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 AN ADDRESS 
 
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 W. C. BROWN 
 
 President Elect New York Central Lines 
 
 DELIVERED AT THE 
 
 SEVENTH ANNUAL DINNER 
 
 OF THE 
 
 ALBANY, N. Y., CHAMBER OF COxMMERCE 
 Albany, N. Y., January 7, 1909 
 
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The Country and the 
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 The Country and the Railroads 
 
 By W. C. Brown 
 
 I am very glad indeed to have the opportunity of meeting 
 this representative gathering of the business men of the 
 capital city of the Empire State. I am glad to speak here, 
 because Albany may very properly claim to be the birthplace 
 of the steam railroad. , 
 
 The Hon Stephen Van Rensselaer, of Albany, was one 
 of the first influential Americans, if not the first, to actively 
 and intelligently advocate steam railroad construction. The 
 Mohawk and Hudson Railroad, chartered in 1826, with Albany 
 as its initial point, was the first steam railroad chartered that 
 actually consummated the purpose of its charter. This road, 
 which was the inception of what is now the New York Central 
 lines, was opened for traffic between Albany and Schenectady 
 in 1831. 
 
 The new member of the family of nations, called the United 
 States of America, whose independence had been won on the 
 battle fields of the Revolution, was tardily and reluctantly 
 recognized by the mother country as an independent state on 
 November 30th, 1782. 
 
 At this time the population of the country, something less 
 j than three millions, of whom about half a million were slaves, 
 
 ^ was located upon and closely adjacent to the shores of the 
 
 - ' Atlantic ocean, extending back into the interior perhaps an 
 ^ average of 100 miles. 
 
 -c In some cases, settlement had followed the course of navi- 
 gable rivers two or three hundred miles westward; but land 
 ~ located more than one hundred miles from the coast or a 
 navigable river, was almost worthless, as the cost of trans¬ 
 porting the products of the soil exceeded the price at which 
 i‘ such products could be sold at the distant market. 
 
4 
 
 During the first decade following the recognition of the 
 independence of the colonies the tide of population had pushed 
 farther and farther westward. The western slope of the 
 Allegheny ^Mountains and the rich valley of the Ohio were 
 being peopled with a vigor characteristic of the Anglo-Saxon 
 race; and it became evident that at no distant date a large 
 population and no inconsiderable portion of the wealth of the 
 nation would be so located as to make trade relations with the 
 Atlantic seabord exceedingly difficult, if .not impossible. At 
 the same time, practicable and convenient transportation to 
 the Gulf by way of the Ohio and ^^lississippi rivers would 
 favor trade relations with the foreign nation then controlling 
 the territory at the mouth of the ^lississippi. This condition 
 involved non-intercourse and estrangement on the one hand 
 and growing and strengthening alliances on the other, which, 
 long continued, must inevitably have become a menace to the 
 peace and perpetuity of the nation. 
 
 The absolute necessity for better transportation facilities had 
 early engaged the attention of General Washington. Some 
 time before the outbreak of the Revolutionary war, he crossed 
 the Allegheny ^fountains for the purpose of ascertaining the 
 feasibility of constructing a canal from the navigable waters 
 of the Chesapeake to the Ohio; and, as a member of the House 
 of Burgesses of Virginia, he urged upon that body the earnest 
 consideration of the proposition. 
 
 During the war this important subject continued on his 
 mind, and he made a trip up the iMohawk valley to the summit 
 of the watershed, near Rome, from which the waters flow 
 into the Hudson river on the one hand and into Lake Ontario 
 on the other, and where nearly a century later were to be 
 realized to their full extent the work and advantages he so 
 earnestly sought to secure to his own State. 
 
 In a letter, at once an epic and a classic, written in 1784, to 
 Benjamin Harrison, General Washington earnestly and almost 
 passionately voices his appeal for binding together a frag¬ 
 mentary nation by those strong ties of interstate union and 
 commerce. In this letter he writes; 
 
5 
 
 “ No well informed mind need be told that the flanks 
 and rear of the United Territory are possessed by other 
 powers, and formidable ones, too; nor how necessary it 
 is to apply, the cement of interest to bind all parts of it 
 together by one indissoluble bond, particularly the Aliddle 
 States with the country immediately back of them. 
 
 “ The way is plain and the expense, comparatively 
 speaking deserves not a thought, so great would be the 
 prize. The western inhabitants would do their part 
 toward accomplishing it Weak as they are now, they 
 would, I am persuaded, meet us half way, rather than 
 be driven into the arms of, or be in any wise dependent 
 upon, foreigners; the consequence of which would be a 
 separation or a war. The way to avoid both, happily for 
 us, is easy and dictated by our clearest interest. It is to 
 open a wide door and make a smooth way for the produce 
 of that country to pass to our markets before the trade 
 may get into another channel. 
 
 “ That it is better to prevent an evil than to rectify 
 a mistake none can deny. Commercial connections, of 
 all others, are most difficult to dissolve. If we wanted 
 proof of this, look to the avidity with which we are 
 renewing, after a total suspension of eight years, our 
 correspondence with Great Britain. So, if we are supine 
 and sutler without a struggle the settlers of the western 
 country to form other commercial connections, we shall 
 find it a difficult matter to dissolve them, although a 
 better communication should thereafter be presented to 
 them. Time alone could efifect it, such is the force of 
 habit.” 
 
 This letter, wonderful in its clear-visioned, prophetic and 
 patriotic foresight, was our nation’s earliest bugle call to the 
 better days to come, of improved canal and river navigation. 
 It was the first splendid dream of that tremendous march of 
 settlement, civilization and development heralded by the 
 national highway and the canal, that later reached its full 
 realization in the continent-wide construction of the railroad. 
 
 From the first visit of Washington to the Mohawk valley 
 there was continuous agitation of the project for water con¬ 
 nection between T ake Erie and the Hudson river, and in 1792 
 the Western Inland Navigation Company was incorporated lor 
 the purpose of establishing lock navigation from the Hudson 
 river to Lake Ontario; and improvements were made by this 
 
6 
 
 company to allow the passage of boats of fifteen tons burden 
 from the Mohawk river to Oneida lake. The limited capacity 
 and imperfect construction of these improvements, however, 
 rendered them almost valueless. 
 
 In i8io a commission was organized by the Legislature of 
 New York State to examine the route of the Western Inland 
 Navigation Company and the improvements thereon. The 
 commission made a report recommending that five million 
 dollars be appropriated for a canal, and that the enterprise be 
 offered to the Federal government. This offer was rejected 
 and, the War of 1812 soon following, all work was suspended 
 until a return of peace. This war, however, had one effect of 
 perhaps more value than the victory itself, in that it aroused 
 the nation to the imperative necessity of welding into one its 
 disjointed, widely separated parts by immediately improving 
 the means of transportation from the seaboard to the west. 
 In 1816 a Board of Commissioners was appointed by the State 
 of New York to consider the subject of improved internal 
 transportation. This board reported at length to the Legisla¬ 
 ture, and on April 15th, 1817, an act was passed authorizing 
 the construction of a canal between the great northern lakes 
 and the Atlantic ocean. The requisite appropriations were 
 made; the work of construction was commenced near the 
 village of Rome on the 4th day of July, 1817; and the union 
 of the waters of the great lakes and the ocean was effected 
 in October, eight years later. 
 
 The cost of the Erie canal approximated $8,000,000, at that 
 time a tremendous undertaking, and to the credit of the State 
 of New York be it said that she bore this burden alone. 
 Appeals for aid to Ohio, Michigan, and other middle western 
 states that, in the years to come, were to be benefited in much 
 larger measure than the State of New York, were in vain; 
 and without assistance and with scant sympathy from sister 
 states, the Empire State assumed the burden. 
 
 By the building of that canal the cost of transportation of 
 freight from Buffalo to Albany was reduced from the almost 
 prohibitive figure of more than one hundred dollars per ton to 
 approximately twelve to fourteen dollars per ton. 
 
7 
 
 Less than a decade later, however, railroads were built along 
 the canal — five short lines, without physical connection for 
 handling through traffic. Later, men who had faith in the 
 future of the great Middle West and appreciated its needs, 
 consolidated and connected these lines, making a through line 
 of them. Measured by present standards, the consolidated 
 road was not much of a railroad, but within five years from 
 the inauguration of through service, it had so cheapened the 
 cost of transportation that it threatened to put the canal out 
 of business entirely; and one of the most bitter political cam¬ 
 paigns in the history of the State of New York was an effort 
 to force the railroad to raise its rates to a figure that would 
 permit the canal to compete for any kind of freight. This 
 contingency was not altogether unexpected. The report of 
 the Assembly committee, to which was referred in 1826 the 
 question of granting a charter for the Mohawk and Hudson 
 Railroad, says: 
 
 “ The only objection that occurs to the committee 
 against the incorporation of the petitioner is the possi¬ 
 bility of its reducing the tolls on the Erie canal.” 
 
 The average cost of handling a ton of freight from Buffalo 
 to Albany is fifty times less than it was before the construc¬ 
 tion of the canal, and ten times less than it was by the canal 
 before the railroad made its beneficent influence felt. 
 
 In 1855 the average freight rate on the New York Central 
 had been reduced to thirty-eight mills per ton per mile; in 
 1907 it was six mills. 
 
 The railroads comprising the “ New York Central Lines,” 
 the successor of the Mohawk and Hudson Railroad, now have 
 a mileage of 12,282 miles, which, if extended in a direct line, 
 would half encircle the globe. An army of 143,500 men is 
 employed, exceeding in number the army and navy of the 
 United States by more than 30,000, and earning about 
 $110,110,000 per annum. Out of $241,456,944 of annual 
 earnings in 1907, $217,000,000, or 71 per cent, was immediately 
 paid out for wages, taxes, interest, and in the purchase of 
 equipment and material. 
 
 The railroads of the entire country employed in 1907 nearly 
 
8 
 
 1,700,000 men; and, based on the accepted rule for estimating 
 population, supported directly approximately eight million 
 people. 
 
 This army of men carried on the pay-rolls of the railroads 
 of the United States almost exactly equals in number the 
 standing armies of Great Britain, Germany, France and Japan 
 combined, and receives in wages an aggregate of more than 
 one billion dollars per annum. 
 
 The gross earnings of the nation’s railways in 1907 
 amounted to approximately two billion, five hundred and 
 eighty-six million dollars, or more than $7,000,000 for each of 
 the 365 days of the year. If the railroads could have held in 
 their treasuries the money they earned in 1907, January ist, 
 1908, would have found the country bare of money; for prac¬ 
 tically every dollar in circulation in the United States, gold, 
 silver, paper, nickel and copper, passes through their treasuries 
 each year. This being the case, it is interesting to see how 
 this vast sum of money is disposed of — what becomes of it. 
 
 Out of each one hundred dollars earned, forty dollars is 
 directly and immediately paid out to employes on the pay¬ 
 rolls of the railroads. Eight dollars is paid for fuel, waste, 
 oil and water, and seven of the eight goes to pay for labor 
 required to produce these supplies. Eighteen dollars is paid 
 for steel rails, ties, cars, engines, structural steel, stationery 
 and thousands of other things necessary in the operation of a 
 railroad. Of this eighteen dollars, approximately sixteen goes 
 for labor. 
 
 Five dollars is paid for permanent improvements, such as 
 additions to yards, additional tracks, additions and extensions 
 of shops, roundhouses and the like; and four of the five 
 dollars is paid for labor. 
 
 Three dollars goes to pay taxes; two dollars for rent of 
 terminals, joint track, etc. 
 
 Fourteen dollars is paid as interest on bonds, which repre¬ 
 sent money borrowed for original construction or subsequent 
 improvements; and this sum amounts to less than an average 
 of four per cent on the face value of the bonds. 
 
 Nine dollars goes to the owners of the railroads — the 
 
9 
 
 shareholders — representing less than four per cent on the 
 face value of the stock. 
 
 One dollar is put into the surplus fund to provide for neces¬ 
 sary improvements to the property and as a reserve against 
 periods of hard times. 
 
 Approximately seventy-one dollars out of every one hun¬ 
 dred dollars earned by the railroads of the country is, there¬ 
 fore, almost immediately paid out for labor, or for equipment 
 and material of which labor forms by far the largest com¬ 
 ponent part. 
 
 During the ten years from 1897 to 1907 the United StatesV.^ 
 has enjoyed an almost continuous and uninterrupted advance 
 in prices of the product of its farms, factories and mines. 
 \\dth a succession of bountiful harvests, farm products, corn, 
 oats, rye, barley, buckwheat, hay and potatoes show an 
 average increase in price in 1907 of 71^ per cent over those 
 of 1897. 
 
 With a full, normal increase and no disease or epidemic to 
 deplete our flocks and herds, values have increased marvel¬ 
 ously. Notwithstanding the advent of the automobile, the 
 price of horses and mules was 150 per cent higher in 1907 
 than in 1897. The price of milch cows in 1907 was 32 per 
 cent higher, that of sheep 113 per cent higher, and that of 
 swine 47 per cent higher than in 1897. 
 
 The products of the forests make an equally marvelous 
 showing: Pine, hemlock, oak, poplar, cedar, ash and chestnut 
 sold in 1907 at an average price 57 per cent higher than in 
 1897. 
 
 Our Southern neighbors have shared in full measure in these 
 enhanced values: r^Iiddling cotton shows increase in price of 
 72.9 per cent; standard sheeting, 61.i per cent; standard 
 drilling, 60.4 per cent; bleached sheeting, 40.5 per cent; stand¬ 
 ard prints, 27.7 per cent. 
 
 Ohio fleece wool in the eastern market shows an increase of 
 from 78.9 to 89.5 per cent. 
 
 Anthracite coal shows increase in price of 28.6 per cent; 
 bituminous, 55.5 per cent; lard, 108.i per cent; pork, 99 per 
 cent; tallow, 88.8 per cent. 
 
I 
 
 10 
 
 During this time farm land in all portions of the West and 
 Middle West has fully doubled in value. 
 
 This great increase in the cost of things has affected the 
 railroad directly and severely. Comparing the prices of 1907 
 with those of 1897 on a few articles used in great quantities 
 by the railroads, the following large increases are shown: 
 Fuel, 38 per cent; ties, 76.4 per cent; steel rails, 47.4 per cent; 
 angle bars, 52 per cent; gray iron castings, 46.9 per cent; bar 
 iron, 47.9 per cent; cast iron pipe, 62.8 per cent; track spike, 
 37.3 per cent; cast iron wheels, 39.2 per cent; barbed wire, 
 47.1 per cent; bridge timber, 77.3 per cent; car axles, 41.4 per 
 cent; locomotive steel forgings, 45.4 per cent; stationery, 
 paper, etc., 20 per cent; locomotives, 50 per cent; cars, 72 
 per cent. 
 
 Labor shows an average increase of approximately 30 per 
 cent. 
 
 If the material used in 1907 by the railroads of the United 
 States, in operation and maintenance alone, could have been 
 purchased at the prices of 1897, it would have resulted in a 
 saving of approximately $176,500,000. 
 
 If the labor actually employed by the railroads in 1907, in 
 operation and maintenance, had been paid on the wage scale 
 of 1897, this item would have cost $^54,000,000 less than it did. 
 If the taxes of 1907 had been at the same rate per mile of road 
 as in 1897, the railroads of the country would have paid 
 $26,800,000 less taxes than they did in 1907. 
 
 If the locomotives, cars, rails, ties, etc., purchased in 1907 
 for additions and improvements and charged to capital 
 account,” could have been bought at the prices of 1897, they 
 would have cost $219,100,000 less than they did, and the 
 bonded debt of the roads, on which interest must be paid, 
 and for the retirement of which at maturity funds must be 
 provided, would be that much less; and these figures do not 
 include the increased cost of labor employed in making these 
 improvements. 
 
 The money raised by railroads for extensions and improve¬ 
 ments in 1897 was obtained at an average interest rate of 3.90 
 
11 
 
 per cent, while the average rate of interest in 1907 was 4.62 
 per cent, or an increase of 18.46 per cent. 
 
 Let us look at the other side of the ledger and see what the 
 railroads have been able to secure in the way of increased 
 rates to offset these tremendous increases in cost. 
 
 In a communication under date of May i8th, 1907, Mr. 
 J. M. Glenn, secretary of the Illinois Manufacturers’ Associ¬ 
 ation, stated that the rates had been advanced on more than* 
 800 articles; that by changes in classification many “ lake and 
 rail rates ” had been substantially increased; and, in a general 
 way, challenged my statement that, considered as a whole, 
 rates in Central Traffic and Trunk Line territory had been 
 reduced. 
 
 I could not answer Mr. Glenn’s statement; there was not a 
 traffic officer in the United States at that time that could; and 
 it is only after ten months of the most thorough, painstaking 
 investigation and analysis that it is possible to answer it now. 
 
 Mr. Glenn was right in stating that during the last ten years 
 increases have been made, by changes in the classification, in 
 the freight rates on approximately 800 articles. To be exact, 
 in the ten years from 1898 to 1908, rates have been advanced 
 in this manner on 897 articles. But, during the same period, 
 rates have been reduced, by changes in classification, on 876 
 articles; and the net result in money on the 1,773 articles on 
 which changes in rates have been made was a reduction of 
 10.69 cent. 
 
 Concisely stated, if the railroads could have purchased the 
 material and equipment used, and obtained the labor employed, 
 in the year 1907, on the basis of prices and scale of wages in 
 effect in 1897, their cost of operation, plus the cost of improve¬ 
 ments and extensions, would have been approximately 
 $676,000,000 less; and had they received for doing the busi¬ 
 ness of 1907 the rates of 1897, their earnings would have been 
 approximately $90,000,000 greater than they were. 
 
 Facts of this character furnish their own argument. Fig¬ 
 ures such as these require no elaboration . 
 
 These are the conditions with which the railroads of the 
 country have had to contend during the last ten years, and the 
 
12 
 
 conditions that confront them to-day. These are the facts that 
 must be frankly spread before investors to whom we are trying 
 to sell securities to obtain money for necessary improvements. 
 
 j\Ir. Toastmaster, this hasty review of some of the past 
 history and the present condition of the transportation busi¬ 
 ness of the country suggests an incpiiring glance into the 
 future. 
 
 Wdiat is to be the development, the growth, of agriculture, 
 of merchandising, of manufacturing and of mining during 
 the first quarter of the new century? What will be the popu¬ 
 lation of this country at the end of that period? * What will 
 be required in the way of increased transportation facilities, 
 and how will these increased facilities be supplied? 
 
 During the fifteen years from 1892 to 1907 the railroad 
 mileage of the United States increased from 175,170 miles to 
 225,584 miles, an increase of 50,414 miles. The population 
 increased almost 21,000,000. The production of anthracite 
 coal rose from 45,000,000 in 1892 to 63,000,000 tons in 1907, 
 an increase of nearly 20,000,000 tons; bituminous coal from 
 105,268,000 to 306,138,000 tons, an increase of more than 
 200,000,000 tons; while the production of pig iron shows an 
 increase of 181 per cent and that of steel 374 per cent. 
 
 During this period the annual production of corn increased 
 from 1,628,464,000 bushels in 1892 to 2,592,320,000 bushels 
 in 1907, an increase of almost 1,000,000,000 bushels; that of 
 cotton from 9,000,000 bales to 13,500,000 bales, an increase of 
 approximately 4,500,000 bales; while cattle, horses, sheep, 
 mules and swine increased more than 35,000,000 in number. 
 
 The wealth of the nation increased from sixty-five billion to 
 one hundred and seven billion dollars, an increase of about 
 forty-two billions of dollars. 
 
 Vast as these increases are, I doubt if they represent a fair 
 average for fifteen years, and certain it is that they fall short 
 of approximating the probable increase of the fifteen years 
 to come. 
 
 During the fifteen years ending with the year 1907, it must 
 be remembered that the country passed through one of the 
 most disastrous panics in its history; and that the great ques- 
 
13 
 
 tion of free silver, the maintenance of the national honor and 
 credit, was fought out and righteously settled. 
 
 Accepting these figures, however, as a basis for computation, 
 the end of the first quarter of this century will see a population 
 in this country approximating one hundred and twenty-five 
 million people. The production of anthracite coal at that time 
 will have increased to approximately ninety million tons per 
 annum, as compared with sixty-three million tons in 1907; 
 that of bituminous coal to 892,000,000 tons as compared with 
 the present output of 306,138,000 tons; that of pig iron to 
 more than 72,000,000 tons as compared with 25,781,000 tons 
 produced in 1907; and that of steel to more than 111,000,000 
 as compared with 23,000,000 tons produced in 1907. The pro¬ 
 duction of cotton, which was 13,500,000 bales in 1907 will have 
 reached more than 20,000,000 bales annually; that of wheat 
 nearly 800,000,000 bushels as compared with 634,000,000 
 bushels in 1907; and the production of corn, which in 1907 
 was 2,592,320,000 bushels, in 1925 will exceed 4,000,000,000. 
 
 Farm animals, horses, sheep, mules, swine, will have been 
 increased in number by approximately 50,000,000, and by more 
 than $3,250,000,000 in value. 
 
 The total national wealth will have increased to approxi¬ 
 mately one hundred and seventy-seven billions of dollars as 
 compared with one hundred and seven billion, one hundred and 
 four million, two hundred and eleven thousand dollars in 1907. 
 
 These figures, especially as they relate to farm products 
 suggest the inquiry whether or not such tremendous increase 
 in production is possible in view of the diminishing amount of 
 unimproved land. 
 
 Xearly all my active life has been spent in the \\ est, and I 
 have made something of a study of the question of reclamation 
 of arid lands by irrigation. I have also given some attention 
 to the possibility of increasing the productiveness of land 
 already under cultivation, by the careful selection of seed and 
 by the application of improved methods of fertilization and 
 cultivation; and I do not hesitate to say that by these means 
 alone our cereal crops can be doubled (without adding an 
 acre to the land now under cultivation). In this connection 
 
14 
 
 it should be borne in mind that under the recently enacted 
 laws for the reclamation of arid lands, millions of acres now 
 sterile and valueless will, during the next fifteen years, by irri¬ 
 gation, be made the most highly productive land in the country. 
 
 The United States, with the most fertile soil in the world, 
 but with its wasteful, slipshod methods of seed selection and 
 cultivation, produces an average annual yield of only four¬ 
 teen bushels of wheat to the acre; whereas, England produces 
 more than thirty-two bushels to the acre; Germany about 
 twenty-eight bushels, the Netherlands more than thirty-four 
 bushels, and France approximately twenty bushels. 
 
 Of oats, the United States produces an average annual 
 yield of 23.7 bushels per acre, England 42 bushels, Germany 
 46 bushels, and the Netherlands 53.1 bushels per acre. 
 
 The average yield of potatoes in the United States is 85 
 bushels per acre, while that of Germany, Belgium and Great 
 Britain is 250 bushels. 
 
 Potatoes, like wheat or bread, are a food staple of the 
 poor man. Germany, with an area no greater than any one 
 of a majority of our States, produces approximately two 
 billion bushels of potatoes, while the aggregate crop of the 
 United States averages barely 275,000,000 bushels per annum. 
 
 There is no other country with which we can compare our 
 corn crop; but I know from personal experience that the 
 average yield of the last ten years, which is also the largest 
 average yield for any similar period in the history of our 
 country, can be more than doubled. 
 
 Accepting these figures, we come to the all important c[ues- 
 tion of what will be required in the way of additional trans¬ 
 portation facilities to handle the tremendous and rapidly 
 increasing business of the next fifteen years, and how those 
 facilities are to be provided. 
 
 During the year 1907, the 225,000 miles of railroad in the 
 United States were operated intelligently, skilfully, and to 
 the very limit of their capacity; and it is a fact well known 
 to every business man in the country that there was hardly 
 a day during that year when it was possible for the railroads 
 (on account of inadequate facilities, very largely terminal 
 
15 
 
 facilities), to promptly move the traffic. There were days and 
 weeks during that year that vessels cleared from Atlantic 
 ports with their holds filled with sand and gravel for ballast; 
 although these same vessels held charters for grain that had 
 been sold for export, but that the railroads were unable to 
 move from interior points; and this in face of the fact that 
 the railroads were handling every day, week, in and week 
 out, a record breaking volume of business. 
 
 Mr. Logan G. McPherson, a special lecturer on Economics 
 at Johns Hopkins University, who has made this question a 
 study, and who has been conducting an exhaustive inquiry 
 and investigation in all parts of the country, in the September 
 number of the Political Science Quarterly, says: 
 
 “ Speaking broadly, the freight traffic of this country 
 increases about lOO per cent, every ten years, and there is 
 every likelihood that it will increase lOO per cent, or more 
 in the next ten years, a period of depression being more 
 than made up by a return of prosperity. 
 
 “If provision for a loo per cent, increase of traffic 
 meant an increase of loo per cent, in facilities, the existing 
 railroad plant of the United States would have to be 
 doubled. Let us assume, however, that the traffic increased 
 by lOO per cent, can be handled with facilities increased 
 by eighty per cent. Taking the cost of main line track at 
 $30,000 per mile, other track at $15,000 per mile, locomo¬ 
 tives at $15,000 each, freight cars at $1,000 each and pas¬ 
 senger cars at $5,000 each, it will be found that an eighty 
 per cent, increase in the track and equipment of 1905 
 would cost over eight and one-half billion dollars. The 
 requisite real estate would probably cost another half 
 billion dollars, bringing the total expenditure necessary 
 to provide for the traffic of the decade ending with 1915 
 to an average annual investment of nine hundred mil¬ 
 lions of dollars.” 
 
 During the great congestion of 1907, Mr. James J. Hill, 
 one of the most able, far-sighted, conservative men of this 
 generation, estimated that it would require the expenditure 
 of one billion dollars a year for five years to make the railroad 
 facilities of the United States equal to the demand they will 
 be called upon to meet. 
 
16 
 
 I do not regard Mr. Hill’s statement as extravagant, but 
 reducing it by half and applying it to the fifteen years covered 
 by the estimates for increased traffic that I have given, will 
 make it necessary to raise seven billion, five hundred million 
 dollars for the purpose of increasing and improving railroad 
 facilities during the coming fifteen years. 
 
 The West, and especially the great Southwest, must have 
 thousands of miles of new railroads to make possible the 
 tremendous development of which that region is capable. 
 
 Texas alone has fifty-five counties in which the whistle of 
 a locomotive has never been heard, and the State of Texas 
 can, with adequate railroad facilities and proper cultivation, 
 raise more cotton than is now produced in the United States, 
 or double the annual corn crop of the country. 
 
 The East requires little in the way of new railroads, but 
 does need and must have vast improvements in existing roads, 
 especially in their great Atlantic seaboard terminals. 
 
 During the two decades from 1905 to 1925, the New York 
 Central Railroad will expend in such improvements an amount 
 closely approximating if it does not exceed the original cost 
 of the road. 
 
 Let me illustrate: The traffic of 1906 and 1907 increased 
 by leaps and bounds and very early in the latter year the 
 railroads were overwhelmed with business far in excess of 
 their capacity to handle it. 
 
 At times, from four to six thousand cars were sidetracked 
 between Buflfalo and Albany, largely on account of the inability 
 of the roads east of the Hudson river to handle the business. 
 
 During the year 1907 and continuing through the depression 
 of 1908, $22,733,000 has been spent by the New York Central 
 and Hudson River Railroad alone in building additional main 
 tracks and providing passing tracks, terminals, and other neces¬ 
 sary facilities. 
 
 ' hese figures, large as they are, do not include the great 
 expenditures being made in the installation of electricity and 
 rebuilding the passenger terminal in New York City. As a 
 result of these vast expenditures, the road is now in shape 
 
17 
 
 'to handle not only the tremendous tonnage of 1907, but a very 
 much larger tonnage without an hour’s delay. 
 
 This is only a typical case. Like situations existed in all 
 parts of the country and, as the business of the nation expands 
 and develops, similar conditions will recur. These conditions 
 demand, and will demand in the future, the investment of vast 
 sums of money, the only alternative being a calamitous limita¬ 
 tion of the nation’s growth. 
 
 This is the problem that confronts the railroads, and every 
 citizen in whatever line of business activity he may be engaged, 
 has a most vital interest in its solution. 
 
 I do not wish to speak in a spirit of complaint or criticism; 
 but I want to ask you to carefully study the legislation. 
 National and State, that has been passed during the last five 
 years in the so-called regulation of railroads; regulation that 
 has resulted in almost every instance in either seriously 
 reducing revenue or largely increasing the cost of operation. 
 
 Recall the campaign of violent agitation and extravagant 
 unmeasured condemnation of the past four years. Bear in 
 mind that the average return on capital invested in our rail¬ 
 roads is about 4.4 per cent., whereas the return on money 
 invested in agriculture (using statistics of 1905 as a basis), 
 averages about ten per cent., in manufacturing over fifteen 
 per cent., and in merchandising and banking above twenty 
 per cent. Remember that everything in the way of develop¬ 
 ment of railroad transportation in the past has been the result 
 of the investment of private capital, and that if these exten¬ 
 sions, enlargements, and improvements, absolutely indispens¬ 
 able to national growth and development, are made, it must 
 be by the further investment of private capital by private 
 citizens, or that dread alternative of Government ownership. 
 
 Then ask yourselves if these conditions are of such a 
 character as to attract new investors or to encourage those 
 that have already invested largely in railroads to materially 
 increase their investments. 
 
 The railroad construction of 1908 was the smallest in ten 
 years, and that of 1909 ])romises to be less than 1908. Ihe 
 problem is an iirportant one and may well engage the very 
 
18 
 
 serious consideration of every citizen interested in the growth 
 and development of our country. 
 
 Mr. Toastmaster, the four great foundation stones upon 
 which the commercial supremacy of this nation has been 
 builded, and upon which its future development and prosperity 
 depend, are agriculture, manufacturing, merchandising and 
 transportation. 
 
 I have placed the great function of transportation last, but 
 it is in no sense least, because the prosperity, yeaj the very 
 existence of the others, depends upon it. 
 
 In the free, untrammeled rise and fall of prices to meet 
 changing conditions agriculture, manufacturing and merchan¬ 
 dising respond promptly, almost automatically. 
 
 The great business of transportation alone, subject to, and 
 as acutely sensitive to, conditions that affect cost of produc¬ 
 tion as either of the others, is hedged about and restricted 
 by legislative enactment and supervision of commissions, 
 national and in almost every State. 
 
 Further than this, every act, every change in tariff made 
 or suggested by the'railroads is the subject of instant challenge 
 and investigation by hundreds of alert, aggressive associations 
 such as yours. 
 
 I do not for an instant question the right, the wisdom, or 
 the necessity for this supervision and regulation of railroads 
 by the nation or the State that creates them. 
 
 No man can gainsay the right and duty of the Albany 
 Chamber of Commerce or any kindred organization to most 
 minutely scrutinize every change in rates, classifications or 
 conditions that may affect your interests. 
 
 Under our form of government, the people rule, and the 
 terms “ rule ” and “ regulate ” are synonymous. The right 
 to rule or regulate carries with it the power, if unwisely 
 exercised, to very seriously injure the thing regulated. In 
 view of this, should not the right to regulate the railroads 
 by both the State and nation be exercised in a spirit of 
 broadminded, unprejudiced, judicial impartiality, uninfluenced 
 alike by the importunities of great interests on one side or 
 uninformed popular clamor on the other? Should not the 
 
 # 
 
19 
 
 right to regulate, the power to control, carry with it the solemn 
 duty to protect, in every proper and legitimate way, the interest 
 thus controlled? 
 
 No one of the four great cornerstones of this vast com¬ 
 mercial structure can be undermined, damaged or weakened 
 without injury to the structure itself. The interests of agri¬ 
 culture, manufacturing, merchandising and transportation are 
 so interwoven, so interdependent, that no lasting injury can 
 corne to one without permanent injury to all. 
 
 Authority to regulate the railways of the country has been 
 and is being conferred upon national and State commissions, 
 limited only by that provision of the Constitution that protects 
 the property of the citizen from confiscation. 
 
 Does not the interest of every citizen, the growth, the 
 development, the prosperity of the nation, demand that this 
 power be' used conscientiously, with the most scrupulous con¬ 
 servatism, and above all, with the broadest possible construc¬ 
 tive wisdom? 
 
■' . 
 
 
 r.