in through freight service east of the Mississippi to earn that 
 amount of money, with that brakeman earning $2.67 for a hundred miles 
 or ten hours. If he is over ten hours, overtime commences at the expiration 
 of ten hours and he gets what? He gets one-tenth of $2.67 per hour for 
 every hour overtime. 
 
 Let us suppose that the run is 125 miles long. Then what did our 
 proposition mean? It meant inserting in our schedules where "ten hours" 
 appear, "eight hours." It meant changing in our schedules where "ten 
 miles per hour" to "twelve and a half miles per hour." That is all it 
 meant; that is all it meant, and nothing more, in freight service, the eas- 
 iest thing in the world, and every operating officer knows it, so far as 
 working it out in our schedules is concerned. But they immediately com- 
 menced to tell you that it would cost $100,000,000 to do this. One con- 
 tract paid for by these railroad companies and if the gentleman wants 
 to dispute it I will undertake to furnish the proof one contract made 
 to one advertising company alone was for three-quarters of a million dol- 
 lars, to tell you and others that it would cost $100,000,000 to grant this 
 request of ours. They paid for that information and sent it out over the 
 country, believing this question would go to arbitration and that you and 
 everybody else who had read it would be prejudiced against us. It was 
 packing the jury pure and simple and that is all it was. 
 
 What do you do today when you call a juror before you? If he has 
 been reading the papers in regard to this murder or crime for which 
 somebody is about to be tried, you immediately assume that he has formed 
 an opinion and he is cast aside. But when you spend millions of dollars 
 to prejudice the public against a certain condition as these railroad com- 
 panies did do through their publicity departments, and then expect us to 
 go to arbitration with a prejudiced jury, have we received a square deal? 
 Not quite. 
 
THE CENTRAL STATES CONFERENCE 69 
 
 And so I am glad of the opportunity to not only come here, but to 
 go to the far corners of the earth to tell this story of what happened. I 
 am only sorry that on this platform does not sit one or a dozen of the 
 gentlemen on the other side who went through the negotiations from 
 start to finish. I do not think that one of them would contradict what I 
 say in regard to these matters insofar as the negotiations are concerned, 
 because we saw them exactly alike. 
 
 We were the ones, of course, who held up the President and Con- 
 gress. We were the ones that held the stop-watch on these people. I was 
 rather sorry to hear my good friend who spoke last before luncheon, speak 
 as if he were under the impressi'on that we were all-powerful and that 
 we told Congress to do so and so by a certain time and they did it. 
 
 Let me tell you the story a little differently from that. When they 
 asked us to arbitrate or leave the question to mediation and we declined, 
 the railroad companies, through their conference committee, appealed to 
 the government at Washington for the good offices of the mediation and 
 conciliation board, and the next day, and for five days following, Judge 
 Chambers, Judge Knapp and Mr. Hanger, who constitute that board, 
 worked with us and with the railroad committee, trying to get us to- 
 gether. It was like the eleven jurors as against the one. The railroad 
 companies would not concede a thing nor make any proposition what- 
 ever and we would not concede any one of the two propositions we had. 
 Therefore, the Board of Mediation and Conciliation were absolutely at sea, 
 and so at the expiration of the fifth day they came before us, and re- 
 member when I said "us," I mean 640 committeemen from your railroads 
 in this city, the ones that enter this city, and every other railroad of note 
 in the United States that were with us in Washington and in New York. 
 The Board of Mediation and Conciliation came before us and said, "Gen- 
 tlemen, we are sorry to advise you that there is no possibility of a set- 
 tlement. The railroad companies will make no concession and you gen- 
 tlemen will make no concession, and so we have completed our services. 
 But, before leaving you, let us give you this notice." And we were handed 
 a communication of which this is an exact copy, and the railroad com- 
 panies through their committee were handed the same communication, 
 so we were told by the Board. This is dated August 13th, 1916. "I have 
 learned with surprise and keen disappointment that an agreement con- 
 cerning the settlement of the matters in controversy between the railroads 
 and their employes has proven impossible. A general strike on the rail- 
 ways would at any time have a most far-reaching and injurious effect 
 upon the country. At this time the effect might be disastrous. I feel that 
 I have a right, therefore, to request, and I do hereby request, as the head 
 of the nation, that before any final decision is arrived at, that I may have 
 a personal conference with you here. I shall hold myself ready to meet 
 you at any time you may be able to reach Washington. Sincerely yours, 
 Woodrow Wilson." 
 
 Remember, that was the 13th day of August, and we had been ne- 
 gotiating from the first day of January, and you hadn't heard much, if 
 anything, about this except through the paid editorials and advertise- 
 ments that had gone out. You had been told, of course, what we were 
 asking for and what it would cost. What could we, as citizens, do but 
 answer the request of the chief executive of this nation with our pres- 
 ence? So that night a sub-committee of thirty of our chairmen and four 
 chief executives went to Washington from New York. On the same train 
 some of the conference committee, who had received the same notice, went 
 to Washington. 
 
 The next day at three o'clock, we met the President. He asked us 
 many questions and we told him our story, just what we were asking 
 for, just why we knew it could be done, and we said to him, "Mr. Presi- 
 dent, we know that this can be done, and we know because we have paid 
 
70 THE CENTRAL STATES CONFERENCE 
 
 statisticians of high standing to tell us what it means, that it would cost 
 less than fifty millions of dollars to give us our request in its entirety. 
 We know that the question of overtime is curtailable. We don't know to 
 what extent, but we do know that it is largely a question of operation, 
 and that these trains can be gotten over the road on a twelve and a half 
 mile speed basis, because in this Southern territory, on 65,700 miles of 
 these roads they have been operating on a twelve and one-half mile speed 
 basis, as it is in our agreement, for years. And of all of those roads, only 
 three are in the hands of the receivers, and the three total a mileage of 
 less than 1,000 miles, while under the ten-hour day, or ten miles an hour 
 schedule, we find roads like the Rock Island of 8,000 miles, the Missouri 
 Pacific, the Iron Mountain, the Frisco and many big systems in the 
 hands of receivers. They have what is called the ten-hour day. They are 
 on the ten-mile an hour basis. Therefore, that should be proof enough to 
 anyone that these railroads can operate on an eight-hour basic day if they 
 want to do so and without putting them in the hands of the receivers, be- 
 cause here is the proof." 
 
 The President heard our statement. He called the conference com- 
 mittee before him and for three days, or about that, the negotiations con- 
 tinued. At the expiration of that time the President handed to us a state- 
 ment and told us that the same kind of a statement had been handed to 
 the National Conference Committee that same day. The National Confer- 
 ence Committee have corroborated that statement verbally to me and 
 others since that time. 
 
 When we outlined our proposition to the President he said to us at 
 the expiration of the third day, "Gentlemen, I agree with your request 
 for the eight-hour basic day. I think it is right. And I am forming that 
 conclusion, not hurriedly, but because this government of ours has for 
 many, many years recognized the eight-hour work day for all of its em- 
 ployes, because thirty of the states of this union recognize the eight-hour 
 work day for their employes, because, in addition to that, a million and a 
 half and over workmen are enjoying the eight-hour day under contracts 
 peacefully negotiated with their employers, and I think it is too late for 
 us now to say that the eight-hour day can't go into effect or is a question 
 of arbitration." 
 
 We had told the President why we would not arbitrate the eight- 
 hour day. We said to him, "Mr. President, they made no proposition to us 
 to arbitrate for all of the railroads, but they excluded railroads where 
 they thought they could whip us. They arbitrated, or were willing to arbi- 
 trate on railroads, where it was a question as to who held the whiphand. 
 That is the position. Now, if we are going to arbitrate, we are going to ar- 
 bitrate for all of these men and roads or none, and we had no opportunity 
 to answer the question of arbitration in that way." 
 
 He said further, "Your request for time and a half and the company 
 request for some matters that they had suggested should be investigated, 
 and so I would only support you in your request for the eight-hour basic 
 day, leaving all other questions to negotiations, to be settled later." 
 
 At that time the President handed to us this little typewritten mem- 
 orandum and the same was handed to the railroad companies. He handled 
 that meeting very satisfactorily. He would call the conference committee 
 and then send them back and then he would call the employes and then 
 send us back and for some days and nights he was pretty busy. His 
 proposition was this: 
 
 "First. Concession of the eight-hour day . 
 
 "Postponement of the other demands as to payment for overtime and 
 the counter-suggestion of the railway managers until experience actually 
 discloses the consequence of the eight-hour day. 
 
THE CENTRAL STATES CONFERENCE 71 
 
 "In the meantime the constitution, by authority of Congress, of a 
 commission or body of men, appointed by the President, to investigate 
 and report upon its consequences without recommendation. 
 
 "Then such action upon the acts as to the parties to the present con- 
 troversy may seem best." 
 
 That is the proposition that was handed to us and handed to the 
 other side. We took that to our committee room and for twenty-four hours 
 our six hundred men discussed it and then they came to a secret yea 
 and nay vote, every man writing his vote and signing his name to it, so 
 that every man could vote as he pleased. The result was that one or- 
 ganization voted not to accept the President's suggestion. Three organi- 
 zations, by majority vote, voted to accept the President's proposition. I 
 mention that merely to show that our men were not a unit in accepting 
 the President's proposition and suggestion. Why? Because they realized 
 they waived more than fifty per cent, of their demands. They waived en- 
 tirely the question of time and a half for overtime. 
 
 They wanted shorter working days. They were being tied up ove^ 
 the hours every day over the country in various places and they wanted 
 to stop that if they could, and they knew, and I know and you, if you are 
 familiar with it, know, that so long as it does not cost the employer a 
 penny more to pay for the hour after the expiration of the day than it 
 did to pay for the first hour or the second hour, there is not much of an 
 incentive to release the man at the expiration of ten hours or eight hours, 
 or any other number of hours. Therefore, our asking for time and a half 
 for overtime was for the purpose of penalizing the company, and we knew 
 that if we- did that that much of this overtime would be discontinued. 
 And as a practical man, and as far as that is concerned, every practical 
 man, I dont* care whether he is a general manager or president of a rail- 
 road, knows that that would have the effect of stopping all possible over- 
 time, if they had to pay time and a half or double time for it. 
 
 Now, we were criticised, of course, for that, but our men voted to 
 accept the proposition coming from the President, because it was the chief 
 executive of this nation who was making that request. We said to the 
 men from the platform when they were discussing it, "Gentlemen, let us 
 suppose for a moment you refuse to accept the President's suggestion after 
 his three days' investigation of it, what do you think public opinion will be 
 when the President tells the public that we refused his suggestions and 
 the railroad companies accepted it, etc.? You can't afford to refuse his 
 proposition, even though it is not what we think you should have." They 
 voted to accept it, as you have been told. 
 
 Then, what happened?" For eleven days we remained in Washing- 
 ton as the guests of the President, waiting for the conference committee 
 or the representatives of the railroads to accept or reject the President's 
 proposition. To this minute, so far as I know, they have never accepted 
 it or rejected it. But the President's own statement to us, at the expira- 
 tion of the ninth day, was "Gentlemen, I think they will give an answer 
 tonight or tomorrow. They led me to believe that when I last met them." 
 
 Finally, after we had been there eleven days, our men becoming ex- 
 cited because they had waived so much of their original proposition, we 
 commenced to see that we could not hold those men, nor the thousands 
 and thousands at home much longer. So we said to President Wilson. 
 "We realize we are here as your guests. You invited us here. We would 
 ask that you kindly release us. We think that we have waited long enough. 
 We would ask that you kindly release us and send these men home. We 
 think these gentlemen down at the Willard Hotel will change front in a 
 few days." 
 
 Whether the President knew just what that meant or not, I don't 
 know, but he said then, as nearly as I can remember it now, "Let us hold 
 
72 THE CENTRAL STATES CONFERENCE 
 
 that in abeyance for twenty-four hours, because I feel confident I am 
 going to get their answer, perhaps this afternoon." 
 
 That was Friday noon. We waited until Saturday afternoon, and no 
 news. We waited until Sunday morning and no news. In the meantime, 
 reporters had told us that the President had gone from the White House 
 to the capitol and that he was then consulting with Mr. Adamson, Mr. 
 Newlands and others in reference to a law. It is as true as there is a God 
 above us that not one of the chief executives or men in these organizations 
 had up to that moment ever thought or heard of an eight-hour law being 
 enacted. We never thought of it. What the President had in mind, 
 what he did in consulting with these people who later prepared that law 
 was not told to us and we had nothing to say until the bill was introduced 
 in the House, which is now known as the Adamson bill. (Applause.) 
 
 We sent our men with the order in their pocket to leave the service, 
 as you know, a week later, September 4th. Within twenty-four hours, 
 of course, the news was out that the strike was going to go on at a cer- 
 tain time. 
 
 The President sent for us and said, "Now, gentlemen, is it true that 
 you have set an hour when this strike will go on?" We said, "The men 
 have the orders in their pockets. They are on their way home now. It 
 will take some of them six days to get home. Some of them live in Seattle 
 and Portland, Oregon, and other places far to the west." Well, he said, 
 "Gentlemen, this strike must not go on. It cannot go on. Here are a 
 hundred million people that would be discommoded. It must not go on." 
 "Well," we said, "Mr. President, don't you think we have been rather 
 patient in waiting here eleven days for the other side to accept or tell you 
 what they are going to do?" He gave no answer to that, but he said, "If 
 we could get some law I don't know whether we can. Congress is just 
 about to adjourn. If we could get some law." We said, "Mr. President, 
 we understand that there is a law partially prepared, etc." That was a 
 compulsory arbitration law, so called. That is the law that I feared. That 
 is the law that I looked for, if any, and that is the law that I expected 
 would be put forth to try to stop the strike. I never thought of an eight- 
 hour law, because I knew that a set of politicians, regardless of party, 
 could not work out a law in six months that would successfully apply to 
 the schedules on these railroads, either to the satisfaction of the employer 
 or the employe. I never in my wildest moment thought they would under- 
 take it. 
 
 But the first thing, you know, there was a law, and we were asked, 
 "If that law is passed will you stop the strike?" We said to him, "Mr. 
 President, we will stop the strike whenever your proposition that you gave 
 us is complied with. Our men voted to accept that and they have gone 
 home, no matter how it becomes effective. That will stop the strike, and 
 that is the only way that we can stop it. The men who voted this strike 
 on have gone home. They left with us the authority to declare it off or to 
 stop it whenever your proposition is accepted by the railroad companies 
 or put into effect." 
 
 That is the way the law was enacted. That is the way the strike came 
 to be declared off . 
 
 Immediately thereafter we were told that we had been gold-bricked, 
 that it didn't mean this and didn't mean that. It became effective or is to 
 become effective on January 1st. I have my own opinion as to just what 
 it means. We have worked it out. The National Congress of railroads 
 have their opinion. They worked it out. 
 
 Perhaps no better opportunity than this moment could come to say 
 to you that we, both sides to this controversy, are carefully considering 
 plans to settle this entire controversy out of court, to settle it before 
 
THE CENTRAL STATES CONFERENCE 73 
 
 January 1st by applying something satisfactory to both interests, and 
 washing and expunging the records, if you please. (Applause.) 
 
 It is only in a crude state yet, but I know I am not betraying confi- 
 dences when I say, some of the very best friends, high up in the cham- 
 bers of the operating departments of the railroads, favor something of 
 that kind. They have discussed it with us. I only left them night before 
 last in New York and will go back there again very soon. We hope to 
 work it out, We know if we don't work it out for ourselves, the employes 
 and the employers, that somebody is going to work it out for us and it 
 will not be acceptable to either one. We know that. (Applause.) 
 
 For twenty-five years these organizations have dealt across the table 
 in the most friendly spirit and we believe there is sufficient intelligence 
 on both sides of the table to get together, man-like, and thrash these 
 things out and reach middle ground, and if we do, take it entirely out of 
 politics and go back to a move of establishing a federal commission of 
 some kind to take the place of this Board of Mediation and Conciliation, 
 a commission of practical men from both sides, appointed by this gov- 
 ernment, answerable to the President, with full authority to hear and dis- 
 pose of all controversies that arise. (Applause.) 
 
 Take four of these men who have dealt with these schedules for years 
 and years, take four operating officers, and I could pick a hundred men 
 to whom I would be perfectly willing to refer the matter and abide by their 
 fairness; put those eight men in the room with authority to settle the 
 matter, cut them loose from their organizations, cut them loose from their 
 railroad interests, and my honest opinion is that ninety per cent, or more 
 of every grievance, so called, that originates today would be settled and 
 settled satisfactorily. That is the line that is worthy of your thought. 
 It is a line that we are trying to work out, and if we do it may stop this 
 so-called compulsory investigation. I call it compulsory servitude, invol- 
 untary servitude.. Why? Because I do not believe in this free country of 
 ours that any Congress of the United States will ever pass a law that will 
 compel a workman to work when he does not want to work, unless he has 
 been tried and convicted of some crime, as long as the employer stands 
 for and demands, as the manufacturers' association went on record some 
 years ago, according to report, their right to discharge men when they are 
 unsatisfactory, or when they do not want them, just so certain do em- 
 ployes have a right to quit the service when they want to. 
 
 And I believe that if the supreme court decisions are at all to be re- 
 lied upon, away back in 1897 that question was settled by the United 
 States Supreme Court in the case of U. S. vs. Harry Ball and others, on 
 January 25, 1897, in these words in part: 
 
 "We are utterly opposed to any law enacted by the state which will 
 in any way, by consent or otherwise, deprive the worker of his right to 
 quit work at any time and for any reason sufficient to himself." 
 
 Look that up. It is still the supreme court decision. And so I am 
 ready to let this question of compulsory servitude, compulsory service, to 
 go to the supreme court if necessary. 
 
 Last night a gentleman referred to a law where a seaman did not 
 dare quit his vessel until the voyage was completed. I said to him, "You 
 forgot to tell these gentlemen that the recent session of congress enacted 
 the seamen's law, which seems to have taken the place of that old decision 
 of the supreme court. The seamen's law has not been carried to the su- 
 preme court by the steamship companies as yet, nor do we think it will be. 
 That seamen's law does what? It provides, among other things, the 
 amount of butter and other food a seaman must be given. It provides the 
 kind of sleeping quarters he must be given. It provides bath privileges 
 for the seaman. It provides that a seaman can quit at any neutral port. 
 It provides that the master must pay the seaman his wages within three 
 
74 THE CENTRAL STATES CONFERENCE 
 
 days from the day he quits, or pay a penalty of two days' pay for each 
 day thereafter, one hundred per cent, penalty, two days' pay for one, that 
 is. If this request of ours is a twenty-five per cent, increase, as alleged, 
 might it not even at that stand the test of the supreme court, if the sea- 
 men's law can pass, the seamen's law carrying a hundred per cent, in- 
 crease. 
 
 And so, gentlemen, this case has gone to the supreme court. We do 
 not know what the decision will be, but, frankly speaking, I hope for a 
 peaceful solution of this question before January 1st, making it possible 
 for us to go back, as we have already gone, to the President, to the de- 
 partment of justice and to congress, if necessary, and say to them, "Gen- 
 tlemen, we have had our experience. You passed a law to save a strike. 
 We worked out a settlement, doing what we think you meant to do, in a 
 way satisfactory to both interests. You will kindly forget that you ever 
 had brought to your attention a wage scale, and we will forever and here- 
 after keep away from that building on the hill." (Applause.) 
 
 Now, I have exceeded my time by far. I only want to impress upon 
 you this fact, that the railroad companies were the ones who appealed 
 to the government, not the employee. If either party received something 
 at Washington that they don't want, lay the blame to the persons who 
 got us to Washington by their requests, and that would be the railroad 
 companies. 
 
 The President of the United States did, in my opinion, what any Presi- 
 dent should do, and I am saying that as a lifetime republican. (Applause.) 
 And not alone that, I never voted a national democratic ticket in my life 
 until November 7th. And until the republican party gets back on the 
 track it's in the ditch now until they get back on the track I am with 
 the democrats. (Applause.) 
 
 Here in the press you see Woodrow Wilson called a weakling and all 
 this. Why? I say that as one of the men who for three days and nights 
 and for almost two weeks was with him whenever he asked, and that was 
 pretty nearly every day, when we sat down and talked this thing over 
 every way, I say that that is what changed me politically. Mr. Stone, of 
 the Engineers, Mr. Gafretson, of the Conductors, have always been re- 
 publicans and they all voted for Woodrow Wilson. Why? Because he 
 made them like him. 
 
 In this particular instance his one desire was the public. When he 
 said to us, "Gentlemen, you must postpone this. It can't go on. You must 
 postpone it until I can try to get Congress to do something." We said, 
 Mr. President, we can't. There is not a power on earth can do it. If we 
 send this message to these men it means a settlement. So we can't do it." 
 I said to him, "If congress had declared war on some nation, would you 
 arbitrarily say 'there shall be no war?' " He said right off the reel, "Yes, 
 if it were wrong I would not permit it." Well, that is going some. (Ap- 
 plause.) I will confess that I didn't feel, czar as I am, according to some 
 of these reports, big enough to say to my 140,000 men, "You shan't strike, 
 even though no settlement of the question you have voted upon was 
 made." 
 
 And so the President's only desire, his greatest desire, as I saw it, 
 was lor the masses, not for us and not for the railroads. 
 
 Now, the law was passed, not creating the eight-hour day to start in 
 August, as we expected it, but on January 1st. But what happened? 
 
 On the 8th or 9th day of November hundreds of suits were filed all 
 over this country. Against whom? Against the government, not against 
 the organizations. Those suits were filed against the United States gov- 
 ernment to prohibit the eight-hour law going into effect, and they are 
 there yet. The railroad companies would not concede anything to us. 
 
THE CENTRAL STATES CONFERENCE 75 
 
 They would not concede anything to the government. They have gone 
 into court now to defeat the government and we would be put in jail if 
 we even thought of doing that. But the railroads seemingly through their 
 legal departments are bigger than the government, and still they are ap- 
 pealing for sympathy, telling you how earnestly they want to have arbi- 
 tration on what? On the roads where they fear a fight, but on seventy- 
 five little ones they haven't use for arbitration and there is nothing to 
 arbitrate and they won't let us talk about that. 
 
 Gentlemen, in conclusion, I want to thank you for the time I have 
 consumed. (Applause.) 
 
 Chairman Murphy: Apropos of President Lee's exposition of the 
 side of the brotherhoods, I want to relate a personal experience. A couple 
 of hours ago I had what I may say was a never-to-be-forgotten conversa- 
 tion with Mr. Lee. I asked him if he would say something this afternoon 
 that would put the Evansville Conference on the first page of every news- 
 paper in the nation. Being a publisher I can perhaps better appreciate 
 the advantage of that than some of you people. He looked at me for a 
 moment, and said, "I will try and do it." And then a moment later he 
 said, "Perhaps I will." Your minds are as acute, or more acute, than 
 mine. I think you recognize that he has said something of remarkable 
 news value, something of significant import. I do not need to point out 
 to you what it was. 
 
 My personal belief is that Mr. Lee and his fellow brotherhood leaders 
 are as little satisfied with the Adamson bill as Mr. Trumbull and his as- 
 sociates. That is my guess. You may have a better guess than that. 
 
 With all modesty I submit that the executive committee of this con- 
 ference has prepared an excellent program and with all deference to the 
 ability and with appreciation of the efforts of the speakers who have gone 
 before, I think we have reserved for the later sessions of the conference 
 the real feast of reason. 
 
 I am reminded of a story that my friend George Ade is wont to tell. 
 He told me not long ago of a poker game in which two frugal sports were 
 engaged. They were playing ten-cent limit. One of them picked up his 
 cards and glancing over them, said, "By jove, I wish the limit weren't so 
 low; I would like to bet a dollar on this." The other fellow examined his 
 hand and replied: "Well, I would like to bet five dollars on my hand. 
 Let's raise the limit." The first chap said, "All right, I will go you one 
 better and bet you a thousand." 
 
 "Oh, let's not be cheap sports; I'll bet you a million." 
 
 The other fellow thought a moment, appraised his hand and said, 
 "I will go you a billion." 
 
 The first man, after a little deliberation, said, "Well, let's make it a 
 trillion." 
 
 "A quadrillion." 
 "Quintillion." 
 
 That rather worried his opponent and he studied his hand pretty 
 carefully for a while. "Well," he said, finally, "I won't let you have it for 
 that. I will bet you a sextillion." 
 
 The second fellow looked at him disgustedly for a moment, then 
 threw his cardsdown and said, "You can go to the devil, you are too darn 
 educated." (Laughter.) if 
 
 Now, with all kindness to the gentleman who has to follow on the 
 program, I submit that he is the best educated man on questions of public 
 welfare that is to be found in the United States. As independent in 
 thought, as he is in politics, he has made a big impress on American af- 
 
76 THE CENTRAL STATES CONFERENCE 
 
 fairs. When I say that in addition to all of his other activities he runs 
 three miles every morning before breakfast you have some idea of his 
 capacity. 
 
 The pleasure of introducing so notable a speaker as Frank P. Walsh, 
 of Kansas City, falls to my lot. 
 
 Mr. Frank P. Walsh: Mr. Lee has one word to add, so I will have 
 to stifle this witticism that was about to flow from me in answer to the 
 chairman's remarks. 
 
 Chairman Murphy: Mr. Lee. 
 
 Mr. W. G. Lee: I would like to get another word in before Frank 
 Walsh starts, because after he gets started he is mighty hard to stop. You 
 will be well paid in listening to him. 
 
 Now, what I wanted to say was this : I should have said before clos- 
 ing that if more representatives of the different cities, particularly through 
 the chambers of commerce, who have been misunderstood from the labor 
 point of view, would get together on this subject, it would be better for 
 all concerned. I am a member of the Cleveland Chamber of Commerce 
 and have been for several years. I joined it so that I could get to tell 
 them how much I disliked some of the things they, were doing. I joined 
 it so that they would have to listen to me, and as your speaker before 
 lunch said, hold up these things until you get both sides of the questions, 
 before you make up your mind. That is why I joined the Cleveland, 
 Chamber of Commerce. 
 
 Now, if more chambers of commerce would hold meetings of this kind 
 on all important questions like this one that involves the Adamson law 
 and get all sides of the controversy to come before you and explain it, as 
 has been done here before this conference, and as I believe this conference 
 has done, there would be a different feeling over this country, and you, 
 the people, yon, the final jury, would be in a better position to talk about 
 these matters than you are, to hold up your hand or say "aye" to some 
 resolution of which you have only heard one side. 
 
 That is what I wanted to say, and now I am through and will yield 
 the floor to Mr. Walsh. (Applause.) 
 
 A motion, giving Mr. Lee a vote of thanks, was unanimously car- 
 ried. 
 
 Chairman Murphy: I now have the honor of presenting Mr. Walsh. 
 (Applause.) 
 
THE CENTRAL STATES CONFERENCE 77 
 
 Our Country's Welfare The Primal Object. 
 
 By Mr. Frank P. Walsh, 
 Chairman of Federal Commission on Industrial Relations. 
 
 Mr. Chairman, brother delegates, ladies and gentlemen: I would feel 
 a little more assurance coming before you had my good brother Murphy 
 explained in more detail the cause for that run of three miles before 
 breakfast, as to who was in front and who was behind, if anyone. 
 (Laughter.) 
 
 A few weeks ago, in the discharge of what I deemed to be a duty of 
 common citizenship, I came to Evansville, Indiana. Excuse my ignorance, 
 pity me for all I missed, it was the first time I was ever off the train at 
 Evansville, Indiana. I met here a community spirit, a pull-together atti- 
 tude among the business men, the officials and the citizenship generally 
 that might well be emulated by all of the cities of the United States, and I 
 found a community for lively 'spirit and energy paralleled in no other place 
 in the United States except Kansas City, Missouri. (Applause.) 
 
 So when I was asked to come here to your conference need I say that 
 I would not have dared to do so had it been to anything but a conference, 
 that I would not have come back here to make a speech, but to meet in 
 common with my fellow citizens from different parts of this, nation, to dis- 
 cuss affairs and throw into the common pot of knowledge, or supposed 
 knowledge, whatever idea I might have that it might be threshed out. All 
 I can say is, and I am encouraged in what brother Lee has said, that I be- 
 lieve that this little conference will turn out as happily as the conference 
 I had here a few weeks ago. (Applause.) 
 
 As I say, I came here because this was a Conference. It was a great 
 idea. It is an idea that I hope is going to rule this nation, the idea of com- 
 mon interchange of thought which will bring out a common understand- 
 ing, which will make us all pull together for the greatest nation that God's 
 sun ever shown upon (applause) and for the production of wealth under 
 circumstances, so fair to all, as will challenge the admiration of the world 
 and serve the best thought of all those that have gone before and all who 
 are still wrestling with this one great question of life. 
 
 I had hoped that all of us would have the time to attend every meet- 
 ing of this conference, so that if there were a difference it might be 
 thrashed out upon the floor of this house. It appears, however, that we 
 are all busy men, and perhaps if these conferences are still to go on, as 
 I hope they will, for intelligent thought and action and for the effect they 
 will have upon the legislators of this country, we will have many oppor- 
 tunities in the future to compare facts, or alleged facts, and to lay down, 
 as it were, the different angles of thought that animate us as forward citi- 
 zens, I hope, of our own republic. 
 
 I read with very great care what was said here yesterday, by Mr. 
 Thorn particularly, and by Mr. Muir. I am only sorry that both of the 
 gentlemen are not here to observe, to hear my views upon these questions. 
 They treated the whole matter in a very broad way, and while I am to 
 address myself, as I understand it, to those phases of our economic and 
 industrial life that finally became fructified in the Adamson law and are 
 now agitating the American people, it was my purpose to do it, if I could, 
 as these gentlemen did, to treat it in the broadest possible way and in its 
 bearing to all citizens of this republic, regardless of the industry they 
 may be engaged in, regardless of courts or politics or any other abstract 
 consideration except the public weal. 
 
78 THE CENTRAL STATES CONFERENCE 
 
 Now, I agree with Mr. Thorn that regulation in this country has not 
 been a success. I would like to state, for the purpose of argument, my 
 thought as to why it has not been a success. I believe that it has not 
 been the success that it ought to have been, because every fundamental 
 step in regulation has been consistently fought by the railroads of this 
 country in every state in this union, as well as against the operations of 
 the Interstate Commerce commission. (Applause.) 
 
 I do not analyze, nor do I propose to confute, nor would I, any of 
 the facts and figures submitted by Mr. Thorn. I will agree that they 
 are correct in their basic analysis, but I do wish to most seriously dis- 
 agree with Mr. Thorn in the thought that he gave forth to this conven- 
 tion as to what he called the Genesis of the regulation of railroads. If 
 figures were essential I am afraid that I would have to say that if to my 
 thought Mr. Thorn was as far off in his figures as he is in his Genesis 
 I would have to disagree with him in toto. 
 
 He said that regulations sprang from the bitter contests between 
 contending interests, upon the one side the public, and upon the other 
 side the owners of the railroads, who believed that they were operating 
 absolutely in the field of private ownership and that, therefore, the public 
 had no concern in what they were doing in respect to the operation of 
 railroads. I disagree with him because his argument in its essentials 
 denies the idea laid down in the plain terms of the constitution of the 
 United States, made at the beginning of this republic, broad enough so 
 that every law passed for the regulation of the railroads was so clearly 
 constitutional as to leave no room for doubt in that realm. 
 
 I likewise disagree with the thought of his Genesis on the part of the 
 owners of these railroads, when I look back to the beginning of that 
 great industry in this country and see that the people, that you and I, 
 that all of us, gave to those railroads as their contribution an empire in 
 land greater than all France and Belgium combined, greater than the 
 entire German empire, and greater in area than the state of Texas, whose 
 northeastern corner is closer to Chicago than its southwestern border is 
 to the City of Texarkana in its own state. I see there the written declara- 
 tion of the organic law of this country which says to my mind, and which 
 I believe should say to every intelligent mind, that the conduct of railroads 
 in this nation is not even a quasi-public function but an absolute and 
 indisputable function of the government itself, one of those functions 
 that can properly be delegated to private hands, but partaking so much 
 of the idea of sovereignty, of the expression of life in the nation, and of 
 the pursuit of happiness as to make it a part of the inalienable rights of 
 the people at any time they care to exercise them. If, as a matter of 
 fact, following in all the years, following the great railroad development, 
 following the civil war, the people gave no concern to this important func- 
 tion of the government certainly does not leave it to be argued, if my 
 intelligence grasps this as I believe it really is, that any intelligent person 
 had a right to ever proceed upon the theory that it was a matter of private 
 ownership in which the public had no concern. (Applause.) 
 
 Now, of course, I would not criticise anything but the viewpoint of 
 these gentlemen and yet I would not pass by what I believed to be ob- 
 vious error for the sake of having the conference at all times pleasant. 
 No person in the world despises the attitude of the death's head at the 
 feast more than I do. No person, I am sure, within the sound of my 
 voice feels the elation that I feel at hearing what has just been uttered 
 upon this forum, but, as I say, we are discussing these things now for the 
 common good and let us get our bases so we will understand each other, 
 not only for this exigency but for all time in the future. 
 
 I take the two arguments presented by these two very able gentlemen, 
 for whom I have the most profound personal respect, as well as for their 
 
THE CENTRAL STATES CONFERENCE 79 
 
 qualities of mind and general intelligence covering the subject upon 
 which they speak, but I find the logic in the argument of Mr. Thorn to be 
 that on account of the regulation which has not been centered properly 
 by the states of this union that investors are timid and that the great 
 operation of providing means of transportation in this country, almost if 
 not altogether, at an end, because investors, frightened away in their 
 timidity refused to put up the money necessary to carry on this great 
 public function, now in private hands, and I read the argument of Mr. 
 Muir who says that in fifteen years the ownership in the railroads have 
 increased and become more generally diffused to the extent of from one 
 hundred thousand investors in 1901 to six hundred thousand investors 
 in 1915. (Applause.) 
 
 And I listened to the figures given by our friend Clifford Thorne, 
 in which he challenges these very able gentlemen that preceded him and 
 followed him to deny, and I see the reason why the investors' circle is 
 rapidly being extended, and I indulge the hope that they will be in per- 
 fect justice so treated by the government of the United States that it will 
 be for a long time to come as fruitful a source for investors, in the future 
 as it has been in the past 15 years. (Applause.) 
 
 I should like to refer to what I might call the complaint of Mr. Mufr 
 with regard to the actions of the brotherhoods and the alleged inactivity 
 of the investors in railroad stocks and their securities. He says, and I 
 quote his own language, "that the giant should not exercise his power 
 tyrannically, that these brotherhoods never should have forced the govern- 
 ment of the United States into the position which they did." And that 
 the only reason they did it was because the investors, six hundred thou- 
 sand strong, as against their four hundred thousand strong were un- 
 organized, that they had not learned the benefit of organization, while 
 these men had thrown in a dollar here and a dollar there, not steadily, 
 but organizing all the time, so that they possessed the economy of con- 
 centrated power of demanding things from the government that the rail- 
 road investors could not demand. 
 
 Now, as I say, not wishing to animadvert to the statements in a 
 manner that would be offensive, I stand here for the purpose of broad 
 truth to say there never was as compact an organization industrially, 
 politically and financially as has been the organization of railroad execu- 
 tives. (Applause.) Need I refer to the fact that for years and years 
 they absolutely dominated the legislatures of the various states? Could 
 I sit here in the presence of gentlemen that I know and name, name after 
 name, not that represented them as Mr. Muir said in a narrow way and 
 openly, but as a part of the perfected political organization that existed in 
 every typical railroad state in the United States? And need I call atten- 
 tion to what transpired in my own state, and that for over twenty-five 
 years fought the passage of the law conceded today to be as just and 
 necessary to the transaction of the railroad business and the administra- 
 tion of justice as the law abolishing the rule of fellow-servant, fought for 
 for twenty years and fought against by the lobby of the railroad com- 
 panies? Need I enumerate the many states where mens' names have 
 gone down as railroad governor? Need I read through the great list of 
 men whose actions won them the title of railroad senators in the Senate 
 of the United States? And I want to state here again, for the purpose 
 of elementary truth, that they have been organized more compactly, with 
 greater force and a greater means of carrying on their objects on the 
 field of industry than they were even in the political field or in the 
 field of finance. (Applause.) 
 
 I expect later to refer, perhaps more specifically to those things that 
 ought to animate our ardor as Americans today in bringing about the 
 solution of these questions that seem to be closer to us, and I might say 
 that one of my reasons for being here today is because I believe the 
 
80 THE CENTRAL STATES CONFERENCE 
 
 railroad operators fatuously and without weighing all that it means to 
 the people of the United States and for our future are taking a wrong 
 attitude, to consideration of which I believe is the primal right and the 
 primal reason for our being here today, as I understand it, and it should 
 be taken into consideration that the railroad companies of this country are 
 a part of the armed forces which seem to stand ready in the various states 
 to do away with the civil processes in these disputes, that seem to be 
 stronger than the action of civil officers, as has been demonstrated in 
 state after state of this union. To illustrate that, may I say that the 
 Pennsylvania Railroad Company has armament enough and potential force 
 enough to use those armies to overthrow a sudden effort upon the part 
 of the militia of Pennsylvania to subjugate or master a situation which 
 they might be called upon to master. I give you that simply as one inci- 
 dent, as one great truth that we ought to consider in leading up to a con- 
 sideration of the subjects that we have before us today. 
 
 Now, my friends, I may not agree in all that my brother Lee has 
 said; no more do I agree, as has been expressed here, with what my 
 brothers Thorn and Muir have said, but I shall try to give my experience 
 as an American citizen and I believe that I can be excused for the same 
 amount perhaps of personal reference as the other speakers have very 
 properly indulged in. 
 
 I never was a member of a labor union. I never belonged to a craft 
 in which there was an organization. As a practicing lawyer for thirty 
 years, I have been the general attorney for public utility corporations as 
 well as steam railroads; and certainly nothing that I say here today, I 
 hope, can be thought to eminate from any angle that had its origin, either 
 in personal interests or in an education along lines that has a tendency 
 to make a man's thought run in a given direction. 
 
 Broadly speaking, every human being has the impulse of freedom; 
 every charter of right wrung from every tyrannical ruler in the history of 
 the world had it for its very foundation stone. Thoughtful men see no 
 difference in the processes by which one man may be enslaved or im- 
 peded in the operation, if you could call it that, of his own self expression. 
 Whether a man stood over me with a whip in his hand and compelled me 
 to perform a designated task, or whether another had been so circum- 
 stanced, either through his own efforts or something fortuitous, as to give 
 him the control over what I needed in order to make my living and leave 
 me in fear that I should starve or would not have the competence to raise 
 my children or spend perhaps my old age in poverty, thus preventing my 
 giving expression to my higher self, makes no difference to me or any 
 other reasoning man. 
 
 Many of us, one way or another, have won our economic independ- 
 ence, but great bodies of men fail to do so, not through the fault of any 
 person living at that particular time, but perhaps through the fault of the 
 institutions, of the false education, if you will, and other circumstances 
 over which they had no control. 
 
 These men banded together in the early days of our republic and 
 started the Genesis of the labor unions. The issues which confront us 
 today have as their chief proponents, or at least all persons as a class or as 
 a mass upon one side of the question. Briefly stated it was the effect of 
 men by combining together to secure that degree of economic independ- 
 ence that they could not secure one by one. 
 
 The keystone of their organization is the right of collective bar- 
 gaining. Please get that word, if I am to transmit my thought to you, 
 the right of collective bargaining. Not something handed to them by 
 other than that means, not something handed to them because they con- 
 vinced some person higher in authority that they ought to have it, but 
 the right of collective bargaining means in its last analysis the right to 
 
THE CENTRAL STATES CONFERENCE 81 
 
 carry on the production of the world co-operatively by those who produce 
 the wealth of the world. In other words, it is the denial of the existence 
 of a master class or of a superior order. It takes, if I understand it 
 properly, into consideration that brainpower necessary to plan, as dis- 
 tinguished from the brawn and muscle necessary to execute. It takes into 
 consideration as well as those two factors the element of distribution 
 under which railroads might properly come, and the right of the em- 
 pioyed to demand the right to be compensated for the very great service 
 which he renders to society. 
 
 Those organizations have grown until we find today presented in its 
 highest development the idea that I have tried to express here in the four 
 brotherhoods, now contending before the country for the right to work 
 but eight hours a day. 
 
 Now, for the purpose of this little argument, I am going to strip 
 this question of everything except the eight-hour principle. I am going 
 to give my conclusions and give my voice for what it is worth. 
 
 The basis of the demand for the eight-hour law has been expressed 
 by the president of one hundred millions of people and, on a direct issue, 
 has been ratified by the greatest majority ever given a man that ran for 
 president. (Applause.) He says that society is insistent in its demand 
 that no man be forced, in order to earn a living, to work over -eight hours 
 a day. Our government has acted upon it nationally. Thirty state gov- 
 ernments have acted upon it. Every society of scientific research along 
 industrial and social lines that has given it any consideration, every inde- 
 pendent society in the United States or Europe has declared for the eight- 
 hour day upon this basis, perhaps with a slightly different wording but 
 practically in the language of the president of the United States, that the 
 physical well being, the opportunities for mental development and recre- 
 ational needs. of man require that he should not be compelled to work 
 over eight hours a day. Some gentlemen have grasped this idea awk- 
 wardly, it would seem, so far as the basis is concerned and believe, it 
 would seem, so far as the basis is concerned and believe, or say they be- 
 lieve, it depends upon a question of bodily fatigue that breaks down the 
 human economy or of monotony which has an evil effect upon the nervous 
 system and upon the operations of the mind, and it is to conserve in that 
 narrow way that this proposition is laid down. 
 
 Far from it. There is something greater even than life, and that 
 is the opportunity for mental development, to engage in all of these 
 operations and personal enterprises that make for the joys of life and 
 that raise us from the level of the dumb brute into that realm of reason- 
 ing and thinking that God Almighty intended all of his children to dwell 
 in. (Applause.) 
 
 And so the happiness of mankind was to be conserved, his recre- 
 ational needs demanded it. And so we find in the year 1916 four great 
 organizations that have attained their economic independence. Why do 
 I say that? 
 
 The President of the United States could not command me tonight to 
 endeavor to drive a train to Kansas City, to my home. I do not know- 
 how to do it. I would lose my life and I would cause the wreck of 
 other men's lives. The President of the United States could not command 
 me today to take a shovel and pick to dig a ditch, although I am better 
 able to do it than many of the men I see performing that operation in the 
 streets of our cities. Why? Because I will it otherwise. I have attained 
 my economic independence. I am not afraid of where my breakfast is 
 coming from in the morning. I have mapped out my whole life, and so 
 far successfully, as you have. I am engaged not in work but in the 
 practice of a profession through which I believe at least I can give ex- 
 pression to that which I believe to be for the service of mankind and which 
 I wish above all other things to do. 
 
82 THE CENTRAL STATES CONFERENCE 
 
 Now then, these men have reached the point where they can say 
 no. And why? Because they in numbers have reached that point where 
 the railroad operations of this country would be seriously impeded, if not 
 absolutely suspended, in case they withdrew from the employment of 
 those railroad companies in a body. They simply have gone through 
 twenty-five years of strife, in which there was bloodshed, in which there 
 was sacrifice, in which there was disgrace for many men, in which there 
 was breaking up of homes, in which finally a God-given intelligence 
 seemed to shine out and teach them that nothing in this world was ever 
 gained by violence, by marching on through the path of education they 
 felt that brainpower and strength of purpose were the first qualities in 
 an immense organization of that kind that absolutely had the power in 
 itself to demand the eight-hour day upon the basis that all organized in- 
 telligent society says a man is entitled to in order to make a living in this 
 great world of ours. 
 
 Now, I am not going into the technique of what happened that 
 brought that question so sharply before this country, but I do want to 
 say with as warm a feeling of kinship to the great railroad executives 
 of this country, to whom we owe so much, as I eve'r felt towards a human 
 being in my life, that great care in this situation ought to be given to 
 what happened leading up to this controversy. 
 
 The President of the United States spoke to those gentlemen spe- 
 cifically and locally, but generally to all the people of the United States, 
 that the eight-hour law was not arbitrable. Some check must be put, 
 must it not, upon the activities of men whose interests might perhaps 
 clash, whose personal interests are very likely to clash? In other words, 
 it is very difficult for a man to be a judge in his own case, to pass upon 
 a question that might seriously affect his own future and his own fortune. 
 
 Generally speaking, society comes to viewpoints as a whole in a N more 
 or less abstract manner. We did away with the question of serf and 
 master among the bright peoples of the world; and in the tumult of soci- 
 ety and in rivers of blood we did away with the idea of chattel slavery 
 among any kind of men upon the face of our own continent. It confis- 
 cated property, it affected the existing order and age-old institutions, but 
 when the thought of the world emerged to that point, it was unjust and 
 it had no basis for its being and it had to pass to a new order, to 
 the higher and the better one to which we must always aim and to which 
 the world must attain, always and always. 
 
 And so the President of the United States told these gentlemen in a 
 most solemn manner that that is not arbitrable. And what does he have 
 behind it? Society and the world have found that the physical well 
 being demands that a man should not work longer than that. That goes 
 into the very right of life itself. Where is the authority that can tell me, 
 a free man, that I must do something that will undermine my health, or 
 make my days in the land shorter than what God and nature perhaps 
 intended that they should be? What power is there in railroad execu- 
 tives, in congresses or in supreme court judges to so control my life as to 
 tell me, if I have the power to do it myself, the length of time that I 
 shall toddle my baby on my knee or look into the eyes of my good wife 
 at home? What power is there in railroad executive or official that can 
 tell me, if I have the power in myself, that I shall work longer to make a 
 living than that time which gives me an opportunity to develop my own 
 mind and to look after the education of my own children, and I leave out 
 of consideration altogether my recreational needs, which are as necessary 
 to life and happiness as the first two, perhaps, fully. Where is the 
 authority? 
 
 I say that in a free society there can be no such authority. I say 
 that our education amounts to nothing unless our minds are so sharp- 
 
THE CENTRAL STATES CONFERENCE 83 
 
 ened and our viewpoints so changed from the past that we can meet with 
 those brothers of ours, engaged in the production of wealth, and by our- 
 selves and without any compulsion lay down those rules that conserve life, 
 mental development and happiness, in the production of wealth in that 
 industry in which we are all engaged. 
 
 Now, then, it has been said that this was a matter for arbitration, on 
 the part of the executives. You are met with the stonewall, the unde- 
 niable, basic hypothesis that no man will arbitrate the length of his 
 life, his own health or his own mental development, and you are brought 
 face to face with it in an industry not only in which four hundred and 
 fifty thousand men are engaged and I say without offense to the execu- 
 tives, if I were going to determine whether or not a thing was right and 
 just in an industry, I would take the 450,000 that operated the trains 
 before I would take the railroad executives, much as I agree with the idea 
 that they have performed their jobs well, because I believe that there is 
 higher intelligence in numbers, and I believe the greater experiences of a 
 great number of honest men, when they can give voice to the experience 
 that they have had are better than those of a small number, so that if we 
 are dealing with them, not as a matter of compulsion, but as a matter 
 of co-operation, I would call upon the 450,000 before I would the 175 or 
 whatever the number is. 
 
 Arbitration upon such a subject, therefore, is impossible. When the 
 organized thought of free society says that it is impossible, then it is im- 
 possible of performance, no matter what a few gentlemen may think 
 about it. 
 
 Much has been said about compulsory investigation, a sort of com- 
 pulsory arbitration. May I say for the purposes of this debate that we 
 are having here and for the purpose of a better understanding perhaps, 
 that that has been very well tried out under the Lemieux act in Canada, 
 and the part that would make it operative in the present emergency has 
 absolutely failed to work out in Canada. The Lemieux act provides that 
 in all public utilities, such as steam, urban and interurban railways, and 
 in the coal mining industries, where there is a dispute between the em- 
 ployers and the employed, that it should be submitted to a public investi- 
 gation and that pending that investigation it shall be illegal for the em- 
 ployers to lock out their employees, or for the employees to go upon a 
 strike. 
 
 Drastic penalties were attached to the act for violation of any part 
 of it. In a coal mine strike many men were confined in jail for giving 
 sustenance and assistance to men that went out on a strike, as well as the 
 actual strikers in this particular coal industry. And when it came to the 
 same proposition with the employes of the Grand Trunk Railway who 
 allied themselves, that the strike was called regardless of the law, and the 
 gentleman that wrote that law and testified before the commission on 
 industrial relations, Mr. W. L. McKenzie, said there would not have been 
 jails enough in the Dominion of Canada to hold those men that violated 
 the law, claiming that no power existed in the government to make them 
 work if they didn't so desire to do. 
 
 Now, what is the use of talking about transplanting that law to this 
 country that has for its underlying principles the right of personal liberty 
 as expressed in the American declaration of independence and attempted 
 to be conserved in every line of the constitution of the. United States and 
 the spirit which is supposed to run through all the laws of Congress and 
 all the legislatures of the United States of America. 
 
 If a man can be compelled to work for one hour, logically he can be 
 compelled to work for a week or a month or in fact for a lifetime. It is 
 opposed to every fundamental principle of our government, and whether 
 Congress passes it or not, it cannot be operative. 
 
84 THE CENTRAL STATES CONFERENCE 
 
 Now, I want to call attention to one other thing as indicative of the 
 state of the nation today upon these industrial subjects. Did you hear Mr. 
 Lee say from this platform that they were going to abide by any decision 
 of the Supreme Court of the United States? Now, mark you, I might 
 have serious controversy with gentlemen that hold certain views; you 
 may have, too, but we should not be like the ostrich, bury our heads and 
 observations so that we could not look at the facts. 
 
 Do you recall that on the day the hearing was called on the Adam- 
 son law in Washington, that a body of laborers representing more than 
 2,250,000 actual workers, with their kin and dependents amounting to 
 more than 6,000,000 of the organized wealth producers of this country, In 
 solemn convention declared that if injunctions were issued or processes 
 taken by the courts to take away what they considered their rights as 
 citizens, that they in a body would violate the law, let the consequences 
 be what they may? Do you see what is going on in this country today? 
 If you do, then you have the same serious thought with reference to the 
 perpetuity of our institutions without the most severe shocks that I have 
 as I speak to you today. 
 
 Out on the Pacific Coast was committed the most abominable crime 
 almost in the whole history of this country. Scores of innocent persons 
 were crippled and wounded and nine human beings hurled into eternity 
 by the explosion of a dynamite bomb; five men arrested and put upon 
 their trial; meetings being held all over the United States declaring that 
 those men were selected on account of the fight that was being made by 
 the chamber of commerce against organized labor and that they were 
 absolutely innocent and that they were picked out because they were 
 heads of labor organizations and agitators along what might be called the 
 extreme ideas of labor organizations, and the facts covering that abomi- 
 nable crime were obscured. Perhaps men that ought to be restrained, if 
 their lives not taken by the law, will escape scot-free; and in any event 
 thousands and thousands of our fellow citizens will begin to doubt 
 whether the law was made to apply equally to all men. 
 
 I recall the case in Seattle, Washington, where the president of the 
 largest shipbuilding company upon the Pacific Coast, testifying before* 
 the Commisison on Industrial Relations, declared his opposition to the 
 Clayton act which removed labor unions and fraternal organizations from 
 the operations of the Sherman anti-trust laws in such vigorous language 
 that he declared against all laws and all governments and all executives, 
 declared that a revolution was coming on, and that he was ready to join 
 in that revolution, a man of great intensity of purpose and of tremendous 
 activity and energy upon the Pacific Coast. I follow along and I say that 
 they have the right to declare that they have the right of free speech, to 
 bring about better conditions in the lumber camps in the northwest, and 
 these men, and here is a disgrace of modern conditions, are attacked by 
 men under authority of law and mowed down by bullets and their lives 
 taken. I am not here to pass upon the rightfulness or the wrong of the 
 prosecutions that may follow or the arrests that were had there, but I do 
 figure from cause to effect and I say as an American citizen that when 
 anarchy is proclaimed in that way that we must reap what we have sown. 
 
 We have these contentions going on all over the United States and in 
 every place the efficacy of the law being attacked by a large number of 
 people. If an official in some instances performs his duty in a way that 
 he thinks is proper and right, but which seems to conserve the interests 
 of what might be called the weaker classes of the producers of the country 
 he is attacked as a demagogue. (Applause.) His facts perhaps are not 
 disputed. His conclusions drawn from facts are not questioned at all. 
 
THE CENTRAL STATES CONFERENCE 85 
 
 But he is personally attacked. Again, an officer attempting to uphold the 
 law, to see that justice is absolutely conserved and the law absolutely 
 enforced, instead of having his acts questioned and brought into the 
 forum perhaps of public discussion, if proper in a campaign or otherwise, 
 he is attacked as an enemy to labor or an enemy to the down-and-out, the 
 producing class a tyrant or such names as that applied to him. So we 
 must look at these things just as they are. 
 
 I said that was the greatest crime in my recollection at San Fran- 
 cisco. I withdraw that and say that it was not as great as the crimes 
 committed by the industrial organization in the fields of southern Colorado 
 in the persons of the operators of those coal mines out there. I speak 
 now outside of the realm of controversy or anything that our commission, 
 the congressional committee or the courts of Colorado found, 
 but of how the supreme court of Colorado, denounced those 
 officials and the operators that were in league with them as potential 
 anarchists that were disintegrating the very fabric of the state of Color- 
 ado. I take the awful butchery of those men, women and children in cold 
 blood, unarmed men and helpless women and children, and the application 
 of the torch to burn down the only habitations they had upon earth, and 
 I take back what I said about San Francisco, and I say that that situa-. 
 tion in Colorado more than paralleled, it absolutely made it fade away in 
 point of inherent infamy and coldbloodedness. 
 
 Now, I say these things to you, my friends, because I am trying to 
 lead to what I believe to be the underlying thing that is causing the con- 
 tention over this Adamson law, down to the present time. Consciously or 
 unconsciously, it is the grappling for power, the dislike upon one side 
 when it holds the power to give it up, and the contention of many other 
 men that they ca.nnot be free and cannot live their own lives unless they 
 have equal power with those who would deny it. 
 
 I say that the most significant thing about this whole situation is the 
 attitude not only of these brotherhoods but of organized labor in this 
 country towards the courts. They are absolutely paying no attention, do 
 you know it, to the highest judicial body in the world. The contest in 
 court is between the railroads upon one side and the government upon 
 the other. There is no primary student of the law that did not believe 
 it was the law that the subject could not sue the sovereign, that no man 
 could sue the government of the United States. The right of a state to 
 sue the government had .to be put into the constitution by an amendment 
 after the original document was drawn. And here are the railroads 
 suing the government of the United States to prevent the operation of a 
 criminal law that has for its object the conservation of life of human 
 beings in the United States of America. 
 
 Think for a moment! Consider what that means! The pleadings, 
 and I have seen many of them, filed in these cases so far as the heads 
 of these brotherhoods are concerned are on printed form, sent around to 
 them by the gentlemen representing the government of the United States 
 in these legal controversies. They signed them as a matter of form. 
 And I want to say to you here today from not only the experience that it 
 has been my privilege to have in an investigatorial way with these gentle- 
 men, but from the comments and observations of those that they would not 
 exchange the power that the executives of the railroads may have over 
 their lives for power expressed through the supreme court of the United 
 States. They have reasons for doing that. They are arguing that the 
 judges of the supreme court have not been educated along industrial or 
 economic lines. If their lives are to be controlled they will take their 
 chances with those men, many of whom grew up side by side with them in 
 the railroad industry. They point to the fact that it took the supreme 
 court ten years to come to the point of view, that they have reversed 
 decisions to come to that view, that it was in the purview of legislation to 
 
86 THE CENTRAL STATES CONFERENCE 
 
 conserve motherhood and perpetuate a virile and healthy race in declaring 
 unconstitutional at first that law prescribing the hours of women and the 
 circumstances under which that labor was to be employed. They point 
 to the fact that the most just law conceded by the entire country today, 
 that of the right of levying of a federal income tax, was denied for years 
 and years by the supreme court of the United States. 
 
 They point to the fact, and it is a significant one, and these men, 
 as I say, are being educated along these lines, that such men as Frank J. 
 Goodnow, at present the president of the John Hopkins University, the 
 greatest living authority on constitutional law, who was called out to 
 map out the organic law of the new republic of China, a conservative, and 
 many eminent men, among whom is a past president of the American Bar 
 Association, a member of the faculty of the University of Columbia, and 
 many others, all join in saying that regardless of anything that might 
 be dishonest in spirit or action, the members of the bar whose training as 
 lawyers lead them away from the economic thought that the great masses 
 of the people think are necessary to the working out of the solution of the 
 problems that have to do with the every-day lives, and therefore, as these 
 great authorities say, look at them with the viewpoint of the few or those 
 who are perhaps exercising the fruits of special privilege, are too often 
 backed by the courts in this country in controversies out of which grow 
 purely social or industrial results. 
 
 Now, none of us ought to have a word to say unless perhaps some 
 remedy might be suggested. I want to say that, of course, I don't hold 
 all of the views that I have expressed here about the courts, although I 
 hold many personal ones. . I believe that the distrust of the courts largely 
 comes from the conduct of the bar itself. I am not pretending to be a 
 curist here. As I say, I represented corporations and railroads the 
 greater part of my life and I must confine myself for the moment of 
 course, not only with the technicalities of the situation, but it is palpable 
 that attorneys can be hired. Their first function was, of course, in the 
 courts of the country and in those places where it took a presentation on 
 the part of some person learned in the law to have a proper adjudication 
 of disputed subjects, but the bar has gone much farther than that. It 
 has gone into the realm of legislation and there has never been any pro- 
 posed legislation in this country in my time that the very best of the bar 
 did not hesitate to take the side of the question that was at least uneth- 
 ical if not morally and subsequently legally wrong. In other words, it 
 has become the practice for men, justifying themselves as making a living 
 and receiving fees for it, to represent before legislative bodies, com- 
 mittees of the legislature, and even in public speaking campaigns, princi- 
 ples to which they don't give their mind and thought and for which they 
 act as mere paid advocates. When these men see these same persons being 
 elevated to high positions upon the bench they naturally have a distrust 
 of the thought that any part of their well-being shall be given into the 
 hands of the courts. 
 
 Now, the remedy, as I take it, is this: I want to say that I am 
 amply repaid for crossing a great part of this country to hear the speech 
 that was made here today. I refuse to believe that a railroad engineer is 
 not as patriotic and as great a lover of American institutions, the engi- 
 neers as a class, as lawyers are. I would be untrue to the best that ever 
 animates us today if I made other reference to the men here that have 
 come up from the ranks, if I say they are not as patriotic as I am or as 
 any engineer was. 
 
 Now, I was simply going to say that my solution would be this, that 
 the law of the land, aside from any technicality that can be imposed by 
 any lawyer, represents now the thought of every society that eight hours 
 is the basic time for a day's work. I don't care what the necessities of 
 the committee were that drafted that bill in order to make it effective. 
 
THE CENTRAL STATES CONFERENCE 87 
 
 We know, and the railroad executives know, that the basis of it was in- 
 tended to be an eight-hour day. Now, we are not going, as a people I 
 mean, to rush into praise hysterically. If it becomes necessary to add 
 to the revenues of the railroad companies, we will do it. When I say 
 "we," I mean, of course, the government will do it. It has always treated 
 them fairly. I care not what any man may say against the government 
 as a whole, it has generously and wisely served and protected all of its 
 citizens, and that includes all investors in railroad stocks and securities 
 as In all other securities. It can be depended upon to conserve their 
 interests in this crisis. Therefore, I believe that the railroad executives 
 of this country, and I am treating them now as a party, are about to get 
 together and put the eight-hour law into operation. If they don't, en- 
 forced arbitration can never obtain in a free organization. Under our 
 organization, executive, judicial and legislative, hours of labor or condi- 
 tions of labor can never be imposed upon a man by any court proceeding. 
 
 Facing the facts then, let us agree upon the eight-hour day. Let us 
 provide the means, if necessary it be, to pay for that eight-hour day. And 
 if these men who operate the railroads are so blind to the tendency of the 
 times, might I be a little harsher and say it is so, regardless of the law of 
 the land, and if it stands out against this just demand then let Congress 
 pass a law that will give the government of the United States the authority 
 to take over the railroads, enforce the eight-hour law and hold them in 
 status quo until these gentlemen are willing to abide by it. (Applause.) 
 
 Chairman Murphy: Probably it will not be my privilege again to 
 address any extended remarks to the delegates in person and I shall use 
 this opportunity to thank them, as well as the notable men who have 
 spoken before the Conference, for coming to Evansville for this meeting. 
 Further, I wish to say the Conference has proved, completely and satisfac- 
 torily, the soundness of the idea, originating in the Evansville Chamber 
 of Commerce, which contemplates the broadest and fullest discussion of 
 every vital public problem in regional meetings to be held here, there and 
 everywhere in this great nation. Business men find it difficult, often im- 
 possible, to leave their affairs for the time required for a trip of several 
 thousand miles and our Conference, with its remarkable program, if 
 staged in New York, Washington, New Orleans or Minneapolis, would have 
 attracted very few of the men who have come to Evansville. Contrawise, 
 the men of affairs of those distant sections could not spare the days neces- 
 sary for the journey here. 
 
 If, however, our plan is developed logically and is adopted generally 
 throughout America, there can be no doubt that transportation questions 
 and all disturbing national problems will receive more intelligent attention 
 and be more sensibly interpreted and wisely unriddled than if their un- 
 raveling and solution is left wholly to politicians. In short, we want the 
 business men of the United States to determine what legislation should 
 come out of Washington when that legislation directly or indirectly, 
 affects business. (Applause.) 
 
 This point -has been developed in the admirable addresses given here 
 yesterday and today. It was touched upon in the speech of Mr. Walsh, 
 with its brililant exposition of the side of the great public, and in the 
 address of Mr. Lee, who so ably presented the case for the railroad 
 brotherhoods. Likewise, the logic of our plan had verification in the 
 statements of the sagacious counsel for the railroads, Mr. Thorn, and in 
 the illuminating addresses of Mr. John Muir, Clifford Thome and Mr. 
 Leigh. 
 
 I am vain enough to think we have written a few pages of history in 
 Evansville this week, for I, believe we have set in motion forces that will 
 some day have a tremendously potent influence for good in the affairs of 
 our states and of our nation. If sectional Conferences of the proper 
 scope, broadness and worthiness follow the Evansville Conference, as our 
 
88 THE CENTRAL STATES CONFERENCE 
 
 great president, Woodrow Wilson, earnestly desires and as every business 
 man should desire, there will be an end to improper legislation directed 
 at commerce and industry. Constructive, reasonable, broad-minded laws 
 will replace the narrow ill-timed, often vicious legislation of a day when 
 only politicians framed the laws. (Applause.) 
 
 May I read one paragraph from our program: 
 
 4 'The Evansville Plan contemplates finding the real solution of trans- 
 portation problems in ascertaining the concensus of business opinion by 
 means of regional meetings, which business men can and will attend. 
 These conferences must be representative of every angle of the question, 
 and in their breadth and scope attract the best thought of the nation." 
 
 I think you will admit we have attracted some of the best thought 
 of the nation here. (Applause.) 
 
 A new Mark Twain story is cast in the setting of Hartford, Conn., in 
 the days when the great humorist lived there and had as a fellow resident 
 Mrs. Harriet Beecher Stowe. One winter's morning, following an un- 
 precedented snow storm, akin perhaps to the one we have just had, which 
 almost house-bound the population of Hartford, Twain was observed 
 struggling through the drifts, fighting hard to make headway, but vigor- 
 ously puffing at a short cob pipe. He carried a large wooden shovel and 
 an iron spade. Asked by a neighbor whither he was bound Twain an- 
 swered : 
 
 "I've just had a note from Mrs. Stowe saying her husband is under 
 the weather. I'm going around to dig him out." (Laughter.) 
 
 The snow fall under which the shippers and the public, the railroads 
 and the investors find themselves is unprecedently deep. The difficulties 
 that beset them are enormous. 
 
 We have here as the last speaker on our set program a man who 
 ought to be able to dig out some truths for the shippers and the public. 
 He is a traffic expert and is regarded as one of the best qualified men in 
 the United States to present the view of the shipper. 
 
 I have the pleasure of introducing Mr. J. M. Belleville, the traffic 
 manager of the Pittsburg Plate Glass Company, who will talk to us on 
 "Mutual Interests of Shippers and Railways in the Transportation Prob- 
 lem." (Applause.) 
 
THE CENTRAL STATES CONFERENCE 89 
 
 Mutual Interests of Shippers and Railways 
 in Transportation. 
 
 By Mr. J. M. Belleville, 
 Traffic Manager of the Pittsburgh Plate Glass Company. 
 
 Mr. Chairman, ladies and gentlemen: I am afraid our friend Murphy 
 has gotten himself into some trouble by making the comments that he has 
 about me being an expert and going to give you a treat. I fancy that after 
 I have talked you will see that instead of the kind words that he said he 
 should have remarked that this afternoon last of all came Belleville. 
 
 I feel, Mr. Chairman and gentlemen, that I owe an apology for pre- 
 suming to come here in answer to Mr. Murphy's very cordial and pressing 
 invitation, knowing as I did know how little opportunity there was for 
 preparation. I had that feeling grow upon me and become strongly en- 
 trenched in me as I sat here yesterday and today listening to the very elo- 
 quent and comprehensive and enlightening addresses, addresses that de- 
 note very, very great thought. I agreed to come, however. I didn't agree 
 to come so much for what I could give to you as for what I could get 
 from you. 
 
 The older I get, the more that I study these great problems of trans- 
 portation, the less I feel that I know and I always find in these confer- 
 ences where both sides are presented and presented forcibly and as com- 
 prehensively as they have been today and yesterday that I have always 
 learned something that is of value and I expect to keep on going to that 
 school, which is the best school after all, as long as I am able to keep upon 
 my feet. 
 
 I began to think, however, this morning, or rather yesterday morning 
 when Mr. Thorn was talking and later when Mr. Walsh was speaking that 
 possibly my alleged brains were not working just right. I didn't, as those 
 gentlemen did, read the address of Mr. Thorn's and Mr. Leigh's and Mr. 
 Muier's in the morning newspapers, but I heard them, and I must confess 
 that I could not find anything in those addresses that indicated they con- 
 demned governmental regulation. Of course, we all know that the rail- 
 road men of the old school who were brought up to believe the railroads 
 were private property did resent anything like regulation and despised it. 
 fc>o, for that matter, did the shippers. But I think all up-to-date railroad 
 executives and railroad managers of today fully recognize that regulation 
 has come, and that it has come to stay, and that proper regulation is a 
 good thing and does a good work. 
 
 I think we all want to remember, however, that the men who passed 
 the regulatory acts were men, and that the men who were administering 
 the acts also were men; and we also want to remember that human na- 
 ture is prone to err. Possibly there may be some mistakes in the law 
 itself that need correction. Possibly there are some mistakes in the ad- 
 ministration of it which need changing, but I believe that will all come 
 about. 
 
 I wish upon this occasion that I were an orator and that I possessed 
 the command of language of the chief magistrate of this country and that 
 I were gifted with the rugged eloquence and forcefulness of our former 
 President Roosevelt, that I might drive home to you forcibly the very 
 grave condition of the transportation problem as I view it, and impress 
 upon you forcibly the crying need of the hour for serious thought and 
 forceful attention. 
 
 These are very troublous times and it behooves all good citizens, and 
 especially all live business men, to want to heed and emulate the railroad 
 
90 THE CENTRAL STATES CONFERENCE 
 
 warning with which we are all so familiar "Stop! Look! Listen!" We 
 are enjoying now a period of the very greatest prosperity this country has 
 ever known and one for which our transportation facilities have proven 
 absolutely inadequate to meet the necessities of the public as they exist 
 today, to say nothing of meeting that increase which is so sure to come. 
 It is idle for us who are on the shipping side to condemn the railroads 
 of bad management, to say that they ought to have foreseen the boom in 
 business and prepared for it. The late James J. Hill, with a prophetic 
 vision, nearly twenty-five years a*go, astounded the business world with 
 the magnitude of the sums which he estimated it would be necessary for 
 the railroad systems of the country to spend in the next five years in im- 
 proving their facilities. The results have proven his estimates to have 
 been correct, underestimated rather than overestimated. 
 
 It is equally idle for us to say that but for the stock-jobbing schemes 
 and graft on the railroads they would have been able to meet the necessi- 
 ties of the times. That is water which has gone over the dam, and the 
 facts regarding those transactions are only valuable to guard against the 
 repetition or recurrence of them. It is a condition which now confronts 
 us and not in any sense a theory, a condition which we must admit that 
 the shippers as well as the carriers are responsible for, a condition such 
 as thfs country has never before known, a condition calling for the serious 
 thoughts of the very best minds of the business world, that we may solve 
 the problems of the hour, a condition which above all else calls in very 
 loudest terms for co-operation. 
 
 A demand for efficiency has swept over the country during the past 
 few years and has pervaded every line of business enterprise. Real up- 
 to-date efficiency in my humble opinion is absolutely impossible without 
 real up-to-date co-operation, and especially is this true in connection with 
 the transportation problem. You, gentlemen, probably all are familiar, 
 many of you, and certainly all the ladies, somewhat familiar with Holy 
 Writ, and you know that St. Paul, in his letters to the early churches, 
 gave a great deal of fatherly advice. I can't say that I agree with all of 
 the advice given in those letters. For instance, his injunction to Timothy 
 to take a little wine for his stomach's sake and his oft infirmities, wouldn't 
 do for everyone to put into effect. I do heartily agree, however, with his 
 advice given in his letter to the Philippians. Lest you may question my 
 knowledge of Holy Writ, I will give you the chapter and verse. It is the 
 fourth verse of the second chapter of Philippians. I want to commend the 
 advice given in that text to every interest that is represented here, rail- 
 roads, manufacturers, shippers, laborers and law-making bodies. The 
 text reads: "Look not every man upon his own thing but every man also 
 upon the things of others." Which is only another way of stating the 
 golden rule, which rule a man said has been more honored in the breach 
 than in the observance. May I say that if in the past there had been 
 more looking on the things of others, both by the carriers and by the 
 shippers, there would not have been a need for so many rigid laws. How- 
 ever, that again is water which has passed over the dam. A consideration 
 of our mistakes is only valuable if we use them to prevent a repetition 
 of th.e same kind of trouble. 
 
 Today, the manufacturers, shippers, farmers and merchants of the 
 country are offering to the railroads a volume of tonnage which is the 
 largest the country's history has ever known, and the transportation car- 
 riers' resources are absolutely inadequate to meet the condition and de- 
 mand. Practically all of our railroads are short of power, short of cars, 
 short of trackage, short of labor, possibly I should say short of money, 
 although that seems to be a very debatable point. I don't believe they are 
 all short of credit. In this situation what do we find? The shippers and 
 the manufacturers are blaming the railroads. The railroads are blaming 
 the shippers. Each interest looking on their own things and not on the 
 things of others. 
 
THE CENTRAL STATES CONFERENCE 91 
 
 Now, what is the remedy for the situation? More law? More regula- 
 tory enactment? Possibly we may need something of that kind, but, as I 
 view it, the one weapon that is ready to our hands is co-operation, and that 
 without consistent, intelligent co-operation we shall never get out of the 
 present quagmire but will be permanently engulfed. We need co-opera- 
 tion on the railroads, one with the other, and in that regard we need 
 co-operation in each railroad of the different departments. A good deal 
 of this trouble in this distribution comes from a lack of thorough co-opera- 
 tion between the various departments of the railroads. Then we need co- 
 operation between the shippers and the railroads, and to make co-opera- 
 tion effective it is necessary that each look upon the things of others. 
 
 You will pardon me when I speak of co-operation if I refer to a per- 
 sonal experience of a few years ago, I do so merely to illustrate the point. 
 I referred to the prophecy of the late James J. Hill for the needs of large 
 expenditures on the part of the railroads. The officers of the American 
 Railway Association, being very much impressed with Mr. Hill's views, 
 together with their knowledge that the transportation system as it ex- 
 isted, issued a bulletin a little over four years ago called their bulletin 
 number 10, in which they set forth at length the condition of the 
 railroads, their needs, their revenues, and showed the enormous expendi- 
 tures that they would have to meet, and expressed the view that the rail- 
 roads' borrowing power would not enable them to borrow sufficient funds 
 to meet that emergency. The president of the corporation which I serve 
 was very much impressed with the figures set forth and the statements 
 made in this bulletin. He asked me if I had any means of verifying the 
 correctness of those statements. At that time I happened to be presi- 
 dent of tne National Industrial Traffic League, and I wrote a letter to the 
 presidents of some twenty railroads asking them their opinion in the first 
 place of the correctness of the figures given in that bulletin number 10 
 and in the second place if the figures were correct, what about the ability 
 of the railroads to provide necessary funds, at the same time expressing 
 the desire of our organization for co-operation. 
 
 I received replies to all but two of these letters and they were ex- 
 tremely interesting and I regard them as a very valuable file in my office. 
 
 One of these letters, however, was from a president of a large trunk 
 line, a man of large and varied experience in every department of railroad 
 service. After commenting fully upon the bulletin and expressing his opin- 
 ion as to the inability of the railroads to raise the necessary funds, sadly 
 expressing the belief that government ownership' was the only outcome 
 and concluded his letter with these words: While my views on this sub- 
 ject are no secret, and I frequently express them in public, I have never 
 before so fully put them upon paper. I do so now because you represent a 
 class whose business it is to get all you can out of the railroads without 
 any regard for anything except the temporary advantage for your em- 
 ployers." May I quote very briefly from my reply: "The very drastic 
 measures which have been adopted in the past few years would, in my 
 opinion, never have been placd upon the statute books if there had been 
 proper co-operation and if the railroads and shippers had each exercised 
 a proper regard for the rights of each other. Futhermore, I do not be- 
 lieve that the attitude of the commission towards railroads, of which you 
 naturally complain, would have ever come about had it not been for the 
 utter contempt of the commission by both railroads and the shippers in 
 the earlier years of the commission's existence. I do not at all regard 
 the situation as hopeless, even now, nor can I- for a moment believe that 
 government ownership of the railroads is the only possible outcome of the 
 present situation. I do most firmly believe that the only solution of the 
 problem, which is unquestionably a very serious one, is co-operation be- 
 tween the railroads, a campaign of education. Our organization has been 
 doing good w^ork along these lines during the last four years, and we stand 
 ready now to join with the railroads in co-operative work of the broadest 
 
92 THE CENTRAL STATES CONFERENCE 
 
 character, but to obtain a measure of success in this direction, which is 
 very plainly needed, and which I am optimistic enough to be- 
 lieve is possible, we must have the executives on both sides 
 thoroughly enlisted in the campaign. I should be very glad, indeed, 
 to have an opportunity in the near future to discuss this matter with 
 you personally and to have the benefit of your counsel regarding some 
 plans which we are formulating for co-operative work." 
 
 To this letter I received no reply, and so co-operation failed in this 
 particular direction. I mention this incident, not at all in blame of the 
 railroad executive in question, who is of sterling worth, strict integrity, 
 and very remarkable executive ability, held in the highest esteem, but 
 simply to illustrate the point that just as it takes two to make a quarrel, 
 so it takes two to co-operate. 
 
 I also mention it for the reason that after a lapse of four years 
 with all of the changes that have come during that time, I am still of the 
 same opinion which I expressed in my reply to that letter which I have 
 just quoted. 
 
 That co-operation is valuable and possible was clearly demonstrated 
 in connection with the formulation of weighing rules. As a good many 
 of you gentlemen know the commission conducted under Judge Prouty 
 it was the last work that Judge Prouty did in connection with the com- 
 mission before he went on the valuation board a very elaborate inquiry 
 into the question of weighing of freight by the railroads. They held hear- 
 ing all over the country. At the last hearing Judge Prouty called me to the 
 stand and said, "We don't want to have to go over and digest all this 
 mass of stuff, or pass upon it, to labor for a long time and lay down rules. 
 Why can't you appoint a committee to get together with a similar com- 
 mittee of the American Railway Association and formulate rules for 
 weighing. Anything you can't agree on put it up to the commission." I 
 said, "Judge, that is a very strong order, but we are ready to do our part. 
 I will appoint the committee, but I will give you notice right now that 
 the two interests are tremendously far apart." 
 
 The committee was appointed and at the first session they were just 
 as far apart in the ideas of proper weighing rules as Maine and California. 
 There were over six or seven meetings of that committee held. Each time 
 they succeeded in getting a little closer together. At the seventh meeting, 
 at which I was very fortunate in being present I hadn't been able to at- 
 tend all of them when we got through with the meeting and were ready 
 to adjourn to a dinner we had absolutely agreed on every solitary weigh- 
 ing rule, except a very trifling one of what the tolerance should be, 
 whether 500 or 1,000 pounds. That was the only thing that went up to 
 the commission for arbitration. I mention that simply as showing that co- 
 operation can work even between such diverse interests as the shipping 
 interests and the railroads. 
 
 There is another matter of mutual interests to the shippers and rail- 
 ways in connection with the transportation problem of most vital im- 
 portance, of which I would speak very briefly. It is my sincere belief that 
 one of the most important factors before us in the solution of our present 
 transportation problem is the fullest possible utilization of existing water- 
 ways, and that necessary improvement to these waterways should be made 
 with the least possible delay. We need to make use of our water carriers 
 for the transportation of heavy tonnage and we will need to do so infinitely 
 more when the war is over and we are facing, as face we must, the most 
 bitter competition that this country has ever known. The manufacturing 
 concerns abroad with whom we shall have to compete are using water 
 carriage to the very fullest extent. They have secured the very highest 
 efficiency along that line and in addition to that they have an intensity 
 of co-operation such as in this country is considered a crime and is for- 
 bidden by statute. To meet this high efficiency and perfect co-operation 
 we in this country must avail ourselves of every possible plan for cheap- 
 
THE CENTRAL STATES CONFERENCE 93 
 
 ening our manufacturing costs so we may hold our own in the world's 
 markets. So we must, wherever practicable, move our cheap and heavy 
 commodities, raw materials, by water. 
 
 I can best illustrate this point by a personal experience of my own 
 company, the Pittsburg Plate Glass Company. We have a coal mine of 
 quite large capacity at Creighton, Pennsylvania, about eighteen miles 
 north of Pittsburg. We have a sand digging plant at Logansport, Penn- 
 sylvania, which is thirty-five miles north of Pittsburg. We have two large 
 plate glass factories at Ford City, forty miles north of Pittsburg, and a 
 silica sand producing plant at Camerdell, forty-five miles north of Pitts- 
 burg. All of these operations are on the Allegheny river. We supply our 
 factory at Ford City with coal from our Creighton plant and with sand 
 from Logansport and with silica from Camerdell, with coal from Creigh- 
 ton, via the Allegheny river and thereby save considerable freight. I 
 might add that for our plate glass factories we are obliged to freight 
 sixteen tons of raw materials for every ton of finished product, so that 
 the rates for freight that we have to pay on our raw materials are very 
 vital with us. Fifteen years ago, when we had to go from gas to coal at 
 Ford City, we had a mine ten miles north of Ford City. The rate when 
 shipped in railroad cars was thirty-five cents a ton and in our own 
 equipment was eighteen cents a ton. Both rates were absolutely reason- 
 able and fair. In the making of rates however, the commission forbade the 
 use of any but the carrier's car, or, in other words, imposed the same rate 
 whether you shipped in your own car or used the railroad company's 
 car. The railroad company had been absolutely satisfied with the rate of 
 18 cents a ton when we furnished the car and the terminals at both ends. 
 All the railroad company had to do was to haul it from one terminal to 
 another, ten miles collecting eighteen cents per ton. It was very remuner- 
 ative and the railroads would have been glad to continue that rate. But 
 the Interstate Commerce Commission made a finding a few years ago 
 that individual cars would have to be treated exactly the same a railroad 
 cars. Therefore, the railroad companies had to cut out those rates. The 
 Interstate Commerce Commission made a ruling not long ago that the 
 rate for any five miles should be applied as a yardstick to determine the 
 rate for any other five miles. That necessitated the railroad companies 
 readjusting their rates because it was manifestly impossible for them 
 to pull the cars through terminals and over the costly and complicated 
 tracks of the cities for the same amount of money that they could pull 
 those cars over five miles of a straight stretch in the country. Therefore, 
 the railroad company had to cut out a rate which had been very remun- 
 erative for them and very satisfactory to all concerned. 
 
 We are very anxiously waiting for the water system in the Allegheny 
 river, and when it is completed we shall have a tonnage of over a million 
 tons a year to move in the river and we will be able to move it in the river 
 for about one-quarter of what it costs us now. 
 
 In conclusion, I want to offer a few suggestions regarding the prac- 
 tical operation from the shippers' standpoint. I would say do not heap 
 any unnecessary abuse on the railroads and their management. Look on 
 the other side a little. Quit going to the commissions or courts with every 
 fancied grievance. Railroad officers are kept so busy now attending hear- 
 ings and answering complaints that they have no time at all to attend 
 to their natural duties. Try to get a real conference with them and you 
 may find out that you are wrong. On the other hand, you may be able 
 to convince them that you are right, and in any event when you settle 
 your grievances in that way it always leaves both parties with a much 
 better taste in their mouths. 
 
 Load cars to carry to tkeir full capacity. Load cars promptly. Unload 
 them promptly, even though it may be cheaper to pass demurrage. There 
 have been a number of bulletins sent out broadcast over the country seri- 
 ously questioning whether the shippers are doing their full duty in this 
 
94 THE CENTRAL STATES CONFERENCE 
 
 regard. Look into this question carefully and if your neighbors are not 
 doing their full duty in this regard, get after them. 
 
 In this connection I want to read a letter. It will not take but a few 
 moments. The hour is late, but I hope I am not unnecessarily detaining 
 you. I think this will be of particular interest to the railroads and ship- 
 pers. 
 
 This letter is from Mr. W. L. Clause, of our company, and is addressed 
 to the President of the Merchants and Manufacturers Association in reply 
 to an invitation to a meeting which they had in Baltimore, a conference 
 to discuss this Newlands joint committee on Interstate Commerce. He 
 declined the invitation to attend the meeting and then said: 
 
 "While I still recognize that there are still many evils to be cor- 
 rected, I am beginning to wonder whether we are not approaching the 
 time when we are in danger of going too far in our endeavor to exercise 
 control over our railroads. Is it not time to take cognizance of the fact 
 that the Interstate Commerce Commission is not the only power exer- 
 cising control? Most of the gentlemen gathered at Baltimore will be 
 business-men. How many of them would want to start in business if the 
 rates of wages and the conditions of employment were so controlled that 
 the cost of their output was largely a matter outside of their control and 
 if at the same time the prices at which they could sell their commodities 
 was a matter in which they had little or no voice? How many of them do 
 you think would care to remain in business, and in case they could not 
 get out, how many of them do you think would feel very much interested 
 in improving or extending its facilities? Certainly, under such conditions, 
 no one not already actually in business would care to start any new enter- 
 prise. 
 
 "To what extent is the present lamentable break-down in our trans- 
 portation facilities due to the underlying causes above referred to? I 
 don't suppose anybody knows very definitely to what extent that may be 
 the case, but isn't there probability enough of their being an intimate re- 
 lation between the present inadequate condition of the equipment of our 
 railroads, and the fact that the officers of our railroads are no longer 
 in control of our transportation facilities to any very marked extent, to 
 make us pause and perhaps look at this problem from a somewhat dif- 
 ferent standpoint. That the railroads themselves are largely to blame 
 for the necessity of exercising some measure of control cannot be denied, 
 but as all movements in public sentiment and in reform swing too far, and 
 have to recede, are we now rapidly approaching the time when the swing 
 of the pendulum in this movement should be checked? 
 
 "It may throw some light on the present status of those problems if 
 we very briefly review the early history of our railroad building. Very 
 few of our railroads were profitable investments when they were first 
 constructed. The resources of the country through which they passed 
 were undeveloped, the revenues in most cases were insufficient to pay for 
 the upkeep of the roads, and equipment, and provide interest for the bonds 
 and most of them went through bankruptcy and had long periods of lean 
 years before they ultimately reached the point where they could pay even 
 5 per cent or 6 per cent on what would have been a fair valuation of 
 their assets. Of course, the investors had hopes of very handsome returns. 
 Or they never would have built the roads. To be sure, the public had just 
 ground for grievance against some of them because of the stock-jobbing 
 schemes that were employed and because of many of the methods of dis- 
 crimination that were followed, but just the same, had it been known in 
 advance that no larger returns would ever be made, and that ultimately, 
 even if they could be made, would not be permitted because of government 
 regulation, most of our railroads would never have been built by private 
 enterprise. Could any group of men today be induced to build a trunk line 
 railroad for the purpose of competing with those already in existence, 
 
THE CENTRAL STATES CONFERENCE 95 
 
 with all the risk of losing their money, knowing that, from the beginning, 
 at best they would have a long period of unprofitable operation, until the 
 natural resources along their line should be developed, and knowing from 
 the beginning that in no event would they be permitted to earn more 
 than a mere five percent or six percent on their investment? 
 
 "With a knowledge of those facts before us, does anyone suppose 
 that if the conditions now imposed had always existed, our railroads 
 would ever have been built by private enterprise? Is it not, therefore, a 
 matter of great good fortune to the country that our railroads were built 
 before these restrictive conditions were imposed? 
 
 "If the conclusions above reached are measurably correct, do they 
 not also apply, although in a somewhat lesser degree, to the problems 
 involved in increasing the facilities and equipment to meet the ever-in- 
 creasing necessities of the public? How far is the present shortage of 
 cars and equipment due to this condition? If our railroads are deprived 
 of the opportunities to make money enough to enable them to provide 
 additional trackage and equipment sufficient to meet the growing de- 
 mands of our country, how are these necessities to be provided for, and 
 how is our country to continue its development? We all decry government 
 ownership, but are we not in danger of creating conditions that will force 
 it upon ourselves? We know something of how the red tape, politics, in- 
 efficiency and increased cost of operation resulting from government own- 
 ership would ultimately affect rates, and the- service rendered, but even 
 more serious would be the fact that government-owned railroads would 
 always lag behind necessity. Needs for additional trackage, terminals and 
 equipment would never be anticipated. We all know that it is hard 
 enough and many times impossible, to get Congress to do a thing, even 
 after the necessity for it has been long apparent. Hence, our railroads 
 would never be ready for a great business movement when it came. The 
 ills we now have are as nothing compared with those we would have 
 under government ownership. It is time to be careful." 
 
 I gave some "don'ts" for the shippers. I want to be perfectly fair 
 and give some "don'ts" to the railroads. 
 
 To the railroads I would say, don't sit calmly down and say the blame 
 for the present condition is all with the shipper and receiver of freight, 
 that if they would do their duty there would be no congestion and no 
 shortage. Look on the other fellow's side a little and you may find not 
 only that the shippers are not so black as you have painted them, but 
 you may even discover that you are not so perfect as you thought you 
 were and that you can make further improvement in your service. Above 
 all, quit fighting the improvement of waterways and don't endeavor to 
 drive the waterways out of business. Water carriers of heavy tonnage 
 are imperatively needed in this country and it is bound to increase in 
 volume. You are certain to share from this increase and from the benefits 
 that are to come, from the increased tonnage carried by water if the in- 
 land system of transportation is improved. 
 
 I thank you. (Applause) 
 
 Mr. Samuel L. Orr: In the absence of Mr. Murphy, who was called 
 out, I want to take this opportunity of thanking Mr. Belleville for his very 
 able address. We will stand adjourned. ' 
 
96 THE CENTRAL STATES CONFERENCE 
 
 FRIDAY EVENING SESSION. 
 December 15, 1916. 
 
 Vendome Hotel, Evansville, Ind. 
 Banquet. 
 
 Mr. J. R. A. Hobson presided as Toastmaster. 
 
 Toastmaster: The Chairman of the Resolutions Committee is now 
 prepared to present resolutions. 
 
 Hon. Benjamin Bosse: Mr. Toastmaster, ladies and gentlemen, and 
 delegates to this conference: The Committee on Resolutions reports the 
 following resolutions: 
 
 We, of the Central States Conference on Rail and Water Transpor- 
 tation, representing business interests of Indiana, Illinois, Kentucky, Ohio, 
 Tennessee and Missouri, in session at Evansville, Ind., recognize that 
 the transportation facilities of the country during recent years have not 
 kept pace with the growth and expansion of commerce. Present facilities 
 are inadequate and bid fair to prove even more so in the near future 
 unless conditions are remedied. 
 
 Therefore, Be It Resolved by this body in conference assembled: 
 
 1. That in view of the manifest need for constantly increasing 
 transportation facilities to meet the rapidly growing commercial needs 
 of the country, we favor constructive action by Congress at this session 
 upon this subject. 
 
 2. We urge that steps be taken to give substantial assurance to 
 investors of the safety and earning power of their funds invested in rail- 
 road securities, thus attracting new capital to further railroad expansion. 
 
 3. We favor exclusive federal supervision of the issuance of securi- 
 ties by the carriers of interstate commerce. 
 
 4. We favor the federal incorporation of the carriers of interstate 
 commerce. 
 
 5. We favor the enlargement of the Interstate Commerce Commis- 
 sion with a division of the duties in order to avoid conflicting functions of 
 detection, prosecution and adjudication. 
 
 6. We favor federal regulation of railroad rates, authority to be 
 vested with the Interstate Commerce Commission with regional sub- 
 commissions sitting in various traffic districts and that this regulation 
 follow the natural lines of commerce and not the artificial lines of states. 
 
 7. We favor the maintenance of State Public Utility Commissions 
 and we urge that such state supervision be standardized and the regula- 
 tions as far as practicable be made uniform as between the various states 
 of the union. 
 
 8. The sentiment of this Conference is against government owner- 
 ship, but in favor of a sound and efficient basis of government regula- 
 tion, beneficial alike to the common carriers, to the shippers and to the 
 public. We urge constructive action on the part of those in authority that 
 will safeguard the interests of investors and will also bring to the ship- 
 pers and to the public the furnishing of additional equipment, the build- 
 ing of better terminals, additional double track and new mileage where 
 needed, and, in consequence, the greater development of the commercial 
 life of the nation. 
 
 9. We enthusiastically advocate -the improvement of our ports and 
 inland waterways and waterway terminals as an important subsidiary 
 part of our transportation system. 
 
 10. We recommend that business-men throughout the country as- 
 semble in regional meetings such as this to discuss and digest the trans- 
 
THE CENTRAL STATES CONFERENCE 97 
 
 portation problem and other vital national questions as they may arise, 
 having all sides of these questions presented by high authorities represent- 
 ing every phase of the subject." (Applause) 
 
 Mr. Toastmaster, on behalf of the Committee on Resolutions, I offer 
 a motion that these resolutions be adopted as read. 
 
 The motion was seconded from all over the house. 
 
 The Toastmaster: The motion is made and seconded that these reso- 
 lutions be adopted as read. Is there any discussion? 
 
 Mr. W. H. McCurdy: I would like to have the second and third 
 paragraphs read again. 
 
 Mr. Lawrence Finn (Kentucky) : Mr. Chairman. 
 
 Mr. W. H. McCurdy: I yield to Mr. Finn. 
 
 The Toastmaster: Mr. Finn of Kentucky, has the floor. 
 
 Mr. Lawrence Finn: Mr. Toastmaster. I understand, sir, that the 
 program will include conversations over the telephone from the various 
 portions of this nation at stated intervals and that that time is now almost 
 at hand. I desire, sir, to present to this audience and to this assembly some 
 facts, which according to my notion, are very urgent. I do not speak with- 
 out authority. For nine years I have been chairman of the Commission, a 
 member of the Commission of the State of Kentucky, and for six years 
 I have been its chairman. I want to state to this assemblage, furthermore, 
 that there is an organization in the United States which is composed of 
 all the railroad commissions of this nation 
 
 The Toastmaster: If the gentlemen will permit me to interrupt him. 
 
 Mr. Lawrence Finn: This Commission is composed of the state com- 
 missions and the Canadian commissions, and I want to state further that 
 in that organization I have had the honor of being chairman of the Com- 
 mittee on State and Federal Regulation. I have had the honor of being 
 Chairman of its Executive Committee. 
 
 The Toastmaster: If the gentlemen will allow me 
 
 Mr. Lawrence Finn: I have been vice-president and president of that 
 organization. (Applause) 
 
 The Toastmaster: If the gentleman will allow me to interrupt him 
 for just one moment It is not purposed that these resolutions be passed 
 at this time. We simply wanted to read the resolutions and if there is any 
 debate on them an opportunity will be afforded before the resolutions are 
 offered for passage. 
 
 Mr. Lawrence Finn: That is all I want, Mr. Toastmaster. 
 
 The Toastmaster: If the gentleman will allow me to interrupt him, 
 I will call upon him first when the resolutions come up for consideration. 
 
 Mr. Lawrence Finn: Thank you. 
 
 The Toastmaster: We wish to give an opportunity for their consid- 
 eration in the meantime. 
 
 Ladies and gentlemen, it is now necessary that we proceed very 
 rapidly with our program and we will consider the resolutions after the 
 program is completed and after this telephone demonstration has been 
 ended. In order to expedite the program and to leave ample time for the 
 consideration of these resolutions the program will be changed in this 
 particular. I am going to introduce the last speaker on the program now, 
 and we will start the telephone demonstration on the minute as scheduled. 
 
 It is now my pleasure, ladies and gentlemen, to introduce to you one 
 of the authorities on the subject which we have been discussing in our 
 conferences, a gentleman who was born in Missouri, who has lived a num- 
 ber of years in Texas, and who has lived a larger number of years in Colo- 
 rado, who is, therefore, from the West and from the South and from the 
 Middle West and who is of New York, but from Missouri, Mr. Frank 
 Trumbull. (Applause) 
 
98 THE CENTRAL STATES CONFERENCE 
 
 The American Railways. 
 
 By Mr. Frank Trumbull. 
 
 Chairman of the Railway Executives' Advisory Committee on Federal 
 
 Legislation. 
 
 Mr. Toastmaster, ladies and gentlemen, I believe the subject as- 
 signed to me this evening is The American Railways. You will agree at 
 once, I am sure, that this is a very large topic. The railroads of the United 
 States have 250,000 miles of main line. They are capitalized at about 
 seventeen thousand millions of dollars. Notwithstanding what you hear 
 about watered stock or about individual caprices of single roads, we stand 
 firmly on the proposition that the railroads of the United States as a whole 
 are worthy of their capitalization, all they are capitalized for, and more 
 too. (Applause) They are the lowest capitalized railroads in the world, 
 notwithstanding the high costs in this country. They furnish the lowest 
 rates and they pay the highest wages. Whatever may be said about indi- 
 vidual transgressions here and there, the railroads of the United States 
 are a tribute to the private energy and daring of Americans. (Applause) 
 
 There have been practices in the past which speakers are quite fond 
 of adverting to. They are not right, practices of both railroads and ship- 
 pers, but many of them most of them have been cured, shippers and 
 railroads alike. Today, the railroad business of America is as honest as 
 any business. There has been a tremendous improvement in the last ten, 
 twenty years in commercial integrity and the railroads have shared in 
 that movement. 
 
 Now, there is one thing that differentiates the railroads from other 
 industries. You know what it is, but most of us do not stop to think of 
 it when we are considering these questions, and that is that the railroads 
 are under minute regulation. I mention that in the beginning because it 
 colors the consideration of the whole subject. 
 
 I can give you no better illustration perhaps than the steel business. 
 The United States steel corporation has increased the wages of its men 
 33 per cent in eleven months, but their prices are not limited as railroad 
 rates are limited. They have put up the price of steel rails $10.00 a ton 
 and railroads must have steel rails. It would not be safe for you to leave 
 here on a railroad if they quit buying steel rails. 
 
 The profits of American railroads in this, the most prosperous year of 
 their history, the net earnings after deducting expenses, taxes, repair 
 of equipment and rentals, were less than six per cent on the seventeen 
 million dollars which I mentioned, and railroads, like other people, have 
 to compete for capital. The last year one company alone, one private com- 
 pany, not under regulation, the Ford Motor Company, of Detroit, earned 
 $60,000,000 profit, 3,000 per cent on its capital stock. One company alone 
 earned one seventeenth of the profits of the American railroads, excluding 
 the smaller lines. 
 
 The Bethlehem Steel Company, its president told me the other night, 
 earned $60,000.000. 
 
 Now, this is the point I want to get before you tonight. This limita- 
 tion, this artificial limitation upon railroad profits, makes it difficult to 
 deal with this question and various other questions; and in saying that 
 I am not at all finding fault with regulations. The railroads of this coun- 
 try accept the principle of regulation; but the railroads ask that it be 
 made unified and consistent. Regulation, like railroad management, should 
 
THE CENTRAL STATES CONFERENCE 99 
 
 be honest, and both of them should be more than honest: They should be 
 competent. 
 
 Now, I had the great pleasure this afternoon of hearing my friends, 
 Mr. W. G. Lee and Mr. Walsh, make very interesting statements to this 
 conference. I had thought that I might tell you something of the history 
 of the so-called eight-hour act, but Mr. Lee made such a splendid state- 
 ment of it that I need not take up your time. I only want to say one or two 
 things, not at all in any controversial spirit, but merely as a matter of 
 accuracy of the record, and because my host has said that they want to 
 hear both sides of everything. 
 
 In the first place, Mr. Lee made a statement which I am sure he 
 thought was true, that the railroads spent threVquarters of a million dol- 
 lars purchasing space in the newspapers and buying editorials. I know Mr. 
 Lee thought that or he would not have said it. He said that they made a 
 contract with one concern for three-quarters of a million dollars. The fact 
 is that the highest contract made was not over one hundred thousand 
 dollars, and the total cost was only about three hundred thousand dollars. 
 
 Now, as has been said to us, time and again, "you railroads make a 
 mistake in not getting your case before the people. You ought to take the 
 public into your confidence. You are public servants. It is your duty to 
 get your facts before the public, to tell them what the facts are, so that 
 they may deal intelligently with you." And we felt it was perfectly 
 straightforward and consistent to purchase space in the newspapers and 
 tell the story, first because we think the public wants us to do it and, 
 second, because we do not want anything from a newspaper man for 
 nothing; and I leave it to Mr. Murphy whether any railroad man can pur- 
 chase editorial space in any newspaper in the country of any note. 
 
 Mr. Henry C. Murphy: I am glad to answer that point. I wish to 
 correct Mr. Lee, or submit my idea. At the time I think he inadvertently 
 erred in saying that newspaper editorials can be bought. I doubt if there 
 is a newspaper of any standing in the United States that would sell its 
 editorial space. (Applause) 
 
 Mr. W. G. Lee: May I interrupt just for a moment, with the speak- 
 er's permission? 
 
 Mr. Frank Trumbull: Certainly. 
 
 Mr. W. G. Lee: I hold in my office copies of letters sent out by the 
 publicity department of the railroads, typewritten, or printed, all ad- 
 dressed to the editors, which says: "We have placed with your com- 
 pany through our publicity department, certain advertisements telling our 
 side of this controversy. We would like to have you write editorials com- 
 menting on your viewpoint of that statement and send us marked copy." 
 Now, gentlemen, my understanding is that if I bought space from a news- 
 paper and then sent it a letter and asked it to write an editorial on my 
 advertisement, that I would naturally look for it to do so in my favor. 
 (Applause) 
 
 Mr. Henry C. Murphy: Mr. Trumbull, if you please, I just want to 
 say one word in answer to that. If Mr. Lee will give me the name of that 
 paper, I guarantee that the name of that paper will be branded in the 
 American Newspaper Publishers Association as a pariah. (Applause) 
 
 ,Mr. W. G. Lee: I will send you the printed copy, Mr. Murphy. I 
 will send you the printed copy, and I presume that it went to every news- 
 paper in the United States where their advertisements were published. 
 
 Mr. Henry C. Murphy: We are performing a public service then if 
 we expose those papers. 
 
 Mr. W. G. Lee: Exactly, exactly. 
 
100 THE CENTRAL STATES CONFERENCE 
 
 Mr. Lawrence Finn: Mr. Toastmaster, I hold in my hand the ac- 
 count of Clifford Thome's address 
 
 The Toastmaster: If the gentlemen will pardon me, Mr. Trumbull 
 has been invited to make a talk to the banquet as assembled here this 
 evening. We haven't the time for debate at this time and we propose to 
 give you all the opportunity to say whatever you please after the program 
 is completed. 
 
 Mr. W. G. Lee: Mr. Toastmaster, I humbly beg the pardon of Mr. 
 Trumbull, and we are such good friends that I know he will accept it. 
 I will not interrupt him again. 
 
 Mr. Henry C. Murphy: Neither will I. 
 
 Mr. Frank Trumbull: I would like to ask Mr. Murphy as an editor 
 what answer he would make to that letter. I know what answer I would 
 make. 
 
 Now, Mr. Lee said that they would not arbitrate because seventy-five 
 railroads were not included. There were more railroads than that that 
 were not included, but there was no way of coercing them in. This is a 
 voluntary arrangement between the railroads. 
 
 Another thing he did not mention, which was most important, was 
 that within three days after they got to Washingon the National Con- 
 ference Committee of Managers offered to the President of the United 
 States to leave the whole thing to a commission to be appointed by him, 
 thereby putting the railroads of this country unreservedly in the hands 
 of the government. (Applause) 
 
 Now, I might say other things. It is evident that this Adamson law 
 does not suit anybody. (Laughter and applause) The brotherhoods have 
 had a look-in on regulation. They have been invited to sit down to the 
 banquet and they do not like the first course. 
 
 Mr. Lawrence Finn: Who don't? 
 
 Mr. Frank Trumbull: The brotherhoods. It does not look good to 
 them. It does not look good to anybody. Because when they start in on 
 the regulation of wages they know it is a long road. If they can compel 
 the increase or decrease of wages they can apply it to all employes of rail- 
 roads. 
 
 Mr. W. G. Lee: Exactly, president and all. 
 Mr. Frank Trumbull: President and all. 
 Mr. W. G. Lee: That's it. 
 
 Mr. Frank Trumbull: Their situation at the moment and ours re- 
 mind me of the Episcopal clergyman who tried to start a colored Episco- 
 pal church down South. He got the school house full of niggers and at the 
 right moment came out from behind the curtain clad in his Episcopal 
 robe, and one of the negroes said to another negro sitting next to him, 
 "What do you reckon he is doin' now?" The other negro said, "I don't 
 know. It looks to me like Klu-Klux." (Laughter and applause) 
 
 Now, Mr. Walsh said this afternoon, and I have known Mr. Walsh 
 longer than I have known most people here, that no intelligent man ought 
 ever to consider a railroad a private enterprise. He criticised that part 
 of Mr. Thorn's statement yesterday. All I say is, whether they ought or 
 ought not to have done so, they did consider them private enterprises. 
 What he says and what I say is simply equivalent to saying that we are 
 more intelligent than our fathers and grandfathers were, and we ought 
 
THE CENTRAL STATES CONFERENCE 101 
 
 to be because this imperial magician, the telephone, has brought us al- 
 together, a hundred million people. "The world do move." Our point of 
 view is different from that of our fathers and grandfathers in many par- 
 ticulars. 
 
 He talked about the railroads fighting legislation. He comes from 
 the state, and I was born in the state in which by referendum the people 
 fought legislation which had been enacted. I refer to the full-crew law, 
 so-called. The legislators enacted this. The railroads did oppose it as 
 they ought to have done in the interest of the investors and in your 
 interest. It went to the people, and the people beat it by 164,000 majority. 
 So that all legislation is not right, simply because it is legislation. 
 
 We have heard about the eight-hour law. I will simply mention two 
 illustrations. The railway postal clerks are not limited to 16 hours even, 
 as men in train service are. -Only two years ago Oregon, California and 
 Washington defeated eight-hour propositions. But we need not argue 
 that. This Adamson law is not an eight-hour law. Nobody pretends it is. 
 There is not a line in it that limits men to working eight hours a day. 
 The crucial point has not been mentioned in this debate here; that is, 
 not whether men should have their pay based upon eight hours but what 
 shall you pay for it, a direct question. Remember what I said to you in 
 the beginning, that railroads are under limitations and have other con- 
 cerns. They must sit down and consider where an increase of pay, which 
 was all this was, is taking them and is taking you. Therefore, they had to 
 consider, not only in their interests, as operating the roads, but in the in- 
 terests of the investors, whether you like it or not, whether you believe in 
 it or not, as the final remedy for this transportation question. The rail- 
 roads of this country are dependent upon private investors. 
 
 We hear about servitude, involuntary servitude of labor. You can't 
 have involuntary servitude of capital. There is not a man in this room 
 will put his money into something he don't want to put it in. So long as 
 you are dependent upon private capital, you must consider, regulation 
 must consider, the officials and directors of railroads must consider what 
 every increase in cost is going to do to them. 
 
 Next we had to consider our duty to you as employers of labor. We 
 had to consider our duty to you as shippers. We didn't believe that an 
 increase in wages ought to be granted to any body of men without in- 
 vestigation. We can't get our rates increased without investigation. You 
 don't want us to. If we believed that, how could we look you in the face 
 and go to the commission in Washington and ask for an increase in rates 
 for you to pay for something that we ourselves were not willing to cer- 
 tify to as absolutely right? We had besides a duty to 1,400,000 men. They 
 are human beings just like these trainmen are. The man who walks the 
 track at night in sleet and snow and rain, to protect you on the trains 
 and protect these passengers is a human being. We can't do, because of 
 your limitation on us, all we would like to do for these men, but if eight 
 hours is right for a day's work and the pay must be increased regardless 
 of investigation, why shouldn't it apply to 1,400,000 other human beings? 
 
 We hear about human rights in your talks, as rightfully we should. 
 We pay more attention to human rights. We are realizing that we are all 
 paying more and more attention to human rights. We are realizing that we 
 are all knit together in one bunch. But no scheme of regulation is fair, 
 consistent or adequate that leaves out of consideration part of the facts. 
 So that if I may, I want to lead this whole thing into a broader field. 
 
 After all, this wage question is only a part of a great problem. The 
 great problem for you and for a hundred million people is not what should 
 be done with the Adamson law, but what is going to happen to your 
 .transportation facilities. This Adamson law will be disposed of some way 
 
102 THE CENTRAL STATES CONFERENCE 
 
 or other, but your necessities will remain. The business of this country 
 is growing by leaps and bounds, and we are now up against an economic 
 readjustment that will jostle the whole world. We can't afford to lose an 
 ounce. We must make every stroke count, and anything that is wasteful 
 must be cut out. The most important thing to you is an expansion of your 
 facilities. Last year a thousand miles of new roads in three million square 
 miles of territory. What does that mean? You may argue all you please 
 about the increase in the number of investors in this country, but the 
 fact is that money has been going into other things. You have been put- 
 ting money into other things. Why? Because you can make more money. 
 
 Therefore, the broad question is, not a wage question, not what the 
 state of Iowa may do, or the state of Kentucky, or the state of Texas, or 
 the state of Virginia, the broad question is what will best serve a hundred 
 million people who speak one language, whose interests are national and 
 not local, and, if I may just say one more "word the toastmaster wants 
 me to suspend this Evansville Plan is going to take root and grow. That 
 is, the regional discussion of these things. (Applause) But the solution of 
 this transportation problem is not going to be limited by state lines. There 
 is not a man in this room that is willing to limit his commerce, his com- 
 mercial opportunities to the state lines of Indiana. It is going to be settled 
 regionally and the system will be uniform. Take for instance, if you have 
 government ownership it will have to be by the federal government, of 
 course. Then what becomes of your state lines? We believe that if the 
 government can take over the railroads successfully, they can regulate 
 them successfully, and they should keep the regulation close to the peo- 
 ple and keep it close in regional ways, just as the Evansville Plan con- 
 templates. 
 
 I thank you. (Applause) 
 
 The Toastmaster: Through the courtesy of the American Telephone 
 & Telegraph Company, not a regional institution, I believe you will be 
 very much entertained and interested in a very few minutes. I have the 
 honor to introduce the vice-president of the American Telephone & Tele- 
 graph Company, Mr. N. C. Kingsbiiry, of New York. (Applause) 
 
THE CENTRAL STATES CONFERENCE 
 
 103 
 
 'Co-operation 
 
 By N. C. Kingsbury, 
 Vice-President of the American Telephone and Telegraph Company. 
 
 N. C. Kingsbury of New York, vice- 
 president of the long 1 distance lines of 
 the Bell system, officially known as the 
 American Telephone and Telegraph 
 company, spoke on "Co-operation" as 
 follows: 
 
 If you and I could trace our ances- 
 tral trees back through the ages to 
 dim prehistoric times, we should 
 doubtless all find a common ancestor. 
 For the sake of our personal feelings, 
 I shall not presume to go as far back 
 as Mr. Darwin leads us, but I do want 
 to call your attention to some of the 
 circumstances surrounding the life of 
 our prehistoric ancestor. He probably 
 lived somewhere in Europe or Mes- 
 opotamia, and recent studies of arch- 
 eologists have revealed the fact, for in- 
 stance, that a race of human beings 
 inhabited caves along some of the 
 rivers in France for a period extending 
 over something like fifty thousand 
 years. 
 
 Let us glance for a moment at a 
 scene which must have been enacted 
 millions of times in the rude habita- 
 tions of the prehistoric man. We will 
 assume it is late afternoon and that 
 our ancestor has been successful in 
 the chase. He has flesh to eat, per- 
 haps also a few nuts and herbs and 
 berries which he has gathered in the 
 vicinity of his cave. He has killed 
 the game, dragged it to his cave, 
 dressed it, and now sits crouching over 
 the fire roasting the meat on the 
 pointed end of a stick. It is all his; 
 the entire benefit belongs to him alone, 
 and he is going to enjoy that meal 
 just as much as you and I will enjoy 
 the elaborate banquet of which we are 
 to partake. 
 
 Let us look for a moment at another 
 scene, more familiar to us all the 
 average American family seated at a 
 table in the average American home, 
 about to partake of the average Amer- 
 ican meal. There is the table covered 
 with the white cloth, the utensils made 
 from porcelain, steel, glass and silver, 
 and there is the food bread and but- 
 ter, milk, tea or coffee, salt and pep- 
 per, sugar, meat, vegetables, fruit, etc. 
 and scarcely anything which I hve 
 mentioned is the direct result of the 
 labor of any person who sits about 
 that table. 
 
 These two pictures present an anti- 
 thesis, in that they illustrate the dif- 
 ference between the condition of man 
 
 having no co-operation with others of 
 his race, and the condition of man fa- 
 miliar to us all, where co-operation 
 does exist. 
 
 Our prehistoric friend has for him- 
 self all the profit arising from his own 
 acts. No ranchman out west raised 
 the animal from which he makes his 
 meal; no railway company derived a 
 profit in transporting that animal; no 
 packer reaped a profit in preparing 
 the animal for his use, and no middle- 
 man took another profit in selling him 
 the necessities of his meal. He did it 
 all; the profit was all his; he was ab- 
 solutely independent. What a bliss- 
 ful existence his must have been! 
 
 Now, if there is a man here who con- 
 siders himself independent, I should 
 like to follow this train of thought a 
 little further and ask him a few ques- 
 tions. When you sit down to a meal, 
 did you ever think who provided it? 
 Why, you don't even know, in most 
 cases, where the different components 
 of that meal came from! Did the salt 
 and the pepper drop as manna from 
 heaven? Did the flax or the cotton 
 which forms the table cloth grow upon 
 the home place? Were the fibres 
 spun into yarn by the housewife, and 
 was the cloth woven on the house- 
 hold loom? Did the man about to par- 
 take of the meal rear the animal which 
 supplies the meat for the repast? Who 
 delved into the earth for the silver, the 
 steel, the lead, the clay, which have 
 been used to make up the utensils 
 necessary for our most simple meal? 
 Did the fruit come from the home 
 orchard? Are the milk and butter the 
 products of the family cow? And did 
 the hired man go out before dinner 
 and gather the various vegetables from 
 the garden? No thoughtful man can 
 consider such questions without being 
 impressed with the utter dependence 
 of even the most independent man in 
 our present civilization upon hundreds 
 of thousands of his fellow-men whom 
 he has never met or never heard of, 
 all engaged in some occupation dif- 
 ferent from his own and scattered 
 about not only all over his own coun- 
 try but many of them located in far 
 distant parts of the earth! 
 
 It makes no difference what voca- 
 tion a man follows. He may be a 
 farmer, and cause two blades of grass 
 to grow where only one grew before. 
 He may be a manufacturer, a mer- 
 
104 
 
 THE CENTRAL STATES CONFERENCE 
 
 chant, a professional man no matter 
 what he is, he depends for his very 
 existence not only upon those who till 
 the soil and deal in its products, bui 
 also and to the same extent upon the 
 great organizations of finance, trans- 
 portation, communication, manufac- 
 ture, which are scattered about all 
 over the earth. 
 
 Our prehistoric ancestor, crouching 
 alone in his dismal cave, had about 
 him in the world all of the materials, 
 all of the forces which have been used 
 to produce this banquet here this eve- 
 ning. The one thing he lacked was 
 co-operation with his fellowmen and 
 co-operation with the forces of nature, 
 and the difference between his lot and 
 ours is the illustration which I wish 
 to bring to your mind of the supreme 
 necessity for cooperation. 
 
 The point I want to make is this, 
 that it has taken the combined efforts, 
 the co-operation of thousands of people 
 and organizations concerning which 
 we may know nothing, to bring about 
 the development of a farm here in the 
 Middle West or anywhere else, and it 
 has taken the combined efforts, in ex- 
 actly the same fashion and to the same 
 extent, to bring about the building and 
 development of a railway or a steam- 
 ship line or a financial institution or 
 even of a telephone company. 
 
 Someone may say, "I am a farmer, 
 I am in the agricultural business. 
 What do I care about railroads?" To 
 me the answer is obvious. Without 
 the means of transportation, the pro- 
 ducts raised by any man must either 
 be consumed by him and those im- 
 mediately dependent upon him, or else 
 they are absolutely worthless. He 
 may say, "What do I care about the 
 great financial institutions in New 
 York or Chicago or Evansville or any- 
 where else? Do they do me any good? 
 Do I use them in cultivating my land, 
 in manufacturing my product, in sell- 
 ing my professional services?" The 
 answer to all these men is just as ob- 
 vious. It requires those very financial 
 institutions to gather together the peo- 
 ple's money and put that same money, 
 still belonging to the people if you will, 
 back into the various complicated pro- 
 cesses involved in supplying capital 
 necessary for the harvesting, the 
 transporting and the marketing of the 
 product of the farm or the factory or 
 the professional man's office 
 
 Another thought, my friends, comes 
 to me in this connection It requires 
 capital to do all of these things, and 
 I believe it is a true saying that there 
 is only one source for capital and that 
 source of profit. If you could conceive 
 of a world of business organized in 
 such a manner that no element in that 
 world of business could make any pro- 
 
 fit, I cannot figure out how under such 
 conditions there would be any capita^. 
 Does it not therefore follow that in all 
 this co-operation which is absolutely 
 necessary in our present civilization 
 we must allow to the other man his 
 modicum of profit if capital is to be 
 produced and gathered together from 
 many different sources, so that our 
 own enterprise may in turn have its 
 success and its share of profit? 
 
 I am told that when the first great 
 war loan was negotiated between Eng- 
 land and France on the one hand and 
 our great financial institutions on the 
 other hand, there was no profit in that 
 individual transaction to the bankers 
 who underwrote the loan But we all 
 know it helped us all. We had bil- 
 lions of bushels of corn, wheat and 
 oats, thousands of horses and cattle, 
 all for sale. England and France 
 wanted and needed them. There was 
 only one way in which they could get 
 them. They had to have not only the 
 money to make payment, but they had 
 10 arrange the medium, the machinery 
 of exchange. Take away this machin- 
 ery, take away the banks, the trust 
 companies, the financial institutions, 
 and your crops would rot in the fields 
 and in your granaries. 
 
 One might say, "What do I care 
 about a telephone company? What 
 has that got to do with my business?" 
 The answer is just as obvious again. 
 The necessity for communication in 
 this age of the world is just as real 
 as the necessity for clothes or food 
 or transportation, or, in other words, 
 the economic value of the thing which 
 you produce and the economic value 
 of the thing that I produce both de- 
 pend upon the value of ten thousand 
 other things which millions of other 
 men produce, and you cannot destroy 
 the economic value of one without im- 
 pairing the economic value of all. Nei- 
 ther can you increase the value of the 
 farm product without increasing the 
 value of the railroad, the telephone, 
 and of the bank. 
 
 I am aware that none of these ob- 
 servations are new. They are, of 
 course, fundamental. But it often 
 seems necessary to reiterate, because 
 we are by nature selfish, and some 
 particular matter connected with our 
 own vocation appeals to our selfish- 
 ness to such an extent that we natur- 
 ally incline to better ourselves at the 
 expense of the other fellow. But if I 
 understand the history of economics 
 correctly, if I perceive rightly the 
 great general laws of human con- 
 duct and of commerce and business, I 
 must say it is my firm conviction that 
 no man or group of men or class or 
 section of the country can secure a 
 benefit at the expense of others, which 
 
THE CENTRAL STATES CONFERENCE 
 
 105 
 
 will remain a permanent, lasting, real 
 benefit. When such a thing is tried 
 between individuals or firms or cor- 
 porations, unfair competitive condi- 
 tions develop. When it is tried be- 
 tween classes we witness industrial 
 disputes, strikes, even civil war. When 
 it is tried between nations, sooner or 
 later international war destroys a gen- 
 eration of men as it is doing in Eu- 
 rope now. 
 
 It sometimes seems as though even 
 with all the facilities for transporta- 
 tion and communication which exist in 
 this country we still have a tendency 
 to mistrust each other, to fail to co- 
 operate, to drift apart. I hear people 
 in the middle West and in the far 
 West and in other parts of the coun- 
 try, continually, say slighting things 
 of New York, and I hear people in 
 New York say slighting things of other 
 parts of the county. Such feelings 
 should not exist, such remarks should 
 not be made. If there is one thing 
 clear to me it is that New York needs 
 this great western country behind it 
 and that it could not exist for one day 
 as New York alone, and it is equally 
 clear that the relation which New 
 York bears to the rest of the country 
 is just as important, just as neces- 
 sary. 
 
 The men who adopted the motto of 
 the United States made popular a 
 Latin phrase which expresses vastly 
 more than the idea that the United 
 States is made up of the union of 
 many states. "E Pluribus Unum" has 
 a much broader application than the 
 narrow political one. 
 
 Now. one of the great results of this 
 necessary cooperation, this interde- 
 pendence which we have been consid- 
 ering, is the fact that we have all be- 
 come specialists along one line or an. 
 other. There has been during the past 
 ages a gradual evolution in the direc- 
 tion of specialization. Just as soon 
 as one man produced more of a com- 
 modity than he and his dependents 
 could consume and the surplus was 
 bartered to somebody else, that man 
 became a specialist in that particular 
 thing which he was producing and 
 bartering, and the man to whom he 
 bartered or sold his surplus likewise 
 had a surplus himself of something 
 else which he had produced and could 
 not use. And as time has gone on the 
 surplus which one man could pro- 
 duce above his own personal require- 
 ments has grown greater and greater, 
 and the specialization has grown more 
 and more intense, until we have ar- 
 rived at this status of absolute inter- 
 dependence, requiring the greatest de- 
 gree of co-operation. 
 
 The great danger is that peopK 
 specializing in one line of endoavoi 
 
 will not know enough or care enough 
 about people specializing in other lines 
 of endeavor to understand their prob- 
 lems and difficulties and purposes and 
 ideals, and that our social body will 
 become so broken up into factions thai 
 disintegration due to warring interests 
 will undermine and destroy much that 
 man has painfully labored to build up 
 during the centuries since the Dark 
 Ages. 
 
 Such class selfishness caused the fall 
 of the great Roman Empire. The 
 cities had grown rich, luxurious and 
 populous. The country grew less and 
 less attractive. To support the excess 
 of the cities, the rural districts were 
 overtaxed, agriculture languished, and 
 gradually brigandage developed and 
 became more profitable than tillage. 
 The" country was harassed by mar- 
 auding bands, and was in no condition 
 to withstand attack. The city hated 
 the country, and in turn was hated. 
 Class was pitted against class. In- 
 ternal weakness, not external strength, 
 destroyed the Roman Empire. 
 
 We must all consider each other. 
 We must not be like the old darky 
 in the South who, while hoeing one 
 day, saw something projecting a little 
 way in front of him he took to be a 
 toad, and raising his hoe, he struck 
 the old toad sharply and then discov- 
 ered that it was his own big toe which 
 was protruding from the soft earth. 
 And as the toe bled and smarted and 
 hurt, he said, "Smart away, old toe, 
 'case it hurts you worse than it hurts 
 me anyway." Now, it is exactly that 
 sort of philosophy which is the dan- 
 gerous philosophy in this country, and 
 indeed, all OVQT the world, today. 
 
 And so, I repeat, we are all special- 
 ists, you in your business, I in mine. 
 But you are my brother and my keep- 
 er, and my full final success depends 
 upon your help and sympathy. 
 
 And I am your brother and your 
 keeper, and your full final success de- 
 pends upon my help and my sympathy. 
 You have the franchise and you vote 
 for things which affect me. I have the 
 franchise and I vote for things which 
 affect you. And if we do not know 
 something of the problems of each 
 other, and have some sympathetic in- 
 terest in those problems, then, gen- 
 tlemen, I believe we have no right to 
 exercise that franchise against the in- 
 terest of each other, both of us being 
 free men. 
 
 If you have helped to build up a bus- 
 iness which is serving its purpose, it 
 is my duty to help you in the protec- 
 tion of that business. Let us not, 
 therefore, become so thoroughly spec- 
 i-ilists that we forget the other fellow. 
 If our work narrows down, at least 
 let our knowledge and sympathies 
 
106 
 
 THE CENTRAL STATES CONFERENCE 
 
 broaden. If some other interest seems 
 to tread on our interests, let us try to 
 get together and talk things over and 
 reason them out. Let us try some- 
 thing constructive instead of destruc- 
 tive. Where the constructive method 
 is applied, peace, prosperity, happiness 
 and long life follow. Where the de- 
 structive method is applied, we have 
 bickerings, contentions, strikes, finan- 
 cial loss, war, confusion, unhappiness, 
 death and mourning. I believe, my 
 friends, that all the difference between 
 Europe today and Europe in July, 1914, 
 can be measured by applying the rule 
 of cooperation 
 
 But I must not forget that I am a 
 specialist, and I do want to tell you 
 something about the telephone bus- 
 iness. 
 
 This crude device which I hold in 
 my hand is an exact replica of that 
 through which a young inventor first 
 spoke on March 10, 1876, in a little 
 attic room in Boston. That date marks 
 the very beginning of the telephone. 
 His words were the first ever carried 
 over a wire. He was unknown, to 
 science and to the world. You all 
 know his name is Alexander Graham 
 Bell. He had an assistant, his elec- 
 trician, his mechanician, Thomas A. 
 Watson the only telephone engineer 
 in the world at that time and Mr. 
 Watson heard this first message in an 
 adjoining room under the same roof, 
 a hundred feet away. 
 
 That was in 1876. The year 1915 
 was also a most important year in the 
 development of the telephone. It 
 marked the completion not only of the 
 Panama Canal and the joining togeth- 
 er of the Atlantic and Pacific oceans, 
 but it marked also a still closer union 
 of the East and of the West, of the 
 North and of the South. San Fran- 
 cisco seemed to move up nearer to 
 New York, New Orleans nearer to Bos- 
 ton, and indeed, all of the states and 
 cities of this broad land seem to come 
 closer together by the medium of com- 
 munication through human speech. 
 Co-operation became easier. 
 
 The history of science has recorded 
 no more dramatic moment than when, 
 on January 25, 1915, the venerable Pro- 
 fessor Bell lifted the receiver from 
 the hook in New York and called to 
 Watson, the friend and fellow-work- 
 er of his youth, in San Francisco. 
 
 There was a great story behind that 
 first transcontinental "hello" a story 
 with years of ridicule at its beginning, 
 strenuous effort and much discour- 
 agement, then years of great develop- 
 ment, of success, and finally this dra- 
 matic realization of hopes entertained 
 at the very beginning of the business. 
 The first voice that ever sent a tele- 
 phone message over a wire spoke in 
 
 New York, and the first ear that ever 
 listened to a telephone message heard 
 in San Francisco. In 1876 the young 
 inventor and his associate had just 
 produced and were using the only 
 telephone in the world, and were with 
 difficulty talking over a few feet of 
 wire. In 1915 they realize that their 
 simple contrivance is the progenitor 
 of a vast system operating over nine 
 million telephones, connected by more 
 than twenty-one million miles of wire 
 and joining together the country's 
 greatest and most distant cities, serv- 
 ing the uses of a hundred million peo- 
 ple. And not only has this great de- 
 velopment taken place in this country, 
 but a similar, although a much lesser 
 development, has taken place through- 
 out the world as a result of their 
 pioneer work. 
 
 Dr. Bell gave this crude device to 
 the art of telephony. It was enough, 
 and served a mighty purpose. The 
 telephone engineers are co-existent 
 with the telephone. They have devel- 
 oped this, which was considered merely 
 as a toy, and they have developed 
 themselves in the process. They have 
 bridged that mighty gap measured by 
 the difference between transmission 
 over one hundred feet, and transmis- 
 sion over 3,400 miles of wire. 
 
 Few know of the difficulties which 
 these men have had to overcome, or 
 the nature of the forces with which 
 it has been necessary to deal. The 
 problems have been too intricate for 
 the outsider to understand or even 
 realize. There have been no great 
 masses to move. No immense weights 
 have been handled. Nothing which the 
 outsider could see or feel or under- 
 stand has taken place. But all this 
 time the telephone engineers have been 
 dealing with the most occult forces of 
 nature in infinitesimal fractions. 
 
 The railroad companies and tele- 
 graph companies had built many lines 
 of wire across the continent from New 
 York to San Francisco, so that the 
 mere physical construction of a line 
 across the continent involved no new 
 engineering problem. What the tele- 
 phone engineers had to do was to con- 
 struct a line of wire over which one 
 could talk when once it was built, 
 which would carry sound three thous- 
 and miles with nothing but breath 
 as the motive power. 
 
 The speed of the voice across the 
 continent is very difficult to measure. 
 It is practically instantaneous. A fif- 
 teenth of a second is about as nearly 
 exact as it can be measured. Now, 
 the speed of sound in the air is 1,160 
 feet per second, while the speed of 
 sound transmitted through the medium 
 of the telephone is about 56,000 miles 
 per second. As an example of just 
 
THE CENTRAL STATES CONFERENCE 
 
 107 
 
 what this means, let us assume that 
 we could put our heads out of the win- 
 dow here in Evansyille and shout loud 
 enough for the voice to be heard at 
 San Francisco. It would require over 
 three hours for our shout to be heard 
 on the Pacific Coast. 
 
 What does the telephone really 
 transmit? You will doubtless all ans- 
 wer, correctly, that it transmits a 
 series of sound waves. These sound 
 waves are created by the human voice 
 in the air at the rate of about 2,100 
 per second. They strike against a 
 metal disc in the telephone trans- 
 mitter and are there transformed into 
 electrical waves, and these electrical 
 waves rush along the path provided 
 for them over the wire to the tele- 
 phone receiver at the other end, 
 where the electrical waves are re- 
 transformed into sound waves of the 
 same character as those originally 
 produced by the speaker's voice. 
 These millions and millions of tiny 
 waves vary infinitely in shape, they 
 transmit the timbre, the intonation, 
 the minutest individual quality of the 
 human voice. They are as different 
 from each other as are the waves of 
 the sea, and they must not tumble over 
 each other or splash about or get in 
 each other's way, but must break on 
 the Pacific coast .just exactly as they 
 started out here in Evansville. If they 
 do not, the telephone line is of no 
 use whatever. In all this vast dis- 
 tance, there must be no imperfection 
 in pole or crossarm or insulator or 
 wire or switchboard, or any other of 
 the thousands of elements which en- 
 ter into construction. If there is a 
 break or disarrangement of the thous- 
 andth part of an inch, the currents 
 and waves and words do not reach 
 San Francisco as they started, and 
 the sound is unintelligible. 
 
 The telephone engineer has no way 
 in which he can increase his motive 
 power. A mere breath against a metal 
 disc is all that he has to work with. 
 The task, therefore, is so delicate as to 
 be gigantic. In his "History of the 
 Telephone," Mr. Herbert N. Casson 
 uses a very striking figure to illustrate 
 the extreme delicacy and weakness of 
 the energy employed in a telephone 
 message. He says: 
 
 "The energy which is set free by cool- 
 ing one spoonful of water just one de- 
 gree releases sufficient power to oper- 
 ate a telephone for 10,000 years." 
 
 And another example: It is said 
 there is in an ordinary sixteen-candle- 
 power incandescent electric lamp suffi- 
 cient electrical energy to operate ten 
 million telephones! 
 
 These illustrations will give you a 
 good idea of the real problem of the 
 telephone engineer. This minute baby 
 
 current of electricity must literally be 
 coaxed across a continent. Nothing 
 must retard it, interfere with it, de- 
 stroy it. It must go under rivers and 
 over mountains, through blistering 
 heat and bitter cold. This is the work 
 which was begun in Boston, as we have 
 seen, forty years ago, and mile after 
 mile in distance of transmission has 
 been gained, city after city has been 
 brought into instantaneous communi- 
 cation, until the goal of transconti- 
 nental telephone has been reached. 
 
 You may well ask, what man made 
 this great achievement possible? The 
 answer is easy no one man did it; 
 ten thousand different men. Starting 
 with Bell and Watson, an army of pa- 
 tient, industrious men have devoted 
 their lives to the problems of telephony, 
 striving day and night for one great 
 end. And that end was not the perfec- 
 tion of this great transcontinental line, 
 great though that achievement may be. 
 That end was and is the perfection of 
 a system of which this line is but a 
 very small part, and that system is de- 
 voted to the conquering of time and 
 space for the benefit of the people of 
 this country and the world. In office, 
 laboratory and shop, under the earth, 
 high up in the air, these men have 
 thought and experimented and toiled, 
 always aiming toward the accomplish- 
 ment of this great idea of universal 
 service. 
 
 When this crude device left the hands 
 of Bell and Watson, in the eyes of the 
 law it was an "essentially perfected 
 instrument." It was claimed for it that 
 it would transmit speech, and it did 
 transmit speech, and that was all. 
 This diaphragm is simply a piece of 
 animal membrane tied around a hol- 
 lowed block of wood and in touch with 
 a magnet. From this acorn, the oak of 
 the Bell system, nation wide, and all 
 the telephone systems in the world, 
 have grown. This instrument is the 
 beginning of the transcontinental line. 
 It forms the first step in a great evo- 
 lution. We shall witness tonight the 
 cumulative effect of thousands of im- 
 provements, some great, some small, in 
 telephone, transmitter, line, cable, 
 switchboard, and every other piece of 
 apparatus or plant required in the 
 transmission of speech. 
 
 In all the 3,000 miles which separate 
 us from San Francisco there is no one 
 spot in line or equipment where a man 
 may point his finger and say, "Here is 
 the secret of the transcontinental line, 
 here is that thing which makes it pos- 
 sible to telephone from Evansville to 
 San Francisco." Such a thing does not 
 exist. It is rather the perfection at 
 every point that has brought this 
 achievement about. It is the develop- 
 
108 
 
 THE CENTRAL STATES CONFERENCE 
 
 ment of the transmitter here in Evans - 
 ville which makes the receiver in San 
 Francisco do its work so well. It is 
 the improvement of the receiver at 
 San Francisco that causes the trans- 
 mitter in Evansville to perform its 
 functions so admirably. It is, in fact, 
 the perfection of every inch of line and 
 every bit of mechanism between them 
 that enables the instrument in Evans- 
 vile to talk and that in San Francisco 
 to hear. 
 
 The building of the transcontinental 
 line depended on the solution of no one 
 isolated problem, as we have seen, nor 
 will the glory of it be given to any one 
 isolated individual, but there are two 
 names that will always stand out above 
 the rest in connection with it. There 
 must be great generals to lead armies 
 that win victories. 
 
 For many years this line from ocean 
 to ocean has been the dream of our 
 president, Mr. Theodore N. Vail, the 
 goal towards which he has pushed and 
 towards which he has steadily led his 
 associates. This has not been an idle 
 fancy of a dreamer, but a prophetic 
 vision. Mr. Vail can see anything in 
 telephony, except impossibilities. He 
 not only cannot see impossibilities, but 
 he will not admit that they exist; nei- 
 ther will he allow his associates to 
 consider them for one moment. "Im- 
 possible," is not in his dictionary of 
 engineering terms. Almost from the 
 beginning of the telephone, Mr. Vail's 
 energy and enthusiasm, his dauntless 
 optimism and ambition in everything 
 relating to the perfection and promo- 
 tion of his idea of universal service, 
 have dominated the company and made 
 enthusiasts of all those related to the 
 system. 
 
 At Mr. Vail's side through most of 
 these years has been a slightly built, 
 live, keen -eyed Massachusetts man, 
 who never has to be told but once 
 when a great thing is to be done. A 
 nod, and a line goes to Denver; a word, 
 and it stretches to the Pacific coast. 
 This man is John J. Carty, chief engi- 
 neer of the American Telephone and 
 Telegraph company. Mr. Carty is in- 
 deed a leader among scientific men of 
 all nations and has been repeatedly 
 honored by the rulers of the different 
 nations for his distinguished services in 
 engineering accomplishment, his wide 
 knowledge, keen judgment and indom- 
 itable energy. These have combined 
 to make him one of the great factors 
 in telephone achievement and advance- 
 ment, not only in this country, but 
 throughout the entire world. Others 
 have played big parts in this drama of 
 human endeavor and achievement, and 
 thousands have given their share of 
 thought and labor. Mr. Vail and Mr. 
 
 Carty would be the last men to claim 
 an undue share of the credit for this 
 great work, but their names will ever 
 be linked together in this triumph. 
 
 But something more than engineers 
 was necessary in developing and pro- 
 ducing this great telephone system. A 
 large company of skilled mechanics has 
 also been developed. You and I would 
 make sorry work of building a pole 
 line, installing a switchboard or string- 
 ing subscribers' wires, and I dare say 
 that very few of us would even know 
 how to install a telephone if it were 
 placed in our hands a completed and 
 perfected instrument. The plant de- 
 partment of the telephone company 
 does this work. Now, the plant depart- 
 ment has nothing whatever to do with 
 horticulture, but it has invaded the 
 forests and taken therefrom enough 
 timber to form a complete stockade 
 around a lake larger than Lake Erie, 
 with each pole touching its neighbor. 
 It handles each year many millions of 
 pounds of copper. It installs every 
 switchboard, it invades every man's 
 back yard, goes into every man's house 
 with his telephone. It works every 
 second of the twenty-four hours, not 
 only in fair weather, but in hurricane 
 and flood and fire and earthquake, con- 
 tinually building and maintaining the 
 indescribable network of appliances 
 which go to make up the telephone sys- 
 tem. 
 
 Now, neither the engineers nor the 
 plant department people could use that 
 telephone plant after it was once con- 
 structed. Another army of people 
 must be recruited for this special ser- 
 vice. A telephone lineman is indis- 
 pensible when it comes to repairing a 
 break in a circuit, but if you were to 
 put him in front of a switchboard and 
 ask him to connect you with some other 
 number, he would be out of his ele- 
 ment and absolutely useless. And we 
 have found after long and bitter ex- 
 perience that not only the plant man is 
 useless for such work, but any man and 
 every man is nearly useless for that 
 high type of service which the tele- 
 phone operator renders to our present 
 civilization. A great deal of education 
 is required in the traffic department 
 of a telephone company. A switch- 
 board operator, in the first place, must 
 have physical characteristics which fit 
 her for the position. Her hearing must 
 be at least average and normal, her 
 sight up to standard. She cannot be 
 too short nor too tall, and must be able 
 to reach a certain distance with her 
 arms. Then she must be educated and 
 trained not only as to the mechanical 
 part of her work, but her disposition, 
 her attitude to the public which she is 
 serving must be brought into conform- 
 
THE CENTRAL STATES CONFERENCE 
 
 109 
 
 ity with the requirements of a most 
 difficult service. But when these young 
 women have been thus trained, in an 
 educational institution which turns out 
 each year about thirty thousand gradu- 
 ates, they perform a most wonderful 
 service. It is seldom they ever shirk a 
 responsibility, and nearly every great 
 flood or fire or earthquake furnishes 
 testimony of their fidelity even in times 
 of great personal peril. And there have 
 been instances where they have lost 
 their lives in remaining at the switch- 
 boards sending out warnings of danger 
 to others. 
 
 But what would be the use of a piant 
 department and a traffic department if 
 we did not also have a commercial 
 department? Somebody has to go out 
 and meet the public and sell the ser- 
 vice to the public and collect the money 
 for the service, and that is the func- 
 tion of the commercial department. 
 The commercial department makes the 
 rates upon which telephone service is 
 based, and when you consider that 
 there are nearly five billion long-dis- 
 tance telephone rates in the United 
 States, you will realize that this is 
 something of a task. The commercial 
 department has to do with the develop- 
 ment of the different classes of service, 
 and must at all times function per- 
 fectly with the plant and traffic depart- 
 ments. 
 
 These three departments, performing 
 three different functions, constitute the 
 operating organization of the Bell sys- 
 tem: A plant department, to build the 
 plant and keep it in proper repair; a 
 traffic department, to take that plant 
 and render service to the public; a 
 commercial department, to represent 
 the company in all its relations with 
 the public. Each of these departments 
 must perform its functions properly 
 and co-operate perfectly, or we shall 
 have no demonstration of transconti- 
 nental telephony this evening. 
 
 Besides these departments are the 
 engineering department, the legal de- 
 partment, and the accounting depart- 
 ment, all having most important and 
 exacting duties to perform in the oper- 
 ation of the business. 
 
 I hope you will gain some idea from 
 the moving pictures of the complicated 
 equipment necessary to connect almost 
 instantaneously any one of the 500,000 
 subscribers in a great metropolitan ex- 
 change like New York, not only with 
 any other subscriber in New York, 
 but with any other subscriber through- 
 out the United States. 
 
 The point I wish to make very clear 
 in these remarks and in the use of the 
 pictures is that the telephone system 
 as a whole is the talking machine, and 
 not the transmitter and receiver, which 
 
 are the only parts of the machine vis- 
 ible to the ordinary patron. The trans- 
 mitter and receiver, without the line, 
 the switchboard, the relays, the trans- 
 positions, the loading coils and a mul- 
 titude of other and various devices, 
 would be of no earthly use, and all of 
 these electrical and mechanical devices, 
 if placed under the control of men and 
 women who were unorganized and had 
 not been trained to the work, could re- 
 sult only in utter confusion of service. 
 
 To develop these hundreds of me- 
 chanical and electrical contrivances, 
 and the men and women trained in 
 using them, has required the undivided 
 attention of hundreds of scientists and 
 executives of the highest rank. It has 
 required the building of actual lines 
 over which expensive experiments and 
 tests might be made, before those lines 
 could be devoted to the giving of ser- 
 vice. 
 
 The cost of these experiments, the 
 cost of equipment millions of dollars' 
 worth which had to be constructed 
 and tried out only to be scrapped and 
 constructed over again, would have 
 been away beyond the financial ability 
 of any one company, and no line ex- 
 tending through the territory of any 
 one company could have been used to 
 work out the numerous experiments 
 and tests which have been required to 
 develop the art of long distance tele- 
 phony. 
 
 I have said that the mere physical 
 construction of the transcontinental 
 line involved no new or exceedingly 
 difficult engineering task, but in spite 
 of that fact, the cost of constructing 
 the line across the continent is im- 
 pressive when we consider the magni- 
 tude of. the undertaking. The data and 
 figures are large. For instance, the 
 line crosses thirteen states; it is car- 
 ried on 130,000 poles. Four hard- 
 drawn copper wires, .165 of an inch in 
 diameter, run side by side over the en- 
 tire distance, establishing two physical 
 and one so-called phantom circuit. One 
 mile of single wire weighs 435 pounds, 
 the weight of the wires in the entire 
 line being 5,920,000 pounds or 2,960 tons 
 of copper. This amount of copper is 
 required for the transmission lines 
 alone. In addition, each one of the 
 physical circuits requires some 13,500 
 miles of fine hair-like insulated wire, 
 .004 of an inch in diameter, for its load- 
 ing coils. 
 
 Simply to string this immense 
 amount of wire across the continent, to 
 set poles and insure insulation, to con- 
 quer the innumerable difficulties offered 
 by land, water, forests, mountains, des- 
 erts, rivers and lakes, was in itself a 
 task of no mean magnitude. 
 
 The Panama canal is hailed as one of 
 
110 
 
 THE CENTRAL STATES CONFERENCE 
 
 the greatest achievements of the world 
 as indeed it is but the almost in- 
 visible lines of the Bell system, spread- 
 ing a thin blanket all over this entire 
 country, and considered simply with 
 respect to labor and cost, constitute a 
 monumental achievement. The canal 
 was begun about ten years ago, and 
 has cost upwards of $310,000,000. With- 
 in that same space of time the Bell 
 companies have spent more than twice 
 that amount in engineering and con- 
 struction work alone. 
 
 During the year 1915 we made 
 the announcement of another tre- 
 mendous advance in the art of 
 communication. To me it was a new 
 idea to consider this broad continent 
 of ours as too narrow for any sort of 
 work or experiment, but that is exactly 
 the condition with which the engineers 
 of the Bell system were confronted. 
 They did not have space in the United 
 States to carry on their work, and in 
 order to perfect their plans it was nec- 
 essary to send a man as far west as 
 Honolulu and another as far east as 
 Paris, and without wires we talked with 
 those men over the telephone from the 
 naval wireless station at Arlington, Va. 
 
 This wonderful development is still 
 in the development stage. I shall not 
 attempt to tell you of it this evening. 
 The discussion of that we will leave 
 until we can meet here perhaps some- 
 time for a wireless demonstration, when 
 we shall be able to talk not only across 
 this continent but across other conti- 
 nents and the oceans as well. 
 
 In the history of the telephone there 
 have, of course, been no greater 
 achievements than the development of 
 transcontinental telephony and of wire- 
 less telephony. The gain to science is 
 great, but the gain to the people, to the 
 nation, is much more precious, and the 
 benefit to commerce and society can 
 scarcely be measured. 
 
 This is a final blow to sectionalism. 
 The East is no longer separated from 
 the West, nor tht North from the South. 
 The railways and the new canal and 
 the facilities for communication are 
 bringing the states closer and closer to- 
 gether. Isolation is the cause of pro- 
 vincialism, and there is no longer iso- 
 lation in this country. People and 
 communities cannot drift far apart 
 when they are in such constant touch 
 with each other. Co-operation is ren- 
 dered easy, natural, necessary, perma- 
 nent. 
 
 It is a wonderful thing, my friends, 
 that we can speak from the Atlantic to 
 the Pacific or from any point between 
 those two great oceans in either direc- 
 tion. That constitutes a wonderful 
 scientific fact. The line connecting the 
 two seaboards is the longest line for 
 
 the transmission of speech in the world, 
 and if there were to be constructed a 
 line connecting any other two equally 
 distant points on the earth's surface in 
 any other country on earth, after the 
 line had been constructed the people at 
 one point could not understand the peo- 
 ple speaking from the other point. And 
 this constitutes, in my opinion, a great 
 social fact. We have a common lan- 
 guage in this country; we do not need 
 translation. All we need is transmis- 
 sion, and it is the function of the Bell 
 system to supply that. 
 
 Now, the expression, "We do not need 
 translation in this country," is not 
 merely a pat phrase. I believe it ex- 
 presses a fact of most tremendous so- 
 cial, economic, national importance 
 indeed, I would go further, and say in- 
 ternational importance. The effect of 
 language on race and civilization is 
 coming to be better understood, and in 
 North America we have two examples 
 which serve to illustrate this point per- 
 fectly. 
 
 To the north is a great country, in- 
 habited for the most part by English- 
 speaking people. In all the four thou- 
 sand miles of the international bound- 
 ary neither nation has a protecting fort. 
 There are no guards, no warships, no 
 armies, on either side of that boundary, 
 and peace has prevailed without inter- 
 ruption for more than a hundred years. 
 There is constant co-operation. 
 
 To the south is another great coun- 
 try, but inhabited by people who do 
 not speak English, a people of different 
 ideals, and with this country we have 
 had wars in the past. We have failed 
 to co-operate. It has been necessary 
 almost all the time for us to protect 
 our borders with soldiers, and at the 
 present time the people along our 
 southern border are hated and hate 
 with an intensity which, in spite of 
 "watchful waiting," may bring us at 
 last to a condition which will be recog- 
 nized even by our government as war. 
 
 Now, I do not mean to infer that the 
 fact of a common language has made 
 all the difference in these international 
 relations, but I do believe that it has 
 been and is the greatest single factor 
 for peace to the north and discord to 
 the south. The power of cohesion in a 
 common language is tremendous; con- 
 fusion of tongues is a constant menace, 
 leading to discord, while the ability to 
 speak with our neighbors has in it ele- 
 ments of real preparation for peace. 
 The surest way to secure co-operation 
 between individuals or nations is for 
 them to talk with each other. 
 
 Now, you may account for this in any 
 way you will, but the fact remains that 
 throughout the history of the world, 
 wars between factions speaking the 
 
THE CENTRAL STATES CONFERENCE 111 
 
 same language have been rare indeed, and, we hope and pray, into closer co- 
 And so, I repeat, it is a social fact of operation, closer fellowship, 
 tremendous significance that together ^^leph^ne was^ bornj^e 
 with other public service corporations greatest perfection. Most of the great 
 in this country, we are bringing the governments of Europe own their tele- 
 people of widely separated states and phone systems, but no foreign telephone 
 . + n - A +v. A , administration has ever invented or de- 
 
 countries closer and closer together. ve i op ed a single important contribution 
 What we need in this country, and to the telephone art. Under no other 
 indeed all over the world, is that people conditions except such as exist in 
 shall get together, shall understand America could the telephone business 
 each other, shall talk to each other, possibly have come to its highest de- 
 shall co-operate, and it is the inten- velopment. With its dozens of tele- 
 tion of the American Telephone and phone systems, Europe has no tele- 
 Telegraph company and I say this phone line that can compare in a small 
 without hesitation or fear of being ac- degree with this line. The transcon- 
 cused of a selfish desire for monopoly tinental line is the culmination of an 
 to make it possible for every man who art which was born in the United 
 can talk, to talk over the telephone to States, the high mark of a science 
 every man who can hear. And we are which was created and has been devel- 
 not going to be satisfied, and we are oped entirely by American genius and 
 not going to stop, when the people of American enterprise. I believe it is the 
 this country have been given universal highest achievement of practical sci- 
 telephone service; but by the means of ence up to today. No other nation has 
 wireless telephony we hope to bring produced anything like it, nor could 
 all the countries and all the peoples any other nation. It is sui generis, it is 
 of the world into a closer relationship gigantic, and it is entirely American. 
 
 As soon as Mr. Kingsbury completed his address lie took charge of 
 the Transcontinental telephone demonstration and the 500 men and 
 women around the banquet tables at Evansville heard distinctly, noted 
 men talk from coast to coast. The banqueters were connected with the 
 following cities: Chicago, Pittsburg, New York, Washington, D. C. f Bos- 
 ton, Omaha, Denver, Salt Lake City, Winnemucca Nev., San Francisco 
 and Sacramento. 
 
 Evansville men and visitors at the banquet talked with the follow- 
 ing: Gov. Hiram Johnson, California; Robert Newton Lynch, President 
 San Francisco Chamber of Commerce; Mr. Delaney, San Francisco, who 
 talked for Mayor James Rollf; Allison Stacker, state treasurer of Colo- 
 rado; Dr. Harry Pratt Judson, president of the University of Chicago; 
 George M. Reynolds, president of the Continental and Commercial Na- 
 tional Bank, Chicago; Lieutenant Governor Coolidge, of Massachusetts; 
 President Weed, of the Boston Chamber of Commerce; Union N. Bethel, 
 President New York Telephone Company; William Fellows Morgan, 
 President Merchants Association of New York; Hon. Josephus Daniels, 
 Secretary of the Navy, Washington, D. C.; Hon. Robert Lansing, Secretary 
 of State, Washington, D. C.,; Hon. Thomas R. Marshall, Vice-President 
 United States. 
 
 After the roll call of cities Mr. Kingsbury was connected with Sacra- 
 mento, Cal., and the telephone conversation was as follows: 
 
 Mr. Kingsbury: Well, now, I think the schedule says we are first 
 to have a talk with Governor Johnson at Sacramento. Has that been 
 arranged? 
 
 Mr. Butts: (Sacramento) Yes, Mr. Kingsbury. 
 
 Mr. Kingsbury: Well, I guess we had better get the Governor on 
 right away. Can you get him right away? 
 
 Mr. Butts: (Sacramento) Yes, I think so. 
 
 Mr. Kingsbury: Where is the Governor? 
 
 Mr. Butts (Sacramento )At the gubernatorial house in Sacramento. 
 
 Mr. Kingsbury: Is this Governor Johnson? 
 
112 THE CENTRAL STATES CONFERENCE 
 
 Sacramento Operator: No, this is the Sacramento operator. I will 
 put the Governor on right now. 
 
 Governor Hiram Johnson: (At Sacramento) Hello, Mr. Kingsbury. 
 
 Mr. Kingsbury: Hello, Governor. Is this Governor Johnson? 
 
 Governor Johnson: Yes, sir. 
 
 Mr. Kingsbury: This is Mr. Kingsbury, Governor, of the Bell Sys- 
 tem. 
 
 Governor Johnson: Yes sir. 
 
 Mr. Kingsbury: I have had the pleasure of hearing you before. I 
 am very glad to greet you again. 
 
 Governor Johnson: Are you down at Evansville, Indiana? 
 
 Mr. Kingsbury: Yes sir, I am at Evansville. Where are you? 
 
 Governor Johnson: I am at the gubernatorial house in Sacramento. 
 
 Mr. Kingsbury: I see. Mr. Henry C. Murphy, Editor of the Evansville 
 Courier, of Evansville, Indiana, wants to say a few words to you. We are 
 all glad to hear you, Governor. 
 
 Governor Johnson: I am very glad, indeed, to have the opportunity 
 of talking to you over long-distance wire. I will be very glad to talk to Mr. 
 Murphy. 
 
 Mr. Kingsbury: Here is Mr. Murphy, Governor. 
 
 Mr. Henry C. Murphy: I want to send you the greetings from In- 
 diana and from the Conference we are holding here in the City of Evans- 
 ville. You know what happened to Indiana in the last election, but we 
 didn't for a long time know what happened in California. 
 
 Governor Johnson: That's so. From the complex situation in Cali- 
 fornia it was impossible to tell with anything like exactness for a long 
 time just what would happen. Even at that we didn't think that it would 
 have such an effect on the country. We now understand that the situation 
 in California really had a great effect on the outcome of the last election 
 and in a way decided the result. Can you hear me all right? 
 
 Mr. Henry C. Murphy: Yes, we can all hear you. Mr. Frank Walsh, 
 of Kansas City, is here and partook in the Conference. He wants to say 
 a word to you. 
 
 Governor Johnson: Oh, I will be glad to hear from him. Hello, Mr. 
 Walsh. 
 
 Mr. Frank P. Walsh: Hello, Governor. Is this Governor Johnson? 
 
 Governor Johnson: Yes. 
 
 Mr. Frank P. Walsh: How are you this evening? 
 
 Governor Johnson: All right. How are you? 
 
 Mr. Frank P. Walsh: Pretty well, thank you. I want to congratu- 
 late you on your late success. 
 
 Governor Johnson: That is mighty good of you. 
 
 Mr. Frank P. Walsh: I am talking from Evansville, Indiana. 
 
 Governor Johnson: I am glad to hear your voice tonight. 
 
 Mr. Frank P. Walsh: Well, I am certainly honored in talking to you, 
 and especially under these circumstances. I recall the night you made 
 your opening speech in the last gubernatorial campaign at Los Angeles 
 when some of us predicted that perhaps you would be President. 
 
 Governor Johnson: Well, that is very nice. 
 
 Mr. Frank P. Walsh: I am speaking now from Evansville, Indiana, 
 after a dinner at which about five hundred people are in attendance. This 
 dinner is held at the close of the Central States Conference on Rail and 
 Water Transportation. We want to send you our congratulations and 
 greetings. 
 
THE CENTRAL STATES CONFERENCE 113 
 
 Governor Johnson: I thank you very much. 
 
 Mr. Frank P. Walsh: I think we have had one of the most important 
 conferences that was ever held in the Central States. We have' just lis- 
 tened to one of the most remarkable speeches that was ever made in any 
 place by Mr. Kingsbury, the Vice-President of this Telephone Company, 
 through whose courtesy we are hearing from you this evening. We hope 
 that you will be with us soon on the shores of the Ohio river. 
 
 Governor Johnson: Yes, I hope so, too. Are you now at the ban- 
 quet? 
 
 Mr. Frank Walsh: We are now at the banquet, Governor, at a very 
 beautiful hotel situated on the banks of the Ohio river. 
 
 Governor Johnson: I am in Sacramento at the gubernatorial house. 
 I have just been informed by the kind gentleman here that the people over 
 at Evansville, Indiana, are having a splendid time. I want to greet you 
 from the people of California, and to congratulate you upon your confer- 
 ence and upon the very great work that you have done. This country 
 owes much to the people who in the past gave their energy and their 
 thought to the upbuilding of the great transportation systems of this coun- 
 try. Much depends upon the transportation facilities that are accorded 
 to a great nation like ours and upon our transportation facilities in the 
 future, upon their proper regulation and efficiency depend the commer- 
 cial welfare of this country. I trust that those in the Conference have 
 realized that. I think the people of the country should realize the possi- 
 bilities of such a conference as this and the potential success that should 
 be acquired through your meetings and deliberations upon such a great 
 problem as the one you have had under consideration. I do not think 
 you quite fully realize the effect of your work, not only the effect upon 
 the Senators and Congressmen of the United States, but upon everybody 
 who is dealing with these questions all over the country. 
 
 You know, I think it is the most wonderful thing that I can sit here, 
 more than two thousand miles away from you, and because of modern 
 science, talk to you as though you were in the next room. It seems in- 
 credible to me. But it is due to this sort of thing, to the path which 
 the telephone has blazed through the country, as the railways have blazed 
 through the country, that those who formerly were separated by so many, 
 many miles have been brought so close together. And it is just that 
 modern invention and modern science which is responsible for all of this. 
 It is just that kind of science, that kind of inventive genius, backed by 
 American ingenuity, that will solve all the problems that are presented 
 to us. I want to say to the different people there that we on the western 
 shores of this country, in this region, will be glad to participate in any 
 conferences of the kind you have held there. I think it is a wonderful 
 thing that I can express myself in this way to you who are so far away and 
 that I can greet you over the 'phone in this fashion, and I am sure we owe 
 m-uch to the company through whose courtesies we are enabled to talk 
 to each other in this way. 
 
 I am very glad that I have had the opportunity to say just a word 
 to you tonight and I wish every one of you everything that this glorious 
 holiday season brings, everything that your heart desires. Goodnight 
 and good luck to you. 
 
 Mr. Frank P. Walsh : Thank you very much, Mr. Governor. We wish 
 you the best of success. Goodnight. Goodbye. 
 
 Governor Johnson: Thank you very much. Good night. 
 
 Mr. Kingsbury: Hello, San Francisco. 
 
 Mr. Beck (San Francisco) : Hello, Mr. Kingsbury. This is San 
 Francisco, Beck talking. 
 
 Mr. Kingsbury: I see by reference to the program that we are to talk 
 to Mr. Rolph, Mayor of San Francisco. Is Mr. Rolph there? 
 
114 THE CENTRAL STATES CONFERENCE 
 
 Mr. Beck (San Francisco): No, Mr. Kingsbury. Mr. Rolph is out 
 of town, but we have another party on the line. 
 
 Mr. Kingsbury: All right. That is fine. 
 
 Mr. Beck (San Francisco): We will get him right away. Mr. De- 
 laney is not at his home. So we will try to get him at the office. 
 
 Mr. Kingsbury: (To the audience) I want to call your attention to 
 the fact that these people are not gathered at any particular place as we 
 are tonight, but they are at their own places. It means a good deal to be 
 able to sit down at this instrument and talk to anyone of the millions of 
 subscribers in the United States, wherever they may be. They are trying 
 to get Mr. Delaney down at his office. 
 
 Mr. Delaney (at San Francisco) : Hello. 
 
 Mr. Kingsbury: This is Mr. Kingsbury, Mr. Delaney. I am very 
 glad to talk to you again. 
 
 Mr. Delaney: I am awfully glad to hear from you. 
 
 Mr. Kingsbury: I haven't heard your voice for six months. 
 
 Mr. Delaney: When are you coming out to San Francisco? 
 
 Mr. Kingsbury: Well, I will be glad to come out there when fishing 
 is all right. Whenever I do come there is something wrong and we don't 
 get any fish. Now, Mayor Bosse of Evansville, Indiana, wants to speak 
 to you for just a moment. 
 
 Mr. Delaney: I will be very glad to talk to him. 
 
 Hon. Benjamin Bosse: Hello, Mr. Delaney. 
 
 Mr. Delaney: Good evening, Mr. Mayor. 
 
 Hon. Benjamin Bosse: How is California? 
 
 Mr. Delaney: Oh, California is very warm and nice. It couldn't be 
 more beautiful than it is. We are just now having the most wonderful 
 weather that you could possibly have, just like a fine April day. 
 
 Hon. Benjamin Bosse: We are delighted to hear that Governor 
 Johnson is going to be your United States Senator. 
 
 Mr. Delaney: Yes, we are very glad that the Governor is going to 
 be United States Senator. 
 
 Hon. Benjamin Bosse: I am sorry he could not take part in our 
 Conference over here. 
 
 Mr. Delaney: Well, I wish we could. 
 
 Hon. Benjamin Bosse: We are trying our best to get everybody to 
 understand that the business of this country can only be done if we all 
 co-operate. 
 
 Mr. Delaney: Well, that is very true. I think you will find out we 
 are very much interested in what you are doing there. I will appreciate 
 it very much if you will send me any account that you may have of the 
 proceedings when they are published. I would like to get a copy of them 
 to keep in my office and to read over and study. I think they will be very 
 valuable. 
 
 Hon. Benjamin Bosse: We will be glad to send you a copy. I want 
 to thank you very much for this communication. 
 
 Mr. Delaney: Well, it is a pleasure to talk to you there. I want 
 to thank you very much for the opportunity, with the best compliments of 
 the season. 
 
 Hon. Benjamin Bosse: Good night. 
 
 Mr. Delaney: Good night. 
 
 Mr. Kingsbury: Hello, Mr. Beck. 
 
 Mr. Beck (San Francisco) : Hello, Mr. Kingsbury. 
 
 Mr. Kingsbury: Now, Mr. Wilbur Erskine, President of the Evans- 
 
THE CENTRAL STATES CONFERENCE 115 
 
 ville Chamber of Commerce, wants to talk to Mr. Robert Lynch, President 
 of the San Francisco Chamber of Commerce. 
 
 Mr. Beck: All right, I will connect him right away. 
 
 Mr. Robert Newton Lynch (at San Francisco) : Hello, Mr. Kings- 
 bury. 
 
 Mr. Kingsbury: Hello, Mr. Lynch. Mr. Wilbur Erskine, the Presi- 
 dent of the Chamber of Commerce of Evansville, Indiana, wants to talk 
 to you. 
 
 Mr. Lynch: I will be very delighted, I am sure. 
 
 Mr. Wilbur Erskine: Hello, Mr. Lynch. 
 
 Mr. Lynch: Good evening, Mr. Erskine. 
 
 Mr. Erskine: I just wondered what you thought of being President 
 of the Chamber of Commerce out there. 
 
 Mr. Lynch: Well, I consider it quite an honor. We have a very fine 
 organization here. It is a very great honor to be connected with it, Mr. 
 Erskine. 
 
 Mr. Erskine: Well, I have always thought very well of it. In fact, 
 I think it is the greatest honor that I ever had bestowed upon me, but 
 since this Conference here I feel that I am just about five times as big as 
 I ever was. 
 
 Mr. Lynch: Well, I congratulate you. 
 
 Mr. Erskine: We have some very live ones here today. Mr. Kings- 
 bury has so electrified us that I am afraid the telephones won't work in 
 this part of the country for about a week. 
 
 Mr. Lynch: Well, that would be too bad. 
 
 Mr. Erskine: And as I spend about half of my life talking over the 
 'phone I wonder how I would get along if it were impossible to use the 
 'phone for the purposes of my business. I trust that this will not have 
 a very bad effect on them. 
 
 Mr. Lynch: Well, it will be very bad for all of us if the 'phones 
 should go out of service. 
 
 Mr. Erskine: We have had a very delightful time at our Confer- 
 ence here. We hope you will get up something of that kind in your com- 
 munity out there. We think they are very beneficial. 
 
 Mr. Lynch: Well, we will take a great deal of interest in the sub- 
 ject that you have had up for consideration and will be very glad to read 
 over the proceedings. 
 
 Mr. Erskine: Well, good night. 
 
 Mr. Lynch: Good night. 
 
 Mr. Kingsbury: Hello. I want Denver, now. 
 
 Mr. Sachaffell: This is Denver, Mr. Kingsbury. 
 
 Mr. Kingsbury: Who is going to talk? 
 
 Mr. Sachaffell (Denver) : Mr. Allison Stacker, the State Treasurer. 
 
 Mr. Stacker: Hello, Mr. Kingsbury. 
 
 Mr. Kingsbury: Good evening, Mr. Stacker. Mr. Meeman, editor 
 of the Evansville Press, wants to say a few words to you. 
 
 Mr. Stacker: Oh, I shall be delighted to talk to him. 
 
 Mr. Edward Meeman: Five hundred men and women assembled in 
 the Central States Conference on Rail and Water Transportation send 
 greetings to the Rocky Mountain States. We have gone through the 
 transportation problems like one of your fine roads goes through the 
 Rocky Mountains. 
 
 Mr. Stacker: Well, we would be very glad to have you come out 
 and enjoy our fine roads through the mountains. This is the state treas- 
 urer talking. The Governor is indisposed. 
 
116 THE CENTRAL STATES CONFERENCE 
 
 Mr. Meeman: We are very sorry to hear that. However, we will be 
 delighted to come out sometime. We are having a very good time here 
 this evening, and we wish you could be here with us. 
 
 Mr. Stacker: Well, I want to extend to you the greetings of the 
 Chamber of Commerce of Denver, of which I was formerly president, and 
 also to extend an invitation to your party to come out to Denver and 
 enjoy our beautiful roads and our beautiful scenery and some of our hos- 
 pitality. 
 
 Mr. Meeman: Thank you very much. Good night. 
 
 Mr. Stacker: Good night. 
 
 Mr. Kingsbury: Hello. I want Chicago. 
 
 Mr. Bell (Chicago): All right, Mr. Kingsbury. 
 
 Mr. Kingsbury: I understand we are to talk to Mr. Reynolds, Presi- 
 dent of the Continental and Commercial National Bank of Chicago, but 
 that first we are to talk to Dr. Harry Pratt Judson, President of the 
 University of Chicago. 
 
 Mr. Bell: I will get Dr. Judson. 
 
 Mr. Kingsbury: Mr. Howard Roosa, editor of the Evansville Courier, 
 wants to talk to Dr. Judson. 
 
 Mr. Bell: Here is Dr. Judson. 
 
 Dr. Harry Pratt Judson (at Chicago) : Hello. 
 
 Mr. Kingsbury: President Judson? 
 
 Dr. Judson: Yes, sir. 
 
 Mr. Kingsbury: I want to introduce Mr. Howard Roosa, the editor 
 of the Evansville Courier, who wants to say a few words to you. 
 
 Dr. Judson: I shall be glad to hear from him. 
 
 Mr. Howard Roosa: Good evening, Doctor. 
 
 Dr. Judson: Good evening. 
 
 Mr. Roosa: I have heard your voice before, Doctor. I heard it very 
 frequently when I was at the University. 
 
 Dr. Judson: Can you hear me clearly. 
 
 Mr. Roosa: Yes, sir. President Judson, we are having a banquet 
 here of about five hundred men and women assembled, after a discussion 
 for two days regarding the transportation problem. We all wish that you 
 would say something to us here tonight. 
 
 Dr. Judson: Well, are you all there and can you all hear me? 
 
 Mr. Roosa: Yes, sir. 
 
 Dr. Judson: It is now nearly a quarter of a century since you were 
 a student here. At that time we had only five hundred students. Now, we 
 have over five thousand. I think only six or seven hundred registered the 
 first year, six thousand registered this year. The less than $2,000,000 on 
 which this University was founded have become more than $45,000,000. 
 
 Now, this globe is very good to live in. I understand that you are 
 considering transportation problems in your Conference at Evansville. 
 We must remember in dealing with these transportation problems that we 
 must not look but one year ahead, but we must look ahead for fifty years 
 or more and plan for that length of time. The progress of commercial 
 activity in this country is something wonderful but no commercial activity 
 of any kind worth mentioning would have been possible without transpor- 
 tation. The transporting of commodities over great distances with great 
 rapidity and at low cost are the chief essentials of commercial activities 
 and have made possible the wonderful development of our Republic. The 
 capital invested in the transportation facilities of the country will be 
 returned many fold. Without transportation by rail and by water into 
 the many cities of the country there never could have been any organized 
 system in the commercial development and in fact the cities of the country 
 
THE CENTRAL STATES CONFERENCE 117 
 
 could never have been organized and developed without the means of 
 rapid transportation. The telegraph and the telephone made possible the 
 railroads and the boats on river and ocean, and it is only by a perfect co- 
 ordination of all of our forces and sympathetic co-operation that America 
 will be able to retain its lead in the world of commerce. The genius of 
 the American people has made possible our talking tonight over such long 
 distances and with such ease. The wonders which we have seen are but 
 a forerunner of the wonders yet to come. Our systems of transportation 
 must be ready in a moment to meet the conditions of a new age. We must 
 look forward and not back. 
 
 I am glad to greet you and want to congratulate you on the success 
 of your Conference. 
 
 Mr. Roosa: In behalf of the five hundred men and women assem- 
 bled at this banquet, I want to thank you, Dr. Judson, very much and 
 extend to your our felicitations and good will. 
 
 Dr. Judson: I want to thank you very much and thank the gather- 
 ing there. Good night. 
 
 Mr. Roosa: Good night. 
 
 Mr. George M. Reynolds (at Chicago) : Hello. 
 
 Mr. Kingsbury: Hello, Mr. Reynolds. This is Mr. Kingsbury. Mr. 
 M. S. Sonntag, President of the American Trust & Savings Bank of Evans- 
 ville, Indiana, wants to say a few words to you, Mr. Reynolds. 
 
 Mr. Reynolds: All right. I would be glad to say a few words to him. 
 
 Mr. Kingsbury: Here is Mr. Sonntag. 
 
 Mr. Sonntag: How are you, Mr. Reynolds. 
 
 Mr. Reynolds: Hello, Mr. Sonntag. I am first rate, thank you. How 
 are you? 
 
 Mr. Sonntag: All right, thank you. We are sorry you could not be 
 with us tonight. We have been having a very fine meeting for the past 
 two days here. 
 
 Mr. Reynolds: I regret very much that I could not be with you. I 
 want to congratulate you, however, on the success of it, but I congratu- 
 late you people more on your initiative in getting up a Conference of 
 that kind. 
 
 Mr. Sonntag: Mr. Reynolds. 
 
 Mr. Reynolds: Yes. 
 
 Mr. Sonntag: We would like to have your views regarding condi- 
 tions for the coming years as to money and general conditions. 
 
 Mr. Reynolds: Well, you know, there is an old saying that a pro- 
 phet is without honor in his own country. Therefore, I am rather loath 
 to prophesy. Our reputation as a prophet usually becomes very low if we 
 don't hit is just right. We don't know what is liable to happen. We 
 some times are up against it when we are asked whether we can prove 
 whether we are right or not. The conditions in this country, of course, 
 are very unusual. We are in the midst of probably the greatest prosperity 
 that the nation as a whole ever enjoyed, superinduced very largely by the 
 conflict abroad and the enormous exports which we have been sending 
 over there and the great imports of gold and wealth in its stead. Now, 
 almost every line, directly or indirectly, has felt a benefit or a collateral 
 benefit of this unusual prosperity. I don't think this is -true, however, of 
 the banks. The banks have been penalized rather than having felt any 
 benefit from this business, because of the great influx of gold and wealth 
 and the little demand for money. I just want to say that what is likely 
 to happen, what is in store for us here, depends a great deal on the trend 
 of the war abroad. 
 
 Mr. Sonntag: What, in your opinion, would be the effect on thib 
 country if peace were declared in Europe at this time? 
 
118 THE CENTRAL STATES CONFERENCE 
 
 Mr. Reynolds: Well, I think we are getting a little forecast of what 
 the effect might be on this country by the effect that the German note had 
 on the stock market in New York within the last three or four days. Now, 
 I think that peace would come as a shock and probably would shock the 
 markets. I can't see any reason for any great disturbance. We would 
 all have to readjust ourselves to the new conditions if peace were de- 
 clared. Personally, I believe that in the long run we will enjoy just as 
 much if not more prosperity than we have had in the past, and we would 
 get away from what many people call blood money prosperity, as it has 
 been called during the last two years. The fear and the lack of confi- 
 dence which is reflected in the stock market, the stock brokers in New 
 York City, is a thing that has got to come when the war ends. Immediate- 
 ly following that, however, confidence will take the place of fear. We 
 will begin then to get on a sound basis and while there will be a great 
 many problems raised I think the American business man is cool-headed 
 enough to solve them. I am sure that the American people will soon re- 
 adjust themselves to the new conditions. 
 
 Mr. Sonntag: Well, thank you, Mr. Reynolds. Good night. 
 
 Mr. Reynolds: Good night. 
 
 Mr. Kingsbury: Now, we want to go to Boston. 
 
 Mr. Bell: All right, here is Boston. 
 
 Boston Operator: This is Boston. 
 
 Mr. Kingsbury: Is Governor Coolidge there? 
 
 Boston Operator: Yes, sir. 
 
 Lieutenant-Governor Coolidge (at Boston) : This is Mr. Coolidge. 
 
 Mr. Kingsbury: This is Mr. Kingsbury, Governor. Mr. Charles F. 
 Hartmetz wants to say a word to you. We are glad to hear from you, 
 Governor. I will put Mr. Hartmetz on the line. 
 
 Mr. Coolidge: All right. 
 
 Mr. Hartmetz: Good evening, Governor. 
 
 Mr. Coolidge: Good evening. How is the weather out there? 
 
 Mr. Hartmetz: It is pretty cold out here now, but we are interested 
 in a proposition of much more importance than the weather, the proposi- 
 tion of transportation, the problem that is connected with the high cost of 
 living. 
 
 Mr. Coolidge: Yes, sir; it is a very important problem. I want to 
 congratulate you on the success of your meeting. I am as interested as 
 any man in the country's prosperity. We regard our welfare as going 
 hand in hand with the development of the railways and waterways. We 
 should use all our energies, bend all our efforts towards the building up 
 of the railways and waterways. We need them, we need them in order 
 to maintain our prosperity. 
 
 Mr. Hartmetz: It is a very big question and a very big proposition 
 and we have been discussing it here from all angles. 
 
 Mr. Coolidge: Yes, sir. I hope you work it out satisfactorily. 
 
 Mr. Hartmetz: We would like to have had you with us. We have 
 had a very successful Conference. 
 
 Mr. Coolidge: Yes, I heard so. I wish you success now, and extend 
 to you the best wishes and greetings of the season. 
 
 Mr. Hartmetz: Thank you very much, Governor, we are very glad 
 to have heard from you. 
 
 Mr. Coolidge: Goodbye. 
 
 Mr. Hartmetz: Goodbye. 
 
 Mr. Kingsbury: Hello, Boston. 
 
 Boston Operator: Mr. Weed is on the line. 
 
THE CENTRAL STATES CONFERENCE 119 
 
 Mr. Kingsbury: Mr. Weed is the President of the Boston Chamber 
 of Commerce. 
 
 Mr. DeJong (Vice-President Evansville Chamber of Commerce) : 
 Hello, Mr. Weed. 
 
 Mr. Weed (at Boston) : Hello. 
 
 Mr. DeJong: This is Mr. DeJong of Evansville, Indiana. I am 
 speaking for about five hundred live wires who are assembled here at 
 the conclusion of the Central States Conference on Rail and Water Trans- 
 portation, held at Evansville, Indiana. If this telephone had a mirror 
 attachment to it as well as being long distance, I would bring you face 
 to face with five hundred live wires. How is the weather out your way? 
 
 Mr. Weed: Well, it is snowing pretty hard just now. 
 
 Mr. DeJong: Well, it has been snowing here, too. 
 
 Mr. Weed: We, of the Chamber of Commerce of Boston, Massachu- 
 setts, want to send congratulations to the Evansville Chamber of Com- 
 merce. We congratulate you and appreciate the work you have under- 
 taken. Whatever you may be able to accomplish in the way of water- 
 ways or railroads we hope will be for the best and we know that your 
 views down there will be respected by the government in its regulation 
 of the railroad. We believe that the national government should be given 
 this authority and not that any state should have the authority to regu- 
 late for interstate commerce, which it does when it imposes regulations 
 upon an interstate carrier. We have the commerce of the world at our 
 doors. We believe that we can keep this commerce, that we can go into 
 the markets of the world, and that we can get prosperity into the whole 
 country and keep it there if we can get the proper transportation for our 
 raw materials and manufactured goods. To get prosperity into the whole 
 country we have got to go to the markets of the world. The only way 
 it can be developed is by the railroads. The telephone company, by its 
 marvelous service, has done its part. The people of this country must 
 be given the right of collective bargaining. The states of this country 
 must have proper transportation facilities or we will never be able to at- 
 tain the place that America is properly entitled to. Much obliged to you. 
 Good night to you all. 
 
 Mr. DeJong: Good night. 
 
 Mr. Kingsbury: Hello, I want New York Now. Hello, New York. 
 
 New York Operator: Hello, this is New York. 
 
 Mr. Kingsbury: I want to speak to Mr. Bethel. 
 
 New York Operator: All right, here you are. 
 
 Mr. Kingsbury: (To the audience) I am going to speak to my boss. 
 I hope you won't notice any change in my voice. Hello, Mr. Bethel. Is this 
 Mr. Bethel? 
 
 Mr. Union N. Bethel (Senior Vice-President American T. & T. Co. at 
 New York) : (Mr. Bethel was born and lived many years at Newburgh, 
 ten miles from Evansville.) Hello, Mr. Kingsbury. 
 
 Mr. Kingsbury: How are you, sir? 
 
 Mr. Bethel: Pretty well, thank you. How are you tonight? 
 
 Mr. Kingsbury: First rate, thank you.. We are having a splendid 
 time. I am down here with your old friends and neighbors. They are 
 specially interested and were very sorry you could not be here. I haven't 
 any apologies to offer for you for not being here. I have left that to you. 
 Mr. J. C. Johnson, Vice-President of the Citizens National Bank of Evans- 
 ville, wants to say a few words to you, Mr. Bethel. 
 
 Mr. Bethel: Hello, Mr. Johnson. 
 Mr. Johnson: Hello, Mr. Bethel. 
 Mr. Bethel: How are you, sir? 
 
120 THE CENTRAL STATES CONFERENCE 
 
 Mr. Johnson: Very well, thank you, sir. I want to extend greetings 
 to you, sir, on behalf of the Central States Conference on Rail and Water 
 Transportation now in session in the city of Evansville. I want to know 
 if you have some message to transmit to this Conference. 
 
 Mr. Bethel: I don't know that I have any message, Mr. Johnson. I 
 would suggest to the people of Evansville who had the honor to hold 
 this first Conference in their midst, that they did something of which they 
 ought to be proud. I am proud of the fact that I have lived in Evans- 
 ville. I was born near there on the banks of the beautiful Ohio at a little 
 place called Newburgh. 
 
 Mr. Johnson: Oh, yes, Evansville is a suburb of Newburgh. 
 
 Mr. Bethel: As I say, I am very glad that Evansville had the honor 
 of holding that first Conference. I have been back there a great deal since 
 my boyhood. I spent my boyhood there and I want to say that there is no 
 state in the country that can compare with Indiana. I hope you will 
 be exceedingly successful in all you do. 
 
 Mr. Johnson: Thank you very much. Your friend, Mr. Brown, from 
 Atlanta, Georgia, is here. 
 
 Mr. Bethel: Yes. 
 
 Mr. Johnson: He has been sitting beside me here at the banquet. He 
 sends his greetings to you. 
 
 Mr. Bethel: Will you please thank Mr. Brown very kindly? 
 
 Mr. Johnson: Yes, sir. 
 
 Mr. Bethel: What family of Johnsons do you belong to? 
 
 Mr. Johnson: What family do I belong to? 
 
 Mr. Bethel: Yes. 
 
 Mr. Johnson: Oh, there is a vast army of Johnsons in this country 
 and I don't know just what family I belong to. 
 
 Mr. Bethel: I am a real Hoosier. Where do you come from? 
 
 Mr. Johnson: I come from Maryland. 
 
 Mr. Bethel: Maryland? 
 
 Mr. Johnson: Yes; I am not a Hoosier by birth. I am a Hoosier 
 by preference. 
 
 Mr. Bethel: I take great pleasure in hearing from you. I am very 
 proud of the fact that I am from the Hoosier state. Now, I belong to that 
 hardy race of people that came down and settled in that great north- 
 western territory north of the Ohio river. 
 
 Mr. Johnson: Yes. 
 
 Mr. Bethel: That gave to the world such men as Abraham Lincoln. I 
 was like Lincoln in one respect. I spent my boyhood in the same coun- 
 try that he did. In that one respect I was like him. I am not a contem- 
 porary of his, though. 
 
 Mr. Johnson: No, I should hope not. 
 
 Mr. Bethel: But I was a contemporary of George Clifford. 
 
 Mr. Johnson: I didn't know you were quite so old a man. 
 
 Mr. Bethel: Yes. 
 
 Mr. Johnson: He is here tonight. 
 
 Mr. Bethel: Give him my love. 
 
 Mr. Johnson: Give him your love, yes. 
 
 Mr. Bethel: And Mark Sonntag. 
 
 Mr. Johnson: Mark Sonntag? 
 
 Mr. Bethel: Yes. 
 Mr. Johnson: He is here tonight, too. 
 
THE CENTRAL STATES CONFERENCE 121 
 
 Mr. Bethel: Give him my love, too. 
 
 Mr. Johnson: He has just finished talking to Mr. Reynols in Chi- 
 cago. 
 
 Mr. Bethel: Yes, those are the fellows that I know. Do you know 
 Will Warren? 
 
 Mr. Johnson: Yes. 
 
 Mr. Bethel: Well, he is a cousin of mine, not by blood. 
 
 Mr. Johnson: Mr. Warren is here. 
 
 Mr. Bethel: Mr. Warren there? 
 
 Mr. Johnson: Yes, Mr. Warren is sitting a few feet from me. 
 
 Mr. Bethel: I would like to talk to him. 
 
 Mr. Johnson: He is right here. Just as soon as he comes he will 
 speak to you, but before he does I want to wish you a merry Christmas 
 and extend to you the greetings of the season. 
 
 Mr. Bethel: All right, thank you. 
 
 Mr. William Warren: Hello, Union. 
 
 Mr. Bethel: Hello, Will. How are you tonight? 
 
 Mr. Warren: Fine. How are you? 
 
 Mr. Bethel: Fine. 
 
 Mr. Warren: I wish you could have been up here tonight. We cer- 
 tainly had a fine time. 
 
 Mr. Bethel: I wish so too. I asked Mr. Kingsbury to bring my re- 
 grets because I couldn't be there, it was absolutely impossible. 
 
 Mr. Warren: Well, he did that, Un. He held up your end very 
 nicely indeed. 
 
 Mr. Bethel:. That is very nice, Bill. 
 
 Mr. Warren: Well, I wish you a very merry Christmas, Union. 
 
 Mr. Bethel: Thank you, Will. I am awfully glad to hear your voice. 
 Are you all well at home? 
 
 Mr. Warren: Yes. Good night, Un. 
 
 Mr. Kingsbury: Good night, Mr. Bethel. 
 
 Mr. Bethel: Good night, Mr. Kingsbury. 
 
 Mr. Kingsbury: Hello! New York. Is Mr. Morgan there? 
 
 Mr. William Fellows Morgan: (President Merchants Association of 
 New York, at New York.) Yes, sir. 
 
 Mr. Kingsbury: Hello, Mr. Morgan. 
 
 Mr. Morgan: Hello, Mr. Kingsbury. 
 
 Mr. Kingsbury: Mr. Robert A. Andres, President of the Retail Mer- 
 chants Bureau and director of the Evansville Chamber of Commerce is 
 on the line and wants to say a few words to you. 
 
 Mr. Andres: Hello, Mr. Morgan. 
 
 Mr. Morgan: Hello, Mr. Andres. How are you this evening? 
 
 Mr. Andres: Very fine, thank you. The Central States Conference 
 on Rail and Water Transportation sends you greetings. The delegates 
 are assembled here. They number very nearly five hundred and we re- 
 great very much that you could not accept our invitation to be present. 
 Have you something to say to us relative to the discussion that has been 
 going on during the past few days, a message that would be of interest 
 to us? 
 
 Mr. Morgan: I don't think I have any message that would be of 
 particular importance at this time. I think you have heard both sides 
 of the question and I shall merely send you the greetings of the season. 
 I have been very glad I have been able to talk to you. It seems won- 
 
122 THE CENTRAL STATES CONFERENCE 
 
 derful to me to sit here and talk to you almost a thousand miles away. 
 Good night. 
 
 Mr. Andres: Good night. Thank you very much, sir. 
 
 Mr. Kingsbury: Good night. 
 
 Mr. Morgan: Good night. 
 
 Mr. Kingsbury: Hello, Mr. Bell. We want to get Washington now. 
 
 Mr. Bell: Hello, Mr. Kingsbury. We wall get Washington for you 
 right away. 
 
 Mr. Kingsbury: Who is this talking? 
 
 Operator: This is the testing station. We are getting Secretary' 
 Daniel's residence. 
 
 Hon. Josephus Daniels, (Secretary of the Navy) (at Washington) : 
 Hello. 
 
 Mr. Kingsbury: Hello, Mr. Secretary. This is Mr. Kingsbury of 
 the telephone company, Mr. Secretary. How are you? 
 
 Hon. Josephus Daniels: Very fine, thank you. How are you? 
 
 Mr. Kingsbury: First rate. I would like you to say a few words to Mr. 
 W. H. McCurdy, President of the Hercules Buggy & Gas Engine Company, 
 of Evansville, Indiana. 
 
 Hon. Josephus Daniels: All right. 
 
 Mr. W. H. McCurdy: Hello, Mr. Secretary. 
 
 Hon. Josephus Daniels: How are you out there? 
 
 Mr. McCurdy: Pretty well. How are you in Washington? 
 
 Hon. Josephus Daniels: All right. 
 
 Mr. McCurdy: We are having a fine time here. We are now assem- 
 bled in the Central States Conference on Rail and Water Transporta- 
 tion and we have had a very successful meeting. We, of course, missed 
 you. We hope to be more successful another time. How are things over 
 in Washington? 
 
 Hon. Josephus Daniels: Things are very quiet here. 
 
 Mr. McCurdy: I happen to have been made chairman of a commit- 
 tee to secure the armor plate plant for Evansville and I hope soon to meet 
 you as well as other Washington officials, for the purpose of laying before 
 you all of our claims as impressively as possible. 
 
 Hon. Josephus Daniels: Well, we expect to send a committee out to 
 see what you have, what kind of territory you have. 
 
 Mr. McCurdy: That will be all right. You will send the committee 
 here to Evansville? 
 
 Hon. Josephus Daniels: Yes. 
 
 Mr. McCurdy: Well, we will give them a royal welcome and show 
 them the advantages of locating the armor plate plant in our community. 
 
 Hon. Josephus Daniels: Well, I know they will have a good time. 
 
 Mr. McCurdy: Mr. Secretary, I hope you will take advantage of that 
 opportunity and come along with them. 
 
 Hon. Josephus Daniels: Well, I hope I can do so. I won't promise, 
 but I will if I can. 
 
 Mr. McCurdy: That will be very good. Do the best you can for us. 
 Good night. 
 
 Hon. Josephus Daniels: Good night. 
 
 Mr. Kingsbury: Hello. 
 
 Washington Operator: This is Secretary Lansing's residence. 
 
 Mr. Kingsbury: All right. Hello. 
 
 Hon. Robert Lansing: Hello. 
 
THE CENTRAL STATES CONFERENCE 123 
 
 Mr. Kingsbury: Hello, Secretary Lansing? 
 
 Hon. Robert Lansing: Yes. 
 
 Mr. Kingsbury: Mr. Samuel L. Orr of Evansville, Indiana, wants to 
 say a few words, to you, sir. 
 
 Hon. Robert Lansing: All right. 
 
 Mr. Samuel L. Orr: Hello, Secretary Lansing. 
 
 Hon. Robert Lansing: Hello, Mr. Orr. 
 
 Mr. Orr: We have had a most successful conference and I am sure 
 that you will be interested to hear how much we have all been benefited 
 and I believe that the Conference will do a great good. As you are a 
 citizen of Evansville by marriage we would like to have you honor us 
 with a few remarks. Have you a message to send to us? 
 
 Hon. Robert Lansing: Do you hear me? 
 
 Mr. Orr: Yes. 
 
 Hon. Robert Lansing: I want to express our very best wishes for a 
 successful outcome of your Conference. The President is very much in- 
 terested in your deliberations. We wish to congratulate the great cen- 
 tral states on their industry and progress. While I cannot be with you 
 in person I am with you in spirit. While I cannot meet with you in per- 
 son I can do so across a thousand miles of wire. I believe that the prob- 
 lems both in transportation and along other lines will be solved by mature 
 deliberation. The railroads and waterways are the channels of commerce 
 and are the great arteries of development, and their perfection in these 
 complex times is well worthy of consideration. I wish to express my 
 highest regarfl for the city of Evansville in undertaking a conference of 
 this nature. I wish you success in your enterprise and want to congratu- 
 late you upon your conference. 
 
 Mr. Orr: We thank you very much, Mr. Secretary. 
 
 Hon. Robert Lansing. Thank you. 
 
 Mr. Orr: Will you please extend to your good wife, Mrs. Lansing, the 
 affectionate greetings of Evansville? 
 
 Hon. Robert Lansing: I will be very glad to do so. Good night. 
 
 Mr. Orr: Good night. 
 
 Mr. Kingsbury: Hello. 
 
 Washington Operator: This is Washington. This is Vice-Presi- 
 dent Marshall's residence. Are you ready for him? 
 
 Mr. Kingsbury: Yes, we are ready. 
 
 Hon. Thomas R. Marshall: Hello. 
 
 Mr. Kingsbury: Hello, Mr. Vice-President. This is Kingsbury of 
 the Bell Telephone Company. Mr. Boehne, ex-Congressman from Indiana, 
 would like to speak to you. Mr. Boehne is right here. 
 
 Hon. John W. Boehne: Hello. Is this Mr. Marshall? 
 
 Hon. Thomas R. Marshall: Yes. Hello, Mr. Congressman. 
 
 Hon. J. W. Boehne: How are you to-day? 
 
 Hon. Thomas R. Marshall: Very well, sir. Is the Conference in 
 progress now? 
 
 Hon. J. W. Boehne: The Central States Conference on Rail and 
 Water Transportation has been in session two days and they send their 
 greetings to the Vice-President of the United States. They would like to 
 have you say a word to them. There are 500 guests here, connected by 
 telephone, who are enjoying his treat through the courtesy of the Bell 
 Telephone Company. We have just had a most elaborate banquet here. 
 Now, we would like to hear a few words from you. 
 
 Hon. Thomas R. Marshall: Mr. Congressman, I am a little em- 
 barrassed. I don't know just what to say. I express my personal appre- 
 
]24 THE CENTRAL STATES CONFERENCE 
 
 elation to all of the members present of the great task that they have had 
 before them, and I want to congratulate the city of Evansville for its 
 initiative in undertaking such a movement as that. The question has 
 been particularly acute in the United States for the last number of months 
 and we have been very much occupied with the discussion of the great 
 question of transportation. That is one of the great problems confront- 
 ing the American people and has to do with and has reference to the high 
 cost of living. The high cost of living is partly induced by the fact that 
 we have the people in one place and the products in another. The great 
 difficulty is to bring them closer together. The question is whether we 
 can bring the people to the products or whether the products can be 
 brought to the people. This is not only an economic problem, but is also 
 a social problem, to the solution of which the members of your Confer- 
 ence do well to lend their best efforts, their best energy and their best 
 thoughts. The only thing I want to say is that the more you can put into 
 the appropriations for the improvements of the rivers and waterways 
 of this country the better it will be for all concerned, because in that 
 way we will be able to relieve part of the congestion. There can be no 
 question of the expediency of improving our rivers. The present condi- 
 tion of affairs does not arise from the fact that river transportation cannot 
 be made possible and valuable to the people of this country, but it does 
 arise from the fact that it cannot be made possible and valuable to the 
 people of the country under the present conditions of the law. So all I 
 can ask of the government of the United States is to permit the railroads 
 to meet and to lower the rates of transportation. We must do everything 
 to arouse enthusiasm over the improvements of the rivers of this country. 
 
 , It is perfectly natural that the people will ship by rail and not by 
 water, because of the greater expediency at this time when the railroads 
 are used than when the waterways are used in their present condition. It 
 is also perfectly natural that, when the waterways are improved, with the 
 cheaper rates they will afford, whatever traffic can be sent over them will 
 go via the waterways rather than by the railways which parallel, unless 
 the rates on the two are equal. It seems to me, therefore, that there 
 must be some adjustment made between the railroads and the rivers of 
 this country, that they must be co-ordinated and that, either through the 
 instrumentality of the states or the instrumentality of the general gov- 
 ernment, there must be a control somewhere of the rivers and the rail- 
 roads of his country; and that there must be power given to fix their se- 
 curities and to enable us to use as much as we possibly can the great 
 natural highways of the country, the mighty rivers that flow in all direc- 
 tions through this United States of America. Now, I am an old-fashioned 
 democrat. I don't want to take away from the various states of this 
 Union any of the rights that belong to them, but it seems to me that it 
 would be to the advantage of the various states as well as to the people 
 of the whole country that there be one controlling body over the railroads 
 of the whole country. I hope that the conditions of America will not 
 necessarily be changed by the new conditions in the markets of the world, 
 but it is a fact that, unless the various states in this Union will assume 
 the responsibilities which they owe to all of the states, and take the 
 necessary steps to induce the people to use both the railroads and the 
 waterways in the transportation of not only the food products, but all of 
 the manufactured products of all of the states of this Union, there must 
 be one central controlling body, and that the different states acquiesce 
 in the opinion of that commission which would have the control over all 
 the waterways and railways. 
 
 Now, I am most delighted to know that in the very grand and pros- 
 perous city of Evansville there has been held a Conference, the members 
 of which are firmly convinced of the necessity of studying this problem 
 which confronts the whole nation, and that that Conference has been 
 called with that one object in view. I trust that that Conference has 
 heard all sides of the question, and that they will give careful considera- 
 
THE CENTRAL STATES CONFERENCE 125 
 
 tion to the questions involved before any action is taken, and that what- 
 ever action is taken will be for the best interests of all the people of this 
 country. Now, for myself, I would be opposed to any legislation unless 
 that legislation could be backed up by the deliberate judgment of all the 
 people. I believe in a very large amount of discussion on any subject. 
 I doubt if the views of all sides can be expressed by any one party or 
 by anybody and everybody who may happen to be at the convention. I 
 hope that no one will refrain from speaking for fear of not meeting 
 with the approval of some in the convention, but that everybody will talk. 
 I trust that your deliberations, which will no doubt become known to all 
 of the people of all of the states of this country, and which will no doubt 
 be crystalized into some set of resolutions, will help to solve for the 
 American people the great transportation problem of this country. 
 
 Hon. J. W. Boehne: Mr. Marshall. 
 
 Hon. Thomas R. Marshall: Yes, sir. 
 
 Hon. J. W. Boehne: I would like to say that I had the great pleasure 
 of talking to you tonight as though I were with you in person, instead 
 or a thousand miles apart, and I want to extend to you and Mrs. Marshall 
 the best wishes, not only of myself but of my entire family. How is Mrs. 
 Marshall? 
 
 Hon. Thomas R. Marshall: She is well, but not strong, Mr. Congress- 
 man; and I hope you will extend to the members of the Conference my best 
 wishes and greetings, and explain to them that it was somewhat difficult 
 to speak over the telephone, that my views with reference to transporta- 
 tion are not fixed, but that they are only tentative. I am at a loss to know 
 what we may do in this great problem. I want you to give my greetings 
 to all members of your good family, to all the people of Evansville, and 
 the delegates to the convention. 
 
 Hon. J. W. Boehne: Thank you, very much. I wish to say that we 
 would like to have you extend to the President the greetings of this con- 
 vention, and to thank him in behalf of this convention assembled for his 
 kind message to us. I hope to pay my personal respects to him and to 
 you as well as to the others in Washington within a very short time. 
 
 Hon. Thomas R. Marshall: I will gladly convey your kind greet- 
 ings to the President, and I want to thank you very much for your well 
 wishes. 
 
 Hon. J. W. Boehne: Well, good night and good luck to you. 
 Hon. Thomas R. Marshall: Good night. 
 
 Mr. Kingsbury: Hello. Give me the transcontinental with San 
 Francisco. 
 
 Mr. Hunter: (San Francisco.) This is San Francisco, Hunter speak- 
 ing, Mr. Kingsbury. 
 
 Mr. Kingsbury: Hello, Mr. Hunter. Have you got the window open 
 there? 
 
 Mr. Hunter: (San Francisco.) Yes. 
 Mr. Kingsbury: How is the Pacific tonight? 
 
 Mr. Hunter: (San Francisco.) The Pacific is rather quiet but there 
 are some waves on it. 
 
 (Mr. Kingsbury: I don't think it is wavy enough tonight for us to 
 hear. When are you ready for us? 
 
 Mr. Hunter: (San Francisco.) Right now, anytime. 
 
 Mr. Kingsbury: All right. Let us have the roar of the Pacific and 
 we will have moving pictures to show where the roar comes from. 
 
 Mr. Hunter: (San Francisco.) All right. 
 
 Mr. Kingsbury: (To audience.) Pictures will be thrown on the 
 screen to show where the roar is taken in the Pacific, down at the Cliff 
 
126 THE CENTRAL STATES CONFERENCE 
 
 House in San Francisco. A telephone receiver is placed on the pier at 
 the Cliff House. Can you hear the roar of the waves? 
 
 Moving pictures were shown, showing the Pacific coast and the 
 waves breaking on the shore, while the roar of the waves was distinctly 
 heard by the conference over the telephone. 
 
 Mr. Kingsbury: Hello. 
 
 Mr. Hunter: (San Francisco.) Hello, Mr. Kingsbury. 
 
 Mr. Kingsbury: Now, will you give us the Star Spangled Banner? 
 
 The Star Spangled Banner was played in San Francisco and heard 
 by the Conference over telephones. 
 
 Mr. Kingsbury: Hello, San Francisco. 
 
 Mr. Hunter: (San Francisco.) This is San Francisco. 
 
 Mr. Kingsbury: Good night, Mr. Hunter. 
 
 Mr. Hunter: (San Francisco.) Good night, Mr. Kingsbury. 
 
 "Good night" was then said to each city on the line across the con- 
 tinent. 
 
 Mr. Kingsbury: Last, but not least, Hello Evansville! 
 
 Mr. Gibbs: (Evansville.) This is Evansville, Mr. Kingsbury. Good- 
 night. 
 
 Mr. Kingsbury: Good night. Thank you very much. (Continued 
 applause.) 
 
 Mr. Henry C. Murphy: Mr. Toastmaster, gentlemen of the Confer- 
 ence and ladies: I want to move the heartiest vote of thanks to Mr. 
 Kingsbury, to Mr. Hobson, to Mr. Brown, to Mr. Webb and their associates 
 in the American Bell System for their wonderful kindness in giving us 
 this marvelous demonstration. 
 
 Hon. Benjamin Bosse: I want to second the motion.. 
 
 Mr. Henry C. Murphy: Mr. Hobson is the toastmaster and modesty 
 would prevent him from putting the motion himself. I ask you all to 
 say "aye". 
 
 The motion was unanimously carried. (Applause.) 
 
 The Toastmaster: In behalf of Mr. Kingsbury, Mr. Brown and Mr. 
 Webb and our company employes, I thank you very much, Mr. Murphy, 
 for your motion and you, ladies and gentlemen, for your hearty accord. 
 (Applause.) 
 
 Gentlemen, as I told you when the resolutions reported by your reso- 
 lutions committee were introduced, we do not wish to pass any resolu- 
 tions, voicing this Conference's sentiments, which do not meet with the 
 full approval of the Conference. If the gentleman who rose to object to 
 that clause in the resolutions, will merely state his objection, if the Con- 
 ference wishes, that clause will be stricken from the resolutions. We do 
 not purpose to pass any resolutions which do not meet with practically 
 the unanimous consent, or the approval of a very large majority of the 
 delegates who attended this Conference. 
 
 Hon. Benjamin Bosse: May I offer a substitute, Mr. Toastmaster? 
 
 The Toastmaster: You want to offer a substitute for the resolutions? 
 I promised Mr. Finn to give him the floor first when the resolutions were 
 under consideration. The Mayor has asked that he be permitted to sub- 
 stitute. 
 
 Hon. Benjamin Bosse: May I have the floor now, Mr. Chairman? 
 
 The Toastmaster: You may. Have you a substitute? 
 
 Hon. Benjamin Bosse: Yes, sir. 
 
 The Toastmaster: The Mayor wishes to offer a substitute. Perhaps 
 that, Mr. Finn, will meet your views. Then I will call on you and you 
 can say what you please. 
 
THE CENTRAL STATES CONFERENCE 127 
 
 Hon. Benjamin Bosse: The members of the committee on resolu- 
 tions beg to offer a substitute for paragraph six of the resolutions as read. 
 We beg to offer this substitute: "We favor the adoption of more prompt, 
 efficient methods by which discriminations between rates established by 
 state and federal authority may be eliminated," instead of the following: 
 "We favor federal regulation of railroad rates, authority to be vested 
 with the Interstate Commerce Commission with regional sub-commissions 
 sitting in various traffic districts and that this regulation follow the 
 natural lines of commerce and not the artificial lines of states." 
 
 Mr. Lawrence Finn: Mr. Toastmaster. 
 
 The Toastmaster: Mr. Finn of Kentucky. 
 
 Mr. Lawrence Finn: There are two things which I have accom- 
 plished by my objection: The first is that the resolutions have not been 
 adopted until tomorrow by Washington time; the next is that they have 
 been amended. 
 
 Another proposition that I desire to call to your attention is this: 
 That in this peaceful assembly where quietude and serenity reigns su- 
 preme but one nationality on earth would raise one note of discord, and 
 that is the Irish. I am an Irishman. (Laughter.) There are some won- 
 derful things that have happened here tonight to which I desire to call 
 your attention. I heard one gentleman talking over the telephone, and 
 I want you to get the intonation that I place upon my voice, which is but 
 a repetition literally of that intonation that he placed upon his voice. 
 He said that he was a "Hughesa". He should have said that he was a 
 "Hoosa" and not a "Hughesa". 
 
 Another gentleman who spoke here this evening said that it would 
 only take one spoon of water to operate the telephone for an indefinite 
 length of time. I tell you that I have here before me the positive proof 
 that it takes almost an ocean of oxygen and hydrogen to operate the rail- 
 road systems of this country. The proposition, Mr. Toastmaster, before 
 this convention is simply this, resolved to its last analysis, that all control 
 of common carriers shall be centralized in the federal government. And 
 why? Because common carriers in this country operate under state 
 charters. Those state charters provide what? Thirteen states of this 
 Union, from which ninety per cent, of the railroads received 'their char- 
 ters, under which they had their existence, provide that no corporation 
 shall issue stocks and bonds except for an equivalent of money paid, only 
 upon property actually received and applied to the purposes for which said 
 corporation was created, and that little or no water shall be received in 
 payment of stocks or bonds. 
 
 Why do the common carriers want a federal incorporation act? Not 
 to be relieved of the conflict between the several states, as has been stated 
 here. I will show you, my friends, that that is not true. The Louisville 
 & Nashville Railroad Company operates through the states of Kentucky, 
 Illinois, Georgia, North Carolina, Virginia, Tennessee, Alabama, Florida, 
 Louisiana and Mississippi. All of these states have railroad commission 
 regulating the Louisville & Nashville Railroad Company any yet, my 
 friends, the Louisville & Nashville Company earned a return in 1916 
 equal to 19.4% upon its capital stock. 
 
 They tell us that the railroad companies are limited in their earning 
 capacity. I defy a single individual in the State of Kentucky to loan his 
 money and collect exceeding six per cent. If he tries to and goes to court 
 about it, you can declare the excess usury and refuse to pay it. 
 
 I will only call your attention to the fact that the Chicago, Milwaukee 
 & St. Paul Railroad Company runs through ten states, Illinois, Wisconsin, 
 Michigan, Minnesota, Iowa, Missouri, North Dakota, South Dakota, Mon- 
 tana, Idaho and Washington, and notwithstanding the fact that it runs 
 through all of these states the Chicago, Milwaukee & St. Paul Railroad 
 Company in 1916 earned 16.32 per cent, upon its capital stock. 
 
128 THE CENTRAL STATES CONFERENCE 
 
 My friends, I could continue these illustrations almost indefinitely, 
 but I want to show you here tonight that there is but one object of the 
 common carrier, and what is that? Federal incorporation. Why? Be- 
 cause so long as they receive their state charters they are bound by the 
 limitations of the very law that gives them their existence. The Inter- 
 state Commerce Commission today is spending millions of dollars to value 
 the railroads of the country. They have thousands of employes in the 
 field for what purpose? Both political parties in this country declare 
 that the stocks and bonds of the railroad companies represent a fictitious 
 valuation. Woodrow Wilson was elected upon a platform that declared 
 in favor of the valuation of corporations, and if you will read the cam- 
 paign book that was issued by his national committee, placed into the 
 hands of democratic speakers that were to go before the nation and edu- 
 cate the public, you will find therein that everyone of Woodrow Wilson's 
 campaign managers declared to the public that there were $9,500,0000,000 
 of watered stock in the railroads of this country. 
 
 Now, Mr. Toastmaster, all I ask of you, and all I ask the gentlemen 
 here tonight, is this: 
 
 First, I say that today and yesterday, you have been criticising the 
 politicians of this country. Why? Because they acted in haste. You 
 say that you are a band of business men here today. I ask you if you are 
 a band of business men assembled here for the purpose of coming to some 
 conclusions as a result of investigation, do not act hastily. Do not act 
 with haste, but act with that self-same, deliberate judgment, which ought 
 to characterize an assembly of business men and which you said in your 
 criticism should characterize the demagogue and the politician. 
 
 Another proposition that I ask is that when you put this vote tonight 
 is that you separate the vote. Let those who are stockholders and em- 
 ployes of the railroad companies vote upon this proposition seperately. 
 Exclude the railroad commissioners and take a separate vote from them. 
 Let the unbiased public that pays the freight rate also vote upon this 
 proposition, so that the public will know where the sentiment is that 
 prompted the vote upon the resolutions that have been offered here. (Ap- 
 plause.) 
 
 (Calls for question.) 
 
 The Toastmaster: Gentlemen, the question is called for. Is there 
 any further debate or shall the question be put. 
 
 Mr. Robert Bonham: What is the question? 
 
 The Toastmaster: The question before the house is on the adoption 
 of the resolution offered by the resolutions committee as amended by the 
 committee. 
 
 Upon the motion being put to a vote the ayes were declared to have 
 it and the motion declared carried. (Applause.) 
 
 The Toastmaster: Gentlemen, we thank you very much for your at- 
 tention. The Central States Conference on Rail and Water Transportation 
 is now adjourned. 
 

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